Copywriting, behavioural economics and AdWords

Applying behavioural economics principles to copywriting Google AdWords ads can promt a significant boost in performance for certain cagtegories like technology, telecoms and clothing

New research from AdWords copywriting specialists ATO Co suggests copywriters could benefit from applying behavioural economics (BE) principles to writing AdWords ads.

BE uses psychological principles to influence behaviour, using three basic principles:

• Heuristics: rules of thumb
• Framing: using anecdotes and stereotypes to understand and respond to events
• Market inefficiencies: using price as a factor

Specific techniques are based on those developed by the IPA's Behavioural Economics Initiative report, written by Ogilvy vice-chairman Rory Sutherland, a noted fan of using psychological approaches, and BE consultant Nick Southgate. The report focused heavily on 'nudge' approaches, including:

• Heuristics - piggy-backing on widespread behaviours that people already know or already carry out provides a ‘behavioural channel’ to reach lots of people who can then be nudged
• Making the behaviour as easy and intuitive as possible because barriers or effort, however small, reduces the power of a nudge
• Accept that there is no single customer journey, and that things are more complex
• Don't distinguish between brand and execution: how people buy is as important as what they buy
• Frame benefits as a compelling incentive, for example a prize freeze is more compelling than a small percentage discount
• Place discounts against pain points, like booking fees, price rises, delivery charges and not against the price of the item, the intrinsic value.

The ATO Co research followed these rules as a guide. They tested existing ads live on Google AdWords, and compared them with specially-written ads using the BE principles outlined above.

Categories were: computers, telecoms, automotive, clothing, lifestyle, airlines, car hire, hotels and supermarkets.

They found a wek correlation between using BE and performance. On average, BE techniques increased performance by 13% but this was not even. In four of the ten categories, the BE approaches actually performed worse - they were car hire, hotels, supermarkets and luxury cars. Such categories are often determined on price (supermarkets, care hire) or intangibles (luxury cars).

For the remainder there was an improvement, particularly striking for computers, where there was a 32% increase in performance for the BE ads.

The authors say using BE approaches could start to move testing away from simple A/B tests and to something more radical. They say up to 20 BE principles and so thousands of associated words and phrases could be tested, and testing different BE principles could reveal new insights into consumers.

For this study, the authors estimate they could represent some £90 million in savings over the status-quo, but probably further benefits when considering accrued responses, conversions and sales, although these were not tested.