The Conservatives’ nudge to marketers

In a comment piece in last Friday’s Guardian, We can make you behave, Shadow Chancellor George Osborne set out his vision for a public policy framework based on the recurring mantra of Cameron’s Conservatives’: “behavioural economics”.

Before I dive into Osborne’s article it’s worth expending a few words to explore exactly what ‘behavioural economics’ is. Essentially, behavioural economics is a rejection of the idea that “individual behaviour is always entirely rational”. So for example, policy experts in Whitehall could spend years planning public policy that presumes the public will make rational decisions that follow logical reasoning. But when the policy is applied it doesn’t deliver the expected results because it failed to account for the fact people don’t make rational decisions. Rather they make irrational decisions based on a range of inter-related, complex and often sub-conscious effects that are usually not taken into account.

Chief among the behavioural economists is US academic Richard Thaler (whose names appears as co-author of the Guardian article). Thaler famously co-wrote the book, Nudge, which offers a sociological underpinning to the idea that rather than designing abstract policy without taking into account human behaviour, Governments and the State should develop policy with the ability to encourage or persuade people to follow policy designed in.

Thaler and Osborne have past form and the Conservatives’ grand strategy is to apply this thinking to their public policy planning.

So let’s jump back to Osborne’s article.

While the bulk of the op-ed focuses on Labour’s failure to effectively regulate financial markets because of it’s assumptions of actors in global financial markets making rational decisions, tucked away in the penultimate paragraph is a passing but intriguing reference to Government advertising.

In particular, Osborne turns briefly to outline how a newly elected Conservative government would embed the theory of behavioural economics into Government communications campaigns.

Osborne tells us categorically:

A Conservative government will require all public bodies that want to launch marketing campaigns to state precisely what behaviour change the advertising is designed to bring about, and an element of the advertising agency fee will be made contingent on achieving the desired outcome. This will not only help to cut wasteful spending, and secure better value for money for taxpayers, ensure that government advertising reflects the best thinking about behaviour change, but it will also mean that the public can transparently scrutinise the goals and effectiveness of government advertising.

I’m not sure whether my reaction to Osborne’s plan is rational or irrational, but my initial feelings include pleasure; confusion and concern. Let me sketch out why and analyse what it might mean for the communications and marketing industries.

At face value, there’s clearly a lot of merit in adapting the ‘Nudge effect’ to public communications. It makes perfect sense to try and maximize public service campaigns’ chances of achieving real behavioural change and to provide value for money. And who is going to object to increasing the success of campaigns like Change4Life, which aims to improve children’s health?

Osborne’s idea of building a ‘success fee’ into agencies budgets will no doubt resonate well with taxpayers but should we as an industry be worried? I’d argue not.

Incentivising success is no bad thing and it will mean the development of more robust measurement and evaluation tools and methodologies – something we’ve seen the COI thinking about recently. However, it’s unclear how rigorously this proposal might be implemented – achieving success and demonstrating success are two different things.

In fact, behaviour change is something the COI is already pushing through in its Five Step Plan to Behaviour Change so the Conservatives’ agenda won’t be too much of a step-change for Whitehall communicators (but it may come as a shock to those in other areas of the public sector).

Perhaps the most commendable element of Conservative plans is its desire to make Whitehall “state precisely what behaviour change the advertising is designed to bring about”.

This drive for transparency works on a number of levels: Firstly, as us social media types are well aware, proactive disclosure is key to building trust. With trust comes increased likelihood to change opinion and subsequently behaviour.

Secondly, by declaring the aim of the campaign and what it’s designed to achieve the public can truly act in their capacity as ‘monitorial citizens’ and scrutinize whether the state is attempting to change public behaviour for the good. This is a crucial role and raises some ethical questions about the use of behavioural economics that I’ll address later.

It could be that Osborne is using the terms ‘marketing’ and ‘advertising’ as short-hand for communications in general, but it’s not clear what sectors will be affected. Will the same transparent, incentivised approach apply to PR? Social media? And what about public sector websites? It’s worth noting that the ASA famously don’t consider websites as advertising.

It also could be seen as an intentional move to woo the UK’s advertising industry, who’s umbrella body, the IPA, has made a public commitment to improving efficacy through behavioural campaigns.

Indeed, the IPA’s president, Rory Sutherland, is a major fan of behavioural economics and wants the industry to commit more to on behavioural research as part of his presidential agenda. Here he is making the case:

Behavioural economics is described (by Thaler himself) as ‘libertarian paternalism’. This is the idea that while people should be able to live their lives as they want, “it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier, and better”.

However, as political analyst Tim Pendry puts it: “What we have to watch for is drift into projects that suit them and not us”.

Of course, you could argue the same about any marketing by the state, as Tim points out:

There are philosophical issues here – should your or my money be spent on systems that try to change my behaviour rather than just require compliance with the law? Should a democratic state be using techniques designed to sell goods and services against its own people?

There are no definitive answers to be had here – but it does create shades of gray that the marketing industries need to take into account should the Conservatives come to power.