SD#32: Availability bias, financial sorcerers and climate action
August 21, 2022
Hi friends,
Welcome to another edition of Seven Dawns, your weekly newsletter on marketing, productivity, psychology and more.
Our seven ideas this week:
1. (Marketing) Creating assets specifically for each channel is more effective than repurposing them Most marketers know the potency of spreading their media dollars across multiple channels. But the temptation to save time, money and effort by reusing the same video execution that was built for TV on YouTube, or reusing print ads for digital ends, is all too often the most common approach.However, data from Analytic Partners suggests that when you create your own dedicated, native content for digital video, it’s likely to be three times more effective than TV creative that’s been repurposed for digital channels. While marketers should aim for cross-channel campaign synergy, they should do so with distinctly created assets that are natively designed for each specific medium. Marketing Week |
2. (Psychology) Availability bias – our tendency to make judgements based on previous experiences that are easily recalled As humans, our ability to make the right decisions is limited by the many constraints of our minds. One such constraint is the availability bias — our tendency to make judgments based on previous experiences that are easily recalled. When some piece of information is easily brought to mind, we incorrectly assume that it’s an accurate reflection of reality. This cognitive bias often leads to the illusion of rational thinking and, ultimately, to bad decisions. For example, if you’re looking for a new note-taking app, you might go for a particular tool because you recall that a friend recently raved about it. Or, if you read about a plane crash in the news a week before you are due to fly for work, you may overestimate the likelihood of your plane crashing. How can you avoid it? (1) Practice deliberate brainstorming. Instead of going for the most obvious choice, generate as many potential solutions as possible. (2) Try “red teaming” ideas. It involves rigorously challenging ideas and assessing them from an opposing point of view to discover flaws. (3) Use self-reflection methods. It can take the form of journaling, talking out loud. Taking time to reflect will reduce the power of availability bias. Ness Labs |
3. (Marketing) Linking Category Entry Points (CEPs) to buying situations is key in building mental availability “The most important search engine is still the one in your mind.” This statement makes a profound point all marketers should internalize about buyer behaviour: most purchases start not by searching Google, but by searching our memory. If you believe most buyer behaviour starts with a memory, it then follows that the primary job of marketing is not to generate clicks, but instead to generate memories. In B2B, as B2C, the evidence suggests the path to company growth requires building mental and physical availability. Mental availability is about being easily thought of in buying situations, while physical availability is about being easy to buy. Category Entry Points are the cues that category buyers use to access their memories when faced with a buying situation and can include any internal cues (e.g., motives, emotions) and external cues (e.g., location, time of day) that affect any buying situation. Understanding CEPs helps you build useful associations between your brand and the category’s core buying situations. Therefore when a buyer enters the category, your brand has a greater chance of being mentally available, which is the first step to being bought. LinkedIn B2B Institute |
4. (Society) What Pre A Manger sales tell us about hybrid work In May 2021, as Covid-19 cases in Europe and the US receded and citizens began emerging from pandemic-induced lockdowns, Bloomberg set out to track the economy’s return to normality using transactions at Pret A Manger Ltd. Because the coffee and sandwich chain is closely associated with the lunch hour in the financial districts of London and New York, Bloomberg’s Pret Index – which benchmarked weekly transactions against what they were before the outbreak of Covid-19 – showed whether hundreds of thousands of bankers, asset managers and corporate lawyers were repopulating those areas as firms recalled workers to the office. In London City, Pret’s transactions have recovered to 83% of pre-pandemic levels, while in suburbs it is 118% of pre-pandemic levels. An indication of remote work having a marked impact. Bloomberg |
5. (Investing) Take note of financial analysts / macroeconomic forecasters with extreme scepticism “The Commanding General is well aware that the forecasts are no good. However, he needs them for planning purposes.” A report from CXO Advisory Group analyzed 6,582 public market calls made by 68 pundits from 2005-2012 and found that their average accuracy was 47%, slightly worse than chance. Despite this, there is still a high demand for pundits and their predictions. For all of the recorded history of humans, we’ve had a deep desire to know the future. Ancient tribes used sorcerers and priests to forecast it, we use financial pundits. So what’s an investor to do in a world filled with sorcerers? Ignore them. Ignore them as much as possible. Because if you don’t, you may be persuaded to do something harmful to your finances. Of Dollars and Data |
6. (Productivity) Creative problem solving for when you’re stuck and out of ideas Even if you usually excel at finding solutions, there will be times when it seems that there’s no obvious answer to a problem. It could be that you’re facing a unique challenge that you’ve never needed to overcome before. You could feel overwhelmed because of a new context in which everything seems to be foreign, or you may feel like you’re lacking the skills or tools to navigate the situation. When facing a dilemma, creative problem solving offers a structured method to help you find an innovative and effective solution. There are four guiding principles to creative problem-solving. (1) Look at problems and reframe them into questions. While problem statements tend to not generate many responses, open questions can lead to a wealth of insights, perspectives, and helpful information (2) Balance divergent and convergent thinking. During divergent thinking, all options are entertained. Throw all ideas into the ring, regardless of how far-fetched they might be. Convergent thinking, in contrast, is the thinking mode used to narrow down all of the possible ideas into a sensible shortlist. (3) Defer judgement. By judging solutions too early, you will risk shutting down idea generation. Take your time during the divergent thinking phase to give your mind the freedom to dream ambitious ideas. (4) Say “yes and” rather than “no, but”. You will only stifle your creativity by automatically saying no to ideas that seem illogical or unfeasible. Ness Lab |
7. (Environment) Why has climate action failed in the US so far (and elsewhere) Why have climate activists and leftists failed to generate a sufficient sense of urgency in the American public? One reason is that many have embraced the idea of degrowth. This is the idea that economic growth is environmentally unsustainable and should be halted (at least in rich countries). Slowing growth or abolishing capitalism would be very bad for the climate for two reasons: it’s too big of an ask for developed countries to give up their middle-class lifestyle and you need a robust economy to fund investment in new green technology. Degrowth, anticapitalism, and doomerism are not a single unified package — many climate activists subscribe to only one or two of the trio of bad ideas. And some climate activists don’t subscribe to any of the three. But enough subscribe to at least one of the three that together, this trio of ideas has heavily compromised the effectiveness of activism in generating the degree of popular urgency required for bold policy change. All of this gets in the way of the positive, can-do rhetoric that will help us actually make progress. The strategy that will work is a technology-focused, bottom-up, whole-of-society effort. In other words, everyone pushes wherever they can push. We campaign for climate-aware state leaders. We build technologies that make decarbonization easier if that’s what we’re good at doing. We persuade our bosses and the companies we own to adopt renewable technologies. We use our investment choices to direct capital toward companies that produce or use renewables. If we work for the civil service, we try to design and implement regulations in ways that favour renewables. That’s how we fight climate change. Noahpinion |
Fun things to click on:
What came first? This Google quiz asks questions like these (and shows relevant images) and challenges you to click what came first. Bad job search advice you should ignore. A window into a dimension where time does not exist.
Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.
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Speak soon,
Tom