Now that I’ve given you an example (here) of what I consider to be a bad commercial for mental model associative purposes, I want to shine a light on the positive and discuss with you a commercial I find to be brilliant and try to explain why I think that.
First, I should define my terms. I define a “good commercial” for the purposes of our conversation as something that makes you more inclined to actually buy the product being sold. This is the obvious, basic truth of advertising. Just as some operational companies go adrift by focusing on sales and total revenues for an extended period of time to the detriment of bottom-line profits, some companies likewise go adrift with their advertising campaigns by trying to be funny, evocative, or “create buzz” even if it does not actually make people more likely to buy the products being sold.
This confusion is understandable because all great advertising faces a certain a dilemma, an internal tension to resolve: How can you be both entertaining and persuasive? If you focus too much on trying to be entertaining and show half-dressed women with a Pepsi on the table in the background, then you are going to catch people’s attention but you are not going to actually be selling that many more Pepsi’s (I know an apostrophe doesn’t go there, but “Pepsis” looks too weird for a place on this blog) than otherwise.
However, if you turn your product into an informercial that simply lists features, then you will be about as captivating as a prospectus on liability insurance. You may be informative, but you won’t be persuasive because people will be using that commercial slot as a chance to talk to the other people in the room or take a bathroom break.
Now, let’s take a look at what H&R Block has done with their recent commercial as part of their “Get Your Billion Back, America” series.
Take the 31 seconds and give it a watch. This is what a perfectly executed commercial is like. It’s persuasive and makes a call to arms that will eventually lead to more clients and profits for H&R block shareholders; they point out that Americans left a billion dollars on the table by doing their own taxes, and call for you to use their service. The whole commercial is actionable.
But it is also entertaining; simply stating a number like “billions” or “tens of billions” or “trillions” is a nebulous concept that is often used with such frequency that they have a glazing, dulling effect on the listener. It’s like when you hear a pundit or analyst use the term “global economy”. The term has become so clichéd that it is devoid of meaning so that when you want to take about a truly global company like Coca-Cola doing business in 210 countries, you won’t adequately catch people’s attention because the term has become so overused it is nearly meaningless.
That’s what makes this commercial so successful: they “tag” the billion dollars by making it tangible. The concession worker putting $500 on every seat represents your money. You can’t practically smell it, touch it, taste it! The narrator then creates an effective juxtaposition by highlighting the enormity of $1 billion (pointing out it represents every seat in every stadium across professional sports) while also making applicable to you; that $500 sitting on the seat represents money that you could be leaving on the table by not using their services.
The commercial is brilliant because it focuses on what they can do for you, rather than focusing on the cost it will be to you. Most commercials say something like, “Instead of $99.99, you can get it for $49.99!” But this commercial shifts the terms; how can you get mad about paying $150 (or whatever the fee that the H&R block tax professional ultimately charges you) when you are getting your $500 back. This is a very persuasive permutation of the “you can’t afford not to buy it” segment of advertising.
These are the kind of soft factors that go towards the qualitative side of investing. No, you aren’t going to make a buy or sell decision about a stock based on an advertising campaign; at most, it represents two or three out of the thousand puzzle pieces that go into making an investment decision. But if I were a shareholder of H&R Block, I would be proud of the company’s strategy with this advertisement. You can tell that the people running this campaign didn’t lose sight of the objective that the end game is to ultimately improve profits, and with that end goal in mind, they crafted a strategy that achieves its persuasive effects through entertainment and information, using visceral imagery and clear-minded appeals to your economic interests to accomplish their goals. These people understand psychology, and know what they’re doing. It’s very well done.