How to Make a Smart TV Ad: A New Freakonomics Radio Episode

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Harvard psychology professor Dan Gilbert has made a series of TV ads that are tiny behavioralist masterpieces.

Harvard psychology professor Dan Gilbert has made a series of TV ads that are tiny behavioralist masterpieces.

Our latest Freakonomics Radio episode is called “How to Make a Smart TV Ad.” (You can subscribe to the podcast at iTunes or elsewhere, get the RSS feed, or listen via the media player above. You can also read the transcript, which includes credits for the music you’ll hear in the episode.)

I don’t watch too much TV but when I do, I see a lot of terrible commercials. They range from sophomoric to earnest to delusional. Occasionally you’ll see a clever ad but almost never do you see one that’s actually interesting.

Almost never — but not never never.

Today’s podcast is about a series of interesting ads which sell Prudential financial products and feature as their pitchman the Harvard psychology professor Dan Gilbert. A few questions are in order:

  1. Are the ads manipulative? Sure, but not grotesquely so (and they are TV ads, after all).
  2. Do they try to frighten people into buying financial products that they might not need? Perhaps, but in the most gentle way imaginable.
  3. Are they tiny behavioralist masterpieces that draw on academic research and data visualization to make points that are almost never made in public discourse (much less on TV)? Indeed they are — at least to my eye.

Gilbert is the author of the wonderful book Stumbling on Happiness and has given several popular TED Talks: “The Surprising Science of Happiness,” “The Psychology of Your Future Self,” and “Why We Make Bad Decisions.” How did a guy like him end up as a pitchman for a financial-services firm? As Gilbert tells us: “They said, ‘we’re interested in doing data visualization and bringing to life the very thing you’ve been thinking about for most of your career, namely errors of prospection.’ … Well, that got my attention.’

In the podcast, you’ll hear extensively from Gilbert — as well as the ad man who approached him (Ray Del Savio at Droga5) and the Prudential executive who helped make it work (chief brand officer Colin McConnell).

I never thought we’d make an episode of Freakonomics Radio extolling the virtues of a series of TV ads for a financial-services firm. But I hope you’ll agree this was worth talking about — and I’m all in favor of raising the level of TV ads.


Walker

The ad discussed in this episode that involves the wall of the oldest person everyone knows always really bugged me, since I think it is lying with statistics.

IIRC, the ad contrasts the average retirement age with the oldest person people know. The problem is that, the oldest person people know is almost by definition an outlier. Moreover, it is entirely possible that the number of old people at the far end of the graph is being inflated, since more than one person can know the same old person.

While you should probably consider the possibility that you will live to 110 when planning for retirement, it is unlikely that you will. This ad uses misleading data to overstate the likelihood that you will and, by implication, your need for Prudential's services. I was kind of shocked that this was never mentioned, especially after all the praise for how Dan Gilbert insisted on the ads being truthful.

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StevenG

I'm really sour about this episode for this precise reason. (well stated Walker)
I absolutely hate this ad, consider it and Gilbert's rationalization of it wholly disingenuous, along with the show's unblinking endorsement of it.

John Pearson

Loved this episode. Appreciated that in the bit with the question about what is the oldest person you've known you realized it was a sales pitch. And I wish you had pointed out why that was, which was that the pitchman was comparing apples and oranges. He started by saying that when social security was created the average lifespan was 65 or whatever it was and you qualified at age 65. He then immediately went to asking people today how old was the oldest person they've known. The inference was that people live longer today. But it is an information free bit and pitch. Without having the same question asked when social security was created and comparing the answers, and comparing the actual life expectancies then and now (now to even get into the problems with needing to retire earlier if you are a physical laborer), it was nothing more than a pitch. There was no information in it; just sales.
Great episode overall. Keep 'em coming.

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Corbin

I'm not here to "poo poo" the ads, but just share my experience as being an actor on the "How much money do you think you need for retirement?" Prudential ad. It was all B.S. Everyone (I literally mean every single person on camera besides the professor) auditioned and was paid to be there (despite the commercial claiming it pulled random people off the street). I played a "Harvard student" running the experiment (which I am most certainly not). None of the "calculations" shown were real (the "program" being run on the tablets was done in post, we were just randomly clicking stuff for the camera to look busy). None of the lengths of ribbon had anything to do with any real guesses - they were random lengths given to random actors. There were probably about 200 people waiting around hoping to get on the commercial, but only 20 or 30 made it on camera.

Although it totally shattered my illusions about any commercial claiming to be "real", this episode made me appreciate the spirit and ideas these commercials were trying to accomplish, and I really enjoyed it.

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Ted Florea

Walker makes a great point but in so doing raises an even greater one. The actual apples to oranges comparison is your retirement needs with an average lifespan. Depending on gender you can expect, on average to live somewhere between 72 and 76 years. What if everyone set that as their retirement goal? Well, noting that median and average are fairly close, 50% of Americans would start eating cat food the day after they surpassed the average. So understanding risk and planning accordingly, the above average or even reach outlier IS the proper planning target. That's why most financial planners (or course accounting for individual curcumstances) advise that you plan for living to 90 or beyond. Just like planning to climb a mountain you don't bring enough supplies for just the average climb time. There a lot that can go wrong (or right in this context!) that means being prepared means thinking retirement age vs the reach target. Once again revealing how our power of prospection is limited by quantitative fuzziness that comes into sharp relief when you visually dramatize it. And the best proxy for that reach, the apples to apples, are your genetically similar relatives and environmentally similar social cohort. The exercise is even more intellectually honest by showing the wide range and letting individuals decide while showing everyone that a large gap between the retirement age and your life expectancy will need to be planned for...prudentialy.

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Enter your name...

I think you are looking at the wrong set of numbers. Average age at death is reduced by the deaths of children and teens, even though children and teens are unlikely to be saving for retirement. The overall life expectancy for the whole population is less relevant than the life expectancy of workers.

50% of people who survive to age 65 will survive to age 85. 25% of the people who survive to age 65 will survive to age 90.

Ad Guy

Walker makes a great point but in so doing also inadvertently raises an even greater one. The actual apples to oranges comparison is your retirement needs with an average lifespan. Depending on gender you can expect, on average to live somewhere between 72 and 76 years. What if everyone set that as their retirement goal? Well, noting that median and average are fairly close, 50% of Americans would start eating cat food the day after they surpassed the average. So understanding risk and planning accordingly, the above average or even reach outlier IS the proper planning target.

Ad Guy

That's why most financial planners (or course accounting for individual curcumstances) advise that you plan for living to 90 or beyond. Just like planning to climb a mountain you don't bring enough supplies for just the average climb time. There a lot that can go wrong (or right in this context!) that means being prepared means thinking retirement age vs the reach target. Once again revealing how our power of prospection is limited by quantitative fuzziness that comes into sharp relief when you visually dramatize it. And the best proxy for that reach, the apples to apples, are your genetically similar relatives and environmentally similar social cohort. The exercise is even more intellectually honest by showing the wide range and letting individuals decide while showing everyone that a large gap between the retirement age and your life expectancy will need to be planned for...prudentialy.

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Kathryn

I love Dan Gilbert's book, I recommend it to everyone, and really wish this episode could have gotten more into the theories and studies in his book. He says a lot about loss aversion and sunk cost fallacies, and I think much of that could also tie into the spirit of the Freakonomics podcast.

PeacenikNYC

As an advertising professional, I always found this Prudential Life Insurance campaign to be little more than Peterson Institute right wing propaganda/fear mongering. (Plus, Life Insurance as a retirement plan is a lousy investment—it's more expensive than simply saving and investing a nest egg, so I also have ethical issues with the overall message.) A much better ad campaign, to my way of thinking, is the one starring Tommy Lee Jones where he asks "Retirement: Will you outlive your money?" Supposed man-in-the-street interviews are shown in which people either say the question is too scary, or they haven't the faintest idea, etc. The campaign clearly is built on an insight from research, which is that many people haven't planned for their retirement because they're too scared to or simply don't know how to. The question, though, is one most of us have contemplated in one way or another. Advertising based on true insights tends to be the most effective. These Ameriprise ads balance the intellectual with the emotion enough to get my attention every time. That said, your piece was a great advertisement for the Droga 5 ad agency. I'm sure they were very pleased and will probably make terrific use of it in their new business pitches.

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Stephen Dedalus

I was confused about what the actual product was, since the commercials seemed to talk only about saving for retirement. If they're suggesting that life insurance is a good (or even adequate) way to provide income during retirement, that seems deceptive. It might support retirement for the _next_ generation ....

osman gani

Very Good Article for me . I have listened audio. it is use for me. Thanks

Judge Mental

I originally parsed the subject for this ("How to Make a Smart TV Ad") as if the episode were discussing the best way to advertise if you were in the business of selling "smart TVs" (e.g Samsung, Vizio, LG) .

James

Smart TV? Is there an oxymoron lurking there?

RafaQuiM

when turned off it is even cleaver. Or when nothing is trnasmitted, we can enjoy 'seeing' the big bang background radiation ad free.

RafaQuiM

Background music title please?
: )

ben

So how does Dan Gilbert say you should calculate the actual amount you'll need for retirement?

Dennis

This episode struck me as a 30 minute commercial for Prudential. I hope they paid a lot for that.

Jeff

I was surprised that Freakonomics didn't address the ad I find most troublesome: the one with the giant dominoes. The image, as Edward Tufte would say, "lies by distortion." We see people noting amounts like $21 or $45, and then Gilbert suggests that putting away such an amount weekly for "20, 30 years" could grow one small domino into the equivalent of a three-story building. The image is deceiving because the dominoes grow in both dimensions. If the starting domino is 2" x 1" and the Retirement Challenge domino is 30' x 10', that would suggest your starting investment could grow 43,200 times!

The image misleadingly suggests it's a lot easier to save a small fortune than it really is. In reality, saving that $45/week for 30 years and earning a 7% annual return, you would only have ~240,000. That's more than 5300 times what you started with. Nothing to sneeze at, but it's far less than the hopeful image portrayed in the ad and it's not going to fund more than a few years of retirement.

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DC Darling

It's interesting that people see their past as more difficult than their future in Dan Gilbert's research because it seems like they see it the opposite when they are at the end of a relationship. Myself and several of my friends (who are, albeit, almost all girls) have all experienced the feeling that they should stay in the relationship they are in because there are uncommonly good similarities and attractions there despite continuing and serious problems. I have countless times witnessed friends in and out of relationships lament that they will never find someone again, in spite of having had several relationships in the past.

I know people tend to start settling down at a certain age, which may trigger some of this fear but with a 50% divorce rate there is a veritable revolving door of potential mates. I wonder if there is any research on this overly pessimistic outlook for future relationships among those who are single or unhappily attached.

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