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Leveraging consumer psychology in marketing has been around for decades. But using these tactics strategically with today’s innovative tools accelerates its benefits immensely.

A perfect example for this is utilizing the Decoy Effect within interactive ads to counteract attention residue and navigate consumer behavior — tackling growing challenges in a world dominated by quick, scrollable content and endless options. So let’s explore why this effect is so valuable and how you can use it to your advantage.

Understanding the Decoy Effect

The Decoy Effect, also known in marketing as the attraction effect, influences consumer choices by presenting several options rather than just one. 

For instance, in the classic Coca-Cola vs. Pepsi Ads, consumers’ choices were guided not by a simple yes-or-no question but by a direct comparison between two major brands, effectively leading to a boost of sales for both brands by changing the question from “if to buy” to “what to buy”.

The Decoy Effect is piggybacking off of that idea by then introducing a third option into the mix: When multiple choices are available, consumers have shown to experience a shift in preference, particularly if one option is designed to be less appealing. 

You have probably seen this principle applied in tiered pricing models: by setting a slightly more expensive package next to a slightly cheaper but less valuable one, the more expensive package appears like a superior deal. The middle-priced package becomes the decoy, subtly nudging consumers toward the higher-tier option. This concept guides consumer choices, often resulting in increased engagement and more substantial purchases.

How the Decoy Effect Counteracts Attention Residue

This concept becomes increasingly interesting with recent technological advancements that significantly alter consumer behavior, leading to the so-called “attention residue”, for example. This phenomenon occurs when users’ focus is divided between content, particularly with short-form media and fast scrolling on social platforms. For advertisers, this split attention poses a challenge, as it reduces their time span drastically to capture viewers’ attention and drive engagement.

In order to navigate this fragmented attention landscape, advertisers have to create shorter and highly engaging content that captures attention immediately. The Decoy Effect can effectively mitigate attention residue by introducing multiple product options that direct consumer focus toward the most beneficial choice, increasing engagement with ads, as viewers perceive greater value in exploring the options presented.

To further this effect, interactive ads enhance this strategy by incorporating multiple clickable overlays within a single video, driving impactful engagement. This combination of the Decoy Effect and interactivity transforms ads into powerful tools, countering difficulties such as advertisers’ fight against the effects of attention residue.

Applying the Decoy Effect in Interactive Ads

Imagine an interactive video ad for a fashion brand featuring various overlays, each with a Call-to-Action (CTA). The first overlay promotes a popular dress with a 20% discount, while the second highlights a pair of more expensive shoes with a 30% discount. The third overlay — our decoy — features a similar pair of shoes, but is an older model with only a 15% discount.

By now placing multiple overlays like Slider or Pick & Choose buttons you’re able to interactively apply the Decoy Effect into your highly engaging ad, therefore maximizing the benefits of applied consumer behavior psychology: By comparing the two shoe options, users sub-consciously recognize that the 30% discount overlay is the most appealing. This draws their focus to the shoes with the greater discount, guiding them toward a quicker, more confident choice. The decoy effectively enhances the attractiveness of the better deal, encouraging a smoother and more engaging experience that increases the likelihood of interaction.

By incorporating the Decoy Effect in interactive ads, marketers can counteract attention residue, maintain viewer focus, and streamline decision-making effectively. Through strategic placements and overlays, you decide where you want to direct the engagement of your ad viewers!

Sources:
The Decision Lab: Why do we feel more strongly about one option after a third one is added? The Decoy Effect , explained.
Growganic: Der Decoy Effekt: Von Täuschung zu mehr Umsatz
Kimp: Pepsi Vs Coca-Cola: Marketing Lessons From Two Iconic Brands
The Economist: The cola wars made Pepsi and Coke “the world’s best marketers”
Timely: Attention residue: the reason why you can’t focus

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Marketeers don’t have it easy these days: standing out against the growing competition, finding innovative ways to create more personalized content, increasing efficiency through automated processes – the list goes on and on. We don’t claim to have all the answers, but we do know how to create captivating content and successful campaigns that will make a true difference in the way you engage with your target audience. Here are four tips to capture their attention and actively engage them with your brand through Interactive Video Campaigns.

1. Define Your Objectives Clearly

Before diving into the planning and execution of your video campaign, it’s essential to set clear objectives. What do you want to achieve with the campaign? Do you want to increase brand awareness, elevate your recruitment strategy, or drive product sales? Your objectives will not only be relevant in regards to your target group or your video material, but also concerning its preparation with the chosen overlays. At Media Match Maker this strategical aspect is assissted by our Campaign Consultant as part of our Full Service Approach.

2. Understand Your Target Audience

Audience analysis is a crucial part of any marketing campaign. You should have a deep understanding of your target audience, knowing its needs, preferences, and habits. This allows you as well as us to create content that is relevant and engaging. Interactive videos provide the unique opportunity to offer a truly personalized experience by not only considering these interests and demographic characteristics, but by activley engaging with them through interactive CTAs.

3. Elevate Your Storytelling

Compelling storytelling is key to making your message resonate. Your video material is already a great step into telling your brand‘s story, transporting company values and / or promoting your product. By adding interactive overlays, you’ll be able to let customers discover your brand in an innovative way and vice versa: through survey overlays, pick & choose options, links to your website or socials and other subtle CTAs you’re elevating your storytelling by creating an emmersive experience.

4. Never Underestimate the Importance of Analysis

Like always, creating the video is just the beginning. Following comes the publication to and targeting of your audience through various channels like newsletters, social media profiles, websites etc. and the analyzing of their KPIs (e.g. CTR, ER, VCR, Conversion Rates) to assess the success of your campaign. At Media Match Maker we have found an incredibly effective way to reach and engage your audience, thus resulting in increased KPIs. Additionally, we provide the entire service around reaching and analyzing your target audience, constantly optimizing your campaign on the Go, all while providing you with mid-campaign-reports as well as a final one.

With AI setting new standards for innovation – not only, but surely in the world of marketing as well –, it has also become very clear how important it is to find ways to set yourself apart from the crowd by creating content that is relevant and personalized. Adding an interactive experience to your campaign offers an innovative and unique opportunity to do exactly that. If you’re intrigued to look at some numbers, read our article about our case study, that we have conducted for our client Schauinsland.