Archive for the ‘Finance’ Category
A well known advertising technique is to exploit people’s dissatisfaction with their own lives. Either by explicitly stating that one’s product will make their lives radically better, or by implying it (through association with wealthy/successful/attractive people, exciting events and experiences, etc). However, because this technique is so well known, it only works some of the time. The rest of the time people are aware that that’s what’s being attempted, and they come away feeling insulted rather than envious and desiring the advertised product.
In order to combat this, advertisers have two options: either they can present the objective features of the product (and hope that it sells on it’s own merits), or they can do the same thing discussed above – but without making it appear that that’s what they’re doing. This particular commercial does the latter.
GEICO’S superior method of making adjustment appointments (which, as an aside, may not even be superior, because if it were, then it probably wouldn’t be advertised in this way) is obviously not enough of an added value to the consumer’s life that it is going to change it in such a radical way so as to, for example, get him a new girlfriend. Certainly not if he also happens to be a pig. No woman is ever going to dump a man for a pig – no matter how superior the pig’s car insurance might be – and to claim that any woman would is very obviously absurd. In other words, GEICO is making the absurd claim that their product will magically cause radical changes in your life (akin to being able to get a man’s beautiful girlfriend to leave him for you, despite you being a pig), but without having to come right out and make that claim. GEICO knows that should it be confronted with the accusation that that’s what it’s doing, it can claim that it’s obviously not seriously doing that by pointing to the fact that it was using a pig. If it’s not doing that “seriously”, then why do it at all? Blank out.
What’s really happening in this commercial is that the advertisers are counting on the emotional effect of the technique of dissatisfaction-exploitation to occur (ie: creating envy), without having to deal with any blow back as result of people understanding that that’s what they’re doing (ie: resentment for having done it). They’re trying to exploit people’s lack of intellectual sophistication (ie: their inability to see that that’s what’s happening nevertheless), and hoping to be able to take advantage of their good nature in order to get away with it (ie: the thought that no advertiser would really be that manipulative. That this commercial must really just be a silly, attention-getting joke – as it purports to be).
The subliminal message of this commercial is that if you consistently make irrational financial decisions, so long as they are not as gratuitously irrational as the one dramatized, it’s okay to make them (ie: that they are somehow not irrational because the contrast between yours and this one makes yours feel that way for a short time).
No one (rationally) makes decisions as capriciously as the one that this man made, but there are plenty of people who do make decisions that might as well be that capricious by rationalizing them. Apparently (according to Citi’s marketing research, at least) there really are plenty of people who will spend money that they don’t have (ie: go into debt), and then excuse it by focusing on some marginal benefit that it will confer and completely ignoring the fact that that benefit doesn’t nearly make up for the costs incurred because of that decision. This commercial encourages that, and presents it as responsible, rational financial decision making.
Companies resort to such things because of the desperate, precarious state of the economy. Every company and industry is at the mercy of the whims and caprice of a large, powerful government. A government that could – and frequently does – change just one or two of it’s many arcane laws and regulations, and suddenly the carefully-constructed, often contractually-obligated, barely profitable business models that make economic production still possible become unprofitable and a recipe for the inevitable demise of the affected industry or company. All companies know this, and so they choose to focus on the relatively-predictable short-term instead. They do whatever they must – no matter how perverse – in order to get as much as they can as quickly as they can. It’s the name of the game in today’s “capitalism.”
“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world?’ You are. -Ayn Rand, Atlas Shrugged
The goal of this ad is to sell insurance. It communicates the fact that State Farm has 24 hour service. This is a legitimate value, and there is nothing wrong with advertising it, but apparently it must not be so much of a value (above that of it’s competitor’s products) that State Farm thinks it can be sold on it’s merit alone. Apparently the company thinks that it must also endear itself to potential customers in some other way. The entertainment value in this ad is not just supplemental, it is essential.
Humor is a fundamentally destructive element. There’s nothing wrong with that – provided that what is being destroyed (ie: mocked) is unimportant metaphysically. Is a person’s lack of interest in his real-life sexual partner – a sign of a lack of integrity generally – unimportant? Of course not. Anyone who would claim it is could be widely – and rightly – denounced for doing do. Nevertheless, that is exactly what State Farm is doing here – while making it seem like they’re not. In order to get away with it State Farm is counting on a confusion about the scope of the humor employed in this commercial. Within a culture, yes, such people are unimportant (ie: most people are not emotionally abusive and self-defeating in this way, at least not most of the time) – and that’s exactly the point that State Farm would claim to be making should they be criticized. They would specifically claim that they are not saying that an individual’s psychological problems are unimportant (to him). The facts don’t support this argument, however.
The phenomenon of “sex addiction” is at all time highs. Modern communications has made sex-based entertainment easily accessible, and as a result many people who wouldn’t have otherwise indulged, have. This, of course, has caused many problems within real life relationships. It is both a personal problem and cultural problem (precisely because it is a personal problem), in other words – and this commercial intentionally makes light of all of it.
What this commercial does is provide the ever-increasing number of people who are using sex-based entertainment a moment’s reprieve from the guilt and shame they (deservedly) feel about their behavior. Such people know that what they are doing is wrong. They know that they have a psychological problem, but they also know that the first step to correcting any problem is to acknowledge it – and that is what this commercial exploits. It makes such people feel like acknowledging it is what they are doing. It allows them to say to themselves: “Well, if it really was as bad as I suspected, I wouldn’t be able to even acknowledge it. Clearly I can acknowledge it (ie: I can laugh at this commercial), so it must not be so bad. At least I’m on the road to recovery.” This is counter-productive and destructive – because it is not really an acknowledgment. A real acknowledgment would be an explicit, intentional, independently-motivated event – not simply a vague allusion to a proclivity haphazardly stumbled upon while watching TV. They are not really on the road to recovery because of having watched this commercial.
To summarize, what is occurring here is that a major insurance company is resorting to psychological manipulation of the worst kind (ie: trying to make people who are encumbered with a psychological problem feel like they are doing something about it, when in fact what they are doing is ensuring that the problem persists) in order to increase revenues. State Farm knows that the value they offer (24 hour service) is, on it’s own, not enough to get people to act in the way the company desires, so instead of appealing to the rationality of people (ie: go into more detail about why it’s service is superior), it has chosen to appeal to their irrationality (ie: to get people to associate the good feelings they feel whenever they have moments of mental health and are objective about their problems not with a desire to fix those problems, but with State Farm and it’s insurance services). In times past this sort of the behavior was the province of “hucksters”, charlatans, and “snake oil salesmen.” People on the margins of the culture who were widely – and rightly – despised. Today, however – in America’s hamstrung, pressure-group-dominated “capitalism” – where the short-term is all that matters because it’s the only thing that can be predicted – is has become mainstream.
“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world?’ You are.” – Ayn Rand, Atlas Shrugged
This is the same “dilemma” that Aviva Insurance Company tried to capitalize on a couple of years ago. It was discussed on this blog here, and is reprinted here – but edited to reflect the minor, non-essential differences between that commercial and this one.
Insurance is, essentially, risk management. All of life’s aspects are constantly at risk of failure and destruction and theft. Insurance companies provide their customers with the ability to exist in spite of that risk because they are assured that should failure or destruction or theft occur, there will be no financial cost. Of course, by buying insurance – also an aspect of life – the customer is risking the possibility that he will spend money on something he may end up not needing (ie: the aspects of his life which are insured may not fail or be destroyed or be stolen within the term of the insurance contract, and thus he will not need to exercise his contractual right to be reimbursed by the insurance company). The reason why a person buys insurance for one or a number of his life’s aspects is because he judges the risk of failure or destruction or theft of those aspects to be greater than the risk of “wasting” money on insurance he will end up not needing. The only way this works – the only way this is beneficial (read: profitable) to the customer is if he assesses the aspects of his life which he wishes to insure correctly. If he assesses them incorrectly he will either buy no – or too little – insurance, suffer failure or destruction or theft of those aspects, and then suffer financially as well because he will be required to correct the damage; rather than the insurance company. Or, if he assesses his life’s aspects incorrectly by purchasing too much insurance, he may suffer no – or too little – damage to those aspects, and then suffer financially because he will be paying for a perogative which he does not need.
Another factor – one which is almost never considered – is that the insurance company doing business with the customer must also make these assessments of his life’s aspects. If it assesses them correctly, the amount of damage caused by failure or destruction or theft will reflect the premiums they received from the customer, and they will be able to reimburse him while also profiting themselves from the agreement. If they do not assess them correctly – if they ask him to pay too small of a premium – when the failure or destruction or theft occurs, the amount that they will be contractually obligated to pay to their customer will be more than they needed to receive from him and they will lose money. Similarly, if they overassess the risk of failure or destruction or theft – if they ask him to pay too large of a premium – when the failure or destruction or theft occurs, this fact will be brought to the customer’s attention and he will demand to renegotiate or stop doing business with the company entirely.
In other words: it is in an insurance company’s financial self-interest to “put members first.” To to make sure that he isn’t being “robbed” (ie: paying unnecessarily high premiums). That is how they make a profit. If an insurance company writes policies which does not take into account the interests of it’s members, it will fail to meet the interests of it’s shareholders. Members’ interests and shareholder’s interests: there is no valid distinction between the two!
Why, then, does Nationwide present this invalid conflict between members and shareholders as if it were implicit in for-profit business? The reason is two-fold. First, the public is soaked in altruistic and egalitarian sentiment. Because most people in the culture are altruists or egalitarians, when a customer incorrectly assesses the risk of failure or destruction to his life’s aspects which he wishes to insure, and (voluntarily) buys the incorrect amount of insurance, the negative consequences of this are automatically blamed on the insurance company. Because the insurance company is “big” or “wealthy”, the average member of the public assumes that the insurance company is solely responsible for this (ie: the customer is not, to any degree, responsible for evaluating his own life and bringing that to the negotiations). In other words: the “big” and “wealthy” insurance company – because it is big and wealthy – is, according to altruism and egalitarianism, morally responsible for doing all of the leg work that is involved in establishing proper terms for a given agreement. Thus, if improper terms are (again, voluntarily) agreed to, and negative consequences to the consumer occur (and occur to the insurance company also, as is much more often the case than altruists and egalitarians wish to acknowledge), it is necessarily because the insurance company was “greedy”, “heartless”, “inhuman”, “money-grubbing”, “selfish.” According to altruism, to not take care of someone (to not “put him first”) isn’t morally neutral (let alone morally good) – and isn’t even just morally wrong – but criminal.
But wait, Nationwide is a big insurance company (and the fact that it’s a mutual, instead of an equity, company doesn’t change that)*. Why would it wish to perpetuate the misconceptions surrounding the nature of insurance caused by altruism and egalitarianism? The answer is the second, interrelated cause of the existence of this commercial: pragmatism in a mixed-economy. What Nationwide is attempting to do in this ad is to appeal to the public’s short-term, unthinking, emotional urges in order to gain for itself new business in the short-term. They are attempting to portray themselves as a unique insurance company – one that exists not for self-interested purposes, but purely for altruistic and egalitarian reasons. By appearing to be a servant of the customer – as opposed to a partner with the customer in the “business” of managing the risks inherent in the act of being alive (an arrangement which they smear as being predatory on the part of the for-profit insurance companies) – they hope to gain a short-term edge over their competition. They are trying to win the business of that vast portion of the public which believes that the primary purpose of having a business is to serve others, not oneself.
Why would a company like Nationwide risk inculcating even more altruistic, egalitarian, anti-business, and anti-self-interest sentiment in the general public when, given the general public’s ability to influence public policy, it is not in their long-term self-interest to do so? The answer is that, from the perspective of just one company in a large industry, or just one industry in a large economy, there is no “long-term.” In a mixed-economy such as the one that exists today – where there are some freedoms and some controls – there is no way for an individual company like Nationwide to know what the business environment will look like years, or even months, from now. In the future, they could very well be the victims of some new regulation or tax that benefits a competing business or industry or social segment, and so with that in mind, they are going to do whatever they must – up to and including distorting the very nature of the industry they work in – in order to make sure that it’s someone else who suffers right now.
The irony of all of this, of course, is that while Nationwide, in this commercial, presents the false dilemma between serving the interests of members and the interests of shareholders in a relationship that is actually beneficial for both, they are doing so precisely because the real dilemma that exists between “us” and “everyone else” in a mixed-economy pressures them to do so.
*To be clear: there is nothing at all wrong with a business model that doesn’t have shareholders – it’s smaller operating costs may attract customers because they can charge lower premiums and/or offer better service – but that doesn’t change the fact that it’s still a for-profit business (it’s just the the profit is in the form of better pay for the management and employees, instead of shareholders that were funnelled through Wall Street). If that is the company’s competitive advantage, that’s fine – and they should proudly talk about it in their advertisements – but not by disparaging their competition’s business models as immoral, and tantamount to illegal.
These are two excellent, beautifully-produced, distinctively-styled examples of what a commercial should be. There are countless examples of commercials inappropriately attempting to emotionally manipulate the viewer (many of them have been documented on this website), but these are two instances of appropriate manipulation (and yes, while the word “manipulation” has a negative connotation, it is just a connotation and therefore shouldn’t preclude the objective use of that word where appropriate). Succinctly, the theme of both commercials is the direct connection between the quality of one’s work and one’s philosophical values. In the case of the Allstate commercial, this is done through an emphasis on the benevolent universe premise, and in the case of Barbasol’s through the dramatization of pride. By promoting good (ie: correct) philosophical values in the process of the promotion of material values, they are showing the consumer how the two do not exist separate from one another, or contradict one other, but in fact require and strengthen each another.
Both companies are assuming that that theme – as well as the particular themes of their respective commercials – don’t need to be stated openly – in academic philosophical terms – since each commercial is clearly just a reminder of a well-known (and therefore well-understood, because of many previous advertisements) brand (which, in that context, is itself a legitimate “informing of the consumer” and therefore satisfies advertising’s primary purpose). While it is true that these commercials lack any directly useful, particular information about the companies’ products and services, and therefore do qualify as emotional manipulation – it is appropriate emotional manipulation because unlike commercials which attempt to get the viewer to reach the wrong conclusion, these hope that he reaches the right one.
What Allstate and Barbasol expect to happen – why they expect these commercials to be successful – is that they will directly touch the emotion which was produced by the thought that any other, previous, directly-informative Allstate or Barbasol created – even if that thought was never identified, organized, and consciously retained as an explicit belief. What both companies hope to do is to validate that emotion by giving it acknowledgment (the psychological term would be “visibility”), and thereby induce the viewer to more seriously investigate the cause of it – and thereby form that conscious belief to compliment the emotion. To possess a conscious and emotional – as opposed to merely an emotional – affinity for the Allstate and Barbasol brands (as opposed to just one of their particular products featured in a more informative advertisement).
While, technically, it is true that what these commercials are selling is not “Allstate insurance policies” or “Barbasol shaving cream” as much as “Allstate the company” and “Barbasol the company” (a tactic employed, for example, by Jack in the Box some time ago, which this blog criticized), because of the context in which it is being done (both are widely-known and familiar brands), in this case there is nothing wrong with that. The reason why is because there actually is a direct connection between having the correct philosophical values and producing a good product or service. The customer can be reasonably certain that if these are the types of people he’s dealing with, even if he isn’t completely informed inside and out about the nature of what he’s considering purchasing, his cursory judgment will be sufficient and that he will be getting his money’s worth. Provided that Allstate and Barbasol then lives up to the philosophical standards each company professes to have (which they must, in order to produce a good product), having a philosophically-healthy – and therefore rational decision-making – consuming public would definitely be good for business over the long-term.
The tactic employed in these commercials is distinctly different from what Jack in the Box in it’s commercial where they were asking the viewer to prefer Jack in the Box’s products not because the “people of Jack in the Box” (as exposed through their twisted sense of humor) were actually likeable, but merely because the (equally twisted) viewer found them likable when he shouldn’t have. Jack in the Box was attempting to capitalize on the viewer’s need to fill the emotional void documented in this website’s criticism, whereas Allstate and Barbasol are here capitalizing upon the assumption that the viewer is already emotionally full (and both companies are willing to risk having him remain indifferent to, or even become hostile to, their companies should he not be). It is an exceptionally bold and noble outlook in today’s cultural landscape, and it should be recognized and applauded.
Few admit it, but most know it: America’s political atmosphere is nearing a state just as precarious as the one that lead to it’s founding as an independent nation. More exactly, instead of most knowing it, they feel it. That is what this commercial preys upon.
An unidentified feeling is, by nature, vulnerable. It comes into existence as the result of disparate thoughts about concrete events, and because they are never integrated into a conscious conclusion, they evaporate before they can be. Instead, the subconscious does it – integrating them into a feeling that stands in for the thought. This feeling is vulnerable because it is possible for any semi-plausible explanation to come along and take credit for it – thereby redirecting it towards something which actually undermines it, or extinguishes it altogether.
This commercial’s message is the following: “Look, even Paul Revere was more concerned with having a good time than he was with saving his freedom – so don’t feel so bad about what you’ve been doing. He got it done. You will too. Somehow.”
Most contemporary Americans, correctly, feel concern about the state of their union – and they also, correctly, feel a certain amount of guilt and responsibility for having let it occur. What GEICO is trying to do here is provide them with a moment’s respite from these feelings (from reality) by making the viewer feel as though his feelings of concern and guilt are unnecessary. GEICO doesn’t contest that the feelings are being felt, but simply that their source is not the precarious state of the nation and the habitual apathy of the average American (ie: it tells them, in effect, that the state of the nation isn’t precarious afterall – The Revolutionaries were able to accomplish their goals even while “apathetic” – so how how apathetic were they, really?). GEICO would would be willing to have you believe that if Paul Revere had been able to make a phone call warning about the enemy’s movements, that he would have used the extra time afforded to him not to do something else in service of the cause, but just to play games.
Of course, in response to this criticism, this commercial’s defenders will say that it’s just a joke. That nothing is meant by it. On a certain level that’s true. GEICO is certainly not saying that America, right now, needs a revolution, or that the American people don’t care at all (to the point where GEICO would expect them to play games if their country were in the midst of revolution), but that’s not what this commercial is really about. What makes this commercial pernicious is not that it pokes good-natured fun at a beloved figure from American history, or that it celebrates the life-enhancing achievement which is the cellular telephone (there’s nothing wrong with doing those things in the correct context), but that it attempts to capitalize on a feeling that should be investigated (and in doing so makes investigating it impossible).
The fact is that America is speeding towards disaster. Towards a point where revolution will be necessary. The fact is that Americans are apathetic about it. Desperate to bury their heads in the sand and “just have a good time.” The feelings that are “addressed” in this commercial refer to (because they stem from) facts. Facts which need to be identified (and the first step is identification of the feelings that refer to them) so that corrective action can be taken before more desperate, revolutionary measures are the only option.
This commercial, instead, takes those feelings and redirects them towards the very things which caused them in the first place: evasion, denial, apathy. Instead of dealing with them, GEICO is telling the viewer that he should just laugh about them; and that that – somehow – constitutes dealing with them. GEICO wants the positive feelings brought about by “dealing with” those feelings of dread, worry, and guilt not to spur disaster-averting change (via a renewed self-confidence and motivated vigor in the American people), but to create endearment towards GEICO (for having provided the “balm for a guilty conscience”) so that they can sell more… car insurance(?!).
This type of short-term, pragmatic marketing is not only obviously destructive to the Americans who, affected by it, continue to let their country go down the drain, but also to GEICO itself; because it – being a private, for-profit business – depends upon a free, right-respecting political atmosphere just as much as anyone does for it’s long-term success. Shame on them.
This commercial is an example of the fallacy of the frozen abstraction. It treats one moral code – altruism – as the moral code, and thereby precludes the existence of any other. It also treats one type of way that money can go from one person to another – stealing – as the only way money can do that, and in doing so conflates trade with stealing. The two conflations – altruism as morality and trade as theft – are interrelated, of course. If you hold, as the altruist does, that it is your moral obligation to help others, then if you do not (or if you do, but compensate yourself for it) then you are stealing from them.
The people who constitute “the banks” are not their customer’s slaves. They exist to serve their own ends, and they do so by offering a service and asking to be compensated for performing it. Why is this immoral? Altruism has no answer. It simply asserts that it is, as if it were self-evident. But that assertion is internally inconsistent. If it is immoral for “the banks” to take a fee for holding your money, since they (allegedly) could just hold it for free – as this commercial demonstrates – then why is it moral for you to benefit from them by giving nothing to them in return? You could just hold it yourself. If “the banks” are evil and selfish when they ask to be compensated, would you not be equally evil and selfish if you were to receive their service for free?
What this commercial really demonstrates is not altruism, but benevolence. To agree to help a stranger in an emergency – even if there is no clear benefit to oneself – is far, far different than to, for example, do so day-in and day-out, in perpetuity, for the rest of one’s life. One is benevolence, the other is altruism. The man in this commercial did not agree to watch the money because he felt morally obligated to sacrifice he time for another. Just as banks do when they agree to take you on as a customer and hold your money for you, this man actually did what he did for selfish reasons (even if he were to say otherwise when directly asked). His moral obligation was to himself – which is why he helped someone else. Benevolence towards others presumes that people are basically good. Basically worth one’s time and effort in an emergency (and certainly someone would have to be dealing with an emergency in order to ask a stranger to hold $100,000 in cash for him). It presumes that emergencies are not the norm of life, and so to help another when they happen is only to protect a value (even if a very indirect one, as in the case of a stranger). It’s an investment, basically. Just like a bank’s investment in you when it agrees to do business with you. It expects a mutually-profitable outcome – and so do you when you agree to help a stranger in an emergency. The stranger gets to (hopefully) resolve his emergency, and you get to live in a world where there is one more decent, productive, unharmed person walking around (to say nothing of the “karma effect”, which refers to the fact that if you wish to live in a worlds where people are courteous and benevolent towards you, you must be that way towards them).
The fact that a bank – Ally – is willing to participate in twisting these already very twisted concepts even further – and to ad on an extra layer of distortion by explicitly claiming that not only is trade immoral, but that it’s also basically stealing – is despicable. They have committed treason to the very morality – the moral code of rational self-interest (not altruism) – which is the basis of all business simply for the sake of some short-term approval by an altruist public, and therefore a bump next quarter’s revenues. Whatever extra, added regulatory and financial oppression Ally – as part of the business community – experiences as a result of an ever more altruistic public voting for anti-business politicians, they will have no right to complain. They will have brought it upon their own heads.