Are you looking for ways to create a deeper connection with your audience? Are you an e-commerce brand keen to sell more products at higher price points via mobile advertising? Read on to find out how understanding the psychology of the endowment effect can help your video marketing strategy.
TL;DR – watch a short snippet about the endowment effect from a Video Marketing Meetup I was invited to speak at.
Do you feel more connected to #videos when you watch them on your phone? The Endowment Effect is the reason behind it!ð§ Never heard of it? In this video, @jon_hurricane from @hurricanemedia explains what this is all about. Does it sound familiar?#videomarketing #marketing pic.twitter.com/EZ4ItF4yNf
— Video Marketing Meetup (@vmm_global) 12 June 2019
Why target your audience on mobile video?
“Stories that move, held in our hands.” This sums up effective mobile video for me. As marketers, we need to create compelling narratives that people want to watch wherever they are.
Videos designed for mobile are vital to reaching audiences when 75% of all video plays are on mobile devices (eMarketer). There is an increasing reliance on mobile devices with 68% of smartphone users checking their phone within 15 minutes of waking in the morning, and 30% admitting to feeling lost without their phone. 76% of those who search on their smartphone for something nearby visit a related business within a day and 28% result in a purchase. (Google)
How does mobile video affect your audience?
How does the fact that our audiences are watching videos on mobile affect their emotional impact and any changes in consumer behaviour?
Increasingly, we live our lives through our mobiles to such an extent that we have come to think of them as an extension of our personal selves. Therefore what we watch on them is awarded more significance as it’s a “part of our self”.
The second aspect of this is that when we physically touch the screen, it makes us feel that we already own it, and this is even greater if we receive haptic feedback. Therefore we’re more likely to give the item we click a higher value.
When we’re in a shop and feel a physical product, we make a connection with it, and a similar process takes place when we touch a product on the mobile screen. The physical motion of touching the object itself drives a psychological relationship between the seller and the buyer.
Our mobile phone is an extension of ourselves
It’s hard to remember, or if you’re a Gen Z imagine, that before mobiles, we kept informed about phone numbers, dating, and holiday memories in our heads or with physical notes and photos, but now we store everything on our phones, and we use our mobile to arrange our social and working dairies and help us get from A-B with Google Maps. In fact, for many of us, we panic if we can’t find our phone for a moment.
Philosophers, Andy Clark and David Chalmers, first wrote about the extended mind concerning mobile phones back in the 1990s. They argued that our mental state is not just formed in our head, but stored in the digital world. Our phones and digital lives are part of us psychologically, and with further customization of mobiles and new features, this is now more relevant than ever.
If you’re interested in finding out more, listen to David Chalmers argue his theory:
What does this mean for marketers?
Your audiences will view their phones as part of their identity through which they gain their sense of self. When brands send them messages via their phones, they may trust them more and make stronger emotional connections as part of this extended self theory. Therefore, when they watch a moving piece of brand content on their phone, they will already make a stronger connection with its messages.
The endowment effect
Ever wondered why free trials work so effectively? The endowment effect explains all. Richard Thaler, a psychologist, argues that when we don’t have something, we need to work to get it. The transaction involves effort and time. But once we have a trial of a product at home, we now value it more as we’ve made the initial transactional effort and now we can sit back and enjoy the fact that we do need to do anything more.
What does this mean for marketers?
When we’re watching videos of products on our phones, we feel that we already own the things because we’re holding them in our hands via the mobile device. When we touch the screen, it plays a trick on us, and we think that we already own it, and therefore value it more highly.
Many studies demonstrate this endowment effect. For instance, consumer psychologists, S Adam Brasel and co-author, James Gips tested the hypothesis of the endowment effect. They assessed buyer behaviour whether using touch devices (mobiles, tablets) and non-touch (laptops), finding that the endowment effect was stronger on the touch devices.
People who bought products on their mobiles were only willing to sell them if they got more money for them than they had paid. The endowment effect was most significant with tactile products, such as a cashmere sweater, and on the subjects’ own phones, rather than borrowed phones.
Therefore for marketers, spending your advertising budget on videos delivered on mobile phones for your most tactile products could help you deliver a greater return for your money.
Understanding the psychology of our consumers, get the right video strategy
For me, it’s essential as marketing experts that we know why video works so effectively as it helps to guide our video marketing strategy and the content that we create to engage our target audiences. The endowment effect is an important one as it shows that people value and make connections on their mobile devices – even to the point of paying more for the items they buy.
If you’re looking for help in creating your video strategy, do check out my book, Video Marketing Strategy and enjoy your 20% discount as a Hurricane blog reader.