By Dan Monheit, 25.6.21
Question submitted by Jonathan, Lightsview
The day trading/commodity trading/cryptocurrency trading game is a wild ride Jono, but you already knew that, didn’t you? You and the nine million other Aussie investors who truly understand the thrill of the short, the rush of an exotic derivative or the pure joy of using your Trezor to buy an NFT with Ether. No wonder you’ve been hitting refresh like a sneakerhead on drop day.
Until now. Now things are different. That folder on your home screen — the one that got all the action in the last 12 months — it’s looking a little lonely, isn’t it? Sure, you’re probably just ‘too busy’ to check where things are at these days. Or maybe you’ve realised that logging in at the wrong time can ‘jinx’ your balance. It’s possible.
It’s also possible that the smoke alarm batteries will magically recharge, that your sore tooth will fix itself and that at some point, that weird smell will just go away. Right?
To find out, let’s dig a little deeper.
The Ostrich Effect refers to our tendency to avoid negative information. Instead of facing the facts, we choose instead to ‘bury our heads in the sand’ (fun fact: ostriches don’t actually do this). By pretending that the information doesn’t exist, we get to hide from the fallout of any bad news and avoid all those unpleasant, ‘icky’ feelings we fight so hard to keep at bay.
The seminal ‘Ostrich Effect’ study comes from Carlsson, Lowenstein and Sepi in 2009. As the world entered a deep financial crisis, the team set out to study how often inventors checked the health of their portfolios. Over a four year period, the researchers found that daily logins were consistently and significantly higher following good news (the market’s gone up! 🎉) compared to bad news (the market’s gone down! 💩).
Rationally, having the most up to date information — no matter how good or bad — helps us make better financial decisions. Emotionally, it’s a different story. Why get reminded about the $150k you lost before breakfast if you don’t have to?
For products and services that customers would rather ignore (think financial counselling, weight loss products or prepaid funeral services), look at ways to demonstrate how avoiding the issue will be far more problematic than confronting it.
Beyond this, brands can reframe negatives as positives, removing the ‘ick’ factor and improving permissibility. Consider the impact of switching out ‘guidance through bankruptcy’ with ‘achieving financial independence’. Same service, completely different feeling. No ostriches required.
PS If you missed the last edition, you can still check out why waiters don’t write down your order here.
Bad Decisions Podcast
Learn more about Ostrich Effect on episode 28 of the Bad Decisions podcast.
Got a question?
Is there something you’ve always wondered about?
Send it through to AskDan@hardhat.com.au
Want more? Check out Dan Monheit’s write up in Advertising Week on The Creative Lens with Dan Monheit.