Scarcity vs. Abundance in GEICO Ad

10

Is abundance better than scarcity? Lately, insurance giant GEICO has been running an ad comparing their advantages to “the other guy.” They illustrate it with a stack of ten chocolate chip cookies for GEICO while their unnamed competitor gets just one cookie.

GEICO cookie ad

At first glance, the imagery seems perfect. Everyone likes cookies, and, the ad implies, you get a lot more cookies when you buy your insurance from GEICO. And, the ad may indeed work exactly as intended.

The Ironic Twist

Here’s the irony, though… Can you guess what the classic experiment demonstrating the power of scarcity used as the key prop? Yep, chocolate chip cookies!

In 1975, scientists at the University of Virginia and the University of North Carolina had subjects evaluate chocolate chip cookies that were abundant (10 cookies in the sample) or scarce (just two cookies). The actual cookies were identical.

Scarcity vs. abundance paradox plays out in GEICO ad. #Neuromarketing #influence Click To Tweet

The subjects were asked, if given the opportunity, whether they would like to eat more cookies and also how attractive the cookies were.

The experimenters varied the conditions – in some cases, they merely showed the subjects the two sets of cookies. In other cases, they explained that the smaller group had been depleted either due to high demand or an accident.

One could predict that social proof (“other people wanted this batch”) would make the cookies that were scarce due to high demand would be more desirable. The scientists found, however, that in every condition the two cookies were considered more desirable than the ones in the group of ten. The cookies were the same, but manipulating scarcity made the subjects prefer the smaller group – sometimes by a huge difference.

Scarcity in Advertising

Many advertisers make scarcity a key element in their marketing efforts. Visit a travel site to find a hotel, and you’ll see overt scarcity and urgency ploys like, “Only 2 rooms left!” and “Booked 17 times in the last 24 hours.” Here’s an example from Booking.com:

Typical listing, booking.com
Booking.com

Countdown timers, expiring deals, “limited quantity” banners, and many other techniques inject scarcity into an offering.

Scarcity cues increase conversion. #Neuromarketing #CRO Click To Tweet

It’s clear, though, the GEICO ad folks didn’t have scarcity on their minds when this ad was created.

Great Ad, or Scarcity Backfire?

What do you think – does the GEICO ad work as intended, or might it be less effective due to the scarcity effect? The original experiments used groups of ten and two cookies; the GEICO ad has ten and one. Does that make the single cookie even more desirable? And, on the other hand, is a pile of ten cookies still much better than a lone, more desirable cookie?

Leave your thoughts in a comment!

Is this GEICO ad at odds with famous cookie experiment? #Neuromarketing Click To Tweet

You might also like More from author

10 Comments

  1. Daniel Reyes says

    I think the Geico Ad serves it porpuse. It is not made for you to desire to buy Geico, but to realize that you get more “delicious” things with them than the others. The times your croc brain gets rewarded will be more, more pleasure times every time you eat a cookie.

    The UV research objetive is different. They want to know who makes you move faster. It is not that the people desire more the cookies when scarse, but instead they move faster to get the cookie because it will be running out. Even if you’re not hungry now, you know you will, so you take the cookie now and save it for later. If the jar is full, you don’t have tu hurry up, you’ll wait until you’re hungry and then go get it.

  2. Jon says

    From a marketing standpoint, I’m not sure how I would react to seeing this ad had I seen it previous to your blog post. I know for sure that it makes me feel hungry. At the same time, I’m trying to stay away from sweets right now, so I am actually a little grossed out by the ad. So, based on my current reality, Geico is a turn off to me. I don’t even want to think about eating cookies, so the ad makes me mad, and like Geico even less.

  3. Tony Mariani says

    How many really remember the cookie test of 1975? Didn’t cross my mind in looking at the ad.

    1. Roger Dooley
      Twitter: rogerdooley
      says

      *I* remember it, Tony! I wasn’t aware of it back when the work was done, but the study underpins a lot more research on the scarcity effect. I’ve got a slide that looks a lot like that one in many of my speeches, only it’s to show that the one cookie is perceived as more desirable and tasty. That’s why the ad struck me as amusing. It’s not all that bad, and framed differently it makes sense. “Do you want a full box of cookies or a box with one left” would almost always get a “full box” response IMO.

  4. Kat Welsh says

    When I first looked at the ad, I noticed a couple of things:

    Geico is listing several specific attributes but not listing the attributes of the competitors. I know nothing about car insurance. But I do find it hard to believe that Geico is the only car insurance company that has licensed agents available 24/7. And “2nd largest auto insurer” is not a good attribute. The consumer isn’t interested in the largest, they’re interested in the best. And even if they WERE interested in the largest, Geico has just told us that there is another, larger insurer!

    But the main thing that stood out to me is that the Geico cookies are in a giant stack, which is not how I’m used to eating cookies. The competitor’s cookie is just lying there in the position to which I am accustomed. It actually looks more delicious because it looks like the beginning of other enjoyable eating experiences I’ve had. Although my brain appreciates the aesthetics of the lovely cookie tower, my stomach cares only about the nomnomnom.

    1. Roger Dooley
      Twitter: rogerdooley
      says

      I agree that the attributes that GEICO touts are not all that distinctive, Kat. I think they assume the reader will do a quick, System 1 processing of the ad without studying the details carefully. Interesting take on the relative edibility of the two groups!

  5. Nick Kolenda says

    Pretty ironic ad illustration. Good eye for catching the coincidence, Roger.

    I think the two situations are inherently different.

    With the scarcity experiment, the number of resources (i.e., cookies) are inherently finite. In a sense, people are competing to acquire them.

    On the other hand, the Geico benefits are intangible. They’re essentially infinite. So there is no competition for acquisition. And there’s no element of scarcity.

    However, I DO think the ad backfires. Even though the situations are different, the cookie metaphor bridges the gap. It transforms those intangible benefits into tangible and scarce resources. Upon seeing the ad, people should feel a nonconscious desire for the one cookie. Cognitively, they’ll make the distinction when they read the text. Emotionally, however, they’ll be drawn to “the other guy.” And that’s an optimistic outlook. Most people use System 1 to process ads. So most people won’t read the text to make the cognitive distinction.

    Just my two cents. Hope all is well!

    1. Roger Dooley
      Twitter: rogerdooley
      says

      Nice analysis, Nick! Thanks for sharing your insights. It would be interesting to know if GEICO actually had any test data from the ad to help firm up all of our speculation.

  6. Magnus Sherman says

    Scarcity (artificial or otherwise) invariably helps to compel people to take action. You can see in certain verticals, internet marketers being a prime culprits, that people play the scarcity card a little too frequently. Overexposure to these scarcity tactics may reduce their effectiveness. That said 9 times out 10 they still do the job.

  7. Michael Storzieri says

    Funny the first thing I feel when looking at the stack of cookies is that all those cookies on the left are going to cost me more $$$ than the cookie on the left.
    I think to myself do I need all that listed on the left for more money or will the cookie on the right give me all that I need with better value.

Leave A Reply

Your email address will not be published.