Ads for high-price vs low-price products

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📝 Context

Topics: Ads | Messaging & Copy
For: B2C 
Research date: November 2020
Universities: Emlyon Business School, Erasmus University, IESE Business School

You’re working on a new ad campaign for your travel agency, but can’t decide whether to focus your ads on:

• Top destinations and the experiences people can have there

• The benefits and features of your service, such as zero cancellation charges, affordable packages, and family-friendly excursions

Science says that your price point, and the quality you offer, are key factors in deciding whether to prioritize emotion or information in your ads. 

P.S.: Your audience’s mood when they see your ad also matters. Simple, information ads work best when people are busy or in a hurry, while emotional ads are more effective for people who are relaxed.

📈 Recommendation

If you’re selling an expensive, high-quality product, emotional ads are most effective to increase your sales (e.g. intrigue viewers with the elegant design of your product, or show a family enjoying a beautiful moment with your product).

If you’re selling an inexpensive, low-quality product use informational ads to increase your sales (e.g. explain features it comes with, the price and possible financing options). 

If you’re trying to create a buzz about your product (e.g. people talk about the item even if they’re not buying it), emotional ads are more effective.

🎓 Findings

• Informational ads drive sales for less expensive products, or those with low quality ratings. Emotional ads drive sales regardless of quality ratings, as well as more searches. Ads can be both emotional and informative, although creatively it’s difficult to do both well at the same time.

• Researchers analyzed 2,317 TV ads for cars, sales data for 15 years as well as search trends for 7 years, and found that:

  • Informational ads drove more sales for cars less than $36,000 or those with lower quality ratings.

  • Emotional ads were especially effective at driving sales for high-priced and quality cars

  • For lower-priced cars, emotional ads generated more online searches of the product, but informational ads were more effective at driving sales

🧠 Why it works

• When we’re looking to buy a low-priced or low-quality item, we often have doubts about the product. Information from ads can help dispel this (e.g. we assume the car has bad mileage, unless the ad tells us otherwise).

• In contrast, we interpret a high price for a product to mean it is of higher quality, so we would already expect that a car has good mileage without being told. 

• When we see emotional ads for a product, it generates feelings towards the item, making us see it more positively and value it more.

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✋ Limitations

• The research looked at TV ads. It’s likely, but still needs to be tested, whether the effect works the same way for digital ads or other formats (e.g. audio).

• The analysis was on the automotive industry. That makes the effect more likely to hold in other categories in which people are likely to research extensively before buying (e.g. electronics). The effect may be weaker or different for low involvement purchases (e.g. snacks).

• The research focused on established brands (e.g. BMW, Toyota). The effect may work differently for new brands, especially as customers may not have previous perceptions of the quality of their models.

👀 Real-life example

Premium suitcase brand Tumi focuses heavily on the features of its Tegra Lite suitcase, including its build and durability.

❌ Issue: Priced at over $1,000, this is undoubtedly a premium travel suitcase. Would features alone be enough to justify buying Tumi’s travel case compared to American Tourister’s Westridge Hardshell set of 3 for less than $200? Probably not.

✅ Solution: Tumi should focus on emotional appeals in its ad. To do so, they could:

• Show the suitcase being used in a way that triggers emotions, for example:

  • For a business audience, associate it with confidence. Show a model in a suit confidently and successfully travelling to meetings

  • For a leisure audience, show a couple or family travelling to a high-end resort in luxury vehicles

• Alternatively, show a hand holding the suitcase handle from the viewer’s point of view, while using it, to help viewers better imagine themselves using the product. Or position the suitcase to seem grabbable to viewers (e.g. handle pulled up and facing towards the viewers) to make people feel a sense of ownership of the item.

• Use a metaphor to describe their product (e.g “Your treasure vault on wheels), or the experience of travelling with it which can make their ad significantly more memorable to viewers a week later.

🔍 Study type

Market observation (analysis of $11.3B ad spent for 2,317 TV ads for cars, sales data for 15 years as well as search trends for 7 years)

📖 Research

The Impact of Informational and Emotional Television Ad Content on Online Search and Sales. Journal of Marketing Research (November 2020)

🏫 Researchers

• Ivan A. Guitart. Emlyon Business School

• Stefan Stremersch. Erasmus School of Economics, Erasmus University Rotterdam & IESE Business School, University of Navarra

Remember: This is a scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s how science works). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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