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WHARTON
Experience Vs. Evidence
Evidence-based advertising, founded on experimental studies, is the only path to improving the effectiveness of persuasive advertising procedures
Issue Date - 06/10/2011
 
Prior to the 1940s, if you had a disease, it made little difference which doctor you went to. There were so many diseases and so many conditions that doctors could not learn from their individual experience which treatments were effective. This changed when doctors began to rely on evidence from experiments. Further progress was made when medical schools began to teach evidence-based medicine. And things progressed even more rapidly when the Cochrane Collaboration for health care began in 1993. It now has 28,000 contributors to serve doctors and patients. Evidence-based medicine has had enormous beneficial effects on the average length and quality of life.

Management is in a similar situation today as medicine was prior to the 1940s. Managers rely on their own experience and on the experience of other managers to decide what actions to take. This works well in simple situations in which they get good feedback. However, many management problems are complex & uncertain, and in these cases, eight decades of research have shown that experience fails. Few people are aware of this research, and, when told, most believe that the conclusion does not apply to them.

When doctors learned that some of their treatments were based on incorrect knowledge or procedures, most reacted as people often do when presented with disconfirming evidence about important topics: They became upset and attacked the credibility of the source. Nevertheless, the pressures are strong to follow best practices in health care. Many patients are well-informed about the possible diagnoses and treatments when they go to their doctors. Many doctors have been sued for failing to adhere to evidence-based procedures.

I have been fascinated by evidence-based management since I began my career in 1960. Many useful management techniques and principles have been discovered. However, to my dismay, this knowledge was typically ignored by managers.

 
In 1980, I visited my friend Paul Westhead soon after he became coach of the Los Angeles Lakers. After spending a day with him as he took the team through practice, it dawned on me that if we could apply management science techniques to the Lakers, it might lead businesses to follow suit. Paul was enthused about the project, but the owner of the Lakers, Jerry Buss, was not. (The Lakers won the championship that year, without my help.)

Nevertheless, evidence-based methods are currently being used successfully across the sports world, by teams including the Dallas Cowboys, New England Patriots and Philadelphia Flyers. Half of the 30 NBA teams had at least one statistician on their staff in 2009-2010. Those teams won 59% of the 962 games they played in the first half of the 2009-2010 season, while those teams with no statisticians on staff won only 41% of 958 games.

Sports isn’t the only field in which managers can benefit from using evidence-based principles. Over the past 16 years, I have been developing an evidence-based approach to advertising. Many of these principles are not obvious, and some are counterintuitive. You can see this by taking the five-minute quiz, “Test your advertising IQ,” at Adprin.com. In that test, few people do better than guessing.

Here are some examples of evidence-based principles that are often violated by advertisers: 1) Do not use odd prices when you want to connote quality; 2) Do not mix rational and emotional appeals when you have something to say; 3) If resistance is expected, use indirect conclusions when the arguments are strong and obvious; and 4) Use comparative advertising for brands that have clear comparative benefits and a small market share.

In all, there are 194 such principles described on Adprin.com. Academic research is the primary source of knowledge about these advertising principles. Until now, this useful knowledge has been dispersed in academic journals, usually written in an obtuse manner. Adprin.com unlocks this source of knowledge and presents principles written in everyday language. As these principles become well-known, pressure to use evidence-based procedures will come from advertisers newly able to judge the ads developed by their agencies. For example, by using the AdPrin Audit, they can, in less than an hour, rate the effectiveness of an ad and then make operational suggestions for improvement.

As with medicine and sports, reading books by successful managers or seeking consensus among managers cannot lead to progress. Evidence-based advertising, founded on experimental studies, is the only path to improving the effectiveness of persuasive advertising procedures.
Amir Moin           
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