How Marketing Creates Reality | Nir Eyal (Hooked)

Nir Eyal (0:00)

Your marketing and advertising is creating the consumer experience.

Tim Soulo (0:05)

Would you say that people want to be lied to?

Nir Eyal (0:09)

People who took the placebo, knowing it was a placebo, had the same effect as the leading prescription medication. If you go to Amazon right now, you will see for sale pills filled with nothing, and you will see underneath that listing, five star reviews for fast acting relief.

Tim Soulo (0:26)

It's a great example of the value of marketing, not just paying to get a product, but you're also paying to feel something.

Nir Eyal (0:32)

The biggest revelation is that it's not just about the product itself. Everybody has a good product out there, but what oftentimes differentiates is not just the quality of the product, it's also expectations driven by beliefs. Who knows you can't spell a belief without a lie.

Tim Soulo (0:51)

Nir, welcome to Ahrefs Podcast.

Nir Eyal (0:53)

Thank you, great to be here.

Tim Soulo (0:54)

So there's a common narrative that marketing is just manipulation and lies. Because marketers, what marketers do is they try to make their product seem better.

But in your most recent book, Beyond Belief, you're arguing that little lies of marketing are actually creating the reality for customers. So tell me more about that because I think it's a very interesting idea.

Nir Eyal (1:18)

Sure, yeah, I think marketing and advertising specifically kind of gets a bad name as something that is pushy and is attention-grabbing and it's just money-grubbing. And I think what people who take that rather unsophisticated view of marketing and advertising don't understand is that the role of advertising is not just to increase awareness. That's kind of the traditional view. You know, here I'm selling whatever product everybody should know about and go buy it.

But there's something that occurs in good marketing and advertising that the average person doesn't realize, which is that good advertising doesn't just tell the user about the product. It incepts how the user should enjoy and experience that product. And this is what I call the experience loop. So it goes believe, anticipate, feel, confirm. That it turns out that when we have certain beliefs about a product that are incepted through the marketing and advertising of the product, it changes actually how we experience the good.

And I'll give you a very basic example on one axis, and then I'll give you a more sophisticated example in the real world. So the research side, there was a study done by a former colleague of mine at Stanford by the name of Babashev. And he put people into fMRI machines. fMRI machines track blood flow in the brain so we can see which area of the brain become more active during certain stimuli. Now, in the fMRI machine, as they were scanning people's brains, they asked them to try two kinds of wine. The first wine, they said, this is a very cheap bottle of wine. Tell us what you think of it. And people said, it's all right. It's a little harsh on the finish. I'm not a big fan of this wine. Okay, no problem. They took a sip of water. Now we're going to give you another wine.

Now, this is a very expensive bottle of wine. What do you think of this bottle of wine? They tasted it. Oh, wow, this is very complex. I can taste the notes of berry and oak and dirt. I don't know what wine snob say.

And it turns out that people said they liked the more expensive wine much more. And of course, the trick, there's always a trick. The trick was it was the same exact wine. Okay, same bottle of wine. Completely different experiences. Now, it wasn't just the people said the more expensive wine tasted better. They could see because they were tracking blood flow in the brain that the areas associated with pleasure and reward became more active when people thought they were getting the more expensive wine, even though it was the same exact wine. So they weren't lying when they said they liked it more. They actually felt it was better. Why? Well, one of our core beliefs about the things that we consume is that the more expensive something is, the better it should be, right? Very basic fundamental assertion that higher quality comes at a higher price. So that belief made the wine actually taste better. And we see this again and again and again. We know that there is an advertising placebo effect. That, for example, we know that when we tell golfers that a particular putter was used by a famous celebrity golfer, they actually putt better.