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Should You Be Using Scarcity In Your Advertising?

 

Should you be using scarcity in your advertising? While some people might condone this type of pressure influence, everyone from mobile app developers to web-based companies can benefit from this technique when used properly.

Today we want to discuss the technique itself along with how and how not to use it.

The idea of Scarcity

From a straight definition, scarcity is the state of being scarce or in short supply. It follows the basic idea of limited supply in comparison to unlimited wants when you look at it economically.

Most likely you have seen numerous ads that employ scarcity to varying degrees of success from “Supplies Limited!”, “Only 10 Left,” or “Limited quantity!” The concept is related to our pre-disposition to want something more when it is limited in supply. Scarcity is related in a manner to FOMO or fear-of-missing-out as people do not want to miss out on having something that others do that they cannot then obtain.

Generally speaking scarcity can be used to increase conversions with people who might make a conversion as it can help nudge them towards making a decision, whether that is for or against the conversion. This is an important distinction because scarcity does not trick someone into making a conversion but instead helps provide insistence that the decision is made quickly.

Applying Scarcity in Advertising

The idea is to frame messages properly to showcase the scarcity appeal with products. This can take a variety of forms from gains to consumers that want in demand items or potential loss to consumers who highly value rare or unique items.

  • In demand – This works with items that are highly sought after for customers that want what everyone else is getting. For example, ‘over 1 million sold’ is a slogan that shows something is in demand. ‘The number one downloaded app this month’ showcases demand. By then also stating that you have ‘only 10 left’ or ‘almost sold out’ you use scarcity to show that this in demand item is almost gone.
  • Unique items – Unique items are often for unique people that value having one of a few. Key phrasing with messages here include ‘limited edition’ or ‘limited supply’. This is also known in some circles as the snob effect where people want what other people can’t have.

After choosing the framing of the message based on your primary type of customers it is a matter of then using phrases and messages within your ad space. Placement is important along with font and color palette to make sure the message stands out properly.

How not to use Scarcity

There are a few examples where advertising inadvertently uses scarcity in an ad campaign and it actually runs counter to the point of the campaign. There is a Geico ad that uses cookies to demonstrate how great Geico is compared to the competition. In the Geico stack they have 10 cookies which represent the time in business, satisfaction rating, agent availability and their size. All of that is impressive.

Next to their stack was a single cookie for ‘the other guy’. The problem is that the single cookie looks more appealing because of the concept of scarcity, which runs counter to what they are trying to showcase. You need to be careful when creating campaigns to not accidently include a technique that could subconsciously affect the power of the campaign.

The bottom line is that you should be using scarcity in your advertising plan in the right situations. It is a very useful concept that can help nudge people towards making a decision which is important so that they don’t end up making that decision down the road while on a competitor’s site. Of course like with any technique it can’t be overused or it will lose some of its effectiveness.

Be sure to check back every Monday, Wednesday and Friday for great new Lounge Lizard blog articles.

 

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