Psychology Behind Advertising

The $3.9-billion argument for soft, believable persuasion

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Michael Burry, the first guy to figure out how to make money from the subprime mortgage crisis, lost out in a way.

Burry saw the crisis coming. He realized he could make money from it by buying something called a credit default swap. This would pay out big time once crappy mortgage bonds failed.

Burry ran a hedge fund. He invested much of the money in his control in these credit default swaps. But this was a massive opportunity. Burry wanted to invest more. So he tried to raise money for a new fund, which would buy more credit default swaps.

Trouble was, Burry was an awkward guy, and not great at persuading. He shocked people with his predictions of catastrophe. Nobody gave him more money to invest.

Fast forward nine months. Burry’s ideas had spread around the industry. So another investor, John Paulson, attempted the exact same thing Burry had tried to do. From The Big Short:

“Paulson succeeded, by presenting it to investors not as a catastrophe almost certain to happen but as a cheap hedge against the remote possibility of catastrophe.”

This brings up a fundamental rule of persuasion. It’s perhaps the most important rule of them all:

Only tell people something that they are ready to accept.

In some situations, this can mean you don’t start with your biggest promise, your strongest proof, or your most shocking prediction. In the words of Gene Schwartz, the best thinker on this topic:

“The effectiveness of your headline is as much determined by the willingness of your audience to believe what it says, as it is by the promises it makes.”

So did Michael Burry lose out? Depends on your perspective. When it was time to cash in, Burry walked away with an estimated $100 million. John Paulson? $4 billion.

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“Controversial search engine” may be a good business model

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Two years ago, I signed up to get emails from Newsmax. Since then, I’ve seen over 50 sponsored Newsmax emails for the same unusual offer:

“Controversial search engine goes viral — have you searched your name?”

So today, when another one of those emails arrived, I finally clicked on the ad and went through the funnel.

I didn’t search my name, but I typed in a friend’s name. I also gave the town he lives in and his estimated age.

And then I waited. And waited.

The search engine worked furiously in the background, combing through public records, government databases, and various social networks to dig up everything it could on my — so I thought — squeaky clean friend.

I say “so I thought” because while I waited, I kept getting notifications like, “You might be surprised by [FRIEND]’s criminal record!” and “You might be shocked by [FRIEND]’s dating site profiles!”

A few times, I was prompted for more info or to confirm info I had put in already. At one point, the search engine asked me whether I planned to make use of my UNLIMITED access to reports, which I would get after getting [FRIEND]’S report. I thought this was a strange question, but I answered “YES.”

Meanwhile, loading bars kept loading, time kept passing, and I kept getting more notices that I will be “very surprised” or “shocked” by what’s inside [FRIEND]’s report.

After about 10 minutes of leading me by the nose like this, the search engine finally finished. One final checkbox appeared:

“Please confirm once again that you are ready to learn the truth about [FRIEND].”

I sighed and clicked yes.

An order page opened up, giving me the option to access the report on my suspect friend (and as many other reports as I want) for $27.78/month.

I found this whole experience interesting, for a couple reasons. First off, even though this offer is unusual — it’s not a supplement or a newsletter — it’s built upon direct response fundamentals like curiosity, consistency, and continuity.

Second, I started wondering where else you could use the same business model. That model in a nutshell:

Create an online tool that takes in some personal information… churns and whizzes while it applies proprietary algorithms to secret sources of data… and finally spits out a shocking and surprising report — which is only available through a paid monthly subscription.

Off the top of my head, I thought of a tool for generating the horoscope of a person… the historical coat of arms of a family… the feng shui of a property… or an auspicious name for a baby born on a given date.

If you have other ideas, let me know. Or if you like any of the ideas above, they’re yours to use. And if you want a copywriting partner in your new endeavor, get in touch. If you can handle the proprietary algorithms, I can write up the teasing notifications that pop up while your algorithms run — and we can become the next Google together.

Captain Midnight: a perfect direct response prospect

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On April 26 1986, millions of homes on the eastern half of the US were tuning in to the spy drama The Falcon and the Snowman.

It was being broadcast on HBO, but not for long. Soon after midnight on the 27th, the picture flickered and changed. The SMPTE color bars appeared along with a message:

GOODEVENING HBO
FROM CAPTAIN MIDNIGHT
$12.95/MONTH ?
NO WAY !
[SHOWTIME/MOVIE CHANNEL BEWARE!]

This weird interruption only lasted 4 1/2 minutes, but it had big consequences.

The next day, network news picked up the story. People around the country got to jabbering about the unfairness of HBO’s prices. HBO was furious, and they put pressure on the FCC to catch Captain Midnight, whoever he was.

Several months and an investigative manhunt later, that’s just what happened.

In July of that year, Captain Midnight was arrested and exposed as a 25-year-old electrical engineer named John MacDougall. He lived in Ocala, Florida. He had a part-time job there at the Central Florida Teleport satellite uplink station.

But what was MacDougall’s motivation for this stunt?

Was he a modern-day Robin Hood?

Had he been planning this for months?

Turns out, MacDougall had a satellite dish installation business. He’d been doing real well for a few years. But then, HBO (and other paid cable channels) started giving satellite dish owners the shaft. Instead of getting HBO for free, satellite dish owners now had to pay $500 for a decoder box plus $12.95 a month.

So people stopped buying satellite dishes. MacDougall’s business tanked. He was miffed. And so, while monitoring the satellite uplink of Pee-wee’s Big Adventure, he made an impulsive decision.

He pulled up the character generator and typed up the above message. Once Pee-wee’s Big Adventure finished, he pointed the giant 30-foot dish straight at the Galaxy 1 satellite. And he jammed Transponder 23, which carried the eastern feed of HBO.

“I had no animus and I had no malice in my heart,” said MacDougall. “It was the act of a frustrated individual who was trying to get his point across to people who didn’t seem to listen.”

I thought this story was interesting. Almost as interesting as Richard Armstrong’s How to Talk Anybody into Anything. That’s the little book Richard wrote about 44 points he learned by studying con artists. Point 3 is about how con artists choose their marks:

“Look for intelligent, emotional & impulsive people”

That’s good to remember and easy to forget. Because when you’re writing direct response copy, you might feel like you have people’s inner motivations at the tips of your fingers. You might feel you can manipulate them into doing what you want. You might even feel your prospects are gullible nincompoops.

But they are not. At least if they are good prospects, like Richard Armstrong says. In order to sell big with direct marketing, you want to write to people like Captain Midnight. Intelligent, frustrated, lacking a feeling of control.

“The customer is not a moron,” said David Ogilvy. “She’s your wife.” But let me finish the story of Captain Midnight.

In the following months, HBO devised a system to identify unauthorized uplink transmissions. Congress passed a new law, which made satellite hijacking a felony. But MacDougall was charged under the old law, with just a misdemeanor, and got away with a $5,000 fine.

He still lives and works in Ocala, FL, where he continues to make an excellent prospect for bizop offers. As for his legacy, MacDougall says,

“I do not regret trying to get the message out to corporate America about unfair pricing and restrictive trade practices. That was the impetus for doing what I did; that’s the reason I jammed HBO; that’s the reason I sent them a polite message.”

General Patton and 4 top copywriters

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“The difficulty in understanding the Russian is that we do not take cognizance of the fact that he is not a European, but an Asiatic, and therefore thinks deviously. We can no more understand a Russian than a Chinaman or a Japanese, and from what I have seen of them, I have no particular desire to understand them, except to ascertain how much lead or iron it takes to kill them. In addition to his other Asiatic characteristics, the Russian has no regard for human life and is an all out son of bitch, barbarian, and chronic drunk.”
— General George S. Patton, August 8 1945

Why is Patton the most famous American military man, at least among those who never became president?

You might say it’s his wartime performance. That might be so. I’m not a history buff so I can’t say. But my guess is there were lots of other great generals in American history who never became household names. Why Patton?

Maybe it’s the Oscar-winning movie that was made about him, which had the Francis Ford Coppola golden touch. But this raises the question, why make a movie about Patton? I’ll tell you my theory.

Patton became famous because people perceived him as a true leader, and they perceived him as a leader because he was (among a few other things) so unflinchingly opinionated.

Look at the quote above. It’s so stupid. Not just by 2020 standards, but by 1945 standards. But the content of what you say doesn’t matter much as long as you say it with enough fury, conviction, and disregard for what others think.

I have another theory: I believe most people (myself included) have this empty socket in their brain. We are constantly looking for an authority to plug into that empty socket, if only for a little while. The appeal of strongmen like Patton is one manifestation of this… but so is our obsession with celebrities… or even the popularity of concerts and clubs.

All of which has clear implications for persuasion. While doable, it might be hard to get to Patton-like levels of opinionatedness and charisma in real life. But if you’re writing, say a sales letter, then you can definitely whip yourself up into the right kind of certainty and frenzy, and channel that across the page.

Speaking of writing sales letters and authority, I listened to an interesting discussion today between four top copywriters. They were Stefan Georgi, Chris Haddad, Justin Goff, and Dan Ferrari.

Odds are, you’ve already watched this discussion. But if you haven’t yet, it’s worthwhile. There’s nothing tactical being discussed on this call, but there’s a lot of behind the scenes thinking that might interest you if you’re into copywriting or persuasion. Here’s the link:

https://www.youtube.com/watch?v=ThUusBt1dIM

Machiavellian logic applied to your next sales letter

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“Because this is to be asserted in general of men, that they are ungrateful, fickle, false, cowardly, covetous, and as long as you succeed they are yours entirely; they will offer you their blood, property, life, and children, as is said above, when the need is far distant; but when it approaches they turn against you.”
– Niccolo Machiavelli, The Prince

Direct response marketing doesn’t expose you to the most noble parts of the human soul.

Fear… greed… shame… vanity… these are the lowest common denominators we appeal to reliably in order to close the sale.

Sometimes it’s clear which of these appeals you have to go with — your offer or your market simply says so.

But what if you have a choice? Are some of these snarling, slobbering, psychological gremlins stronger than others?

Well, Niccolo Machiavelli, who would probably own many direct response businesses had he lived today instead of in the 16th century, has something to say about general human nature in his quote above.

Men are fickle and swayed by the present moment, says Machiavelli. In other words, just because someone starts, say, writing a book today, that doesn’t mean he will continue to work on it next week. And vice versa. Just because a man will suffer from a hangover tomorrow, that doesn’t mean he won’t drink tonight. So let’s take that as the first axiom of Machiavellian mathematics:

Present >>> Future

Moving on. Here’s a second Machiavelli quote:

“And men have less scruple in offending one who is beloved than one who is feared, for love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage; but fear preserves you by a dread of punishment which never fails.”

What is Machiavelli saying here? Maybe I’m reading into it, but it sounds like he’s saying people are motivated more by negative emotions than by positive ones. Or in precise mathematical notation:

Pain >>> Gain

Of course, there are going to be exceptions to this. Some individuals and some markets will be immune to these nasty Machiavellian laws. After all, people volunteered to cross Antarctica by sled 100 years ago.

But don’t bet the house on it. Most of the time, if you’re in doubt, remember the two axioms above. And in particular, remember it will take an enormous amount of future gain to outweigh even a little bit of present pain.

Soothing the shame-filled sailor

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If Billy Budd is real, I haven’t met him in my 39 years on this planet.

Billy Budd, as you might know, is the eponymous main character of Herman Melville’s last novel. He’s “the handsome sailor,” which is shorthand for saying he is beautiful, brave, optimistic, strong, kind, likeable, healthy, and noble.

Quite a combination.

Not often seen.

Especially in real life.

For example, I’ve only ever come across a few people — fewer than 5, either men or women — who I thought qualified to be a real-life Billy Budd. And that was only at first sight.

Because whenever I got a chance to know these people better… it turned out they were not really “the handsome sailor.” These perfect-seeming people all had secret problems, conflicts, and scars lurking beneath the surface.

And so it is with all of us.

All of us have problems. Usually bunches of problems.

​​And along with these problems, there’s almost always shame. ​This shame doesn’t have to be conscious. But it’s there. And it’s powerful.

That’s why a hackneyed copywriting phrase crops up in so many sales letters, year after year. You might think this phrase is hokey… but it works. It soothes shame, cleanses sins, and opens up the reader to the possibility that their problem can be fixed.

Do you wanna know the phrase? Here goes:

“It’s not your fault.”

Try using this phrase in your copy in some form. And watch your conversions rise like a sail in a full breeze.

Because like I said, most of us are not handsome sailors… we’re shame-filled sailors. Not that that’s all bad. In Melville’s book, Billy Budd pays for his perfection with his life — though he dies a noble, admirable death. But who wants that?

The quick and easy marketing lesson hiding under Harry Potter’s robes

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A few days ago, I watched Harry Potter and the Philosopher’s Stone for the first time.

Odds are, you know all about Harry Potter.

But just in case, let me summarize the first 20 minutes of the movie for you:

Harry is an unloved and unlovable dork. He’s 12 years old and the most distinctive features about him are his John Lennon glasses and his Ringo Starr haircut. In other words, this kid ain’t going nowhere.

And then he gets a letter in the mail.

“You are a wizard, Harry Potter”

Within a whirlwind few days, Harry suddenly comes into talent, money, connections, plus he’s famous and good at sports. Oh — and he gets to wear some snazzy black robes.

So what’s the lesson hiding under all this?

Well, this Harry Potter fantasy is the human condition.

We are all unloved and unlovable in different ways.

We trudge on through life, smiling and putting on a brave face. But deep down, we all keep a bit of hope that we too will get a letter in the mail saying:

“All your problems have been solved, starting NOW! By a magical accident, you are now beautiful and talented and admired and by the way all your money problems have been solved from here to eternity!”

Admit it.

That would be a sweet letter to get, if you could at all believe that it’s true.

Trouble is, Hogwarts is full up for the year.

And probably next year too.

And that’s where direct marketers come in.

Because the best direct marketers will send you just such a letter, promising to take away your biggest problems, starting now — and in a perfectly quick and easy way.

So if you’re trying to sell something, think of poor bespectacled Harry Potter living under the dusty stairs in his aunt’s house, and imagine him receiving your sales pitch.

Will it transform the little dweeb into a magical wizard overnight?

Will it get him excited enough to scrape together his meager allowance so he can send for your “From Weirdo to Wizard” course?

Because if not, you’ve got some work to do, fashioning a better offer or some better marketing.

I can’t help with the offer. But if you want help with the marketing, then I’ve got a quick and easy solution for you:

https://bejakovic.com/advertorials/

The power of negative thinking

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“Just go talk to her!”

I was walking on the street a few days ago. The sun was shining, there was a cool breeze, and lots of good-looking women were out and about.

Each time one of these monsters passed by, wrapped up in her headphones, masked with her sunglasses, I would tell myself to go talk to her.

Of course, all that happened is that I tensed up.

These women on parade were too intimidating.

​​Or too busy.

​​Or too something.

In the past, I’d tried hyping myself up.

“What’s the big deal?” I would say. “She’d probably be super happy to get a compliment. And maybe you will hit it off. It could be a win-win!”

That would always get me excited. And that was all.

Because more good-looking women would pass by…

And I still wouldn’t go talk to any of them.

So a few days ago, I did the opposite. I told myself the ugly truth:

“Why not just go home? You probably won’t talk to any of these women. It’s too hard. Or maybe you’re just too weak. Or not good enough at problem solving. Whatever the reason, odds are you’re wasting your time. You should probably just head home.”

If you’ve ever read Jim Camp’s Start With No, you might recognize this as a “negative stripline.”

That’s when you’re in a negotiation, and your adversary is having doubts, concerns, or vague bad feelings.

At this point, according to Camp, the worst thing you can do is to paint a sunny and bright picture.

Instead, you want to be honest. Brutally honest.

“You’re probably right,” Camp would say to such an adversary. “This probably won’t work out. It’s probably best if we just cut off this negotiation right now and stop wasting your time.”

What happens when you do this?

Well, all I can say is what happened to me. I finally got to talking to some beautiful, intimidating women. Because the negative stripline works even when your negotiating adversary is yourself.

So if you’re not seeing real results from the power of positive thinking, whether in social situations, or in business…

Then try negative thinking.

And whatever you do, don’t let me know how it works out for you.

The other way to persuade

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Let me ask you a personal question or three:

Are you very politically conservative?

Do you care passionately about the fate of the planet and about climate change?

Were you out in the streets last night, partying after the Toronto Raptors won the NBA championship?

If you said “yes” to any of the above questions, then I believe you’ve got a leg up in the copywriting, marketing, and persuasion game.

Here’s why.

Dan Kennedy, possibly the most influential educator when it comes to direct marketing, once shared his four guiding principles for writing direct response copy. The one that’s relevant for us right now is:

“Great direct response copy makes people identify themselves as one or the other.”

In this way of looking at the world, there are two ways to persuade. One is based on self-interest — that’s 95% of “How to write copy” guides will tell you. But there’s another way. And it’s to appeal to somebody’s identity.

As Dan puts it, “they tell you the identification, and you tell them the behavior.”

This can be overt, such as, “If you’re politically conservative, then you should be outraged at the state of illegal immigration in this country.”

It can also be more subtle. Such as, “Choosy moms choose JIF.”

Now, I hope if you dig around in your brain right now, you will find at least one or two strong “self-identifications.”

Maybe that’s an alignment with an outside group, like a party or a cause or a team.

But it might also be the kind of person you strongly feel that you are (for example, a good mom).

Once you find this self-identification in yourself, start observing your own feelings, your own behaviors and attitudes when it comes to protecting and cherishing that identity.

Bottle all that up.

And use that insight and experience to become a superhuman marketer, persuader, or copywriter, by talking to other people’s self-identifications.

You will have a new and powerful arrow in your quiver — which the majority of your competition won’t even know about.

And you don’t even have to do much to attain it besides what you already love to do.

As for me, I’ve been working lately with some choosy owners of online businesses. They’re trying to build up a stockpile of copy assets that get their prospects to buy, and their customers to buy more.

I’ve also heard from other business owners who are in the same position, but who aren’t working with me yet. And you know what they did? They wrote me an email to talk to me and see if I could also help them grow their business.

Prematurely moving out of Maslow’s basement

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Just coz it’s science don’t mean it’s true.

I’m currently reading Chip and Dan Heath’s Made to Stick. This brotherly tome teaches you how to present your ideas in a way that sticks in people’s minds — long after you’ve made your pitch.

Overall, I am digging this book.

But there’s one section that irked me when I read it. Somewhere along chapter 4 or so, the Heaths talk about how to make people really “hear” your message. How to get them emotionally invested. How to get them to care.

Of course, you can appeal to their self-interest, which is what direct response copywriters like myself love to do.

But no, say the Heaths.

That’s short sighted, and there’s science to prove it. So they cite research where people are asked to explain what would motivate them to take a new job:

Option 1: more security because the new position is so important

Option 2: more visibility because the new position is so important

Option 3: the great learning opportunity this important new position would provide

Apparently, most people choose 3 when explaining why they themselves would choose a new job. But when asked what they think other people would be motivated by, they choose options 1 or 2. (Short-sighted buggers, those other people.)

So the Heath brothers draw this conclusion, referring to Maslow’s hierarchy of needs:

In other words, a lot of us think everyone else is living in Maslow’s basement — we may have a penthouse apartment, but everyone else is living below. The result of spending too much time in Maslow’s basement is that we may overlook lots of opportunities to motivate people.

To which I’d say, “Interesting… But do you prefer going to the movies or to the theater?” It’s a question the grandpapa of modern-day direct marketing, Gary Halbert, asked once:

Once I asked at class at USC how many of them preferred to go to plays more than movies.

Lots of people raised their hands.

“Bull!” I said to them. “You are all fooling yourselves and I’m going to prove it.” I then asked for a show of hands of those people who had seen a play in the last week or so.

No hands.

I then asked to see the hands of people who had seen a movie in the last week or so.

Many hands.

Does this mean you always have to appeal to brute self-interest when trying to convince people? Not necessarily. This ad certainly doesn’t seem to:

MEN WANTED
for hazardous journey, small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful, honor and recognition in case of success.

This was an ad put out by Sir Ernest Shackleton, a polar explorer, and it supposedly drew an enormous response of men interested in accompanying Shackleton into the penguin-infested waters of Antarctica.

The point of all this?

Maslow’s basement can work.

So can Maslow’s penthouse.

But talk is cheap, and what people say is not necessarily what they will do. Even if they themselves wholeheartedly believe it.

So when choosing which appeal to go with in an advertisement, look at what people actually do, rather than what they say they want.