Marketing Dojo#79: 🔢 Precise Percentages Prompt Purchases.🛍️
The rational profits of irrational discounts, performance branding, PayPal's advertising play and more.
Hello Everyone,
Welcome to issue #79 of The Marketing Dojo! 🎋
This week is a festive one in China, Japan, Korea, Vietnam, and Singapore, with the mid-autumn festival in full swing. Happy mid-autumn festival if you're celebrating! And happy dieting if you've been gobbling up one too many of those yummy mooncakes like me.
Here's the healthy spread we have for you in this edition:
🏷️ The psychology behind the discounts
🌟 Vibes, clicks or both?
🖥️ Pixels over people
💳 PayPal's new AdVenture
And more...
A quick request before we dive in - If you haven't already, consider subscribing to the Marketing Dojo. Every week, I share the best marketing news with you in an easy-to-read format. Sign up and join the gang!
Enjoying the Marketing Dojo? Spread the love by sharing the newsletter today.
Now, let's kick off this week's marketing wisdom...
The Power Of Irrational Numbers.
Discounts—who doesn't love them?
Retailers adore them the most because they bring out the irrational side of human behaviour like nothing else.
Despite attracting a lot of research, there are still some undiscovered quirks around the human reaction to a discount.
A study titled "Can Rounding Up Prices Reduce Sales" in the Journal of Consumer Psychology uncovers a new twist in discounting strategies.
Picture this: Your go-to coffee shop is feeling generous. They offer a 15% or a 14.7% discount on your favourite brew. Which one would have you fill your cart faster?
Surprisingly, the 14.7% discount takes the cake. The imprecise number creates a perception that the deal is fleeting. Discounts like 7.7% or 14.3% spark urgency and boost purchase intent more than their rounded counterparts of 8% and 15%.
Truth be told, consumers are wary of discounts. When consumers see a significant 20% or 30% off, they expect it to stick around. But throwing in a 23.6% discount triggers a "Quick before they realize their mistake!" response.
PayPal’s New AdVenture.
Guess who the new advertiser in town is—PayPal (and Venmo).
Whether it's the hotel you stay at (Hilton), the cab you book (Uber), or the payment platform you use (JPMorgan Chase)—everyone is trying to use your data to serve you ads.
Last week, The Wall Street Journal published PayPal's plan for its advertising platform, based on online and offline transactions via its platform and sister app Venmo.
In its latest earnings report, PayPal revealed that it processed 6.5 million transactions from 427 million customers in the first quarter of 2024.
PayPal has already launched a product called "Advanced Offers," which uses artificial intelligence to provide personalized promotions to users. Advertisers are only charged when a consumer makes a purchase, making it a performance-based model that could appeal to many merchants.
They've hired a top exec from Uber's advertising division to drive their retail ambitions.
And it's not just PayPal—Visa is reportedly toying with the idea of its own retail media network.
As more companies turn into advertisers, brands will be spoiled for choice when it comes to media partners.
Last week, I shared ANA's survey on Retail Media Networks. According to the study, the number of marketers expecting to add additional retail media platforms to their plans is declining, with just 35% saying they will use more partners.
In short, despite a 400-million-plus robust database, it will not be a walk in the park for PayPal.
Meme-Time: Is Marketing Out of Ideas?
The marketing community has been locked in the "brand vs. performance" debate for a while now.
On one side, we have Camp Brand Marketing, a.k.a. The Vibes. They emphasize that advertisements generate results over the long term. Brand marketing focuses on building awareness and emotional connections. Its impact? Often tricky to measure directly.
Then there's Team Performance Marketing. They concentrate on immediate, measurable outcomes like clicks, conversions, and sales through digital channels like PPC advertising, affiliate marketing, and email campaigns.
But this is more than a friendly match. Marketing budgets are limited and often shrinking. Which is why this push and pull between brand and performance is a zero-sum game. Long-term and short-term growth will come at the cost of each other.
As expected, the term "performance branding," a.k.a. "can't we all just get along?" is gaining traction. If it sounds like a consulting buzzword—you're right.
McKinsey wrote about it in 2020 as the best of both worlds—the measurability and swift ROI of performance with the long-term, upper-funnel branding magic.
It's like Team Brand and Team Performance split the difference and arrived at an uneasy peace pact.
I'm skeptical, much like Mark Ritson in his latest article "There's No Such Thing as 'Performance Branding' Marketing."
Balancing brand vs. performance creates marketing whiplash. Most companies will swing one way and then another. But mixing both of them together? That's like breeding an elephant with a penguin; you'll end up with a mess, not a penguiphant.
Pixels Over People: The Magic Of Digital Dopamine.
Digital Avatar or IRL You? Where Do You Feel More Comfortable?
If you think the answer is obvious, think again! NewConsumer asked this question as a part of their latest research, and it turns out that GenZ and Millennials are living their best lives... online!
COVID pushed most of us into a more digital world, but our preference for the virtual realm has now become the norm.
Younger consumers are also more likely to say they feel "more valued for their talents" online than offline, feel "more appreciated" online, and feel "more creative" online than older consumers.
The preference for the online world jumped for Boomers, too, from 10% in 2022 to 16% in 2024.
Now, what does this mean for us marketers? Well, it's time to speak fluent internet!
Take Kamala Harris' "brat summer" campaign. It was a hit with the younger crowd, and here's a thought: maybe it's because the concept was as digitally native as a cat meme. It spoke the language of the online world, where many young people feel most at home.
Short Stuff:
Telegram to start moderating chats after its founder’s arrest (Nothing is private online)
Australia is considering banning kids from using social media. (Setting a precedent).
Amazon introduced ads into its GenAI-powered chatbot Rufus. (Monetizing every second of engagement)
That’s a wrap on this week. Thank you for your time and attention. If you liked this week’s newsletter or found something interesting, please give me a like ❤️ or drop a comment🗨️. Your support helps drive the newsletter's discoverability.
Regards,
Garima Mamgain
Stories on the Internet are often stranger than fiction.
Every once in a while, I tumble down an unexpected rabbit hole of things I don't fully grasp but find incredibly amusing. A couple of weeks ago, my Reddit feed blew up with controversy around the YouTuber Nikocado Avocado.
Here's the summary of the controversy:
Nickocado Avocado, a mukbang celebrity (we'll get to that in a sec), dropped a bombshell:
Lost 250 pounds in two years
Kept uploading pre-recorded content to fool his audience
Calls it a "social experiment" (because why not?)
Speculation about Ozempic use (more on that later)
Claims he was "two steps ahead" of critics (Checkmate, internet!)
There's so much to unpack here:
First off, mukbang comes from the Korean word 먹방 (meokbang), combining "eating" (먹는 meongneun) and "broadcast" (방송 bangsong). It's a video of a person eating insane amounts of food. Why are people even watching this??
There's also mukbang ASMR like this one that has garnered 26 million views!
Then, there's the "social experiment" Nickado Avocado ran. Nickocado pre-recorded TWO YEARS of content while secretly shedding pounds. I can barely plan my work week, and this guy's living in 2026!
Finally Ozempic. Many people (myself included) have body image issues. Weight loss drugs like Ozempic and its competitor, Wegovy, are heavily advertised in the USA. Both drugs combined spent $450 million on advertising their injections in 2023!
The aftermath?
Some followers are mad. Where's the authenticity?
Others are impressed. 4D Chess moves, apparently.
His follower count? Through the roof!
Plot twist: Even Mukbang luddites like me now know about this genre
Just another day on our weird little blue marble, where people film themselves eating, others watch, and someone turns it all into a two-year prank. Who needs sci-fi when the reality is this strange?