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“Doing well by doing good”? There’s a framework for that

Jennifer Anzaldi — Wed, 02 Jul 2025 15:38:03 +0000

“Doing well by doing good”? There’s a framework for that Jennifer Anzaldi Wed, 07/02/2025 - 11:38

In This Story

Russell Abratt

Today’s customers don’t just buy products—they buy into what a company stands for. It is no longer just low prices or flashy marketing that target the latest trends. Stakeholders are asking harder questions: Does this company treat its workers fairly? Are they harming the environment?

In a recent study published in the Journal of Brand Management, Russell Abratt, a marketing professor at the Costello College of Business at �鶹��Ƶ, tackles a key strategic challenge: How companies can move beyond shallow social and environmental messaging to meaningfully shift consumer perceptions. Joining Abratt on this research team are co-authors Emmanuel Silva Quaye of University of Witwatersrand and Nicola Kleyn of University of Pretoria.

Russell Abratt

When a brand is described as being true to themselves, holding values of fairness, a concern for society, and an obligation to goodness, it becomes what they call a conscientious corporate brand. These are brands who are trusted to do the right thing consistently and authentically.

But trust alone is not enough. Companies want to know: Does being conscientious also deliver better business outcomes?

Building on their 2023 work, which introduced a framework for developing conscientious corporate brands, the research team now offers empirical evidence that this framework not only enhances brand trust but also leads to the response companies are hoping for—responsible branding can drive tangible value.

“Firms in order to succeed these days really need to go beyond profits,” says Abratt. “You’ve got to be ethical in whatever you do. You’ve got to be socially aware. And you’ve also got to be very, very conscientious about what you are doing.”

To further investigate Abratt’s 2023 framework and understand what changes stakeholder perceptions, the researchers conducted two experiments with South African participants. Each participant was shown a scenario involving a fictional construction company: the control group highlighted traditional business goals such as efficiency and profitability, and the experimental group emphasized ethical leadership, social impact, and environmental sustainability. The results were striking.

“We saw very clearly the differences between the control group and the experimental group,” Abratt explains. Participants viewed the purpose-driven, socially engaged version of the company as significantly more conscientious, responsible, and authentic than the version focused purely on business efficiency.

Their research identified four elements in a chronological sequence that contribute to conscientious corporate branding: organizational purpose, brand authenticity, corporate social responsibility (CSR), and ethical organizational culture. These are not separate strategies; they reinforce each other.

The first element of this sequence is organizational purpose. A company must begin by defining why it exists beyond just profits. Next is authenticity. “Authenticity leads to trust,” says Abratt. “The more authentic that an organization is perceived to be, the more positive perceptions the stakeholders have.” The paper finds that authenticity acts as a bridge that connects an organization’s purpose to stakeholders’ perceptions of conscientious corporate branding.

Next is the third element: corporate social responsibility. This must be integrated, not performative. “Developing a corporate social responsibility strategy should be part of the organization’s overall strategy,” says Abratt. “It should not be seen as greenwashing, as added on and fake.”

Lastly, an ethical organizational culture is created by top leadership through example and prioritizing ethical values across the organization.

According to Abratt, “In order for a firm to say this is our purpose beyond profits, they’ve got to have a top leadership that says these are our values. This is what we stand for. Then that needs to be typicalized throughout the organization.”

So what does this mean for business leaders? It means that building a conscientious brand is no longer just a marketing strategy—it’s a business imperative. But the real challenge lies in making sure those sustainable actions resonate with consumers to ultimately result in success. Can companies do well by doing good?

Looking ahead, Abratt and his colleagues hope to expand their research to other industries and other countries or regions to test whether their results are generalizable to other contexts.

“Brands that have a purpose beyond profit are the ones that are going to be seen by stakeholders in a more positive light. And if they are seen in a more positive light, those stakeholders, especially customers, are likely to support that particular organization,” Abratt concludes.

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Brett Josephson’s GovCon research honored with coveted award

Nilesh Patel — Mon, 16 Jun 2025 18:40:36 +0000

Brett Josephson’s GovCon research honored with coveted award Nilesh Patel Mon, 06/16/2025 - 14:40

In This Story

Brett Josephson

The American Marketing Association (AMA) has awarded the prestigious Louis W. Stern Award for 2025 to a paper co-authored by Brett Josephson, associate dean for Executive Education at �鶹��Ƶ and associate professor of marketing at the Costello College of Business.

The award’s namesake, Louis W. Stern, is the John D. Gray Distinguished Professor Emeritus of Marketing at the Kellogg School of Management, best known for his influential work on marketing channels.

Josephson describes Stern as “one of the founding godfathers of marketing, especially on the interorganizational side, involving B-to-B channels and distribution.” Appropriately, the Louis W. Stern Award is given annually by the AMA’s Interorganizational Special Interest Group, in recognition of “a published article that has made a significant and lasting contribution to the field of interorganizational marketing and channels of distribution.”

The winning paper, “Uncle Sam Rising: Performance Implications of Business-to-Government Relationships,” was published in Journal of Marketing in 2019. Josephson’s co-authors were Ju-yeon Lee of Iowa State University, and Babu John Mariadoss and Jean L. Johnson of Washington State University-Pullman.

The paper proceeded from Josephson’s observation that “the notion of the government as a customer — not just any customer, but the largest, most impactful customer in the world — had been left out of the business scholarship consensus.”

To fill the knowledge gap, the researchers conducted in-depth interviews with sector experts, who highlighted the additional transaction costs inherent in the B2G (business to government) space. “The interviewees were saying that government contracting had all these idiosyncratic costs, and it was really hard to diversify away from government contracting,” Josephson says. “If you wanted to be in this space, you had to be all in.”

By the same token, companies were rewarded for upping their commitment to government clients. Comparing firm value metrics to actual government contracts, the researchers found that the more a company’s portfolio was weighted toward B2G, the more market benefits it enjoyed.

However, there can be risks associated with deepening involvement in government contracting. Because federal agency budgets are linked to political priorities, they can change quickly and unpredictably. Josephson and his co-authors discovered that companies could hedge against that risk by catering to a greater number of government clients. Those with a more concentrated B2G portfolio faced higher risks when taking on more government contracting, but saw higher gains in firm value on the whole.

The dynamics of the B2G sector lend themselves to increasing specialization, Josephson says. “Just because you have knowledge of a customer, there’s no guarantee you know how to translate that to someone else, and if anything, it can become a detriment because you don’t know how to speak that customer’s language.”

With the government contracting ecosystem adjusting to rapidly shifting political winds, Josephson’s findings may be even more relevant today than they were in 2019. The risks Josephson describes in his paper are hitting close to home for contractors with deep ties to civilian agencies, while military contractors may be basking in a proposed trillion-dollar budget for the Department of Defense.

Nevertheless, Josephson does not expect to see serious attrition in the B2G ecosystem anytime soon. “Even with cuts and uncertainty and ambiguity, the federal government is still the largest customer in the world, hands down.”

The Louis W. Stern Award stands as gratifying proof of the paper’s ongoing impact and influence. “Past winners include not only some of my academic advisors, but also many other people who have made major contributions to marketing scholarship,” Josephson says. “So it’s pretty awesome, even just to be on that list.”

The award will be granted at the AMA’s annual summer conference in Chicago.

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In Silicon Valley, human capital trumps intellectual capital

Marianne Klinker — Mon, 22 Jan 2024 16:23:12 +0000

In Silicon Valley, human capital trumps intellectual capital Marianne Klinker Mon, 01/22/2024 - 11:23

To stay competitive in the war for talent, tech companies must weigh secrecy against specificity when crafting job ads. Are they disclosing too much?

Job postings are a key tool for attracting qualified tech workers. However, companies face a dilemma: on the one hand, they want to provide enough information to attract the right candidates; on the other hand, they want to keep the information about their product development and planning private. Sometimes it is just hard to get both.

Yi Cao

In a recent paper for Contemporary Accounting Research, accounting professor Yi Cao of the Donald G. Costello College of Business at �鶹��Ƶ argues that highly competitive companies are more likely to post specific job requirements in order to find qualified workers even at the cost of potentially leaking proprietary trade secrets. (The paper was co-authored by Shijun Cheng of Shanghai Jiao Tong University, Jenny Wu Tucker of the University of Florida, and Chi Wan of the University of Massachusetts Boston.)

Generally, companies reveal less information during fierce competition to avoid giving their competitors an advantage. However, Cao finds that “when the technological competition is more fierce, companies provide more information into the labor market because they have to do this in order to attract talents, which is the essential driving force of innovation. They're balancing the trade-off between not leaking secrets but not hiring the matching candidates, versus leaking some of the trade secrets while more likely to hire matching employees. So between these two trade-offs, obviously, we find that companies choose to bear the risk of leaking information in order to acquire talents.”

The benefits of quickly attracting desired tech talent outweigh the potential costs of revealing proprietary information.

To examine the relationship between technological competition and skill specificity in job postings for tech positions, the researchers used a novel job posting database provided by Burning Glass Technologies (BGT). They calculated the skill-specificity scores of the job ads based on the level of information disclosed in the skill-requirements of the job postings and the taxonomy of skills, and then aggregated it annually by firm. Cao’s paper is the first to propose a taxonomy theory-based measure of term specificity in the business field. This provides companies with a handy tool for measuring the specificity of textual documents and precisely determining how much information to disclose.

Cao uses the example of a company looking for workers with AI experience to demonstrate how the measure works. The company could post a job listing that simply says, "We are looking for someone to build machine learning tools." This is a relatively vague job posting that would not provide job seekers with detailed information about the specific skills that the company is looking for. The company could also reword the post more specifically, e.g. "We are looking for someone to use Python and decision tree algorithms for credit card risk." Alternatively, they could be even more specific with language like, "We are looking for someone who have experience with random forest algorithms to specifically apply a portfolio level of prediction of credit card defaults." This description provides job seekers with detailed information about the specific tasks and skills that the company is looking for, while at the same time revealing information about existing technology.

Cao found that on average, firms disclose an additional 27 specific skills in their job ads when facing intense technological competition. The results reveal that the benefits of quickly attracting desired tech talent outweigh the potential costs of revealing proprietary information.

The findings did not apply to job advertisements for lower-level non-tech positions, such as food preparation and cleaning staff. However, they were observable for senior non-tech positions, e.g. directors of marketing or finance. These nuances suggest that both tech and managerial talent were valuable enough to motivate a higher degree of disclosure from employers.

Additionally, the effect on disclosure was much stronger for incremental innovators—firms whose patents tended to build on past knowledge, rather than strike out in new technological directions. The researchers speculate that breakthrough innovators would have too much to lose if they were to signal their plans through job postings.

While more detailed job postings can be helpful for finding qualified workers, they also could reveal proprietary information about the company's products and strategies. Cao emphasizes, “[Companies are] basically telling the world what [they’re] trying to create. With higher level of detail you’re trying to describe, you're disclosing more information to potentially everyone. And that information is beneficial in terms of labor demand because it attracts the right employee. But it's a concern in terms of competition because you basically show cards to your opponents.”

As an accounting scholar, Cao is intrigued by the possibilities inherent in the discovery that labor-market pressures can force employers to divulge potentially compromising information. “In financial reporting, we don’t capitalize human capital; we consider it an expense,” he says. “But that’s not necessarily the case when the labor market is tight and when the labor is essential in productivity. Our paper shows how the labor market, product market, and capital market are not segregated, but connected.”

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�鶹��Ƶ professor contributes to groundbreaking mega-study in behavioral economics

Marianne Klinker — Wed, 09 Aug 2023 13:44:11 +0000

�鶹��Ƶ professor contributes to groundbreaking mega-study in behavioral economics Marianne Klinker Wed, 08/09/2023 - 09:44

A new "mega-study" consisting of dozens of simultaneous, independently designed experiments–shows that competitions have no automatic impact on our morality.

Academic research is tapping into the power of the crowd, thanks to an emerging paradigm known as the “mega-study.” Instead of one experimental design with a single set of parameters, mega-studies utilize a diverse array of simultaneous studies submitted by independent research teams, with a shared research question and participant pool.

In addition to efficiencies of scale, mega-studies can help scholars more quickly come to grips with the slippery issue of generalizability–i.e., the degree to which findings in one context apply to other contexts. For example, something that motivates people to do one prosocial behavior (e.g., recycling) might be different from what motivates people to do another prosocial behavior (e.g., donating to charity). Observing the full range of results across dozens of studies provides a clearer sense of how different environmental conditions may affect research outcomes.

The mega-study model is ideal for the field of behavioral economics, which explores how various factors in the world around us influence our daily decision-making. Human behavior, after all, is extremely complicated and changeable.

Einav Hart

Einav Hart, an assistant professor of management at �鶹��Ƶ School of Business, participated in the first-ever crowdsourced mega-study in behavioral economics, recently published in Proceedings of the National Academy of Sciences (PNAS). Hart’s experimental design was one of 45 selected for the mega-study. The broad research question was “Does competition erode, promote or not affect moral behavior?”

The mega-study was conducted to better understand and reconcile previous findings about the relationship between competition and moral behaviors. Previous (individual) studies have yielded mixed results. While some studies show that competition promotes moral behaviors such as trust and reciprocity, others point to a moral erosion.

In the mega-study, 18,123 online participants were randomly assigned to the 45 research designs. Notably, the 45 experiments were quite eclectic in their interpretations of “competition” and “moral behavior”. One research team, for instance, proposed a game in which participants solved puzzles either in or out of a competitive scenario, and were asked to self-report their performance. In this case, the honesty or dishonesty of their self-reported scores was used to measure “moral behavior”. Another proposed design was an online game in which an “investor” granted points to an “investee”, who could then choose whether or not to return the favor.

The pooled data from all 45 experiments showed that competitive conditions led to a minor decline in participants’ moral behavior. However, the size of the decline varied considerably from study to study. Further analysis revealed that the majority of the variance was due to the design differences among the 45 experiments.

The authors conclude that when it comes to broad research questions that admit a wide range of interpretations, there may be limitations to what a single study with a specific context–even one with a very large sample size–can reveal. Hart says, “This shows that in any individual study, you could observe very different results even with the same ‘ground truth,’ and this variance is largely dependent on how competition and moral behavior are operationalized.” In these cases, true generalizability may arise only from a greater diversity of experimental approaches, such as the mega-study and other crowdsourced research paradigms. As the PNAS paper states, “Our findings provide an argument for moving toward much larger data collections and more team science.”

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No easy answers for retailers’ returns dilemma

Jennifer Anzaldi — Tue, 29 Nov 2022 14:48:38 +0000

No easy answers for retailers’ returns dilemma Jennifer Anzaldi Tue, 11/29/2022 - 09:48

Mehmet Altug, an associate professor of operations management, has been researching retail returns policies for a decade. The issue has recently come to prominence, as the lenient policies of online retailers have led to skyrocketing return rates (now exceeding 20 percent in the U.S.). Altug’s various academic papers delve into the difficult trade-offs retailers face when setting returns policies. While there are no easy answers, Altug’s research identifies factors that can help retailers achieve more strategic flexibility.

Mehmet Altug

Who’s smarter—online shoppers or their counterparts in physical stores? On the one hand, e-commerce consumers have a huge advantage in comparison shopping. They can cross-reference products, learn about competing brands and scout for deals in minutes from their living room couch. However, basic physical features of a product—its size, texture, fit, etc.—aren’t represented well on digital devices. That’s why purchasing items such as clothing online can be a stab in the dark.

Retailers have used lenient return policies to counteract e-commerce’s sensory-deprivation problem. Such policies effectively create an antidote for buyer’s remorse, so that consumers can confidently click “Buy Now” for an item they’ve never seen or used. But the industry’s permissiveness regarding returns may be backfiring.

According to the National Retail Foundation (NRF), the average rate of return for online purchases in 2021 was 20.8%, up from 18.1% the year before. The total value of returned items for 2021, according to retailers’ estimates, was more than $761 billion.

Mehmet Altug, an associate professor of operations management at �鶹��Ƶ's School of Business who has been researching pricing and retail operations—and consumer returns in particular—for over a decade, says, “When I first started doing research on this, I used to say up front ‘pricing is the main decision, returns are just something to deal with.’ But now, it’s becoming a primary problem for retailers.”

The main reason why return management does not have a well-defined solution is that it can be seen as a "double-edged sword." While flexible consumer return policies increase our valuation and willingness-to-pay for the product (a positive effect), they also lead to more returned units, which are ultimately sold by retailers at a loss (negative effect).

Therefore, we see a wide range of return policies in the industry. Recently, more and more brands have been tightening up their return policies. For example, Banana Republic, J. Crew, Old Navy and Gap have shortened their grace period to one month; in the U.K., Zara recently started charging for items returned through third-party drop-off points. But it remains to be seen whether online customers, with their penchant for comparison shopping, will accept this austerity drive, or flock to competitors with more permissive policies.

As Altug’s published research shows, the strategic buying behaviors of online customers further complicate retailers’ returns dilemma. His 2016 paper in Manufacturing & Service Operations Management (co-authored by Tolga Aydinliyim of Baruch College) details how offering lenient refunds can entice buyers to purchase items earlier, instead of waiting for them to go on sale. Forward-thinking consumers, however, will anticipate that liberal return policies will lead to more items being returned and marked down for resale. This expectation would increase wait-and-see behavior, as consumers monitor for products to become available at clearance prices. In short, lenient return policies can (again) cut both ways in the presence of strategic customers, either raising or lowering profitability and depending largely on the salvage prices resold items can command through off-price outlets such as TJ Maxx.

These outlets are where department stores turn to offload their unsold inventory, including returned items. And like department stores, they range from low-end (e.g., TJ Maxx and Marshalls) to upscale (e.g. affiliated discount branches such as Saks on Fifth and Nordstrom Rack). Altug’s paper argues that the refund offered for a product is closely related to the resale value of the item, and the partial refund offered should not generally exceed that. The best case for retailers would be a no-returns policy on expensive items with low resale values, since these items would be most subject to the wait-and-see effect among strategic online consumers.

However, retailers are rightfully cautious about the customer defections that may result from restrictive returns policies. Altug’s research finds several alternatives they could explore to preserve profitability in the face of the returns dilemma. For example, if the retailer can enjoy profitable clearance sales (i.e. resale value is greater than the cost of the product) or if the lenient return policies stimulate additional demand, then the retailer may offer full refunds. Similarly, to sustain a lenient return policy, the retailers can lower transaction costs for the consumer by providing return labels in packages. Moreover, in the presence of competition, Altug finds that the retailers’ ability to clear inventory at a higher price (maybe through a reputable clearance partner) will also help them offer higher refunds, stock and sell more at a higher price and make more profits compared to their competitors who do not have the same higher resale value advantage.

The 2016 paper assumes that consumers are making choices in good faith. But free and easy returns also invite opportunists whose intent is to use online retailers as a de facto rental service. Though this class of bad actors is relatively small–responsible for about 11 percent of returns nationwide, according to NRF estimates–it can do significant damage within the low-margin retail industry.

Altug’s 2021 paper in Management Science (co-authored by Tolga Aydinliyim and Aditya Jain of Baruch College) tests the respective profitability of two approaches retailers employ to manage opportunistic returns. First, some retailers use data analytics to identify renters based on their buying and return behaviour and target them through more restrictive returns policies. While mostly effective, this solution carries a risk of false positives, which could unfairly target valued customers. Making inferences about consumer intent from purchase and return information alone can be a dicey prospect. Second, online retailers can deploy price/refund pairing as a sorting mechanism, charging less for an item (e.g., a three-percent discount)–if the buyer agrees to waive free returns. That way, renters self-select to pay up front for their intended temporary use of the product and the honest majority are rewarded, at least initially, with a lower price.

Again, resale price surfaced as a pivotal factor in Altug’s findings alongside renters’ valuation. The self-selection approach works just as well or better than data-driven targeting in a market with low-rental-value potential or when the retailer sells returned units at a low resale price even in a medium-rental-revenue-potential market such as electronics or fashion products.

While there are no easy answers for retailers, Altug’s research maps out the main elements they should consider when setting their returns policy. “There are several issues that need to be considered in this context and still not very well-defined solutions that could address all of them,” Altug says. “One thing is for sure, you can’t just give maximum flexibility and forget it. Retailers need to find the right balance and that is not a trivial task.”

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Marketing Prof Named Finalist for Prestigious Weitz-Winer-O’Dell Award

Jennifer Anzaldi — Thu, 24 Mar 2022 18:11:45 +0000

Marketing Prof Named Finalist for Prestigious Weitz-Winer-O’Dell Award Jennifer Anzaldi Thu, 03/24/2022 - 14:11

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Jessica Hoppner

A paper co-authored by Jessica Hoppner, associate marketing professor at �鶹��Ƶ, has been named a finalist for the American Marketing Association’s prestigious Weitz-Winer-O’Dell Award.

The annual award recognizes “an article in the Journal of Marketing Research that has made the most significant long-term contribution to marketing theory, methodology and/or practice” and eligibility begins five years post-publication.

Hoppner says, “I am grateful to have our article selected as a finalist for the Weitz-Winer-O’Dell Award. With each article you hope to make an impact. To have the JMR community consider our article on inequity and interdependence as one that makes a long-term contribution to the field is an absolute honor.”

The paper being recognized, “The Influence of the Structure of Interdependence on the Response to Inequity in Buyer-Supplier Relationships,” appeared in JMR in February 2017. To date, “The Influence of the Structure of Interdependence on the Response to Inequity in Buyer-Supplier Relationships” has been cited within marketing, operations and B2B journals—attesting to its interdisciplinary impact.

Saurabh Mishra, chair of the marketing research area at the business school, says, “At �鶹��Ƶ we have some of the brightest minds in marketing working on topics of high relevance to scholars and managers. Selection of Professor Hoppner’s work as a finalist for this award is a testament of the quality of her work and an honor for the marketing area and the School of Business.”

Hoppner and her collaborators, David A. Griffith of Texas A&M, Hanna S. Lee of Miami University, and Tobias Schoenherr of Michigan State University, looked into how power differences between buyers and suppliers, in addition to their relative level of dependence upon one another, affected the suppliers’ willingness to share valuable resources. Hoppner and her co-authors sent questionnaires to 1,000 Japan-based suppliers about their relationships with U.S. buyers. Their analysis identified a complicated three-way interaction between inequity, interdependence, and relative dependence that, in some cases, sharply deviated from received wisdom on resource-sharing. For example, suppliers who had the upper hand in a highly interdependent relationship did not take steps to equalize the dynamic by increasing resource-sharing, even though they could easily afford to do so. The researchers suggest a working culture that stresses competitive achievement over cooperation may have had something to do with this.

Therefore, Hoppner and her co-authors recommend that managers “consider both the limitations of magnitude of interdependence and the cultural orientation of the manager in determining managerial action.” For other academics, the paper offers novel frameworks for understanding business relationships, which, unlike standard frameworks based on equity theory, do not presume fairness as a primary motivation in workplace interactions.

Finalists for the Weitz-Winer-O’Dell Award are selected by the editorial review board, associate editors, and advisory board members of JMR. A smaller group of selectors drawn from the same pool will meet in the coming weeks to choose the winner, which will be announced at the upcoming Summer AMA Academic Conference.

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Winning the Keyword Wars

Jennifer Anzaldi — Wed, 16 Feb 2022 17:40:36 +0000

Winning the Keyword Wars Jennifer Anzaldi Wed, 02/16/2022 - 12:40

In This Story

Siddharth Bhattacharya

Among other things, Google’s search engine is the most successful billboard ever invented. Keyword marketing—i.e., placing text-based ads at the top of search results—has become an over $100 billion business responsible for the majority of Alphabet’s revenue.

Search marketing offers a variety of avenues for matching supply to demand. For example, companies can bid on their own keywords (e.g. brand and product names), putting ads in front of already-curious customers. Marketers can also bid on their competitors’ search terms, thus co-opting the brand recognition of others. The latter practice, known as competitive poaching, is increasingly prevalent, as casual Google users may have already noticed.

There are no hard and fast rules for winning the keyword wars. For researchers, it’s a tantalizingly uncharted area. Siddharth Bhattacharya, a professor of information systems at �鶹��Ƶ, recently co-conducted (with Jing Gong and Sunil Wattal) the first-ever empirical study on competitive poaching. In a real-life experiment, the researchers tried out differently worded ads piggybacking on various competitor keywords, measuring performance based on click and conversion rates.

Across two distinct sectors—business academia and automotive sales—they noted similar results that help provide actionable guidelines for poachers and poachees. From the user perspective, their findings also contribute to understanding whether competitive poaching improves or detracts from overall search quality.

There were four varieties of ads used in the experiment, listed here in no particular order. First, ad copy stressing vertical, or quality-based, differentiation—expressed in phrases like “Top Ranked School. World Class Faculty” and “Best-Selling Luxury Car.” Second, horizontal-focused ads suggesting unique features and providing multiple options to consumers—e.g. “Extreme Versatility. Great Driver Assistance” and “Flexible Schedule. Mobile-Friendly Format.” Third, prescriptive copy conveying an aspirational appeal—e.g. “Have the Power. Push the Limits” and “Discover Opportunities. Leave Transformed.” Finally, control ad copy making no particular claim and serving as our baseline for comparison (“Upgrade to an Audi Today”).

No one type of ad performed best across the board. Rather, the effectiveness of the ads was directly related to the quality of the brands being poached upon, the researchers found. When poaching from high-quality competitors such as top-ranked business schools or luxury auto brands, vertical ad copy was up to 114 percent more effective than the control ad copy in driving clicks. On the other hand, for low-quality competitors, horizontal ad copy was up to 84 percent more effective in comparison to the control ad copy. Prescriptive ad copies did not show any effectiveness in driving click-throughs.

Bhattacharya explains the results by pointing out that different customer segments are after different things. Luxury consumers are sensitive to quality-based indicators, hence they respond to vertical differentiation. However, mass-market buyers have resigned themselves to not being able to afford the absolute best, but are looking for realistic options that meet their specific needs.

The prescriptive ads did not particularly resonate with either segment because their aspirational claims could not be verified. But that doesn’t mean prescriptive copy should never be used. For Bhattacharya, it comes down to the distinction between search-based and experience-based products. Search-based goods, such as the graduate degree programs and automobiles in the present experiments, are subject to objective evaluation based on their attributes. Experiences aren’t. A suspenseful, violent novel or movie, for example, may be well-made but nevertheless unappealing to those who dislike the thriller genre. More research is needed looking at experience-based products specifically.

The very first step when planning a competitive poaching campaign, Bhattacharya says, is to know whether what you’re selling is search-based or experience-based. Experiences are outside the purview of this research study. But for search-based products, your best bet is to tailor your ad copy depending on the quality of the poached brand.

The other determining factor of poaching success was physical distance. As you might expect, it proved difficult to poach from far away. Targets in close proximity, such as competing auto dealerships in the same town or city, worked better for driving clicks on poacher ads.

The experiment also investigated the presence of competition, i.e.ß, presence of competitor’s own ad appearing alongside the poacher’s ad on the search results page. Surprisingly, the presence of both ads increased clicks to the poacher—but only for high-quality keywords. Low-quality keywords resulted in fewer clicks on the poacher ad when the poachee was also present.

This implies that competitive poaching has mixed implications for search quality. On the one hand, it allows discerning high-end consumers to make more educated choices and comparisons between competing products. On the other, it seems to dissuade mass-market consumers, who may find the dueling messages distracting or confusing.

Bhattacharya believes the relevance of the study may extend beyond product marketing in the most strictly defined sense. Political campaigns are also avid keyword marketers. Vertical and horizontal approaches to advertising roughly parallel the ever-widening rhetorical divide between managerial elitism and working-class populism in many locales. If the analogy holds true, Bhattacharya’s study may offer a glimpse into the future of political messaging.

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When Innovation Suffers from Too Much Information

Marianne Klinker — Fri, 14 Jan 2022 20:05:12 +0000

When Innovation Suffers from Too Much Information Marianne Klinker Fri, 01/14/2022 - 15:05

In This Story

Cheryl Druehl

Innovation thrives on free and open competition. That’s the basic idea behind innovation contests, where companies with a creative challenge invite the crowd to solve it rather than sourcing answers in-house. Talented outsiders who are after cash prizes and bragging rights will often come up with better, more original ideas than those closest to the problem.

Perhaps the purest form of crowd-sourcing is the unblind contest. In this contest model, participants can view everyone else’s entries, identifying information for all competitors and the feedback each submission has received from contest holders. The heightened transparency of the unblind model should theoretically make for even stronger creative outcomes, as contestants monitor and learn from one another’s submissions.

Cheryl Druehl

However, Cheryl Druehl, an operations management professor at �鶹��Ƶ as well as the �鶹��Ƶ SBUS associate dean for faculty, has found that unblind contests can foster contestant behaviors that constrain overall innovativeness. Put another way, such contests can increase the friction between the often subjective, nuanced nature of creative innovation and the binary winner-loser logic of the competition format.

In a series of three academic papers (co-authored by Jesse Bockstedt of Emory University and Anant Mishra of University of Minnesota), Druehl explores contradictions of unblind competitions that anyone contemplating crowd-sourcing should consider.

All three papers use a data-set provided by Logomyway.com, a crowd-sourcing platform through which organizations and individuals can hold crowd-sourcing contests for the creation of a new logo. Launched in 2009, the site has hosted more than 40,000 unblind design contests to date. Druehl and her co-authors analyzed designer profiles and performance histories for 2,626 participants, and recorded feedback and full results for 1,026 innovation contests.

The researchers found several factors other than design quality seemed to influence how innovation contests turned out. In the most recent paper, forthcoming in the journal Production and Operations Management, they describe how the participant pool for each contest was strongly shaped by the behavior of “superstar” designers who rank among the top five percent of Logomyway.com contestants. The more superstars entered the fray, the more non-superstars would refrain from competing, presumably because they were intimidated or believed they would have no chance against such stiff competition. As one would expect, the effect was particularly significant when the top-ranked contestants entered early in the competition. Early superstar entry was correlated with the amount of the cash prize – the greater the reward, the earlier top contestants would throw their hat in the ring, on average.

At first glance, it may seem natural and good that the “best” designers collect a disproportionate share of prizes. But in the long run, the overall innovativeness of the Logomyway.com community may suffer if the same few contestants are rewarded time and again. “There’s a dampening of competition that goes against the idea of an innovation contest where you’re trying to get a diverse set of voices”, Druehl says.

The latest findings on superstars reinforces an earlier paper by the same research team, which found that Logomyway.com contests favored early entrants on the whole, superstar or not. Duration of engagement was more important than frequency. While the designers who submitted the highest number of entries to a contest were not the most successful, the ones who submitted both early and late reaped competitive advantages. Therefore, more sustained engagement appears to foster learning which, in turn, improves innovative outcomes.

The researchers’ 2014 paper showed how contestants’ country of origin affects their level of engagement. Designers from performance-oriented cultures – such as the United States – characterized by a competitive work ethic contributed a higher number of entries to the same contest, reflecting iterative learning from feedback on their own and others’ work. Cultures with higher levels of uncertainty avoidance – such as Japan – tend to be resistant to change and ambiguity, and more rigid in their approaches to problem-solving. Because designers from these cultures showed less aptitude in adapting to feedback, they posted fewer entries per contest on average.

Additionally, contestants from less wealthy countries (i.e. where the prize money paid in U.S. dollars would have greater purchasing power) submitted more often than average, presumably because they were more motivated by the winnings.

Druehl and her co-authors also turned up some evidence that contest holders may favor contestants from their own or culturally similar countries. However, it is difficult to say how much of this is due to irrational “home bias”, as opposed to the possibility that cultural overlap helps designers produce work better suited to the contest holder’s specific needs.

All told, Druehl’s work on innovation contests suggests that creative competition can suffer over time from too much information. If the star power of top performers shines too bright, it can dissuade new entrants – resulting in an inordinate echo-chamber effect. In addition, the possibility of “home bias” implies that contest holders should not be able to see contestants’ nationality information.

On the other hand, the demonstrated differences in engagement between cultures argues for unblind approaches. Performance-oriented designers would respond positively to frequent, timely feedback; those from uncertainty-avoiding cultures would welcome transparent explanations of contest rules and more detailed briefs. The contradiction could be resolved by equipping crowd-sourcing platforms with algorithms that would automate culturally specific interactions with contestants, while keeping nationality data hidden from contest holders and participants.

Crowdsourced innovation and its many options for information availability to contestants and contest holders, therefore, may benefit from additional scrutiny from humans and algorithms alike.

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