Is Advertising a Bad Thing?

In a 2009 TED talk, advertising guy Rory Sutherland make a case for the good in advertising — that the perceived value it creates should be seen as a positive thing.

All value is relative, says Sutherland. All value is perceived value. This is why people think a more expensive bottle of wine tastes better, only to find out they were drinking a $3 bottle, or that the “expensive” wine and the “cheap” wine were actually the very same bottle.

Sutherland also talks about how perceived value can be used to alter personal finance behaviors. What if, for example, we replaced impulse buying with impulse saving:

If you had a large red button…and every time you pressed it it…put $50 into your pension, you would save a lot more. The reason is that the interface fundamentally determines the behavior…We’ve never created the opportunity for impulse saving. If you did this, more people would save more. It’s simply a question of changing the interface by which people make decisions.

How can this be applied to real life? Think about autopay memberships, such as your gym dues. People often pay them and never go to the gym. They’re too lazy to cancel or forget they’re even paying the fee.

When you put your savings on automatic deposit, where a certain amount of money goes directly into your savings account each month, it’s an effective way of saving more. You get used to not having the money in your checking account, and it’s unlikely that you’ll “undo” automatic deposits, which might involve a trip to the bank or your HR department.

What are some other ways you can “change the interface” to change your money habits for the better?