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Because of the fluid nature of memory, advertising can be used to change the way consumers actually recall a product. This model helps to explain the on-again off-again pattern of advertising and why big-name brands continue to advertise even after becoming well known.
Jesse Shapiro, Becker Fellow at the University of Chicago Initiative on Chicago Price Theory, combined psychological research with data on advertising's effect on consumer behavior in his research "A 'Memory-Jamming' Theory of Advertising," which he presented at the Quantitative Marketing and Economics Conference October 22 at Gleacher Center.
"Advertising can manipulate the memory of product experiences," Shapiro said.
Research shows that consumers rated an orange juice favorably after seeing an ad for it, even if the sample they were given was adulterated with vinegar and salt, he said. Those who saw the ad also systematically selected a better juice when asked to match the taste of the sample they'd drunk earlier.
Shapiro's model shows that experienced consumers draw from a mass of memories about a brand, so an ad that theoretically enhances a single experience among many has a relatively weak impact. An ad would be stronger if it could change a consumer's recall of information about a brand.
"If you have a lever you can pull to distort that recall, that's going to be more effective with more experienced consumers," Shapiro said.
Consumers who had less experience with a brand have memories that stand out sharper and truer. "The result is that a firm will want to engage in more recall-distorting advertising the more experienced the consumers are," Shapiro said in his paper.
This helps explain the fact that "people drink something like 10 gallons of Coke per day, yet we still see tons of advertising," he said.
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—Mary Sue Penn