How advertisement framing increased loan demand by 25%

Intervention · Business


The advertising market is far reaching and ever growing, with American firms spending almost $300 billion on advertising just last year.1 This intervention examines how behavioral science can be used to design effective advertising content.2  Specifically, the experimenters conducted a field experiment in conjunction with a consumer lender, mailing a randomized combination of creatively designed letters and a range of loan prices. The study found that framing content to promote affective decision making can be an effective advertising strategy. Adding a picture of a female on the letter increased demand by the same magnitude as decreasing interest rates by 25%. Moreover, extending the deadline to apply for the loan increased the take-up rate by 3% and was as effective at increasing demand as decreasing interest rates by almost 10%.


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Rating: 4/5 (Significant results; large-scaled; need for duplication in different demographics)

How the design of advertising content caused an increase in demand for loan offers
Control group
  • No statistically significant change
Including a female’s photo on the advertising letter
  • Increased demand as much as a 25% reduction in interest rate
Extending the deadline to take up the offer
  • Increased demand as much as a 10% reduction in interest rate

Key Concepts

The framing effect: A cognitive bias which results in our decisions being influenced by the way information is presented, rather than the content of the information itself.

Affective decision making: When our decisions are influenced by information eliciting an immediate emotional response rather than a rational option.

The Problem

A lack of research on the effects of persuasive content on demand

There are advertisements all around us: during intermissions of television shows, between breaks in sport games, at bus stops, on large screens downtown, and on flyers in the mailbox. Although firms continue to pour substantial amounts of resources into advertisements, there is little systematic data on how persuasive content affects demand on a large scale outside of a laboratory setting.2 

Though firms often conduct small-scaled randomized experiments to adjust their marketing strategies, the sample sizes are generally too small for the findings to be reliably attributed to the behavior of a larger market. There is a need for more academic research to be conducted, consisting of large scale field experiments, to better understand the effect of marketed content on consumer demand. 

The need to implement more behavioral science into advertising strategies

Though economists and strategists have commonly used psychology and aspects of behavioral science, such as the mere exposure effect, there is room for growth. The application of many behavioral science concepts such as affective decision making, choice overload, and anchoring biases have not been studied at a large scale in reference to the advertising industry. 

As found in this large-scale field experiment, designing advertisement content based on  behavioral science can be very effective in generating demand within a consumer base.


Determining the sample population and contact strategy

A sample population of 53,194 individuals were mailed letters with a randomized combination of non-informational content and loan rates. The individuals in the sample were former clients of the lender company that the experimenters collaborated with. The collaboration provided the experimenters with personal information of the clients. The content was designed to be positively perceived bythe client based on factors such as age, gender, and language preferences.

Inclusion of deadlines to accept mailed offers

The letters included a set of randomized deadlines before which the client had to take up the offer. Though otherwise randomized, the assigning of deadlines took into account that some individuals receive their mail before others based on PO-box mailing addresses and proximity to urban areas. The assigned deadlines ranged from 2 weeks (short deadline) to 6 weeks (long deadline), with an option for short deadline clients to request an extension.

Creative treatments to the content 

Several versions of non-informational content were designed, each with varying creative treatments. All letters contained the same basic information such as the lender company’s logo, the slogan, branch hours, and instructions to apply for the loan rate offered. Several other aspects of the letter were purposely altered, such as:

  1. Photos: A photo of a smiling person was included in 80% of the letters. There were photo subjects matching every gender and race combination within the sample population. 
  2. Personalized language blurbs: A blurb mentioning that the lender’s company spoke the individual’s language was included on every letter sent to a client who did not primarily speak English, representing 44% of the sample population. 
  3. Promotional blurbs: Letters with 50% off promotions included a blurb stating “A special rate for you” and 25% off promotions stated “A low rate for you.” The clients that received no discount did not have any such blurb. 
  4. Example loan payment plans: The letters included a table displaying the example loan amounts and maturity. The number of examples included within the table were randomized, ranging from one to four examples. 
  5. Comparison to competitors: Some letters were randomized to include a sentence comparing the offered loan rate to higher competitor rates. 
  6. Deadlines: Letters included a randomized deadline by which the client had to respond to accept the offer. The deadlines ranged from two weeks to six weeks. 

The MINDSPACE Framework

Each of the six treatments were designed by the experimenters to study the effectiveness of specific behavioral science concepts applied to a large-scale setting. The design of the study was primarily guided by the MINDSPACE Framework. This framework utilizes nine forces to drive behavior: consisting of and working around Messengers, Incentives, Norms, Defaults, Salience, Priming, Affect, Commitments, and Ego. This study: presents an established Messenger to communicate information; provides clear Incentives to the people involved; uses Norms to influence behavior; works around people comfortable in their Defaults; promotes the Salience of the product; makes use of Priming and Affect to induce favorable subconscious decision cues; accounts for Commitments; cater to the consumer’s Ego. 

The photos that matched the client’s gender and race, and the personalized language blurbs were expected to promote affective decision making within the recipients. The inclusion of long deadlines were used to accommodate the clients’ commitments, while the promotional blurbs and comparison to competitors were mentioned to provide an incentive to take up the offer.

Results and Application

Non-informational content increased consumer demand

 The results suggest that using content that appeals to the consumer’s affective decision making hasa positive impact on demand. The inclusion of a female’s photo to the letter had statistically significant results, increasing demand by the same magnitude as  a 25% reduction in interest rate. Furthermore, extending the deadline to accept the loan by two weeks increased take-up by approximately 3% and increased demand equal to a 10% reduction in interest rate. The other content treatments did not produce any statistically significant results.

Retail & Consumer Marketing department of retail companies can use the results of this study to design more effective flyers and advertisements 
Impact Investing & Private Equity Investing companies can use letter designs in order to be more effective at approaching potential clients
Insurance Marketing departments of insurance companies can highlight their rates compared to competitors and attract clients as done in this study with interest rates


  • The lender name and personal information of the participants was not disclosed 
  • Only previous clients of the lender were contacted with letters and the participants were given a complete choice in their response to the mailed offer

Does the intervention demonstrably improve the lives of those affected by it?
Room for Improvement
Though loan rates were offered at discounted prices, the lives of the sampled population were not particularly improved
Does the intervention respect the privacy (including the privacy of identity) of those it affects?
The experimenters did not disclose the name of the lender or any personal information of the sampled population 
Does the intervention have a plan to monitor the safety, effectiveness, and validity of the intervention?
Insufficient Information
Any plans for follow-ups with the affected parties after the completion of the study were not disclosed

Does the intervention abide by a reasonable degree of consent?
A reasonable degree of consent was present 
Does the intervention respect the ability of those it affects to make their own decisions?
No methods of persuasion were used besides the letter. The recipients had the ability to take-up or ignore the offer
Does the intervention increase the number of choices available to those it affects?
Not Applicable
Not much increase in choices, though some letters contained promotional rates never previously offered by the lender

Does the intervention acknowledge the perspectives, interests, and preferences of everyone it affects, including traditionally marginalized groups?
Insufficient Information
No information regarding participant demographics was released, other than their status as  residents of South Africa 
Are the participants diverse?
Room for Improvement
The study mentioned that 44% of participants had a primary language other than English, but no other information was released
Does the intervention help ensure a just, equitable distribution of welfare?
Room for Improvement
Many loan offers were at interest rates lower than competitors, ensuring participants received a good deal

Related TDL Content

Ad Retargeting and Psychological Reactance

Further interested in how behavioral science is used within the marketing industry? You might find this The Decision Lab article to be very interesting. This piece is an insight on the concept of ad retargeting in digital marketing, where advertisements are personalized based on the consumer’s browsing history. 

The Halo Effect in Consumer Perception: Why Small Details Can Make a Big Difference

People are likely to attribute certain properties to products based on non-informational content and aesthetics rather than objective information. The halo effect is found to have a great impact at the product level, with people attributing visually appealing products to a better quality, and vice versa. This TDL article explores the broad idea of the halo effect and describes key findings of studies relating to consumer perception.


  1. Adgate, B. (2021, December 8). Agencies Agree; 2021 Was A Record Year For Ad Spending, With More Growth Expected In 2022. Forbes. 
  2. Bertrand, M., Karlan, D., Mullainathan, S., Shafir, E., Zinman, J. (2009). What’s Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment. Yale University Economic Growth Center Discussion Paper No. 968, Yale Economics Department Working Paper No. 58. 
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