Funny + Money: Does Humor in Financial Advertising Work?

When it comes to advertising, are some banks and credit unions too eager to tickle the funny bone?

Anyone who works in marketing likes to run a funny campaign. Ask your average marketing exec to rationalize the strategy and they’ll likely tell you that humor can help engender positive feelings about their brand. They believe that if they produce something funny, people will be more likely to engage with the message and the campaign will be successful.

But if they were candidly honest, they’d also confess that they want their friends and family to have a laugh. Marketing people don’t want to be bored at work. They want to have fun, and produce material they are proud to share with others.

This also happens to be why ad agencies love making funny commercials. The prototypical ad man will tout a litany of reasons intended to help their clients rationalize a humorous approach: people hate the intrusion of ads, consumers want to be entertained, and funny ads often go viral. Besides, banking is boring, and humor helps inject some life and levity to an otherwise dull topic.

But the real reason ad agencies like making funny ads is that (1) they win awards, and (2) creative people would rather work on funny spots over the alternative(s).

You can’t blame them. Who wouldn’t prefer to work on an entertaining project than the typical, dull, mundane ones? And consumers will generally tell you that they’d rather see an amusing spot than serious and straightforward commercials.

But does that mean that humor is a smart advertising strategy?

No Laughing Matter

The effective use of humor undeniably has the potential to deliver a range of various benefits to advertisers, but its misuse can have the exact opposite impact. The subjective nature of humor means that some people may find its use annoying — or worse, offensive — which can harm the advertiser’s brand.

“If you try to be funny and fail, it almost always hurts the brand,” notes Caleb Warren, assistant professor of marketing at the University of Arizona.

One study titled “When Humor Backfires: Revisiting the Relationship Between Humorous Marketing and Brand Attitude” cautions that humor can sour consumers’ attitude toward a brand — even if the ads succeed at getting laughs. This is a sharp departure from marketers’ broadly held assumptions that humor inevitably yields positive brand associations. However, the report’s conclusions are grounded in the psychological principles that influence what we find funny and how our brains process humor.

“Humor threatens our identity or worldview by violating some type of norm, whether it’s a social convention, moral standard, or grammar rule,” explains Caleb Warren, one of the authors of the study. “Attempting humor can be risky because violations can often trigger negative feelings along with — or instead of — laughs. To amuse people without creating negative feelings, the violation has to strike them as benign. In other words, something is humorous when it seems both wrong and okay at the same time.”

Warren’s research casts doubt on the widely held belief that “funny = money” in the ad business.

“While ads that aimed for humor were perceived as more amusing, they were no more likely to evoke positive feelings than those that attempted to be merely creative or those that were just persuasive,” Warren reports. “In every case, humorous ads were no more likely to improve consumers’ brand perceptions than non-humorous ads. In some cases they did more damage to the brand than a non-humorous strategy would have.”

So does this mean humor in advertising doesn’t work? The truth is that this is an infuriating question to try and answer empirically. As Derek Thompson points out in The Atlantic, trying to study humor is a methodological nightmare.

“The world is not divided into two clean categories: hilarious ads and perfectly serious commercials,” Thompson writes. “There are ads that try to be funny but are not. There are ads that don’t try to be funny but are. And there are ads — thousands of ads — that try to delight us and elicit a ‘meh.'”

Nevertheless, that hasn’t stopped researchers from trying to study the subject. After all, billions of dollars are spent to create and run ads every year, and a sizeable chunk of them are funny, or at least aspire to be.

Funny Isn’t a Crutch

Many indistinct brands with uninspiring products use humor to compensate for their shortcomings. They don’t really have anything unique or relevant to say, so they aim for the funny bone. “We’re boring and don’t have much to say, so let’s be funny instead.”

You see this approach all the time.

But Michael Curran, director of insights and analytics at Ace Metrix, says any effective ad message must be built of substance and should only use humor as a supplement — not a replacement.

“Funny ads drive other great advertising attributes such as attention and likeability,” Curran explains. “However, low information and relevance on many funny ads results in creating lower desire for the advertised products than non-funny ads.”

Curran is more than just another advertising pundit with an opinion. As part of a major research project to measure the effectiveness of humor in advertising, he studied every single commercial that aired nationally on TV over a three-month period — a total of more than 6,500 ads. About 20% used humor, a statistic that speaks volumes about advertisers’ perceptions toward the effectiveness of humor. What he found is that humorous ads tended to be light on informative content, which in turn created a lower desire for the advertised product.

“Stop trying to be funny. You can entertain a million people and not sell one of them.”
— John Caples, advertising legend

Curran concluded that funny commercials were often seen as more appealing, but were less likely to increase desire or intent to purchase than commercials that played it straight. Funny ads may entertain viewers, but aren’t necessarily the most effective way to convince consumers to buy.

However, Curran says that there are appropriate times where humor can be successfully employed in an ad strategy. It can be an extremely effective tool when placed in a context relevant to the product — for instance, a cute baby gag in a commercial for diapers.

Curran’s findings align with marketing scholars Thales Teixeira, Rosalind Picard, and Rana el Kaliouby, who used web-based facial tracking to gauge consumer responses to various humorous ads. They found that “excessive amounts of entertainment” tended to backfire and actually reduced an ad’s persuasiveness.

“Entertainment evoked before the consumer is aware of the brand being advertised reduces purchase intent,” the team wrote in their report.

Think about the funny ad campaign Apple ran a few years ago that pitted Macs against PCs. The commercials used humor to convey a clear message that Macs were the superior choice for savvy consumers by using actor John Hodgman (PC, shown on the left below) as the comedic foil for actor Justin Long (Mac, shown right). The campaign personified Mac as young and hip, humble and unassuming — a sharp contrast to the stodgy, pudgy, awkward and older PC. It was funny and relevant.

Looking at GEICO’s commercials, you might argue that relevancy is overrated. GEICO’s use of humor has absolutely nothing to do with insurance. In fact, the context and settings they use are completely random — whatever gag they can use to elicit a laugh. And everyone in America can recall that “15 seconds could save you 15 percent or more on car insurance,” so random, irrelevant humor works… right? No, not quite so fast. The reason everyone knows GEICO’s ad slogan has everything to do with repetition.

Read More: Say It Again: Messages Are More Effective When Repeated

The fact that GEICO’s commercials are funny helps make the frequency with which consumers are exposed to these messages bearable. But it isn’t the fact that GEICO’s ads are funny that makes their marketing strategy work. “HeadOn — apply directly to the forehead,” was just as effective, and completely unfunny.

Key Insight: Don’t be funny for funny’s sake. Use humor when the context ties back to the product, is relevant to the message, and complements the brand.

Disarming Consumers With Laughter

Many in marketing have long believed humor can make consumers feel that they are being entertained as opposed to being the recipient of a sales pitch, which may lessen their natural resistance to the sales process. Now researchers have proven that humor weakens consumers’ marketing defense mechanisms.

In a report entitled, “Those Who Laugh Are Defenseless: How Humor Breaks Resistance To Influence,” researcher Madelijn Strick said her team discovered a “built-in BS detector” inside the human brain that helps shield people from the onslaught of advertising messages that bombard us. Experts estimate the typical consumer is exposed to over 350 different ads every day, and this “BS detector” is the only thing that keeps us from going insane from marketing overload.

Strick and her team of researchers found that humor has two fundamental effects. First, humor interferes with this “BS detector,” Because humor is a pleasant form of distraction, the brain is less likely to let the “BS detector” kick in. Instead of seeing an ad message as annoying or intrusive, humor helps consumers form positive brand associations.

However, there is also a cost to advertisers using humor: it hinders recall. Why? Presumably because of humor’s distracting effect. In simple terms, people might have good feelings for your brand when you use advertising — “Thanks for the laughs!” — they just might not remember who you are because they’re too busy enjoying themselves.

You are probably familiar with this phenomenon. In fact, it’s likely happened to you. You hear people talk about “that funny ad they saw on TV last night,” but they can’t remember who the ad was for. It’s an all too common occurrence. Humor is effective at defusing defuse the brain’s defenses, letting marketing messages penetrate down to consumers’ emotional core. But that process might bypass (or even short circuit) the brain’s capacity to form conscious associations — i.e., linking the positive vibe with a specific brand.

Strick’s researchers concluded that humor can help prevent the formation of negative associations for brands that expect to meet resistance in their target audience. This might suggest that financial institutions should consider leveraging humor in their marketing — almost no one wants to see ads from a bank, so a high degree of resistance can be assumed.

But Strick’s research says using humor as a psychological distraction should be used in moderation — too much and your brand might not be remembered. The harder you make people laugh, the harder you may have to work at getting people to recall your name, logo and brand.

Key Insight: Banks and credit unions might want to shoot for “moderately funny” instead of “knee-slapping hilarity.” A good chuckle could be enough to foster the positive feelings you want associated with your brand without sacrificing brand recall.

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