An Historic Analysis of Advertising’S Role in Consumer Decision-Making: Paul F. Lazarsfeld’S European Research

ABSTRACT - From 1927 to 1933 the later-famous sociologist Paul F. Lazarsfeld directed nearly 40 market research studies through his Office of Economic-Psychological Research at the University of Vienna. He and others wrote conceptual papers on the studies. Hitherto moldering in archives, these studies and papers constitute an important historical body of work on consumer behaviorCpioneering research by some of the most capable social scientists of the Twentieth Century. The purpose of this paper is to explain and to evaluate, critically and historically, the Office of Economic-Psychological Research’s methods and findings on the role of advertising in consumer decision-making.

Citation:

Ronald A. Fullerton (1999) ,"An Historic Analysis of Advertising’S Role in Consumer Decision-Making: Paul F. Lazarsfeld’S European Research", in NA - Advances in Consumer Research Volume 26, eds. Eric J. Arnould and Linda M. Scott, Provo, UT : Association for Consumer Research, Pages: 498-503.

Advances in Consumer Research Volume 26, 1999      Pages 498-503

AN HISTORIC ANALYSIS OF ADVERTISING’S ROLE IN CONSUMER DECISION-MAKING: PAUL F. LAZARSFELD’S EUROPEAN RESEARCH

Ronald A. Fullerton, University of the South Pacific

ABSTRACT -

From 1927 to 1933 the later-famous sociologist Paul F. Lazarsfeld directed nearly 40 market research studies through his Office of Economic-Psychological Research at the University of Vienna. He and others wrote conceptual papers on the studies. Hitherto moldering in archives, these studies and papers constitute an important historical body of work on consumer behaviorCpioneering research by some of the most capable social scientists of the Twentieth Century. The purpose of this paper is to explain and to evaluate, critically and historically, the Office of Economic-Psychological Research’s methods and findings on the role of advertising in consumer decision-making.

INTRODUCTION

The sociologist Paul F. Lazarsfeld (1901-1976) influenced American analysts of consumer decision-making long efore there was a formal discipline of Consumer Behavior. During the 1930s, 1940s, and 1950s, Lazarsfeld’s work on questionnaire design, market research, and psychological analysis of buyer motivation (eg., Lazarsfeld 1934a, 1937) was avidly studied. Lazarsfeld himself had emigrated from his native Austria to the United States in 1933, a part of the great brain drain that within a few years saw most of the world-leading intellectual talent of Germany and Austria escape the emerging fascist regimes there.

Lazarsfeld had to leave behind his Office of Economic-Psychological Research (Wirtschaftspsychologische Forschungsstelle), an institute at the University of Vienna which funded itself largely through commercial market research studies (Lazarsfeld 1982; Neurath 1988). He maintained contact with the Office, which functioned for a few more years. Lazarsfeld and several of his colleaguesCespecially Herta Herzog, Marie Jahoda, and Hans ZeiselCwere already known in the U.S. for their work on the social consequences of long-term unemployment and for the commercial studies of buying behavior which they had conducted since 1927. The studies were done across German-speaking Europe, particularly in Vienna, Berlin, and Zurich. By 1933, 20000 consumers had been interviewed by the Office researchers ("Verkaufen als Reklame" ca. 1933, p. 4), providing a rich portrait of consumer behavior in Central Europe six decades ago. Sixteen full market studies, excerpts and summaries of twenty one others, a Lazarsfeld-supervised dissertation on advertising to middle-class women (Toffler ca. 1933), and several conceptual papers analysing advertising are preserved in archives at Columbia University and the University of Vienna. Together, they constitute an extremely important historical body of work on consumer behaviorCpioneering research by some of the most capable social scientists of the Twentieth Century.

The purpose of this paper is to explain and to evaluate, critically and historically, the Office of Economic-Psychological Research’s methods and findings on the role of advertising in consumer decision-making.

Method of Investigation

This paper follows established methodology for historical research as taught in Western Europe and the United States. The subject had not previously been researched; the challenge was to develop an interpretive synthesis which drew together and illuminated scattered detail, and to be sure that it was anchored in multiple corroborating sources of evidence wherever possible. In addition to thorough examination of published and unpublished works by and about Lazarsfeld, interviews with surviving colleagues were conducted (Wagner 1989, Neurath 1989). Analysis of the literature on and/by other consumer and advertising researchers in Europe and the USA during the 1920s and 1930s enabled Lazarsfeld’s work to be placed in context (eg., Converse 1987, Jahoda 1983, Link 1932, Lynd 1933). A full bibliography is available from the author. Nearly all of the source materials represent what historians refer to as "primary sources"Cwork produced during the period under investigation. The market research reports were proprietary hence never published. Since Lazarsfeld had to leave Austria hurriedly, and since the dislocations of the Nazi takeover in 1938 and World War II scattered both people and paper, little remains to show who many of the clients were and what use they made of Lazarsfeld’s reports.

The Advertising Environment

Central Europe was in the depths of the Great Depression when most of Lazarsfeld’s studies were done. Neither Germany nor Austria had ever fully recovered from the economic burdens of the First World War (1914-1918). After a burst of prosperity in the mid to late 1920s, conditions during the early 1930s were worsening with the world Depression. At the same time, however, Austria, Germany, and Switzerland were highly developed consumer societies by the standards of the time. Branded goods ha been well established for decades (Matis 1997). Advertising was done on a large scale and taught and researched at the university level. Advertising agencies, some of which dated to the mid-1800s, emphasised media broking but were also providing creative services by the late 1920s. The main advertising media were magazines, newspapers, Litfass (ie. poster) columns, signs, electric signs, walls, sales letters, circulars, and leaflets. As in every developed economy except the United States then, radio was government owned and not used as an advertising medium; television was not yet in use.

HOW LAZARSFELD’S STAFF ANALYSED ADVERTISING

The Office’s market research studies were done for individual companies which produced and retailed a considerable range of consumer productsCincluding service productsCas is shown in Table 1. Formal market research was still the exception in Central Europe then, but awareness of American advances and Lazarsfeld’s vigorous proselytizing had led some Austrian, German, and Swiss firms to commission studies to help them deal with falling sales, inability to gain on strong competitors, the desire to maintain market leadership, and the quest for new opportunities.

The Office’s primary method of investigation was "systematic questioning of the buyer ...[in order to] determine all of the factors which play a role in the purchase of a specific product" ("Neue Wege der Verkaufspsychologie" p. 3). All interviews were face-to-face. Lazarsfeld believed that every purchaseCeven habitual purchases of mundane itemsCwas subject to a variety of influences. "Central to our investigations...is the task of uncovering all of the connections between a specific group of consumers and a specific product ... [so that] the full structure of the relationships between the consumer and a particular product category is illuminated" (Untitled Report on Advertising ca 1933, pp. 7-8). [All translations from the German are by the author.] Advertising was one aspect of these relationships. It was examined in every study; often suggestions for more effective advertising messages and media selection were advanced.

To an extent which may seem striking today, Lazarsfeld and his colleagues blended quantitative and qualitative analysis. Lazarsfeld’s doctoral thesis was on applied mathematics; he had written a statistical primer. He relished dealing with great piles of questionnaires, reading and re-reading them, tabulating and totaling figures, and performing both statistical and interpretational analyses. The studies were among the earliest to make extensive use of cross tabulations. All calculations were done manually, the Office being too poor even to afford an adding machine. (There are very occasional computational errors in the reports.) The psychological analyses drew upon the work of Freud, Adler, and others, as well as upon linguistic psychology. Others also used psychology, but Lazarsfeld was acknowledged as the master, unequalled in his ability to interpret social research data (Converse 1987). There is a fuller discussion of Lazarsfeld’s methods in Fullerton 1990.

If questioned systematically and in psychologically-informed ways which enabled them to recall the details of buying processes, Lazarsfeld believed, consumers could actually and accurately explain how advertising effected themCa view which few held at the time. Some of those questioned might give inaccurate or confused answers, but the large number of respondentsC300-1500 for each reportCassured overall accuracy (Lazarsfeld 1934a). Lazarsfeld’s directives stressed that the questioning process would produce solid data only if it "proceeds in the least constrained way possible, in the form of a relaxed and impartial conversation" (Neue Wege der Verkaufspsychologie ca. 1933, p. 4). The fact that respondents were questioned about the factual details of the process before being asked about their opinions and attitudes, increased the objectve accuracy of their "buying biographies".

Questioning about advertising effects proceeded in three stages. First, the consumer was asked which advertising for a product he or she was familiar with. Second, thoughts and observations about the familiar advertising were elicited. Finally the consumer was questioned about whetherCand whyCthis advertising either did or did not culminate in purchase. In cases where specific advertising messages and/or media were at issue, the interviewer then probed the consumer’s contact with itC@special questions about whether it [the advertising] was noticed and what [he/she] remembers from it" (Untitled Report on Advertising ca. 1933, p. 2).

Probing and "Natural Experimentation"

Some Office’s research projects probed advertising at length; in a few, "natural" (ie., field) experiments testing various aspects of advertising were carried out. One field experiment, done at the 1932 Vienna Spring Fair, queried 596 men and 345 women about their reactions to seven of the then most common posters advertising stockings. The questioning probed which of the seven posters were the most likely to get respondents to buy the advertised stockings. Further questioning at the Fair investigated the relative potency of the figures shown in the posters as opposed to the copy and the color ("Strumpfkauf bei Delka"). A study of advertising for a branded malt product used field questioning about various versions of copy "Propaganda fuer Naermil" ca. 1933).

"Economic-Psychological Analysis"

After the Office’s researchers completed their questioning, consumers’ answers underwent "economic-psychological analysis" by Lazarsfeld and his colleagues. The result of the analysis, which was termed "psychological-scientific advertising knowledge" (psychologische Reklamekunde), illuminated the relations between a product and different advertising methods, media, and messages. Reflecting the intellectual vitality of Vienna in the 1920s and early 1930s, the analysis drew upon social psychology, Marxism, Freud, behaviorism, introspection, statistics, and psycholinguistics. Lazarsfeld himself had done doctoral studies in statistics. Herta Herzog had advanced training in introspection (Lazarsfeld Memo 1938). Several of the Office researchers, including Lazarsfeld and Herzog, had studied psycholinguistics with the then-famous Professors Karl and Charlotte Buehler. They were thus able to evaluate the intensity of needs by analyzing consumers verbalization: the more words consumers would evoke to describe a product, the greater their positive need ("Der Milchverbrauch in Berlin" ca. 1934, II).

"Economic-psychological analysis" did not draw upon conventional economic thought; Lazarsfeld did begin to study economics seriously until the late 1940s.

Claimed Superiority to Other Methods of Analyzing Advertising Effectiveness

Lazarsfeld was convinced that the methods used by his staff yielded richer and more realistic insights than the two methods which dominated analysis of advertising effectiveness then: 1) formal Advertising Research (Reklameforschung) utilizing laboratory testing to ascertain the impact (Auffaeligkeitswerte) and memorability (Erinerungswerte) of an advertisement ; and 2) analysis of sales data, which was then termed "Market Analysis" (Marktanalyse). The Office’s field experiments were asserted to be superior to "artificial laboratory experimentation" ("Neue Wege der Verkaufspsychologie" p. 7). Moreover, the Office’s methods were designed to determine directly the effectiveness of advertising in stimulating actual purchases. Advertising Research, on the other hand, dealt only with those advertising impacts on memory which were a precondition for purchasingCyetdid not necessarily signify actual purchase. At least one Office projects, an investigation into the "Economic-Psychological Situation in the Berlin Market for Edible Fat," tested for advertising recall, but it also utilized several other investigation techniques to get at the reasons for actual purchase ("Die wirtschaftspsychologische Situation am Berliner Fettmarkt" 1933).

Market Analysis did have the virtue of using objective sales data to measure advertising effectiveness. But its results could not compare with those achieved by "Economic-Psychological Analysis": "This method ...must be carried out over a long period of time; it works slowly and yields only coarse results. ...[whereas] our method permits us to ascertain a multitude of valuable details regarding advertising effectiveness in relation to sex, age, social class and so forth" ("Verkaufen als Reklame" ca. 1933, p. 3). Each of the Office’s projects consciously included both males and females, all adult age groups, and substantial representation from the three main socio-economic strata of European societyCupper middle class, lower middle class, and working class.

FINDINGS: WHAT LAZARSFELD BELIEVED MOST IMPORTANT

To Lazarsfeld, the most important finding about advertising was that its role and importance differed widely from product to product, from male to female, from youth to age, and from one socio-economic group to another. In addition, the effectiveness of different message categories and advertising media differed across the same dimensions. Lower middle-class women, for example, were powerfully attracted to messages such as "my coffee...lowest possible price" ("Untersuchung ueber die Absatzchancen"). To be effectively used, advertising had to be considered on a case by case basis, carefully linked to the specific relationships different groups of consumers had with specific products. Lazarsfeld’s bold handwritten comment, "Very good!" stands next to this sentence in a dissertation on advertising: "Within a social group needs are strongly dependent upon the reigning traditions, which in turn vary considerably as a consequence of fashion and other current cultural influences" (Toffler p. 29).

TABLE 1

MARKET STUDIES BY THE OFFICE OF ECONOMIC-PSYCHOLOGICAL RESEARCH, 1927-1934

Cologne as an Illustrative Example

A study of the cologne market in Vienna illustrated many of the differences ("Wiener Kolnisch" ca. 1932). Among working class people the product was used only on special occasions; among the upper socio-economic group it was used regularly. Special occasions could be the advertising themes in messages directed at the former. There were sex differences, males exhibiting greater brand loyalty and tending to buy by habit or by relying on shopkeepers’ suggestions; women being much more influenced by friends’ recommendations. Future advertising for the client brand needed to take these differences into account. Its current advertisements were well-known but not liked; consumers found them too pushy and complained that they failed to present the product in a suitably dignified way.

Advertising’s Varying Effect on Product Purchase

As the Office’s studies cumulated, it had become more and more apparent that advertising played a much greater role in purchase decision-making for some products than others. Table 2 presents findings on Vienna consumers.

Improving Advertising Effectiveness

Lazarsfeld clearly believed that most of his clients could use advertising more effectively. The role of advertising, in other words, was not set in stone but rather could be increased in many cases. Even in the case of butter, where advertising currently played the smallest rle of any product studied, Lazarsfeld’s Berlin colleagues found that advertising based upon the research insight that consumers liked to experiment, had promise in promoting trial ("Die wirtschaftspsychologische Situation am Berliner Fettmarkt" ca. 1933).

Improving the effectiveness of advertising demanded flexibility, subtlety, and responsiveness to ever-fluctuating as well as relatively constant influences. It was not necessarily a question of spending more; market success was not necessarily commensurate with share of voice. The Office’s researchers found several cases in which advertising that had a strong impact on memory proved weak in stimulating purchase (eg., "Staerkungsmittel oder Hustenmittel"; "Strumpfkauf bei Delka"). Numerous suggestions for more effective advertising messages and media selection were advanced in the Office’s reports. To be best understood by present-day readers, several of these may be organized thematically as follows.

TABLE 2

THE VARYING INFLUENCE OF ADVERTISING ACROSS PRODUCTS

Involvement and Message Strategy

The concept known today as "involvement" is evident in several of the recommendations put forth by Lazarsfeld and colleagues. They usually used the word "reflection" (Ueberlegung). The greater the degree of reflection by buyers, as for example found in decision-making about shoes and men’s clothing, the greater the need for messages rich in information and persuasive argument. If, on the other hand, "a product be one to which little reflection is devoted, and if there are several competing firms. the most successful will be the one that bases its advertising on the constant repetition of the product name. [Repetition] in a way fills the psychological vacuum which surrounds the product. Arguments are not necessary here, details are to be avoided ("Die Negativmaterialien der Marke Hauff" ca. 1934, p. 12. Emphasis in original). Examples of such products were vinegar and camera film.

Rites of Passage and Message Strategy

The psychological sophistication for which Lazarsfeld and colleagues were becoming famous helped them notice an association between product adoption and rites of passage in life. Cologne and tea, for example, were most likely to be adopted when Viennese entered adulthood; people saw the use of cologne as sign of having grown up. Advertising themes stressing the adult nature of these products was called for, argued the Office reports ("Der Tee und die Wiener" ca. 1932; "Wiener Kolnisch" ca. 1932). A macabre right of passage strategy of which Lazarsfeld was enormously proudChe wrote about it repeatedlyCwas that the housewife preoccupied with a family member’s funeral and wake, was likely a potential customer for the services of a cleaner; the client was advised to follow the obituaries carefully and have condolence/sales letters ready (Lazarsfeld 1934a, pp. 55-56).

Targeting the Right Audience

Most of the Office reports advocated shaping messages and choosing media to effectively reach different socio-economic, age, or gender groups. One of the most ingenious reports dealt with "Honigmalz" (Honey Malt), a product which was being promoted as both a tonic and a cough medicine. Office researchers discovered that advertising had little effect on consumers’ decisions to buy tonicConly 3% of purchases could be attributed to itC but that 39% of consumers’ decisions to buy cough medicine could be attributed to consumer advertising. Since consumers’ tonic purchases were overwhelmingly (62 %) influenced by physician recommendation, the Office report suggested that advertising for "Honigmalz" as a tonic be targeted to physicians, whereas advertising it as a cough medicine should be targeted to consumers ("Staerkungsmittel oder Hustenmittel" ca. 1932).

Media Choice.

The choice of media had to be carefully related to both the audience and the type of message desiredCthis advice came through often. Merchants and businesspeople were the biggest readers of magazines; proletarians the smallest. Newspaper ads nnouncing sales were the most effective way to advertise household items and clothing to middle-class Viennese housewives (Toffler). Magazine ads and sales letters were the media of choice for messages featuring information and persuasive argument ("Verkaufen als Reklame", p. 2). Ready-made men’s clothing, for example, was most effectively advertised by means of such messages, in magazinesCyet posters, which were less efficacious, were more commonly employed ("Geschaeftswahl beim Kauf konfektionierter Herrenanzuege").

Rational versus Emotional Decision-Making

In several reports Lazarsfeld’s analysis distinguished between rational and emotional decision-making and suggested advertising to follow suit. Women’s decisions to buy stockings and socks were for example emotionally-based; men’s were not ("Strumpfkauf bei Delka"). Among both sexes purchases of edible fats by Berliners exhibited rational decision-making ("Die wirtschaftspsychologische Situation am Berliner Fettmarkt").

Unified Communication and Brand-Building

Lazarsfeld and his colleagues were extremely proud of recommendations given to a struggling producer of chocolates. Despite good product quality, relatively low selling prices, and respectable expenditure on advertising the brand had a faint image and unimpressive sales. The Office researchers explained why:

"Chocolate is very much a branded good, which means that it is not the characteristics of the product itself which are in the forefront of consumer consciousness, but rather the brand name and the packaging (especially the color). ...What is decisive is that the consumer in mind only a few of all the product variants and brands on the market, and again and again purchases from this small group. ...To induce the buying habit among large numbers of the populace it is essential that the brand be simple in form and in colour ("Wie wirbt man fuer Schokolade?").

At present the firm used a wide variety of packages, alike only in their lack of striking color, which were imprinted with many different fonts. It needed to devise a memorable and unifying graphic theme (including font) for all of its packaging and print advertising. This simple, powerful, theme would impress itself in consumer consciousness.

In addition, the Office report recommended advertising which would link the firm’s products to such occasions as sports events and school.

CONCLUSION: CRITICAL-HISTORICAL EVALUATION

Lazarsfeld and his colleagues believed that the answers to clients’ questions required research which examined all phases of and influences on buying decisions. Advertising was one of these influences, more important in some situations than others. The studies of the Office of Economic-Psychological Research thus had broader scope than would be usual today in commercial studies. They also had broader scope than the studies done in the early 1930s by advertising agency researchers in the United States and elsewhere.

The product-by-product nature of the Office’s studies may have subtly influenced the interpretations of advertising, possibly underplaying its long-term impact. A few of the studies explore long-term advertising effects, but much of the work dealt with immediate advertising effects, particularly in the studies done for retailers. Toffler, a doctoral student who worked with Lazarsfeld, implicitly acknowledged that the Office researchers sensed shortcomings in drawing conclusions about advertising from diverse market research reports. Toffler’s dissertation was based on a study dealing exclusively with advertising effects on one specific group, middle class Vienna housewives. No doubt more such work would have been done, had he Office continued with the vitality it possessed in the early 1930s. But Lazarsfeld’s emigrationCwhich became permanent as he realized that it would be dangerous for a Left-Liberal Jew like himself to returnCfollowed by the emigration of Herzog, Jahoda, Zeisel, Dichter, and others, cut off the lifeblood of the Office. The Office continued until 1938, but political pressure and emigration cost it its dynamism after 1933. Here we evaluate the work which was done through 1933.

Shortcomings of Lazarsfeld’s European Work on Advertising

Lazarsfeld and his fellow researchers were academics who conducted market research in order to support their academic environment, not purely commercial researchers. Nearly all of them were active in Social Democratic politics in Austria. At times their work slights issues which, say, advertising agency researchers would not have. They were not concerned with the costs of advertising, though their clients surely must have been. They did not test or recommend specific media vehicles, for example one magazine or newspaper as opposed to another.

Superior to Other Contemporary Work?

They asserted continuallyCand were believed by many sophisticated researchers in the United States as well as EuropeCthat their work, particularly in its psychological depth, was far in advance of advertising research in the United States as well as elsewhere in Europe. While the chapter on "Consumer Analysis" in White (1927, Chapter 9) contains many of the concepts that the Viennese used, Lazarsfeld completely avoided the simplistic, later-discredited, typologies of "innate" psychological instincts which filled U.S. advertising books then. Where American advertising thought then drew heavily upon the mechanistic notions of Watson’s Behaviourism, the Office researchers reflected the more complex and illuminating work being done in Europe by Freud, Adler, and other giants. Lazarsfeld’s reports have greater range and penetration in analysis and interpretation than work proudly published by the J. Walter Thompson Agency at the same time (J. Walter Thompson News Bulletin 1929-1930). The Austro-German H.F.J. Kropff (1934) also drew upon Adler and Freud, but with considerably less power. The more one studies other work on advertising done then, the more convinced one becomes that Lazarsfeld was an unusually gifted researcher.

Strengths

Lazarsfeld’s method was different, even radically different at the time. It was grounded in the conviction that consumers can accurately express the impact of advertising on them if they are questioned effectively. His method has the virtue of being direct, as opposed to approaches which examine mental proxies for decision-making such as attitudes and memories (recall and recognition).

The greatest strength of the Office analyses of advertising lies in the impressive richness and fullness of their interpretations. This was an enormously energetic and talented group of social scientists who drew upon rich intellectual life of Vienna then and who skillfully utilized their University connections to the Buehlers and others. Their own Socialist beliefs, far from leading them into ritualistic denunciations of consumer society, seem to have helped them empathise unusually well with the mass of consumers trying to get through each day.

The work of analyzed here, strictly speaking, applies to only Central Europe decades ago. It is an historical portrait. Yet little of it appears alien in time and place. Lazarsfeld, Herzog, Jahoda, Zeisel, and their colleagues in the Office of Economic-Psychological Research anticipated many of the concepts which are sometimes taught as the last and latest word today. Their methods exemplify a smooth and felicitous marriage of quantitative and qualitative aproaches towards which some consumer researchers have been aspiring during the past decade. Working at the dawn of formal advertising research, they dealt with consumers who were glad to answer questionsCwho indeed often felt empowered by being questioned. There were no professional respondents then, no jaded and cynical people wondering if the researchers were not really trying to gull them into unwanted purchases. As methods later became more formal and precise, consumers became jaded and less forthcoming; it would be difficult to say that present work is "superior" to that of Lazarsfeld and his colleagues.

A last word: Lazarsfeld and his key colleagues grew in stature after coming to the United States. His work on framing questions became basic to American research methodology by 1940. His studies of radio listening and political behavior remain classics. His psychological analyses were the foundation upon which much of the "Motivation Research" of Ernest Dichter and others was built. Beginning in the late 1940s he pioneered new statistical analyses. Yet in all his American writings he looked nostalgically and with pride to the pioneering work of the Office in Vienna.

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