The ABCs of Selling Fear

"…huge 'billboards' turned out to be 3'x6' backlit advertising panels…."

by Michael Cooney

It's well known among seasoned marketing experts that fear is often a greater motivator than gain. People will work ten times harder to keep from losing something of value they already have, than they will to gain something of value they do not yet possess. This phenomenon is appropriately called "Fear of Loss."

The recent referendum in Glendale on Propositions A, B and C was a notable case in point, and for those interested in the subject of selling through fear, provided a glimpse into how such a campaign works.

In a nutshell, developer Nick Caruso had won City Council approval to build a high quality commercial/residential development on blighted land in downtown Glendale. The City would donate the land, valued at about $65 Million, plus spend $12 Million on nearby traffic and infrastructure improvements. The developer would maintain agreed-to standards and spend around $186 Million on construction. A company called General Growth, owners of the Glendale Galleria, allegedly didn’t care much for the idea of upscale competition moving in right next door, so it spent several hundred thousand dollars to gather enough signatures to countermand the Council and put the development on the ballot.

With General Growth funding the "NO on AB&C" campaign, television commercials aired, mailers began flying into resident’s mailboxes and lawn signs sprung up on many properties. Developer Caruso largely funded the "YES" campaign, with similar marketing efforts.

Several people involved in local politics told me the measure should easily win by a 2-to-1 margin. I agreed. As weeks passed, however, it became evident that was not going to happen. Why? The opposition was effective at selling fear.

Their mailers made good use of the public’s collective fear of loss. There was fear of financial ruin for the city. After all, why donate $65 Million in land value when the city could sell the land to a developer? And there was parking. Only 2,700 parking spaces for the thousands of cars pouring into the development? Then there was fear surrounding the street closures, and how traffic would be snarled beyond comprehension. And fear of increased crime. Fear of massive billboards destroying the serenity of the city. Fear of 70-foot tall “walls” destroying views. And more.

Fear is a fascinating tool. We know what we have now, in Glendale. And we’re rather comfortable with it. Still, we’d like to see the area in question developed. But we don't want the city coffers to go bankrupt. And we don’t want our streets becoming clogged with impassable traffic. We certainly don’t want more crime. And so it goes. We want something nice. But above all, many don't want to trade what we know for something unknown. And that’s how fear works.

I suspect the fears were overstated. I spoke to the developer’s architect who told me there were 776 residential parking spaces in addition to the 2,700 retail spaces. Not perfect, but better. Crime? The development’s security force will certainly help, working in conjunction with Glendale police. The huge “billboards” turned out to be 3’x6’ backlit advertising panels on storefronts. The traffic? We’ll see. Using that logic, the Galleria should never have been built, since it brings thousands of cars per day to that part of Glendale. Certainly there will be more traffic, but if you want to build a destination, like The Grove or Old Town Pasadena, you get traffic. Topping it off, the “NO” literature seemingly ignored the tax revenues and job creation benefits.

The "YES" campaign, for it's part, did a poor job of promoting the project’s merits. One mailer contained the exact same information front and back. What a waste. One side could have been used for expanded arguments, or for key point translations into several languages. Another piece offered free parking at The Grove (another Caruso development), but contained no description of that development to motivate a trip there, and also provided no address or map! Astounding.

In the final tally, the YES vote won by only about 550 votes, and a thin 51-49 majority. The "NO" campaign was effective and almost won the day.

Fear is a highly effective motivator. In advertising, fear of loss motivates people to buy investment newsletters (don’t lose your life savings in the coming crash!), health newsletters and supplements (don’t lose your health!) and much more. Since effective advertising relies on an understanding of human nature, those who know how to use fear effectively will do well.