Contact us

1 (888) 505-5689

The Unethical Marketing Tactics of Scarcity in Advertising

Marketing tactics

The marketing practices of the past don’t necessarily work today, especially when it comes to marketing to millennials. Now, more than ever, consumers are more privy to unethical marketing tactics, and because of the rise of “fake news”, people are that much more skeptical about what messages they are receiving.

In the past, marketers took an interruption type of approach in order to get in front of their target audience. However, thanks to the rise of the internet, and to marketing pioneers such as Seth Godin, we moved into a taking a permission marketing approach, which then opened the doors to inbound marketing (content marketing).

Where there used to be a consumer blind spot (of which, companies capitalized on), the internet has expanded the consumer’s peripheral vision, which has forced companies to be that much more transparent in how they do business. In this article, I’ll show you how using scarcity in your marketing can either make or break your business.

The Timeline of Supply-and-Demand

In the old days, natural resources and raw materials were scarce. Back then, people needed land to grow food, or metals to create cooking items – such as pots and pans. We’re talking about the resources and raw materials that someone would need for daily living.

Big tycoons, who were privy to the markets vulnerabilities in those days, ended up making a fortune. In other words, by taking advantage of a market that was scarce in resources, they were able to make huge profits.

A few years later we gave rise to the Industrial Revolution, which was led by industrialists such as Carnegie and Ford. No longer was there scarcity in resources, but rather scarcity in finished goods. These industrialists made their millions by providing what the economy demanded hence, the concept of supply and demand. It was at this time, when options were limited, that business owners, industry leaders, and marketers could call the shots.

However, in today’s free market economy there are plenty of brands, plenty of options, and even the number of factories in our country is beginning to increase. In short, with just a little personal financial management, and a little time to research and shop around, consumers now have the upper hand.

The Business Model of Scarcity in Advertising

In the old days, before the internet, if a company was implementing unethical scarcity tactics in their marketing or advertising, it was much harder to notice. Because of this consumer blind spot in the market, big companies could take advantage of it and the consumer would be none-the-wiser.

However, because of the internet, these unethical business practices are that much more difficult to implement. Now, once again, the consumer is given the upper hand and are able to force companies to be transparent in how they employ scarcity tactics in their advertisements.

When a company that sells retail products, decides to implement a content marketing strategy in their business, and they use scarcity as their primary business model, it’s possible to set up marketing campaigns. These campaigns are legitimately only available for a limited time, or that are rarely repeated. There may be similar deals down the line, but the scarcity tactic is mainly dependent upon the impulse buy. In other words, consumers are forced to make a quick decision with very limited thinking.

Using False Scarcity to Boost Sales

Using scarcity tactics in your marketing is perfectly valid, but only if it is done in a genuine way. Putting out the same offer every other week would be considered unethical. You are lying to your target market, and utilizing a content marketing strategy for your business is not just about building trust, but nurturing it as well.

Here is an example of what false scarcity may look like: When you create the impression that you only have limited quantities of a product, but you actually have more than enough to go around, then this is lying.

If you’re selling physical goods, you might be able to get away with this (but not likely if you’re using a content marketing strategy to do so). I remember being in a sales funnel for a product that I missed the cut-off date for, only to enter another sales funnel where I could get the same packaged deal (with a few extra bonuses) and pay less then what was originally shown to me.

This kind of marketing and advertising is unfair to the people that bought the product at the more expensive price. And what’s even worse than that is not paying attention to your customers, and what they just bought, only to send them the second marketing campaign where they can get the same package at a lower price.

Moreover, if you’re selling digital products, there’s no such thing as ever running out of inventory. Now, with something like this, you may decide to include bonuses with one of your products that prospects can get for free, but only if they take action now (or within 48 hours). There’s nothing unethical about this type of marketing tactic. However, to state that an eBook or online course will be completely gone within two weeks (of 48 hours) doesn’t make a whole lot of sense.

Imagine what your customers or prospects are going to feel when they become privy to your deceptive false scarcity marketing tactics. More than likely betrayed won’t even scratch the surface of what they feel. Creating this type of fake scarcity means that you are putting all of your hopes on generating enough buzz to make a profit rather than putting all of your attention on creating a strong enough offer that a consumer or prospect can’t say no to.

Think about what this kind of unethical business practice says about you as a business. No matter how you want to justify it, it’s dishonest and manipulative. Today’s consumer won’t tolerate it.

About the author

William Ballard

William Ballard, MBA is a freelance writer, author, entrepreneur, and content marketing specialist. His mission is to help both large and small businesses go from merely surviving operations, to truly thriving organizations. He does this by being a highly sought after business strategist and market research analyst. He has been involved in digital marketing since 2009 and business management since 2013. Connect with him on Twitter @ApostolicAuthor.