The study was conducted in partnership with a highly profitable consumer lender in South Africa to determine the effects of advertising content, price, and offer deadlines on loan take up, and in doing so, to analyze the effects of advertising content on real decisions, involving non-negligible sums, among experienced decision makers.
The lender sent direct mail solicitations to 53,194 predominantly urban former clients offering them a new loan at randomly assigned interest rates ranging from 3.25 percent per month to 11.75 percent per month. These mailers varied in a number of ways. First, there were eight variations in advertising content- (1) a person' s photograph on the letter, (2) a suggestion of how to use the loan, (3) a table featuring either a small or large number of example loans, (4) information about interest rate and payments, (5) a comparison to competitors' rates, (6) mention of a promotional raffle, (7) a reference to the "special" or "low" rate, and (8) a mention of the lender offering services in the local language. Additional randomization included the time before the offer' s deadline, which varied from two to six weeks.