Definition

Adding a deliberately inferior third option to make one of your two main options look better by comparison. Basically marketing psychology's version of a optical illusion.

Example Usage

We added a 'Good' tier between 'Basic' and 'Premium' so most customers skip straight to Premium.

Origin

Discovered in behavioral economics; popularized by Dan Ariely

Fun Fact

Movie theater popcorn pricing uses the decoy effect: a large costs only 50¢ more than medium, making it seem like the best value.

Source: Behavioral economics and pricing psychology

Related Terms

Beginner

converted

The magical moment when a potential customer stops browsing and actually opens their wallet, transforming from a tire-kicker into someone who validates your entire marketing budget. In digital marketing, this is the holy grail event—whether it's a purchase, sign-up, download, or any other action that proves people don't just tolerate your ads, they actually respond to them. Every marketer's favorite verb and the metric their job security depends on.

📣 Marketing / Advertising
Intermediate

rebirth

A dramatic rebranding and revival of something old into something shiny and new—whether it's a spiritual renewal, a comeback, or a product line relaunch. In marketing, rebirth is the carefully orchestrated resurrection of a brand's image.

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Advanced

ad server

Technology that stores, manages, and delivers advertisements to websites or apps, deciding in milliseconds which ad you're about to ignore. The invisible infrastructure making targeted advertising possible and privacy advocates nervous.

📣 Marketing / Advertising
Intermediate

ladder strategy

A sequential content marketing approach where each piece builds on the previous, leading audiences from awareness to conversion. Like a choose-your-own-adventure book, but with more CTAs.

📣 Marketing / Advertising
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newsjacking

The practice of inserting your brand into breaking news or trending topics to hijack attention for marketing purposes. Opportunism disguised as timely relevance.

📣 Marketing / Advertising
Intermediate

Silo

When different departments (sales, marketing, product) don't share information or work together—essentially organizational dysfunction with a trendy name.

📣 Marketing / Advertising

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