The Power of Artificial Scarcity

Creating arti­fi­cial scarcity works — but is it ethical?

In my line of work as a spin doc­tor, I some­times cre­ate arti­fi­cial scarcity to ful­fil my PR object­ives. I’m not alone — many com­mu­nic­at­ors and mar­keters do the same thing.

In this blog art­icle, I will dis­cuss why cre­at­ing scarcity works, why we use it, and wheth­er or not it is ethical.

Here we go:

The Principle of Scarcity

The prin­ciple of scarcity is well-estab­lished in sci­entif­ic lit­er­at­ure. If some­thing seems scarce, we anti­cip­ate our pos­sible regret of fail­ing to acquire the resource in time:

“In 2 exper­i­ments, a total of 200 female under­gradu­ates rated the value and attract­ive­ness of cook­ies that were either in abund­ant sup­ply or scarce sup­ply. […] Results indic­ate that (a) cook­ies in scarce sup­ply were rated as more desir­able than cook­ies in abund­ant sup­ply; (b) cook­ies were rated as more valu­able when their sup­ply changed from abund­ant to scarce than when they were con­stantly scarce; and © cook­ies scarce because of high demand were rated high­er than cook­ies that were scarce because of an acci­dent.“
Source: Journal of Personality and Social Psychology ¹Worchel, S., Lee, J., & Adewole, A. (1975). Effects of sup­ply and demand on rat­ings of object value. Journal of Personality and Social Psychology, 32(5), 906 – 914.

We are pro­grammed for sur­viv­al and will, there­fore, a) over­value items and ser­vices that are scarce and b) under­value those plen­ti­fully. ²Silfwer, J. (2016, August 4). FOMO & Digital Trends: You Don’t Have To Catch Them All. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​f​o​mo/

Creating arti­fi­cial scarcity (by lim­it­ing avail­ab­il­ity) is a power­ful PR strategy, but to avoid back­fir­ing, the PR pro­fes­sion­al must refrain from fram­ing the offer using untrue statements.

Learn more: The Power of Artificial Scarcity

Artificial Scarcity

Artificial scarcity: “Only 5 spots left for this exclus­ive lead­er­ship train­ing — sign up now or miss out on this once-in-a-life­time opportunity!”

Artificial scarcity occurs when a com­pany or indi­vidu­al cre­ates the illu­sion of a lim­ited sup­ply or urgency to manip­u­late con­sumer beha­viour, even when the scarcity is not genu­inely based on the avail­ab­il­ity of resources. This tac­tic often encour­ages rushed decisions and cre­ates a sense of urgency that may not be justified.

In a busi­ness con­text, arti­fi­cial scarcity can pres­sure cus­tom­ers into mak­ing hasty decisions, lead­ing to over­con­sump­tion, regret, or loss of trust. While it may drive short-term sales or engage­ment, it can also under­mine long-term brand loy­alty if con­sumers feel manip­u­lated or deceived by the false urgency.

To avoid fall­ing into the trap of arti­fi­cial scarcity, busi­nesses should focus on build­ing trust and provid­ing genu­ine value rather than rely­ing on psy­cho­lo­gic­al manip­u­la­tion to drive sales. 

Transparency, clear com­mu­nic­a­tion about product avail­ab­il­ity, and cre­at­ing mean­ing­ful exclus­iv­ity or lim­ited-time offers can help busi­nesses main­tain eth­ic­al mar­ket­ing prac­tices while still sus­tain­ably gen­er­at­ing excite­ment and demand.

When scarcity is craf­ted, desire grows not from need but from the illu­sion that what is lim­ited is some­how more valuable.

Learn more: The Power of Artificial Scarcity

Artificial Scarcity and Public Relations

People tend to act more quickly when they believe that the thing they want is about to dis­ap­pear. The fear of not hav­ing some­thing can drive people to take action when they would­n’t have oth­er­wise acted.

Our brain releases dopam­ine in response to a poten­tial reward, which causes our beha­viour to be rewar­ded by the pro­spect of a new thing. It’s FOMO (fear of miss­ing out).

PR pro­fes­sion­als often base their PR strategies on cre­at­ing arti­fi­cial scarcity. We know that the more scarce some­thing is, the more people want it.

In a world where everything has become read­ily avail­able, it isn’t hard to under­stand why many PR pro­fes­sion­als, com­mu­nic­at­ors, and mar­keters use arti­fi­cial scarcity as one of their favour­ite tricks. We apply arti­fi­cial scarcity in many ways, such as lim­it­ing quant­it­ies, expiry offers, exclus­ive stor­ies, and rare occurrences.

I once cre­ated an invite-only wait­ing list for a new stream­ing ser­vice. Your place on the wait­ing list was par­tially determ­ined by your num­ber of social fol­low­ers and the num­ber of fol­low­ers of the per­son who invited you. The scarcity of avail­able seats sparked intense anticipation.

The Ethics of Artificial Scarcity

The Principle of Scarcity is an effect­ive motiv­at­or because it appeals to people’s instinct to acquire what they per­ceive as lim­ited. People have an innate desire for things or activ­it­ies that are scarce.

Creating arti­fi­cial scarcity can be an effect­ive motiv­at­or if appro­pri­ately util­ised. Is it eth­ic­al? I wish I could deny the inher­ent cyn­icism that seems to accom­pany our scarcity bias.

My approach is to use arti­fi­cial scarcity sparingly.

Example: I could use a count­down timer to get more users to sign up for a spe­cif­ic deal. But I would only use the timer if I were con­fid­ent that the offer would­n’t remain or resur­face soon after the count­down runs out.

Another way of put­ting it:
Creating arti­fi­cial scarcity is okay. But lying nev­er is.

THANKS FOR READING.
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