Halo effect

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The halo effect (sometimes called the halo error) is the tendency for positive impressions of a person, company, country, brand, or product in one area to influence one's opinion or feelings positively. The halo effect is "the name given to the phenomenon whereby evaluators tend to be influenced by their previous judgments of performance or personality." The halo effect is a cognitive bias which can prevent someone from forming an image of a person, a product or a brand based on the sum of all objective circumstances at hand.

The term was coined by Edward Thorndike ^↗. A simplified example of the halo effect is when a person, after noticing that an individual in a photograph is attractive, well-groomed, and appropriately attired, then assumes, using a mental heuristic, that the person in the picture is a good person based upon the rules of their own social concept. This constant error in judgment reflects the individual's preferences, prejudices, ideology, aspirations, and social perception.

Context and applications

Psychology

The halo effect is a perception distortion (or cognitive bias) that affects the way people interpret the information about someone with whom they have formed a positive gestalt. An example of the halo effect is when a person finds out someone they have formed a positive gestalt with has cheated on their taxes. Because of the positive gestalt, the person may dismiss the significance of this behavior. They may even think that the person made a mistake. The person would justify and connect the behavior with the other person's positive gestalt. The halo effect refers to the tendency to evaluate an individual positively on many traits because of a shared belief.

It is a type of immediate judgment discrepancy, or cognitive bias, in which a person's initial assessment of another person, place, or thing will assume ambiguous information based upon concrete details. The halo effect is an individual evaluation. It can affect the perception of a decision, action, idea, business, person, group, entity, or other whenever concrete data is generalized or influences ambiguous information.

The halo effect can also be explained as the behavior (usually unconscious) of using evaluations based on unrelated criteria to make judgments about something or someone. The halo effect is sometimes used to refer specifically to when this behavior has a positive correlation, such as viewing someone attractive as likely to be successful and popular. When this judgment has a negative connotation, such as when someone unattractive is more readily blamed for a crime than someone attractive, it is sometimes referred to as the horn effect.

Marketing

The term halo effect is used in marketing to explain consumer bias toward certain products because of a favorable experience with other products made by the same company. It is used in the part of brand marketing called "product line extension". One common halo effect is when the perceived positive features of a particular item extend to a broader brand. A notable example is how the popularity of Apple's iPod generated enthusiasm for the corporation's other products.

In the automotive industry, exotic, limited-production luxury models or low-volume sports cars made by a manufacturer's racing, motorsports, or in-house modification teams are sometimes referred to as "'halo cars'" for the effect they are intended to produce on selling other vehicles within the make. To contrast this with the automotive terminology "flagship model".

Advertising in one channel has been shown to have a halo effect on advertising in another channel.

A halo effect with regard to health, dubbed a "health halo", is used in food marketing to increase sales of a product; it can result in increased consumption of the product in the halo, which may be unhealthy.

The term "halo effect" has also been applied to human rights organizations that have used their status to move away from their stated goals. Political scientist Gerald Steinberg has claimed that non-governmental organizations (NGOs) take advantage of the halo effect and are "given the status of impartial moral watchdogs" by governments and the news media.

The Ronald McDonald House, a widely known NGO, openly celebrates the positive outcomes it receives from the halo effect. The web page for the Ronald McDonald House in Durham, North Carolina, states that 95% of survey participants were aware of Ronald McDonald House Charities. This awareness is attributed to the halo effect, as employees, customers, and stakeholders are more likely to be involved in a charity that they recognize and trust, with a familiar name and logo.

A brand's halo effect can protect its reputation during a crisis. An event that is detrimental to a brand viewed favorably would not be as threatening or damaging to a brand that consumers view unfavorably.

Other uses

Non-psychology/business use of the term "halo effect" describes the monetary value of the spillover effect when an organization's marketing budget is subsequently reduced. This was first demonstrated to students via the 1966 version of a textbook and a software package named "The Marketing Game."

The halo effect can also be used in the case of institutions as one's favorable perceptions regarding an aspect of an organization could determine a positive view of its entire operations. For example, if a hospital is known for its excellent open heart and cardiac program, then the community would expect it to excel in other areas. This can also be demonstrated in the positive perceptions of financial institutions that gained favorable coverage in the media due to meteoric growth but eventually failed afterward.

The term "halo effect" is also used in metal detecting to denote the enhanced ability of a metal item or coin to be detectable when it has been left undisturbed for some time in wet soil. The object can leach some metallic properties into the soil, making it more detectable. The area surrounding the object is called its "halo."

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