Rory Sutherland, Vice-Chairman at Ogilvy UK, is famous for his unique perspectives, witty anecdotes, and being an all round legend. The 2020 Coronavirus (COVID-19) pandemic has brought into focus an opportunity for businesses and marketers across the world to reevaluate their activity, reflecting on where we’ve gone wrong so far, and where we can do better in the future.
In this comprehensive webinar, Rory addresses some of the failings COVID has brought to light and also the opportunities during this period of change.
Some key points covered were:
– How the virus has forced us to reevaluate team communications, how introverts and extroverts interact, and how Zoom in particular has been a great asset for businesses acting in the current environment.
– How the current model of being paid by the hour makes no sense in the current agency environment as the value we add is not proportionate to the time it takes
– Kano theory – A model for explaining how moments of magic have the ability to delight the customer. Not only this, but how these moments of magic, often the first things to be cut from a budget, can be key drivers of commercial success.
– And just so so so so much more.
So hello, everyone and welcome to the third marketing meetup webinar. Today it’s an absolute pleasure to be welcoming the vice chairman of Ogilvy UK And may I say a real life Cinderella story, man. Roy started in 1988 as a graduate trainee at Ogilvy and has since
raised through the ranks to be the vice chairman, which I might say is the most vague job title possibly in the world but I think that’s quite conscious. In the fact that gives Rory the freedom to explore advertising as well as look to elevate the industry in many ways, so through his article, spectator but also through many podcasts, the webinars and all sorts of things.
Rory personally has had a
huge influence in my career personally, we’ve had the pleasure of meeting a couple of times, the first time was at my time at business software, where I used to work for Bartlett wood. And he was one of the first World Class marketing speakers that I’ve ever seen in my life, I just want to say thank you, to you, Rory, that’s like, unreal, he really set me up with a foundation for the rest of my career. So I’m really grateful for that.
And as a fun fact, he’s also the owner of a Japanese style toilet, which I think is pretty damn cool. So the way today that today is gonna work is we’re always going to give a short presentation, we may have a short chat beforehand. And then we’ll open things out to q&a. Before we do that, and by the way, the q&a function is just found beneath here. So if you wiggle your mouth mouse, you’ll be able to see q&a, and you can ask questions in there. Before we get going, I just want to say a big thanks to the sponsors. Growing up
has changed the entire way the marketing metres marketing metre has operated.
And I won’t go into the in depth here but I just want to say thanks to pitch content cow phi the red gate Cambridge mask college leader brand further third, light and human.
All these companies have stood by aside and said, Look, we want to support the marketing community which has been unreal and enabled us to carry on doing what we’re doing,
when asked for me is just to say to them in the follow up email to say thank you very much for helping us out because it’s truly appreciated.
So, with that preamble fully completed, I just want to say welcome to the legend. That is Rory Sutherland. Thank you very much for being here today.
Right? Well, I’ll start off I think just chatting before I share any slides.
And one of the things I’ve called this talk very provisionally where did it all go wrong and
I’d just like to talk a little bit about, I think some roads not travelled by the marketing services industry over the 20 or 30 years in which I’ve worked within it. And normally, I’d feel a bit reluctant to give a talk about, you know, God, why why are we such idiots. But I think we do have a unique moment here for large scale collective reinvention
and a large scale collective rethink. And I started off I think I’ve written a piece for campaigns saying this that if I ran an agency myself, one of the strange things I do is I mandate simultaneous holidays. So at the moment, we just about do this around Christmas, you know, around Christmas, you know, for about six or seven days, you don’t get many emails from colleagues. It all goes a bit quiet and everybody arrives back simultaneously refreshed. And I think rather like northern industrial towns, which used to have a factory fortnight’s where everybody went on holiday
But at the same time, often they went to the same place. They’d all go to Blackpool. And you have kind of Glasgow week in Blackpool, where, and this was partly I think driven by the needs of industrial plant, which is, you know, you had to have some sort of week where you de coke your smelting machine or something, and therefore, you send everybody home simultaneously for that week and so everybody holiday together, but the value of having everybody emerging refreshed from a period of withdrawal simultaneously. I think he’s actually useful. I think there’s a reason why religions have Sabbath’s and fasts and Ramadan and, and so forth simultaneously, which is it’s the kind of reboot it’s a bit like at a collective level, that thing that you should always turn your laptop off, you know, every few days or turn your mobile phone off and restarted every few days. And I think this very rare, unprecedented and imposed similarly
taneous lockdown is an opportunity for us to rethink things, and is a case of I think, forced a forced rethink. There’s a wonderful, wonderful experiment I’m very, very fond of, because it shows the Power of Habit,
which was a few years back, there was a selective London Transport strike which affected two or three lines on the London Underground, but not the others. As you remember, the Circle Line was unaffected, I think. But for example, the Victoria line, the Northern line and one other line, maybe the Piccadilly line went on strike.
And so everybody who normally use those lines to travel into work was forced to formulate a plan B. And some interesting people from a mix of universities went to London Transport, and they got the Oyster card, the the anonymized, but still personalised Oyster card behavioural data for a group of people before during an
After the strike,
and they discovered, as they think they predicted, but they certainly proved that a surprisingly large minority of people change their behaviour even after the strike, it ended. In other words, the strike could force them to reevaluate how they got to work. And it forced them to attempt, you know, a second best option as they saw it. And a surprisingly large number of people stuck with their second best option, either always, or sometimes, after the strike, it ended. And it might have been that they never realised that the second best option even existed before they were forced to choose it. Because you know, quite often what we do is we find a route to work we know roughly how long it takes. Therefore, we know that if we take that route, we can be fairly sure of not being late for work. And so we stick with it partly for reasons of low variance, not necessarily optimality.
And what would happen is that people are forced to choose
Ruby, perhaps in some cases, they discovered that Ruby was faster or quicker. In other cases, they might have discovered that although it was four minutes longer, there was a Marks and Spencers simply food at one of the stations. So you could use it without breaking your journey home, you know, to go and stock up on chicken tikka masala or whatever. Or maybe they discovered that if you took the Thames link rather than, say the Northern line, although it was four minutes slower, you had more chance of getting a seat and it was above ground so you can use your mobile phone. I mean, who’s to that. But what was interesting is that sometimes an imposed jolt to a system improves the health of the system overall.
And I think we’d be missing an opportunity. If we don’t use this enforced external jolt to rethink the way we do things. And one of the best examples of this by the way, as I see the participants creep past the 203 mark, was on brief, the left and resume
is quite simply
You know, the importance of video conferencing and remote working, and the way in which we can significantly use this to reinvent the way we do business. And there are about five different reasons I like to do this, one of which is it might solve the property crisis to a degree, because arguably, if you only had to be in London for three days a week, where you could feasibly live, would expand enormously. And since area expands at the square of distance, you don’t have to get far beyond the 25, before affordable property becomes available, actually.
And so one of the things that worries me about you know, the ad industry is worries me about how we recruit is that the ask that you have to live in London in order to work in it is a fairly significant, you know, we worry endlessly about, for example, gender bias, or ethnic bias, but this is a pretty extreme geographic bias. I remember talking to an applicant to go to third she was Britain.
But she’s got a third. And ironically she said weirdly, with my third in medicine, I’m much better off than all my contemporaries at university because my mum lives in London.
So I can crash down there and go job hunting in a way that they simply can’t. I can take short term job opportunities and see what transpires in a way that you know, someone living in bombs they simply can’t submit. So that’s just a trivial part of it. The other the other very important part is I’m now talking to 211 people with no idea where on the planet you may be, you’re all over the place. I haven’t had to go to a sodding airport. You know, pack a bag, remember my passport book a taxi. I haven’t had to go to any ask aching pain in order to speak to you or
someone from Houston I favourite cities By the way, obviously wonderful place. delighted to see that. But the fantastic thing is that I suddenly realised two days ago
I’ve always been a zoom advocate. And it’s very, very important in business, not least because you can win business over zoom that you can’t win over email and over the telephone. So it’s, it fills if you if you look at the sort of funnel for getting paid work, there’s a huge missing link between getting on a plane and seeing someone and having a phone conversation or an email exchange in terms of what you might call the, you know, the translation from a prospect to a customer. And zoom fills that gap. Extraordinary well, but it also occurred to me two days ago when I started today, speaking someone in Australia one of my colleagues, has moved to Sydney.
About four hours later, I was talking to about 100 people in Bucharest two hours after that I was talking to three people in Atlanta.
And it suddenly occurred to me this made more difference to my ability to do business than if WP p had bought me a Lear jet boat.
Gulf Stream, which by the way, I think the likelihood is pretty remote.
But you know, the fact that for 1199 a month, which I think is the cost of your own private zoom subscription, you whether you’re a one man band, and based in Latvia
can have conversations with anybody anywhere. And I think the future of the world might end up with being one which is physically quite localist, and intellectually extraordinarily cosmopolitan.
And so, that that fascinates me because I think it’s a way and I’ve been, by the way, just in case you think I’m a late convert. I’ve been a zoom evangelist, and a video call evangelist within my team of 15 people in London for about the past year and a half. So one of the things we were doing years before this happened, was literally zoom Fridays, and I argued,
there were about three big reasons why the ad industry hadn’t adopted. What is the
Most important technology to transform our working lives in 1520 years, one of which is there’s a bias against introverts in all behaviours. Most people in Ogilvy are introverts. By the way, most people in advertising, although they’ll do the presentation stuff, but the minority or possibly small majority of extroverts, drive behaviour.
And so I’ll give an example. Okay, you have a client wants to brief three agencies, the clients based in Frankfurt. Okay, now the briefing can take place over zoom perfectly well, extremely well, right. But once one of those agencies decides to send two account men out by plane to Frankfort, the other two or three agencies are forced to follow suit for fear of looking lazy or uncommitted. And so an enormous amount of extraneous and non value generating behaviour is driven by this kind of competitive efforts.
signalling. And it’s kind of extraversion signalling. extroverts can bully introverts? No, you must come we need you there. You’ve got to be, you don’t get the opposite. And I was saying earlier, you don’t get people at Everest base camp gain rank, don’t bother climbing to the top. Why don’t you just stay in your tend to read proofs to be lovely, okay? You never get that. You’ll notice when you go with a family on a country walk, the duration and length of the walk is determined by the most energetic participants, which is why people are often reluctant to go on walks, because you’ve had a nice two and a half mile walk and you think that’s about right in terms of a decent stroll. And there’s always one bastard who goes with them another two miles up that hill will be able to see the view from badgers match, and you’re forced to go along with them, because you can’t really bunk out and go. So introversion extroversion and the asymmetry between those two is an important factor.
The second thing I think it’s important factor is coordination, the coordination problem. The open plan office has setbacks.
Zoom use by about, you know, seven years. Because if you’re in the office, it’s actually more difficult to bloody well have a zoom meeting and find a meeting room than it is to have a physical meeting.
You can’t very well do it in public, someone did try to invent something that looked a bit like a motorcycle helmet, which was a private mic that covered your face for that purpose. But I can see all manner of reasons of social embarrassment, why that’s never going to take off. But what we did what we invented in the behavioural science practice was zoom Fridays, we said look, certain parts of the week will focus on what you might call concentrated, intense, withdrawn work, or virtual work, email, video conferencing, deck writing, ad writing.
David Ogilvy never wrote a word in the office didn’t write any of his ad copy in the office didn’t write any of his,
his books in the office, too many distractions as he put it, and I said, Look, if we can come
departmentalized the weak and all do it in the same way. So that when we’re in the office, we dedicate our time to face to face exchange, which is the only area of of human contact in which the office has an advantage. And then dedicated pockets of time will will devote to either virtual Contact or email. And that might also apply to early mornings, I’ve always said to my team, Look, don’t struggle to get into the office at nine o’clock in the morning, and then spent two hours doing email, those emails would have been exactly the same if you’d been at home. So there’s no sense in struggling in a crowded train on another way in which you can’t do an email rather than doing email from eight till 930. And then travelling in an empty train in which you can continue to work or think or get on with worthwhile work.
And so there’s that coordination problem. There’s the introversion problem. And then I think there’s also an interesting problem with zoom which this particularly
A crisis has helped solve, which was the quality of video call was always determined by the crappiest participant. So the you know, the law that was was typically By the way, the most senior person in the meeting. And so for whatever reason,
and I don’t know, that’s a very good question that’s just emerged. That’s why you need an office is accidental natural collisions. But I think we can also recreate natural accidental collisions on zoom. Yeah, we’ve been doing the same with the NOx metre compensation clubs. Exactly. So So actually, I think we can start to use digital technology to simulate I always envy BBH has a wonderful lobby, because to get from one part of BBH to another part, you have to go through this central coffee shop. Over beat some extent I used our ground floor coffee shop for the same purpose. If you sit there for long enough, you’ll bump into everybody you need to talk to anyway without needing to
Fix a meeting.
But that kind of thing can be recreated electronically. And by the way, the other the other thing about electronic meetings is that we’ll start to rethink properties of meetings, which are purely a product of their physicality, don’t need to be replicated. A lot of meetings don’t need to last an hour. Now a physical meeting needs to last now, in many ways, because if you’ve asked someone to cross town to come to your agency, you feel a bit of a dick if you only talk to them for 15 minutes. This was the curse when I was based in Canary Wharf because people would come out, they’d show me their book, and I go, it’s great book. Fantastic. I like your ads. You need to get to see me and Charlie, who are the main creative directors and see if they’ll give you a job. Now, that would only take me 10 or 15 minutes to determine that, but because they’ve travelled to Canary Wharf, I had to give them another 45 minutes, because otherwise I felt I’d take them around.
brainstorms By the way, which we try and cram into one meeting. Other interesting brainstorming tools like me
Right, which is kind of virtual whiteboard, which we’re investigating at this very moment. But brainstorms will be much better split into two. So you actually have a period of immersion, which may be 2530 minutes, okay, then you have a week off, which is fermentation. And then you maybe have a few hours of intense ideation at the end. Now, the reason we tried to cram all of those three phases into one was because of the coordination costs. And in many cases, the travel costs of getting everybody in the same room required you to do it that way. By the way, the last part could even be physical once this virus goes away. But suddenly we can rethink things. But then that final point I mentioned, which is that the great thing about this thing is that everybody is forced to be at least half competent. I think the great success of zoom was that it was easy enough to use with a single click that you actually felt a bit of an adult if you failed technologically, but I mean, think about it, okay, if you had an account
Man, you had an account man, you sent them to a client meeting is it? I missed the train because I couldn’t find Waterloo station. Okay? You wouldn’t allow me to get away with that shit more than twice, right? But for some reason, it was almost a badge of honour to be shifted video conferencing, you know, people would do it with extreme background noise or, you know, with, you know, a bright window behind them. So they look like a paedophile and a channel for documentary, you know, I mean, hopeless, hopeless video conferencing techniques. No one invested any money in any kit. And so, finally, I think this thing has jolted people into realising. And I think the introvert minority stroke silent majority, because I’m not quite sure what the ratio is. The introvert, silent majority will now be able, I think, to voice its preferences a little more confidently by saying, actually, if by default, every large meeting becomes both physical and virtual, then this is something that really interests me hugely.
In the behavioural science area, which is the idea of libertarian legislation, which is legislating for choice.
Now, if that sounds like a really strange concept, the idea of in acting laws to improve the area of human choice.
It’s worth remembering that when john Stuart Mill wrote on liberty, he’s as much preoccupied with how you free people from social pressure and social conformity, as he is the question of liberty from governmental oppression.
And so I think there are many cases where if you simply legislator’s it, we’re all we make it a rule within WP, that is you have a meeting of more than seven people. You have to offer a zoom alternative. Huge fan of the meeting owl if nobody knows about this. When I finished, go to our labs.com it’s owl as in the bird and have a look at the technology
A wonderful 360 degree camera, you plunk in the middle of a meeting room table, and the camera automatically focuses in on the person or people who are talking, it’ll intelligently create a trip check if there are three people all talking at once.
And I’ve been a huge devotee of these technologies for ages. But offering people choice, then means that there’s nothing abnormal about choosing one rather than the other. No. And there’s a wonderful person very, very bright local MPs, Conservative MP for favish them, as well, Helen waitley. And one of the most interesting pieces of legislation
is a rule that when you advertise for a job, it is assumed by default, that the job offers flexible working
in less the ad states a good reason to the contrary. So obviously, if you’re a cop, you know, you can’t work from home, I get that right. But nonetheless, what it does is it simply changes the default so instead of having most jobs
as being inflexible, with a small minority of jobs offering a degree of flexibility of hours or place. Instead, the default is deemed to be the other way around, which is you have to stipulate the restrictions, rather than stipulating the freedoms. Now, what was fascinating about this, and this is true, I think of all legislation that offers more choice
is Helen quite rightly intended this to be of particular value to working mums?
And sure enough, I think, you know, it gained a huge amount of support from a variety of campaign groups, which campaign for the fact that one of the disadvantages that women suffer in the workplace is simply that if you spend five or six years primarily engaged in childcare, and lose visibility in the office, it’s a disproportionate career setback, you know, equivalent to being sent to jail, you know, if you like, I mean, obviously, not in reputational. But if I look at my own career
When when various people made this case to me, I was president of the APA in London, like the four A’s.
In the US, for a two year term, 2009 to 2011. My kids were born in 2001. They’re twins. not identical, so useless for experimental purposes. But Tim, but they’re both twins born to that one. If I had done what my wife had done, which is I’d been out of the workplace or rather invisible, not necessarily physically at the workplace. But I’d been invisible between 2001 and 2006. My chance of being a PTA president would have gone from being, you know, how to 60% to about 10. Okay, so we can’t deny that this is really an interesting thing. But what Helen immediately discovered is as soon as she proposed this, not only did she get huge support from her intended target audience, which was working women, she got equal amounts of support from men who wanted to do something similar. Sometimes it was childcare.
Sometimes it was caring. Sometimes it was just look, you know, I’m 61 I really want to retire to the coast. I can’t do that with a five day commute, because I’ll be bankrupt and exhausted. But I can do that with a three day commute.
And so, I’m at a guy very interestingly, who retired from a very senior position in a huge British bank, when he was on an insane amount of money. I mean, literally insane. And
he went plural and started living in France for four days of the week, commuting down by train coming into London, Tuesday, Wednesday and Thursday, which technique is called a flat, it’s an M for someone who comes into London Tuesday, Wednesday, and Thursday, just in case.
shortly after doing that, he you know, he was enjoying himself and doing some quite interesting work. Someone came to and offered him another obscene amount of money to go back to a five day week and he sat down
And said, How much would I need to be paid in order to work that way again, and he sat down. And after 10 minutes, he and his wife agreed that there was no amount of money that would have made it worthwhile going back into that path in the work. So what was wonderful about this, it was legislation with a very narrow target audience in mind, which then ended up having a far wider appeal, for sure, for sure. And I said, as a marketer, you should always look for that be very, very careful if you’ve got a new product in doing very targeted marketing from the off, because whatever product you have, will almost certainly have multiple target audiences. And therefore, one of the arguments for mass marketing it particularly early on, is precisely to discover what your real target audience is. Because your presumed target audience is almost certainly smaller, or maybe even diametrically wrong. Yeah. Yeah, absolutely.
And so you know, it’s an important point that the, the idea of media efficiency
might actually be limiting. Because the very urge to talk to a predefined audience means you never discover who the real audience might be. spoke to someone who developed a fairly good scientific hangover cure, and they assume their target audience was 25 year olds. It wasn’t. It wasn’t 25 year olds on a Wednesday, it was as you can get 35 year olds on a Friday evening. Absolutely. But he’s actually 25 year olds, when you’re 25 you think back to the time your hangovers were bad, but they were gone by 11 o’clock the next day, the weekends when you’re 45 it’s the last weekend. Okay, those are the people who really wanted the product. So that’s that’s my one sort of weird enthusiasm at the moment, which is how we can use this to reinvent how we work and when I say take away the usual assumptions. Now I’m I particularly believe that WP P is an entity This is me talking totally out of school, okay? But you have a large entity like WP p where far too
Much of the talent is siloed.
And far too much of the talent within WP is fully policed by account people who essentially isolate the value creating parts of their businesses to prevent them giving any value away.
Or actually the ability to create virtual businesses across WP p silos, bypassing some of those gatekeepers strikes me as an extraordinary valuable way in which you could almost create new virtual businesses from scratch.
So within WP p we are the behavioural science practice it as part of Ogilvy consulting, where 15 people we can grow I think quite easily even with this crisis, because you know, if there’s one thing that’s proved slightly virus proof, behavioural science advice is, is still fairly current. And it’s something we can deliver remotely fairly well. But freed up by zoom, we could turn that
into a 200 person business simply by saying who out of your 40,000 employees is interested in participating? And what expertise Can you bring? Absolutely not. It might be slightly mischievous and their managers may get slightly paranoid but what the hell that’s not really my problem.
And so, the capacity to reinvent the way we work, I if you if you want one of my rants about this business, the separation of media and creative was one of the dumbest decisions ever taken by the marketing services industry. Because the two are inextricably linked cars now.
The radars are there to Monster at is to be honest, if you will, this is exactly one of the points I made is a lot of people want to work for the Ogilvy behavioural science practice and there’s a limit to the speed at which we can feasibly grow. Give them in next week, you know, unless we go and seek separate funding from our
Were on the other hand if we have a WP virtual behavioural science practice, I
think you may have muted
behavioural science in Tbilisi. So you can literally go and get a job anywhere on a web agency sign up to this entity, and we can work together. So you know, one of the great things is I’m bypassing a huge bureaucracy if you if your current skill is largely in
Oh, sorry, I’m not muted. I think that was that was a computer glitch, but huge apologies.
So if your skills are largely immediate or your skills are largely NPR, go get a job in a PR agency, but you can still be a behavioural scientist in your spare time. If you like.
technology changes all of that. And you know, I would very easily with the Chief Technology Officer of WP, who’s a fantastic visionary, one of the things we’re planning to do is to sit down and say, okay, you can actually use this to reinvent the business. Now, we spend a lot of time talking about how the internet would change the way we worked. But we totally miss things like the fact that emails kind of shipped. An email suffers from By the way, that exact, you know, exact problem of the country walk, which is the person in your team who’s that heavy email user sets the pattern of work for everybody else to some extent.
And it’s what you simply have to realise is that typing is incredibly slow compared to speaking. And it’s a very simple thought experiment. You may not have noticed
Signal it’s slow in that you can edit yourself, I grant that.
But on the other hand, it’s it’s not only slow in that people don’t communicate it, you know, a proper bandwidth speed. It loses nuance. It often offends people unintentionally, because it’s completely lacking in tonality. The great writer is a brilliant American comic writer, and I’ve briefly forgotten his name, the siege of Baltimore, he was known as someone will, someone will helpfully type up his name in a second.
Not David Sedaris, but it’s it’s an early 20th century writer. He always wanted to HL Mencken, thank you very much indeed.
The hive mind you see doesn’t let us down.
Always wanted a form of type that was the opposite of metallics, which slopes the opposite way, which he wants to call a ronix. So that when you said anything, ironically, or sarcastically, you put it in this sort of backward sloping type face, to make clear that you weren’t intended to be taken seriously. And we try with emails with emojis and exclamation marks to take the sting out of what we say. But I must have inadvertently offended people, you know, on many occasions. And of course, you know, generally
it’s, it’s a wonderful thing that, you know, you can actually speak quickly and we can, we can arrive at decisions without a four hour delay between every response. So it’s not just the fact that typing is slow. It’s the fact that all those synchronous email exchanges get protracted over weeks. Something that had to attend minutes zoom call would probably settle to the satisfaction of all participants. It’s also good that it’s slow. Of course, if you
you’re charging by the hour. But that’s a that’s
your absolute right conversation spark ideas. That’s absolutely spot on. I couldn’t agree more. So anyway, so part of my reason for optimism and I see ways in which we change the way we work and the way we work together. What I’ll also do now is just do a little bit of a kind of
where did it all go wrong for the ad industry. And this refers very much to my time.
In the ad industry, I joined in 1988. Now, in 1988, it was a useful time to join because virtually nobody, none of you, I’m guessing your ages, I can’t see you. But none of you was around there. Because you saw the very, very last minute of payment by the hour. Now, when the internet came along, no one can accuse the advertising industry of not noticing or not making a lot of noise about it. Okay.
However, and this is the
important, I think, when I’m painting by the hour stopped.
I think we failed in two counts. And I think two very, very big things happened in advertising and marketing services that the ad industry completely failed to respond to in any intelligent or imaginative way.
And the first one was that after we stopped being paid on commission, there was no reason to confine our skill sets to those people whose problems came attached to a large media budget. Okay, that was a constraint on the size of the industry, when we’re paid on commission, because if we were paid on commission, if they didn’t buy any ads and running the ads, we didn’t get paid. Okay.
The second we stopped being paid by the hour, someone should have sat down and said, what does this mean in terms of who our customer base could be? And we sat down and tried to make money
Monday through fy in the same way that we were paid by commission.
And no one sat there and said, But hold on a second, the selling of creativity married to human insights, married to I would argue measurement and testing isn’t applicable and valuable and rare talent, which can be deployed in 100 times more ways than in simply filling newspaper space and television airtime.
And nobody asked that question because the muscle memory was so strong, and arguably the status currency of I Am, my status derives from the ads I produce, not from the value of my solutions that no one spend any time looking for a way to target audience. And so I always describe an ad agency as being a general hospital which kind of has a sign outside the door which says, we offer cosmetic surgery. Now we do offer cosmetic surgery and sometimes that surgery is
valuable, but there are lots and lots of other problems we can solve, which go far wider. One of the things I love about running the behavioural science practice is we have a client base which includes, for example, the Thames Valley police. The Thames Valley police never going to be a big advertiser when I go to the Ogilvy new business person to go, we’re working with the Thames Valley police, okay.
They don’t go, whoo, this is going to solve our problem, because they don’t see the Thames Valley police as being akin to Unilever. But the human value of the you can create working with the Thames Valley police with a creative mindset and a behavioural science mindset is every bit as great as the value great for a large advertiser.
And we missed that.
And the second thing we missed, okay, is we miss the fact that our clients were changing in the nature of the businesses they were in.
So when I first went into advertising
As recently as I think 1995, two thirds of ad spend was packaged goods. So it was Unilever, PNG that would include beers even include that kind of thing frequently, you know, fast moving consumer goods or some shape or form, you know, soap powders, detergents.
You know, beer cigarettes even back in the late 80s. Okay.
That within the space of about 10 years went from two thirds of ad spend to less than a third probably now, around about a quarter. What took its place was insurance, comparison websites, mobile phone, handsets it consumer electronics, mobile phone networks, and broadband providers. Okay, a whole bunch of online retailers, a whole bunch of entities, which in many cases didn’t even exist when I first came into the ad industry.
But what was different about those companies was that the marketing person was a lot less
and add people continue going to can and grovelling to marketing directors without noticing the fact that whereas the marketing director in Unilever or in p&g was a valued person in many cases with p&l responsibility within p&g, the marketing director inside say an insurance company was treated somewhere like kind of Reaper graphics with a degree. Marketing was not seen as a strategic function. It wasn’t a board level function. It was a supply and service function. And it was seen as a cost and not a source of value creation.
Now, if you go into Unilever, you go into PNG, the senior people in PNG or Unilever will also spend a considerable length, their time working in the marketing function, and we’ll be happy using marketing vocabulary.
If you go into an insurance comparison website, and the guy there is an actuary with a background in finance and statistics
You start talking about brand iconography. You sound like a whack job, okay? And what we failed to do was to realise we needed to silence our power vocabulary to talk credibly to senior people within client companies who would of necessity be a large part of our new audience. Now, unsurprisingly, what you’ll see is that behavioural science, I would argue, help solve all of these three things.
And also say that behavioural science is valuable because it’s a kind of triage function.
In that before you’ve decided whether the solution is advertising PR, large scale media buying b2b marketing, which may be actually the first port of call rather than b2c behavioural science can look open mindedly at a business as a marketing ecosystem, and decide where the game can come best from intervening first
That’s one of my other registers under the ad industry, it made money through advertising.
And therefore advertising is very expensive. So when you went to talk to an ad agency, they tended to talk about advertising questions. First brand questions. Now, advertising and brand questions are hugely an inordinately important. And in many cases, advertising is the most valuable thing you can do to transform a business. However, that does not mean it should be your first port of call and problem solving. And let me explain this. Importantly, I think, and there’s a thing in sales promotion in shopper marketing, which is occasionally called shelf back planning.
I think when you approach any marketing problem, you should do the opposite of what that agency does. You should start from the end and work backwards. And everybody I’ve spoken to in complex systems in complexity theory, anybody who knows, Eli girl wraps this
of constraints, basically says, Yeah, you’re kind of right.
And the point I’m making is, there’s no point in optimising the top of the funnel if there’s a constraint in the bottom of the funnel.
So the first thing to focus on, I would argue is repurchase. And almost no one looks at this, by the way, no one says, okay, when someone’s bought this product from you, how do you get them to buy more shares?
Okay, that’s considered a secondary consideration. The second thing would be conversion, and then the third, you know, and then you work your way up to the top of the funnel towards awareness and choice architecture and so on.
But the reason you should work backwards is there’s no point in optimising the top of the funnel, if there’s a constraint further down. I subsequently discovered that one of the best advertising campaigns ever run in Britain for a German luxury car brand, which you can probably guess but which I can’t name
was briefly rendered totally ineffectual because there was a problem at the dealership.
Which is they would only allow you to test drive a car if you’d already spoken to the dealerships finance guy.
And because there was only one finance guy per dealership, this crazy the bottleneck, where people weren’t free to test drive the car. So they either would come back later when they could test drive it, which was limiting the number of cars you could sell, or they’d piss off by Mercedes because they were frustrated. Okay.
That’s a classic case, ultimately, the guy solved that problem. And the advertising proved to be almost insanely effective. But there was no point in solving the advertising problem until they’ve solved the problem of constraint at the level of sales or sales from conversion. And I’d say that about the car industry in general until you’ve sorted out sales from conversion. There’s not much point in doing great advertising.
And yet, what we tend to do is we start far out work away in now that’s equivalent saying there’s no point in widening a road okay?
If 505 yards further on, there’s a really badly phased set of traffic lights, you’ve got to sort out the traffic lights first, only then is it worthwhile working backwards and widening the road. Because if all you do is widen the road, you just create a traffic jam further along the road. You don’t reduce anybody’s journey time. In the same way, you know, if you optimise what you might call a customer journey, you fix the traffic lights before you start worrying about the road widening. Makes sense? And so these would be various areas of criticism about that industry. And beautifully phrased what we’ve failed to do is we’ve failed to sell to two thirds of our clients see marketing as a cost to be minimised and as a possible source of cost savings and efficiency gains. They don’t see it as a source of value generation in and of its own right.
The Economist Tim Harford very British brilliant British economist and broadcaster asked
Once when we met at a conference, he said, Why is your job so difficult? I said, What do you mean? I said, Well, why did you find it so hard to sell companies on the basis of
individual value creation of psychological value creation like it? Well, I don’t know. It’s just really good. But why don’t you just say, Apple.
And his argument was the world’s only trillion dollar company was a company, which essentially was in the business of creating psychological value, rather than technological value. You know, it was a marketing driven company. And the problem is that 90% of the companies like Apple have at their Helm a guy with a background in finance or technology, not a guy who’s the world’s greatest, instinctual marketer. Yeah. And therefore, in a engineering culture, or a financial culture or in a technological culture, marketing is framed as cheating. It’s seen as because your professional status comes from producing
impressing your colleagues who are coders by producing a superior intrinsic product. And therefore, if you win out through superior marketing, you don’t gain any status.
And that actually happened within apple. It’s not widely known, but large numbers of the tech community within Apple hated Steve Jobs. One of the great quotes is, I don’t get what Steve even does,
if you like, like Austrian School economics, which believes that value is generated in the consumers hand, rather than thinking like either Marxism or Chicago School economics, which somehow thinks that value is created in the factory.
That value resides in the objective properties of the product, not in the stories around which
You tell the stories, which you tell around that product until you can get that community to think off strim.
We’re doomed now. So let’s just say okay, I’ll move on to here. Okay, creative agencies haven’t been paid on commission since 1990. But we still behave as though we were.
Once we were paid by the hour, what made us money became misaligned with what creates value. Now, what payment by the hour allowed was a load of managerial nerds to take over the ruling of the typical ad agency. My argument is that advertising is a rockstar business in that a few very weird and very talented people.
Maybe a few times a year,
come up with weird ideas, slogans, stories, reframing ways of looking at things, insights, okay? These people are not all creative people, by the way, okay?
Just to be able to see clear on that
And they do that not very frequently.
But that 90% of the value generated by advertising agencies occurs in those fleeting moments. Absolutely. Ogilvy said that in his book. He Ogilvy himself came, he only had about five big ideas in his life, I think is slightly self effacing. To be honest, he also said I can’t do TV very well. Yeah.
I mean, you know, but but nonetheless, if you think about it, you know, the Beatles. 90% of their value was created in a very short period of time.
JOHN Haggerty once worked for Paul McCartney, and he was working on an ad. And
he and McCartney wanted a few changes made and then john Haggerty sent him he said,
Yeah, I said, I’d rather have you know, a week ready to go and think about this because nothing really good ever comes out of a short time. And Paul McCartney said, That’s not true. I wrote yesterday.
15 minutes, okay.
Now whether that’s true or not, it’s a bit debatable. But some years later, john haggard, he said that he still wakes up regretting the fact of not saying, Yeah, but Paul, imagine how much better that wouldn’t be.
But, but nonetheless, a helia golfers, you know, most of your professional career as a golfer, you only spend about sort of, I think it’s about two and a half minutes with a club in contact with the ball in professional Max, play, match play. So you know, okay, there’s been a time wandering around, there’s preparation, there’s practice, but the real thing that distinguishes a championship golfer from an indifferent golfer is a surprisingly short amount of actual time.
And so paying by the hour is wholly wholly inappropriate to creating healthy incentives reading agencies, and once more the the account people who take over think that what’s valuable about what the agency
Does is what makes money, I things that are time consuming and tedious rather than things that are magical. And so the focus of the agency disproportionately rests on those drugs like time consuming, large, ongoing projects, rather than focusing on moments of alchemy and magic, where you make 5 million quid in the space of a 10 minute phone call. Yeah.
And as a result, it’s given too much power to account people who essentially account for time and, and, and quantify it and too little wealth and influence to the people who create that value in the first place. And you know, my cynical point about Ogilvy is that, you know, I sometimes feel about any agency that’s paid by the hour, but if I invented a cure for cancer, I went into overwinter, I think I might have come up with a cancer cure people go that’s quite interesting. Whereas if I went in and said, I’ve renegotiated the Unilever blended rate, hourly rate, you know, up by 1.7%
For the financial year 2021 to 22 I be carried out on people’s fucking shoulders like a hero.
And so it’s essentially, it’s a rock star business. Now, by the way, rock stars. This is complicated, because what I’m not suggesting rock stars need lots of roadies and all manner of shit around them, for them to function. Okay, I’m not suggesting you can, you know, you can create the same business in isolation. Some of the people who often have just spectacular organisational skills or persuasion skills are equally deserving of spectacular reward and spectacular emolument and real regard.
But nonetheless, what we shouldn’t do is try and turn this into a drudge business where you know the value we created somehow proportionate to the labour expended because nothing could be further from the truth. And when I said about my vice chairman role, which is it’s a deliberately vague job
title. One of the things that
payment by the hour did is it compartmentalised our skill base. Now, if you went to an agency, I can remember the kind of tail end of this in the 80s. She went to a J. Walter Thompson in 1988, there would have been two or three quite well paid people in the creative department who were, in some ways dysfunctional, possibly unbelievably rude, maybe borderline alcoholics,
who were kept on the payroll, essentially, nude and no client would ever say I’d like this person on my account, okay. But then they’re kept on the payroll because four or five times a year, they can solve a problem that no one else could.
or they’d stumble into a room in a state of confusion and just come up with, you know, seven words of magic. Now, the fact that we’ve compartmentalised our employment base, it also means that it was always the case that the best planners are often creatives
And the best creatives didn’t want to be planners, but they were fucking good at planning. Okay. And that kind of blurriness, which used to happen in the old days, everything became much more kind of sequential. And I’m kind of confused about process because I like process. I always regarded, I would say it’s not process. It’s a checklist. don’t regard it as process in the sense that you have to do these things in a specified order. Just make sure you do all of these things to ensure you’re not missing anything. But when when a check this becomes going to process in an order.
I think quite often, you know, I mean, a lot of the very best work was by the way, great creative idea, which was post rationalised, and that’s fine. By the way, a lot of the best scientific discoveries are a flash of inspiration, which is written up as though it was the product of kind of big kuhnian scientific experiment. The insight never arrived that way. Okay? It’s okay to pose rationalised just just so you all know okay.
If someone can, you know, I used to be in meetings as long as they are, you’re leaping towards execution. The folks run with that said, you know, you know, you know, go, you don’t go into a teaching hospital, you don’t show the patient, you’re supposed to be doing diagnosis, right? You know, if you kill the patient, you’re the patient.
And so don’t don’t let your you know, don’t, don’t don’t let your strategy interfere with your tactics. You know, if you if you happen to come up with a brilliant idea, which instinctively feels like it’s doing the job, rewrite your strategy around it, you know,
emerges. So anyway. But anyway, the other thing is that we should do small, and this is the weirdest one, okay, I want to be able to work with small Silicon Valley startups. They’re never going to be of interest to a standard agency, but they are or some of them will be the brands of the 21st century. We can’t simply spend our time focusing on 20th century and 19th century brands on keeping them fresh or in
more dire cases, keeping them on life support, we have to work out a way we can spot and work with 21st century brands, which by the way would mean in my own particular world, if anybody put me in charge, which is never going to happen, I move off of bloody Ogilvy in the US to the west coast. But there we go, you know, I don’t think you should spend all your time focusing on that corridor between New York and Chicago. I think there needs to be a focus further west and a focus in India, by the way, as well.
You know, who’s banging down the door of D Jaya, and China, my guess is nobody, you know, it’s an extraordinary new brand.
And so, um,
so the interesting thing, there is
the great thing with behavioural sciences, it’s scalable. Now, Keynes always said of economics that he wanted to see an age when economists were treated a bit like dentists, where you rang up your local economist and said, I’ve got a bit of a pricing problem. What do you think I should do here? I think ad agencies should become a bit more like dentists.
Which is we need to find a way in which we could offer drop in surgeries.
You know, I mean, the thing that annoys me about, you know, the payment by the hour is everybody goes on, you know, if it’s not like a long term retainer project, okay. Well, you know, it’s, it’s all about long term long term retainer projects. Well, I mean, a lot of people like working, and I’m one of them. Okay. This is a really interesting question. Read, what if you read nothing else read this paper by Paul Graham, the founder of Y Combinator, who I’m proud says a Brit who wrote a paper called makers shedule versus manager shedule. It might be the other way around as you might be manager shedule versus maker shedule. It’s one page of a4 and it’s my most brilliant stuff you’ll ever read about different patterns of work and how different people like different patterns.
And it always occurred to me is interesting. In this Coronavirus crisis, we’ve had people from Formula One teams working with
Kim kina manufacturers to come up with a way in which you could produce a either for example, a C pack machine, an oxygen machine, or indeed a ventilator, at a very low cost of manufacturing on a very high speed.
If you do that, that quickly under these conditions, why can’t you do that the rest of the time? It occurred to me if you’re the kind of guy who likes working in Formula One, your desired mode of life is either white knuckle share, pant filling terror, okay? Or idleness, right? I imagine you have periods of unbelievably high tension and periods where you bugger off to the French countryside and wallow there. I don’t know, maybe I’m mischaracterizing these people, okay.
And that’s partly what I mean by the Rockstar business. That’s how we like to work, I think to a large extent. If you look at animals one of the most interesting insights in animal behaviour is that launch successful animals spend
The Spectacular managed, I’m doing bugger all, you know, and then they’d like to concentrate activity into short bursts of high excitement that if you took people through a Formula One team, and you made them work with NHS procurement, and the standardised medical equipment approval process, my theory is that they basically be killing themselves with boredom in the space of about three or four days, I once found myself backs and did a meeting on a drug company away day where they were discussing the launch of a new drug. And by mistake, I was not put into the marketing stream, I was put into the project management stream. I don’t know if anybody knows this, but you know, very rarely and it’s only happened about five months of my life. Boredom goes from being an irritant becoming actually physically painful.
So I was going to the laboratory about once every seven minutes just to escape this meeting. And I definitely remember thinking about 45 minutes into this meeting of project managers
If I put my fist through this window, how long would it be before I blacked out? Because I was literally finding the meeting. It was it was actually, it was actually angry to me, you know? Now imagine if you’re a Formula One kind of engineer person, right? And the whole thing is, how do we get at a time? I should do they do tire check, refuelling? They don’t do anymore, is it I think, but you know, I’ve got to get a tire change down from 3.1 seconds to 2.8. Then working with NHS procurement and medical equipment approval processes would be literally basically like dying.
And so one of the things we’ve also got to look at his pace, you know, is there a way in which in fast bursts, small teams of people can be brought in to go, let’s just shake this baby up and clear off a hidden run, create creativity, because this obsession with payment by the hour, and this is why you know, we need people with very good job titles, you know, are useless at some things and just great at certain moments.
example because I’m coming up to the hour, I’m conscious of this because if I see you dropping off, I understand you all have busy lives. So if I see the numbers fully, I’m not going to be offended. So anybody has permission to leave now, but I’m going to end with just a very nice little story.
it’s an example of doing small Now, here is a hotel in Los Angeles. Now you can see from the pictures
okay, but it’s not the four seasons. Okay? It’s not the the Amman group. I think that’s what they call them that there’s a fantastically expensive hotels. They call a mom, I think it’s something like that, isn’t it? That’s the Amman group. Yeah. Okay. It’s a dated building and slightly old fashioned. The swimming pool is pretty tiny. The pool furniture has nothing to write home about. You don’t have those weird square umbrellas. We mark the place as sophisticated place.
this is just a simple media free way of transforming a business
Through a focus on psychological value, and it’s, it’s, it’s something which many people in advertising might have heard of. It’s called Kano theory. It’s the only thing I’m going to talk about now because I’ve given you my hour. I don’t want to exhaust everybody because someone said them, you know, the beginning of the 20th 21st century is marked by headphone air in the way that the beginning of the 20th century was marked by trench foot, you know, you know, the pain of wearing headphones is becoming a condition. So I’m going to try and read me quickly. Now what you’ll see from this slide, if you’ve got it up big is first of all, it’s getting 222 that’s probably 250 bucks a night, maybe 249 I’m guessing.
Okay. That’s quite a lot of money. You know, offseason. What’s really weird about it is that if you look at the top of the TripAdvisor rating from 3464 reviews, it’s number six of 380 hotels in Los Angeles.
Now here, I think what they’re focusing on is
Not what gets people to come to the hotel, but what gets people to come back. Okay, so I’ll click on to the next slide what you’ll see now, just to be clear, the hotel is not crap Do not tell the story as if it’s a shit hotel, but they do these things right. As you can clearly see the hotel is immaculately clean. You know, the beds are nicely made. You know, the air conditioning unit is, you know, reasonably shiny. You know, and the building is slightly weird, but there’s nothing rundown about it. This is not the Bates Motel. Okay. It’s nicely done. Nonetheless, it’s number six. There’s pretty hot competition with the Los Angeles hotels I think we can reasonably infer, and this gets in at number six.
And then you see the swimming pool, again, not very big. Now, somewhere on this photograph is a tiny clue to one of the few things it does, which seems to make it number six in Los Angeles hotels, as well as being competent, clean, hygienic, I’m sure the service is very friendly.
It’s that, I gotta think Richard shatan the author of the choice factories are telling you the story. I’d never heard of it before. In the main photograph, there’s a popsicle hotline.
And if you call up the popsicle hotline while you’re out waiting for a thing, someone comes along with a immense tray covered with frozen ice lollies as Brit school and we don’t really use popsicle, except as a term of endearment for you know, partners
that only rarely, but
they come out and they deliver them and you have them for free.
Now, I also noticed that actually, when you get your laundry bag, it’s handwritten, someone’s drawn a little smile on it. It’s wrapped in brown paper and knotted with string, which is really rather lovely in all sorts of ways. And they put a sprig of lavender on it, which I’ve stayed in blinged up, you know, hotels all over the world. I’ve never had the spring of love. I think somewhere in Malaysia I had something similar where they put a flower on
On top, but lovingness particularly nice to go with laundry.
And my hunch is they get five or six of those things right? The people are probably bastard friendly. And there they are number six of hotels in LA. Okay. Now I’ll just briefly take you through the content theory and then I’ll probably come to an end and give give time to answer questions. new exciting is like this. This is kind of theory and it shows how the objective qualities of a product or service do not correlate with customer satisfaction in a linear way. And there are three components that are threshold attributes. Now that’s the hotel being clean, the staff being pleasant, you know, the manager not being a serial killer, your important stuff like that in a hotel, right? But once you hit that threshold, getting better if you buy a particular brand of milk. What’s the one called lander lakes if I remembers the American one has that right? If you have to renovate and twice when you buy the land that bad
To milk twice in three purchases, the carton springs a leak, you’re not going to buy that brand again. Okay? So the absence of a threshold function is absolutely dire, but its presence doesn’t create much excitement. nobody wins them out milk Herrmann goes non leaking carton, air punch high five, whoo, that’s my brand then
then you have performance attributes which are usually surprisingly well correlated to the main central function of the device. And these are the things which scientists or engineers are trying to optimise
and hear the relationships kind of linear. Okay, so if you were selling a cassette deck in the 1980s, it would be battery life, sound quality, build quality, you know, volume, you know, the power of the subwoofer, all that kind of stuff, which you can kind of measure and then it’s good to be better, but up to a point, but there’s nothing superlinear
and then we’ve been
exponential is excitement attributes. Now that’s your popsicle hotline, right? That’s, you know, I didn’t expect the Spanish Inquisition for the Python fans among you. That’s the thing which is slightly peripheral to the core function of the actual service or product, but which is unexpected, and somehow delightful. Now in the 1980s cassette deck or the 1990s, DVD player, that will be the object mechanism, you remember them, you press the jack now, it was perfectly satisfactory if the thing went clack, but you didn’t want to buy that one. Okay, that was rubbish. Whereas if the object mate mechanism gave rise to a kind of damn tie Drollet mechanism with a hiss No, we’re a bit like a door opening on the Starship Enterprise. Then you thought that was a brilliant because that
uncanny the Kano model of simply understanding now what’s interesting about excitement attributes, I would argue in any of the New World, businesses, which we have to make our clients which are full of engineers
Scientists and rationalists and quantifiers Okay, the excitement attribute is precisely the thing that finance director wants to kill first.
Okay, because he understands threshold attributes, he understands performance attributes, but what you might call magic dust is the most potent translation of expense into psychological value is the bit the finance director hates most. And therefore, the most important competitive advantage a business or organisation can have is a marketing function powerful enough that the organisation can do things that the finance director doesn’t want to do. And that’s more or less hanging around. Okay. That’s why the empower of marketing and by giving marketing through behavioural science or scientific vocabulary, we can at least do something to translate marketing thinking into economic vocabulary.
I talked to behavioural scientists who work in the valley in Silicon Valley. And they say they’re principally employed by the marketing director to go
and talk to coders to explain marketing, in terms of evolutionary psychology or behavioural science that the coder actually understands or respects
if we don’t do this, and this is my final little fame, famous example. Okay, I’ll end on this. They spent half a billion pounds I think, renovating some Pancras station, fried communications, PR agency, all credit to them. Every single press release about the news and Pancras station on which half a billion pounds have been spent on the architecture and the renovation and the acceptance of your star trains and so on. Every single Pr Pr release contain the spectacularly
oblique of tangential claim to fame that the station condemned the lung
The champagne bar in Europe, which apparently it does. I don’t know how they really torture the data to come up with this because I’ve been doing this long. Secondly, it’s not that important. Nobody ever goes. I’m thinking of going to champagne brothers in Juneau, any long ones or I don’t go to that champagne bar anymore. It’s not nearly long enough, okay? It’s not a very important criterion for champagne.
This single irrelevant fact is remembered by Londoners 15 years later.
So if you ask them a random selection of Londoners where’s the longest champagne bar in Europe, they’ll go some Pancras station, but what I did magically, by its very gratuitousness is it said this station isn’t merely a utilitarian transit hub, designed to minimise the inconvenience of people who need to make a journey. No, no, no. This station is a destination its own right and a place you might want to visit for its own sake, thereby transforming a city’s perception.
Have a station.
And they’re okay with a simple lesson in Canada theory, Canada is still alive, he wasn’t probably still is a professor at the University of Tokyo. It’s one of the most useful mental tools you can use in arguing your case against the follies of naive rationalists and quantifiers. And it’s what I call marketing at its most basic and simple. Everything else you might argue is almost a build on that. But that to me, I hope it’s been useful. And now I’m very happy to turn it over to questions. Those people who need to leave I’m going to stop sharing the screen really quickly.
Those people I do have 10 questions. I know see, those people have had to leave very shortly on Twitter. Okay, I’m at Rory Sutherland. So at ROI, Su th er lmd. So ROI and then Sutherland as in Keifa, which is pretty much where the resemblance is.
Okay, and then you follow me on Twitter, and totally happy to do follow up answers to questions in that format once this thing ends, but in the meantime, I’ve looked I’ve looked at the QA is Jonah, Jonah, Jonah, compare? Look at the chats as well, by all means. So the first one that came in at 604. So from Andrew good, so hope you still here was what super simple message with what Rory recommend if you’re trying to get SME manufacturing is to engage in marketing. And I guess that can also be brought out to the bottom by the way.
There is a whole new talk at least now long, which is being sponsored by LinkedIn,
which I’m shortly to give, which is about the totally under rated importance of marketing in b2b.
And there are a lot of extra reasons for this. Now when I talk about
The engineering stroke financial.
What was Eisenhower call it complex, you know, the engineering financial complex that hates marketing. It’s all the more potent in b2b, because the pretence in b2b is that once you become a b2b decision maker, you suddenly become extraordinarily rational. Yeah. In fact, behaviour and decision making biases are I would argue stronger when making institutional decisions than we’re making individual decisions.
one of the entities I see as a major, major, major source of opportunity for agencies in general and for marketing thinking and for creativity is in b2b marketing, not only companies that we conventionally think of as b2b companies, which are SMEs, okay.
Okay, but also in consumer companies that don’t realise their SMEs. I mean, Unilever probably spends more on its trade marketing budget than
Doesn’t consumer marketing, and yet they probably apply 5% of the creativity and thought towards their trademark. But it SMEs in general that sense of consumer SME, one of the things I love about doing behavioural science is the fact that it’s scalable. And one of the things we do is we’re very happy working for very small organisations or charities, because what we learn doing for them, albeit not much money, we can deploy at scale for much larger organisations.
And so an example would be telling a local coffee shop that’s on a busy road. Okay. How would you signpost that you’re open? Yeah. Now I don’t know if the person in Somerset, who I noticed on chat will be very familiar with this. In England we have things called tea shops, which are not like coffee shops that tea runs they usually called and they have the most erratic and stupid opening hours of any retail category on the planet.
So for example, they tend to close at four o’clock despite the fact that most people like to have a tea at five. There. I have no clue what was going on. But the natural assumption as you pass a tea room is that it’s closed because they usually are. Now, by local coffee shop in a busy road, I said, you can put up a sign saying open but that doesn’t really work. I said, If you leave your furniture out, and you make it kind of movable furniture, and you leave it out, whenever you’re open, people will automatically assume you’re open and they can see the fact from 400 yards away from a fast moving vehicle, because they instinctively know that if you’re closed, you wouldn’t have locked your chairs away. It stopped people nicking them and stop them blowing onto the road.
Absolutely. Okay. So, so looking at the customer journey through human
epistemology, and through the extraordinary power of humans not only to observe things, but to draw inferences from them can be a complete activity.
liberation, in terms of an SME and kind of theory, by the way, if you read, I think it’s called the 10 principles of customer satisfaction by a guy called.
Oh, it’s a friend of mine, I briefly got this name.
with a hive mind, but I’m sure come up with it. I think it’s called the 10 principles of customer satisfaction. It’s great, Great Britain, customer satisfaction. Doing Little things like putting blankets on the chairs outside. So when it’s a bit nippy, people can wrap up. Those kind of weird little gestures can make an extraordinary difference. Absolutely. I couldn’t agree more. Yeah, absolutely. Couldn’t agree more. And I guess one of the questions that’s going to come here and
it’s our friend, Ludwig von Mises. I hope I’m pronouncing that right. Doesn’t differentiate between the value of the tangible and the intangible. No.
This is mine.
Okay, this is my favourite story of marketing at its most scalable, which is how you persuade apologies to be blunt Brits here, how I persuaded my dad to get sky TV now my dad at the time was bought be born in 1930. At the time, I guess he was about 80.
And he’d spent 80 years of his life effectively where you paid for TV licence fee in Britain, the rest of your TV was free, once you pay the mandatory licence fee, okay. And I said, Look, you know, I know he loves factual television, you know, the world that was his idea of, you know, the Greatest TV ever made, quite rightly, in many cases. Love is factual. You know, you know, the Nazis of the Serengeti, you know, that kind of stuff. Okay, loves it. Right.
And so did you really like Skype because you get lots of channels to do this, but better still, it’s really easy to record the stuff so you get Skype last Newton recorded on a PVR
He goes, Oh, right. Okay.
Yeah, but it’s 17 pounds a month. So why did why that wasn’t I’ll pay for it for you. He said, Well, now he’s too expensive. I don’t even know that, you know, that’s like, you know, that’s like more than 200 pounds a year, you know, shouldn’t 200 pounds gmtv that’s just too much trouble the licence fee and I don’t want to pay. Yeah.
I said dump up right. This pure both Don Draper meets a little bit on me. As
I said, it’s not 17 pounds a month, $30 60 per day and he has more different snap makers. And when you spend to pass down newspapers, he gets at least two broadsheet newspapers a day, right.
And as it is meant to fanzone, specifically to power newspapers, stop that crazy spending 60 p to get another 120 channels of TV is it with 24 hour breaking news, BBC News. 24 Sky News. You know, that wonderful Indian channel I watch occasionally just changed your perspective. nd 24 seven or something. Okay, so you got all of that, you know, 60 people
A day and you know he’s spending too much he would you mean makes perfect sense. Not only did he get he paid for it himself, and then became a major advocate of sky among everybody was own age group going around the valley again, you know to all his eight year old friends. I can’t believe you haven’t gotten Sky
Full love I tell you, you know, and he teases my brother who’s an astrophysicist, unable to record television.
And so the point that Mises would say is that what something costs or what something’s worth is created in the head. Right? Okay, whether something’s expensive or cheap, whether something’s brilliant or shit. I said, just the very beginning of my talk, didn’t know that zoom is more valuable to me than if WP bought me a Learjet. Yeah, that, to be honest, you know, I quite like a live chat. But if you think about it in my ability to do business, and ability to do what I’m doing now, oh, by the way, yeah.
And I think the
ability to bring expertise from all over the world
can be a very simple thought thought experiment, okay? Not many people in the world, okay, I’m excluding like Barack Obama and Tony Blair, you know, and kind of, you know, people like that. But most people in the world if you said, I want you to just ask us some questions, give us an opinion on the zoom call, and I’ll give you $1,000. Okay. nearly everybody would say yes, yeah. Yeah. Okay. Whereas if you say, We want you to give a keynote, talk to our marketing conference in Sarasota, Florida, on the 27th of September. Yeah. What the speaker is charging, I talk to people who can charge much more than me. I mean, you know, Nassim Taleb and people like that, who are real rock stars of the speaker circuit. While you’re really charged for the talk, he quite enjoy that to be honest. It’s a it’s a commitment of time. It’s a commitment of two and a half days because you can’t really give anything either side of that talk for you know, if you’ve got to travel out to town
hassey or wherever it is. It’s also combined with a place now I can’t go on holiday that way. Yeah. Now if I commit to delivering something over video, and I do that from Barbados, you know, all I need to make sure of is wherever I’m on holiday. There’s a reasonable web connection. I take my I travel with the kind of video conferencing kit. You can’t see it. But one good tip is buy a musician’s music stand right, from music shop, and attach all your shit like webcams and mics to that stand. And it makes it quite a lot more portable. And if you put stuff on a desk, that’s wonderful. You can have a whole kind of video conferencing rig. Actually, no, there’s no way I can show you. I probably can show you bits of this if you want to. There is a bit of a bit of the rig there. Clip for mobile phones kit for a tablet. And that whole thing is, you know if one of my daughters decides she wants to stop playing thrash metal, I can then move into another room a bit more easily. That’s amazing.
But the fascinating thing there is that, you know, this, this fundamentally changes the way that people will sell their time, it fundamentally changes the way we should apportion time, it changes where we should live. And I’ve always argued about technology. If you fly over Britain, the really important technology is the railways, the canals, the
Industrial Revolution, etc. all their effects are visible from the air. And my great beef about the internet is other than, you know, flying over the Googleplex or something. The effect of internet technology is not yet visible from the air. Yeah, yeah. And actually, you know, what we should see is, you know, an explosion of people moving to the seaside or whatever, or, you know, you know, or, you know, interesting that, I’m proposing that when we restart when we kick off that overall vision, having an office somewhere out of London, yeah, but just for what you might call business continuity.
purposes, I’m particularly keen Margate particular favourite,
on the grounds that you can’t get creative people to move to the countryside, but you can get them to move to the seaside. I think that’d be wonderful. Yeah, but overly modally fan it is basically my ambition for the rest of my working life.
But we don’t we’re in, aren’t we this is an opportunity to rethink things in parallel. And to have a really big what we do. I mean, an awful lot of travel by the way was done. I mean, I hate to say this, you know, I know I’ve travelled. It’s very easy for me to say this because I’ve travelled a lot. Yeah. However, it’s worth saying that the majority of business travel I did, I would have preferred to do virtually, if it weren’t for people demanding my presence. Sure. Absolutely. I think he’ll be one of the greatest effects of it and to the point of hitting the reset button on an awful lot of things. Yeah, I’m beautiful phrase where we’re heading to from a marketing perspective.
And the reason I say that is because I think a lot of people view marketing as a function of the tactics that are implemented. I think
a lot of the messaging that I’m seeing about marketing these days is one about empathy and looking to understand the customer and looking to help people through this crisis. But in a sense, it kind of feels like that’s always been the point. That’s always been the way that it should have been. So I’m struck. Have you seen people deviate away from that, that view of marketing as the lens of the customer in companies? And if what’s vital about in my beginning to find a mathematical justification is that the customer view is in many ways at 90 degrees to the spreadsheet view of a business right? Because the spreadsheet view is, is a snapshot view of an aggregate at a particular time, whereas the
Customer view is the non gajic path dependent experience of a customer in repeated interactions with the same entity. Yeah, yeah. And
business thinking without a marketer on board doesn’t differentiate between selling one thing to 10 people and selling 10 things to one person
to a business, they’re both identical to the customer. Your expectation after you’ve bought 10 things may be very, very different. And your perception may be very, very different to the 10 people buying one thing, which why I think amazon prime which, which Bezos was kind of slated for when he first introduced it by almost everybody else. The point being that 10 people don’t mind paying three pounds for delivery once a month. But one person really resents paying three pounds delivery 10 times a month.
And so without a marketer at board level companies, really
danger of making spectacularly dumb decisions simply because they’re seeing the business through one angle. And it is like looking at it looking at architectural plans from the top without seeing them from the front, for sure. Make sense. And someone who’s looking at the top of a building, there’s nothing about the front of the building. And so the fact that they’re kind of orthogonal in many ways, is really, I think, really, really important.
Okay, great. So we have a question here from Ravi and I’ll probably in the interest of respecting that in the your time, but also the folks that are tuning in, we still got 170 retained. I hope Vernon that introverts will be given some licence to opt out.
So that the introvert option will be seen as an acceptable parallel option to the extrovert option.
Rather than being seen as the, the inferior alternative by also
I hope by the way, and this is an important point, I think, which is that certain types of social events will be repressed heavily like the drinks party. You know, there’s things we can’t hear a fucking word. Anybody say, right? If you’re over the age of 35, okay, if I go to an indoor drinks party, that’s indoors, I don’t mind garden parties. Okay, you’re going to know I can’t hear a damn word that Emily’s saying. Okay. And yet, to some extent attending those events is almost a prerequisite for promotion at a certain stage in your career. And they’re incredibly extrovert friendly, and intolerable for introverts. And people go, Well, I don’t understand how you’re an introvert. How come you go and speak to 1000 people on stage Margaret is no. When I spoke to those thousand people on stage, I’m knackered, okay. So it’s more efficient for me to spend to speak to 1000 people for an hour than it is for me to speak to 10 people over 100 hours, in which case I’d be basically you know, no longer fit for conversation.
And so it’s not that introverts are shy, it’s that they find social interactions energy draining rather than energy enhancing.
Now interestingly, as an introvert, I find zoom, engagement, energy enhancing to a greater or at least neutral. Whereas I find, you know, speaking in physical in a physical setting, mildly draining. So this is very common, by the way among stand up comedians, everybody assumes that stand up comedians, get offstage, go straight to the bar, that cracking gags all that then they go back to their hotel rooms, and sit their pants and watch Sky News. Okay. And so it’s worth understanding that introvert and extrovert are more complex and nuanced terms. But simply giving people the right to choose, I think is really, really important. For sure. Absolutely. So we got a question here. Which tips? Oh, yeah. Okay, electronic meeting. One. It’s got to be a video call. Not necessarily because you need to look at people because it gives you something to look at.
If you have a telephone conference, your mind will wander because 90% of perception is visual. And if your visual part of you is that’s why the radio is great because you can do other shit while you’re listening to the radio, okay? The reason the telephone conference is bad is because you can do other shit while you’re on a telephone conference. A colleague of mine during an IBM telephone conference once took delivery of a flat screen TV and mounted to the wall. Okay.
Now once you have to realise is that the part part of the value of video is it gives you something to look at. So you don’t start looking at emails or or generally wondering off.
The second thing by the way to all of you and the conditions of lockdown is if you’ve only got a laptop, go on Amazon and if you can possibly afford it, buy like a 32 inch or bigger 4k monitor. Or if you really want to buy a big 4k TV, which is not much better than HDTV as a TV
Until you plug your laptop into it with a USB C to HDMI cable, in which case it’s the monitor of a James Bond villain. He’s fantastic. Trying to do everything on a screen that’s 11 inches across is not what we should have been trying to do. So I’m I have the picture of Joe up on a 32 inch thing while I was presenting it was my laptop screen which showed the deck could have done it the other way around wouldn’t have mattered much.
And also, if you can have that mobile tip with a buying a
microphone stand and some clips to attach to it. So you can have all your shit wired together on a single moveable rig so that if you do need to retire to a cupboard or something, you can that’s probably Another good tip. For sure. I use a Yeti blue as well. Yeah, I’ve got I’ve I’ve got the Yeti the smaller version of the Yeti blue which
She’s actually attached upside down to a tripod stand at the end of my mic. That’s
the only way I can probably show you that. Here we go. There we go. There we go. What are you seeing that you’re seeing? So there you go. And there’s that there’s an awful stand to stop me gobbling up my own microphone, and an anti pop screen. There you go. But this is fairly new business status. It used to be a BA gold card. The new business status is to have an incredibly elaborate rig with the, you know, if you’re if you’re a furry microphone that’s upside down, you’re basically gone. You’re balling
We’ll do two more if that’s okay. And then and then. That’s Twitter. So there’s a question from Ravi. The I love you by noon very blue was bought for my wife by my daughter.
The London bubble will burst
Well, the trouble is young people are obsessed with living in central London. I think it’s a meeting thing. I think it’s that you can’t pull if you live in Bromley I’ve got a very Darwinian theory about this. But actually the the other crazy thing is that when people leave London, they get miles away, they will call the Cotswolds dinner. If you want love to come to that orpingtons far enough, okay, I can show you photographs taken from where Darwin live, which is inside the M 25. where you’d assume you’re in the middle of the countryside to get that far.
But will the London bubble burst? And that’s a really, really interesting question. The great news is it certainly can’t go up.
It’s my birthday. Lucky me. How would you celebrate your birthday resume? I think having getting a bunch of friends together and actually having either drinks or if you’re in that kind of silly mindset kind of themed party could be quite jolly. We do attach up every day for half an hour the 15 of us. I’ve been standing around
Miss, because I’ve overslept. For the last two days, I’m heading on holiday. But it’s basically we check on each other’s general mental state. And,
you know, having having a meeting with no agenda is rather fun. What’s strange about this is I see friends of mine who now live in Canada and other places worldwide more frequently than I ever did beforehand. So in some respects, it’s social closeness with physical distancing. Couldn’t agree more? Yeah. Do 21st century startups want to work with agencies?
The marketing person is the last person they hire. So I think by that we can assume the answer’s no. But you can use behavioural science or UX as a Trojan horse. Nice. Okay. The Kano model in b2b I’m sure it’s highly relevant to b2b. You’ll never get a business person to admit that the reason they chose something is because of something that you know, they’d never tell procurement about. But
Actually, I think,
put it this way. I think winning new business for Ogilvy since we’ve got an office that overlooks the river, okay.
is probably a little bit easier than it was when we’re in Canary Wharf.
Okay, so yeah, I mean, funnily enough, most businesses understand carny theory when it comes to their offices a bit, where they don’t understand that is so
rather lovely bit of common theory is the Doubletree cookie offered by Doubletree hotels, which is a branch of Hilton rather sweetly and the lockdown they’ve published the recipe. Nice.
How the isolation would change digital marketing habits and how the code would change the narrative.
storytelling and gateway advertising isn’t going away. Don’t worry about that. Because as I said, long before humans there was advertising flowers are basically an ad. You know, they’re a weed with a marketing budget. Okay, there’s a huge amount of signalling in nature, the need for companies to signal
Something to advance. And to use costly means to do it ain’t going to go away. Because I would argue it’s innate in human epistemology and perception.
Performance marketers, actually, the problem of performance marketing is the emphasis on media relative, the emphasis on creating was completely out of whack isn’t just me saying this. It’s people like Google saying this.
I don’t see many online performance marketing ads, which have had a copywriter look at them.
And yet, as Google will quite comfortably thing, despite the fact that it’s not in their financial interest to do so because Google doesn’t write ads. They will say that the actual quality of the creative is the biggest single determinant of the success of an app. So stop making the case for testing outlier creative approaches. If you can test them affordably with a very, very short, you know, kill rate if they appear to fail.
The cost of the test is trivial. The potential upside is massive. And it is asymmetries like that which exploiting those and discovering those which is what business is all about.
What reading would you recommend us to read? Well, my own book alchemy. Obviously I’m because my publisher wouldn’t forgive me if I didn’t.
And, but I’d also recommend reading strangest, frustrating read a few books on economics, Tim Harford the logic of life, for example. The reason for that is that most people who aren’t marketers think like economists often describe marketing as the science of knowing what economists are wrong about. And to understand your clients, you have to understand the economic thinking, because it’s only by understanding where their mental frame differs from yours, that you can actually bridge the gap.
So the logic of life by Tim Harford, maybe, you know, the Darwin economy. Also to understand signalling in its more general sense. Read a book called spent by Jeffrey Miller.
So the meeting mind if you want an even way to read by the same author How would you market a documentary filmmaking video school and, and training
that one has to train a BBC. Yes, that is in our little model. If you aren’t BBC trained in
documentary making you have international recognition.
However, I’d also do a little bit of emotion in that I’d give away a really, really a couple of really simple tips. And one of the lovely things to give away as a kind of free sample of your thinking is anything which is obvious only once you know it.
Everything I just bought a drone, okay, now, by the way, I’m not claiming on any kind of auteur, or, or videographer but then I feel a little thing on drones and they said the one group
thing when you film just a drone footage is going backwards. Because when you move backwards with a drone, you’re revealing new things as you pull out, which holds their attention more strongly than simply zooming into something. Now, the second I was told that it was blindingly obvious, and I will never forget it for the rest of my life. But until I was told that I would have spent hours and hours flying my drone around, zooming into things, not realising that I was basically making a mistake. Okay, that kind of stuff.
You know, but no, the BBC and when you have a provenance and heritage of that kind with international recognition, it’s what we call in our mind space model messenger. Why should I accord you any credibility? Well, if you can hack it at the BBC, and documentary filmmaking, my satisficer instinct says, wherever you are, you’re obviously not shit.
Right? At the very least, I won’t be entirely wasting my money.
Another way I might, I might be in the market for what you offer, because I suddenly realised that making films is going to be 20% of my life for the next 10 years. Every conference that I used to fly out to appear on stage to, I’m now uploading film footage for and I’ve already bought a gimbal
and, you know, I’m working on things like that. So, I cardigan This one’s actually from a sauce. It’s low hair. I bought it online A while ago. And a good tip for videoconferencing early in the morning. Okay, a cardigan worn over pyjamas bloke normally means you get away with it. Okay, so if you only want to wake up five minutes before your video conference starts climbing over pyjamas generally works.
Well, except to not walk kinson I kept one minute say Wilkinson. I knew it was
Match the 10 principles of great customer experience by Matt watching this would be another book I recommend to the hive mind does not let me down. Thank you. Well, it’s Helens events. They’re wonderful. What a wonderful audience. So this has been you know, I’m just off to get a cup of tea. I don’t know I have to take a long train ride home I don’t have to spread COVID across the landscape in and you know, and I’m you know, and
bear in mind is extroverts have caused this bloody epidemic with a lot of skiing holidays now. That’s the first thing the skiing holidays.
Skiing resorts ski resorts are absolute petri dishes for this kind of shit.
Well, we’re grateful for and notice Houston, right. I bet I mean, I mean, compare Houston to New York, right place where people have a bit a bit of personal space.
So Houston, which is it by the way, it’s an extraordinary place because I visited his accident.
Tourists, and no one would ever go there as a tourist and having a 24 hour layover and as a what a lot of Brits say because more Brits ended up there and they said it’s terrible place to visit but it’s about the best place to live in the world. And I can understand why because it’s I kind of even in 24 hours I kind of really really loved it. Yeah, well it goes back to your point of
long distance travelling. Are you missing the Galleria, you must be missing the Galleria a bit. I bought my wife’s favourite necklace, I think in Neiman Marcus in the Houston Galleria, which is a place I have an insane fondness for because the food court in the Houston Galleria is is actually forget Paris is the finest place to eat in the world. Now it is the city with the highest obesity rate in the United States, which may be correlated correlated, but whoever you are from Houston, that food court in the Galleria is seriously.
Hanes gallery has got a bagel factory, the London
calorie Of course there is. Yeah, my goodness. Okay. That’s coming about. But if you haven’t been to the food court, the Houston Galleria, you have lived.
So it’s gonna be a sudden surge in people heading to Houston.
In any case, we’ve exhausted the questions. And we have taken more than that as your time already. So it’s a recording because if I can share the recording, absolutely, it’s recorded, it’s going to go up on the blog, it’s gonna go on cast as well.
And if people have any more questions, then they can hit you up on twitter at Rory Sutherland as well. I know that you’re particularly active on that. So absolute pleasure was useful to me because often what’s glorious about this compared to speaking in the physical world is sometimes people ask me a lot of questions. Now I can just go watch this.
Rather than having to repeat myself. So thank you very much for that. It’s been a joy and see you in the real world some point. Absolutely. Absolutely. Can’t wait. Really happy
bast, thank you very much. Have a great evening and stay safe and stay indoors folks. Okay, bye bye
Transcribed by https://otter.ai
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