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Rory Sutherland's Blog

January 2009 - Posts

More kittens: Or how Sir Martin Sorrell can end the recession overnight.

One of the things that has long baffled me about the advertising industry is that, although we pay for most of the media, we make no active attempt to influence its output.

No other large-scale buyer of goods or services acts in this shamefully wimpish way.

We have endlessly talked about the need to consolidate media buying power, and then all we do is to use this power to drive down prices. At present, this is a completely misdirected effort.

Because, at the moment, it doesn't really matter whether you are paying £20,000 or £10,000 for a full page in a British newspaper.  What matters is that 50% of your £10,000 is being spent on paying journalists to write doom-laden articles discouraging consumers from doing anything except to cower inside their homes waiting for redundancy and repossession.


In short we are currently using our clients' money to pay newspapers to destroy our clients' businesses.


It reminds me of a Viz bus-side advertisement that reads "Smoke Tabs." Underneath is written "HM Government Health Warning: Don't Smoke Tabs"


What is the point in spending £10,000 to buy an advertisement in the Daily Mail that says "Buy Stuff" if that £10,000 merely pays for the three adjacent articles which tell readers "Don't Buy Stuff!"


In the good old days before CSR, when large American Fruit companies saw their supply-chain threatened by pinko governments in Latin America, they didn't sit around wringing their hands. Not a bit: they paid their chums in the CIA to start a little insurrection and install a more fruit-friendly regime in the Presidential Palace. We should do something similar now.


Group M and the other large media buying houses should simply withhold all advertising money from British media until they learn to cheer the f*** up. And, correspondingly, we should lavish advertising money on feel-good media.


Imagine the phone calls. "Hello, Daily Telegraph, we were going to give you £100K to run a series of ads for IBM, but unfortunately you ran an article on repossessions yesterday. So instead we're going to put all the money towards sponsoring "Dogs do the Funniest Things on ITV3 and a gatefold pull-out in Hello! Now, don't do it again, right."


That would sort the bastards.


We should also withhold all money from Rupert Murdoch until he launches Sky Good News, a 24 hour channel featuring kittens doing amusing things with wool - perhaps occasionally interspersed with stories of people who've survived cancer.


The economic problem - what Keynes calls the paradox of thrift -  would be solved in a month.


Posted Jan 28 2009, 11:12 AM by Rory Sutherland with 8 comment(s)

A dog that doesn't bark in the night.

 

 

Social media are desperately important, as we all know. It is wildly exciting that, without having to hand over large sums to Rupert Murdoch, you can now reach millions of people simply through what is now called the "amplified word of mouth" which is made possible by social networks. Great content now does not necessarily need a media budget at all to reach thousands of new eyes and ears - for, the moment it appears online, it acquires its own kind of centrifugal force.

In a way, what we are doing with viral content is outsourcing the job of media buying to the public. And a wonderful thing it is too. Even when we acknowledge that there are inherent problems in this model (only the very best content acquires this magical momentum, and there is probably a natural limit to the extent to which people are willing to play unpaid message-boy for large corporations) we cannot deny that frictionless content is a vitally significant development in media.

All the same, it occurred to me yesterday that there is a completely different approach to social networks which is potentially even more important - but has been utterly neglected to date by an industry still besotted with mass audiences and reach.

This new approach is almost the opposite of the first, "viral" approach. For, rather than using networks effects to reach a lot of people indiscriminately and cheaply, it uses network effects to reach very few people precisely and expensively.


And rather than outsourcing media buying to the public, it works by outsourcing media planning to the public.

 
It works not by reducing the cost of distribution (as with conventional virals) but by totally eliminating its usual inefficiency and wastage.

 
I'll give you an example of how this might work. Let's say you and your wife/mistress/boyfriend/husband/sheep have just spent a lovely weekend in a hotel in the Cotswolds (rather you than me, frankly - I find the place a bit up its own *** - but no matter). Anyhow, you get home and you receive a thank-you letter or email from the hotel. And inside the thank-you letter is a voucher for three nights for the price of one at the hotel. It's not for you, you understand, but it's to give to any one person you choose.

Or suppose you go to the cinema and particularly enjoy the film. As you leave you are given one two4one offer to the cinema to any showing of that very same film. And you can give that to any one person you choose.


Or suppose American Express writes to you and says that you can nominate one person you know for free American Express Platinum Cardmembership for a year? 


Or a car company writes to a happy owner allowing them to lend a new car to anyone for a weekend's test-drive?

 
In each case the incentive to pass this on is not bribery or self-interest. It is instead generosity and the desire to display a certain munificence. And, to maximise the value of your giving, you naturally pass on the offer to the one person out of the hundreds you know who would value it most.


Now, what you do is this: you mentally scan your address list of perhaps fifty to a hundred people and choose the one person who would most enjoy The Upitsownarse Arms in Upper Slaughter. In making this choice you factor in taste, wealth, age, geographical location, marital status, size of household and ability to spend time in Gloucestershire without vomiting. Or you apply everything you know about their taste in films, cards, airlines, etc.


Now the amount of intelligence which is applied in that act of individual selection simply surpasses any level of targeting you could achieve through databases or other automated means. It is as though you could interview the entire country for five minutes individually to decide whether or not they belonged in your target audience.


I suppose the idea here is a kind of open-source targeting. Certainly, in some sectors, the efficiencies achieved could justify remarkably generous offers. Yet this practice doesn't much happen.

 

There are referral programmes, obviously. But all of them seem to make three mistakes. They aren't all that generous. They ask you to recommend as many people as possible, which sounds like too much effort. And they reward the recommender as well as the recipient - to me this introduction of an element of self-interest seems to devalue the social currency of the gift.

Does anyone know of a successful instance of this. Answers on a generous postcard, please. 

Posted Jan 19 2009, 07:45 PM by Rory Sutherland with 18 comment(s)

Getting off at Edge Hill.....a defence of shopper marketing.


Vrb phrs. To perform coitus interruptus. A catholic Liverpudlian expression derived from the symbolic use of the railway station before the Mersey tunnel and the last stop. Also heard phrased as jump off at Edgehill. Other UK cities also have their own variations, such as get off at Paisley, used in Glasgow; get off at Gateshead, used in Newcastle-upon-Tyne; get off at Haymarket, used in Edinburgh.

 

Every part of the country seems to have one of these phrases - the London version being "to get off the Eurostar at Ashford" (or perhaps now Ebbsfleet).


Marketing, of course has something similar. Those campaigns where everything about the initial brand promise is good, but where it never quite goes, er, "all the way" to purchase.

I must admit I "got off at Edge Hill" when it came to the Sony Bravia.


It began well. The Bravia advertising drove me to investigate large LCD TVs in the first place and I was even on the point of ordering one; yet somehow, both online and in-store, I failed to find that one little factual sentence, in writing or from a salesman, which justified what seemed to me a fairly outlandish price premium. I also had an unresolved fear that Sony TVs were in the habit of displaying a large green "2" on the screen which was difficult to make go away. Lacking any reassurance that this would not be the case with the Bravia, I went and bought a Toshiba instead.

 
So far, so anecdotal. What makes this all the more interesting is recent research evidence of just how many retail decisions do take place in store. This fine post references a worldwide survey conducted by my chums at OgilvyAction suggesting that in some categories the majority of purchase decisions happen in the shop. As many as 10% of customers may enter a store intending to buy a specific brand only to leave completely empty-handed, even though it is in stock.

 

My TV-buying experience may not be all that unrepresentative. While many marketers base their strategies on US research, this study shows key differences between shopper habits in the US and the UK. For example, men in the UK are more fickle in their shopping habits than women and more influenced by in-store activity, so less likely to stick with their original purchase plan than their colonial counterparts.

 “Dominance outside the store does not guarantee you sales instore ,” says Andrew Aylett, Planning Director at OgilvyAction. In fact, high-profile ad campaigns often drive sales for other rival brands. One campaign for a leading brand in the confectionery sector, for example, drove consumers to the corresponding aisle in the supermarket, giving smaller brands the chance to “hijack” these shoppers and capture their spend.

 

To prove this is not only an Ogilvy obsession, you will also find a very interesting piece on Shopper Marketing by Simon Moore and Marina Foxlee in the latest Market Leader. As with the Ogilvy piece, it is keen to dissociate the art of shopper marketing from price promotion. This seems to me a really essential distinction - especially now.


At the moment, there is, quite rightly, a spate of articles and think pieces from the advertising industry disparaging a recessionary tendency for clients' expenditure on measurable short-term activities to supplant investment in the immeasurable long-term value of brands. This is what Tess Alps calls "confusing countability with accountability."

 

This is, I think, a very fair criticism to make. But it needs a little qualification. Just because spending money close to the moment of sale is indeed highly measurable (search would be another example of this) does not mean it is necessarily short-termist. In fact it is only by getting elements such as shopper marketing or search marketing right that it is worth spending money on longer-term brand building at all. After all, if you are going to fall at the last fence, why bother even starting the race?


There are, of course, short-term transactional practices which damage brands. But people have a dangerous habit of conflating the transactional with the short-termist. This is simply wrong. Packaging design, search marketing, shopper marketing are all measurable and weighted towards the moment of purchase - but this does not mean they cannot help build brands. They also have another virtue; they are relatively cheap.
 

Although that's actually a disadvantage in agency world. One of the most frustrating things about working in any below the line capacity is that money is apportioned to your agency not in accordance with the value you can add, but in proportion to how much your discipline costs overall. Anything without huge media costs attached generally ends up with the ***-end of a budget. Maybe that will start to change this year. But I doubt it.

Posted Jan 18 2009, 01:56 PM by Rory Sutherland with 2 comment(s)

Was Sherlock Holmes a Planner or a Creative?

A recent post in the splendid Adliterate blog by pinko atheist and Dawkins acolyte Richard Huntingdon is dedicated to discussion of what constitutes an insight.

The piece contains a very useful coinage of Richard's - the phrase "consumer fundamentalism"; it's a term he uses to describe the "process of seeking insights by opening oneself up to the deeper and less palatable reasons for the way people behave." This is something I'll be writing about in a few days time - because I do agree that most conventional research, by coating everything in a patina of rationality, completely fails to uncover the baser (and hence deeper) motivations behind human behaviour.

But, in the meantime, I'd like to add a little extra complexity to the business of defining insight.

For I think the blog raises a supplementary question: What is the difference between an idea and an insight?


My own first stab at a definition would be this. That an insight is a sudden and potentially valuable revelation concerning what is; an idea is a sudden and potentially valuable revelation concerning what might be.


The former is likely the result of asking "why?"; the latter is a prodict of asking "why not?"


In Darwin's case the insight was to ask why there were so many different types of critters all over the place; the idea came from asking whether this might not have arisen naturally rather than by design.


Perhaps an idea is simply an insight that's facing forwards.


The two seem to me closely related - even though the methodologies by which you arrive at both may vary. Very often an insight can spawn an idea. But it can equally happen the other way round - a good idea often prompts an insight (although, when writing up a case study, the author will always rejig things so that the insight appears to precede the idea, partly because the author is almost always a planner and partly because it simply seems more respectable to pretend things happened in that order.)


By this definition, Sherlock Holmes is the insightful planner par excellence. For what he does is to see what everyone else sees, but extracts far more from the observation than anyone else.


"You see, Watson, but you do not observe."

And..... “Beyond the obvious facts that he has at some time done manual labour, that he takes snuff, that he is a Freemason, that he has been in China, and that he has done a considerable amount of writing lately, I can deduce nothing else.”


As Schopenhauer puts it: "The task is not so much to see what no one yet has seen, but to think what nobody yet has thought about that which everyone sees." In the words of Proust, "The only real voyage of discovery consists not in seeking new landscapes but in having new eyes." Or, in the immortal words of the philosopher Manilow, "Bermuda Triangle, try and see it from my angle."


In the Holmes oeuvre, however, there is one famous instance where Holmes is, I think, truly ideaful rather than just insightful. A truly creative moment.  


“Is there any point to which you would wish to draw my attention?”


“To the curious incident of the dog in the night-time.”


“The dog did nothing in the night-time.”


“That was the curious incident,” remarked Sherlock Holmes.


To those of you who don't know the background to this, Holmes has arrived at King's Pyland to investigate the disappearance of a valuable racehorse, The Silver Blaze. Holmes spots this is perhaps an inside job, since any intruder would have aroused the stable dog which could be easily overheard.


To spot something that isn't rather than gaining a new view of what is seems to me a creative act. A why not rather than a why. But, in detection as in advertising, both questions seem useful at different times.


If I remember rightly*, there is an Agatha Christie book called "Why didn't they Ask Evans?". Again, this is a creative rather than a deductive piece of detective work.


Why would you ever confine yourself to just one approach?


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* I know, I know.... in the Google age to use the phrase "If I remember rightly" is a mark either of extreme laziness or pretention. Sorry. 

Posted Jan 17 2009, 11:38 PM by Rory Sutherland with 5 comment(s)
 
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