That's why mum's gone to Finland.

The first thing you learn when you have travelled a bit is that there is absolutely no correlation between how far you travel and how much you learn.

One of the reasons I slightly wince at the middle-class gap year habit is that it is a product of bourgeois distance snobbery. If you are asked at a dinner party "what's young Jolyon up to these days?" it's no good replying that he's working the drive-thru lane at the local Burger King - people will think he's a bit of a loser. But if you reply "Oh, he's travelling" this is automatically an acceptable answer  - even though the wretched Jolyon is at that very moment lying on the floor stoned with three English schoolfriends after a night-shift at a Hungry Joe's outside Cairns  - where he will learn no more than he would have done back home.

 Travel narrows the mind.

If you ever want a really interesting trip, don't bother with Asia. A couple of hours on a plane to Finland is all you need. And it's especially healthy for right-wing people like me because, rather to my discomfort, I find I absolutely love all the Nordic egalitarian paradises. I imagine my resulting confusion must be rather similar to that experienced by a lifelong socialist on finding he really likes Las Vegas).

I'll be writing about Finland more in coming months I hope. But for now let me leave you with just two interesting facts. 1) Traffic fines in Finland are calculated as a percentage of your annual salary. So it has been rumoured that Mikka Hakkinen was recently fined a few hundred thousand Euros for a minor road traffic infringement. 2) In Finland it is rather easy to calculate these fines because...... wait for it..... your salary is a matter of public record.

Yep, you got it. In fact it's even better than that. If you want to know a colleague's annual salary, there's no need to go along to the local post office and fill in a form. No, you just send a text to a short code containing the person's name and address and, a few minutes later, back comes their full annual salary. My Ogilvy colleague out there tells me this realy helps cut down on bullshitting at job interviews. "Now what did you say you were on at Leo Burnett, again.....?"

What is fascinating is the extent to which an idea of privacy varies so greatly from one society to another. Dutch people won't even install downstairs curtains in their homes - as "it seems somehow furtive." Whereas five miles across the border, Germans refuse to fill in census forms.

You can see how much this attitude to privacy varies here in an excellent report by IBM's Institute for Business Value. And it matters to all of us because of what you'll read here in a super Prospect article by the wonderful Peter Bazalgette, and also at the subsequent blog discussion, including a post by me.

In short, what Peter says is something we all know but have never realy fessed up to. Which is that much of the content on the internet is not really paid for in "attention dollars" but in "prrvacy dollars". The way we pay for our Youtube clips or our gmail or whatever is not only with our time, but in the information we (knowingly or not) allow to be collected about us. A country with a particularly paranoid populace (a majority of Germans browse with cookies turned off, for instance*) is therefore reducing the income that can be derived from online content in that market.

This issue may be one people simply choose to ignore. But the scandal aroused by Phorm (not always proportionate, I think) suggests it is one that won't go away.

I also suspect that there is an answer here in the shape of trusted infomediaries. One of the reasons the Finns are so relaxed about marketing data is that it is held by the (trusted) government, and the money generated by it benefits them in the shape of lower taxes. I have a hunch that some highly trusted brands (charities, the Post Office?) may be able to play a role here as guardians of personal data. The name for this kind of body - the infomediary - has been around for about ten years. But it is a concept strangely slow in becoming real.  

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 * German aversion to cookies may be a product of their obsession with privacy, or just as likely may be a by-product of their appetite for bizarre deviant pornography. I was once staying in Germany and saw a pornographic film (on a free-to-air channel, I add) which started with a bunch of middle-aged couples in walking clothes and stout boots climbing up a hill. This hill-walking went on for about twenty minutes, at which point they suddenly disrobed and engaged in bizarre sexual practices for about ten minutes more.  Goretex fetishism, I suppose. Truly the strangest thing I have ever seen.

Who makes the better planners - Part 2......

Following the superb IPA debate - "Who makes the better planners - planners or creatives?" between Dave Trott and David Golding, it occurs to me that there is a parallel debate you could host in the music industry.

It would be called "Who makes the better songwriters - singers or songwriters?"

Think about it. To any rational observer, the act of singing and the act of songwriting are two wholly distinct specialisms. Simple division of labour theory would suggest that the two functions would be best performed by entirely different people - you would have expert musicians writing the songs, and attractive, coordinated people with good voices to sing them.

And, indeed, quite often this is how it works. Classical music sometimes operated this way - although not always. Bach was a tip-top organist and Liszt a first-rate pianist, for example.

And quite often popular music works this way. Elvis didn't write all that much of his own material, for example; nor does Tom Jones. Nor do many manufactured bands such as Girls Aloud.

Yet (ABBA, the Beatles, Hank Williams, The Beach Boys, U2, Coldplay....add your own 100 names here) it is astonishing how often the greatest and most successful songwriters are singer-songwriters. Even when their qualifications as singers (the velvet voice of Bob Dylan, anyone?) are not all that evident.

One explanation for this comes in the recent book Outliers by Malcolm Gladwell, My reading of this suggests that creativity is not for the most part a specialism in itself, but is rather the product of frequent and repeated execution. In other words if you want to write a good song, don't start by taking a songwriting course - do a lot of singing instead.

Yet we still adhere to an agency process which attempts to separate these two things - to treat them as though they were sequential and independent, rather than being inextricably intertwined. A brief spends two weeks in the song-writing department before being handed over to some singers.

There is a precedent for this approach in the music business, of course. The genius founder of Motown, Berry Gordy (below, left), bizarrely the sixth cousin of Elvis Presley, was perhaps responsible for more musical creativity than anyone else in the last century, a feat he achieved by modelling his business on Detroit car production lines. As you would expect, bands, recording studions, compositions, were all deployed with spectacular efficiency according to Taylorist principles, division of labour and economies of scale. And it worked.

Clearly you can't dismiss process in creative industries quite as easily as all that.

But this adherenece to process did have its downside. Gordy wouldn't allow anyone to perform dual functions, insisting that songwriters wrote the songs and singers simply sang them. Which is why a frustrated young singer left the label in 1975 in protest at not being allowed to write his own material. 

Michael Jackson wrote Thriller in 1982.

Whose idea was this?

To aficionados of the shopping trolley, this type is apparently known as "the Japanese style" presumably because it originated in Japan. I suppose I should ring someone at WPP to check - even though technically Wire and Plastic Products only makes baskets, not trolleys.

The Japanese model can be distinguished from the vast full-depth trolley model popular with survivalists and Catholic families in that the deck is much higher up and there is a large area of wasted space beneath. Its capacity is perhaps a third that of a large trolley, but several times that of a basket.

Now to a purely rational man this kind of trolley serves little purpose. What is the point of something which takes up just as much floor-space as a larger trolley but which only offers a fraction of the load-carrying capacity?

I think the answer lies in an couple of anomalies of human behaviour.

For one thing, people entering supermarkets are probably prone to underestimate how much they will buy, or at least enter the store intending to buy very little, but end up tempted to buy more. When confronted with the choice of a basket and an insanely large trolley, many people may end up picking a basket only to find themselves overburdened with heavy shopping half-way round the store, hence buying much less than they might have done with a smaller trolley. The medium-sized trolley seems less disproportionate to moderate shoppers as they enter the store, and hence may discourage the use of baskets.

But the main reason is, I suspect, to do with what behaviourists call choice anchoring - the idea that the choices we make are often illogically distorted by the range on offer. One example of this is the following conversation supposedly overheard in an American restaurant.

"What entrees do you have?"

"We have fish or chicken."

"I'll have the fish"

"Oh, sir, and I forgot: we also have beef."

"In which case I'll have the chicken."

The point here is that, even though the beef was never an option, its presence on the menu served to make the chicken seem a relatively healthier option.

The medium-sized trolleys hence probably work in tandem with the large trolleys to implicitly discourage the use of baskets. (It would be wonderful to try a few experiments here - perhaps with outsized baskets.)

But my question here is really that at the top of my article. Who came up with this discovery? Behavioural insights such as this might well have been worth a few hundred million pounds to any retailer over the last ten years, and yet I have never heard of anyone much being briefed or paid to look for them.  

We spend almost all out time attempting to change behaviour through overt persuasion - while paying no attention to influencing the other, barely conscious ways in which people behave.

In the same way, far too little time is spent understanding and improving customer experience. Seventy-five percent of the US economy is now in services, and yet the focus of advertising has changed little from the time when it was used mostly to sell products.

One hope of mine is that a recession may bring new focus on these things - not least because they are sometimes fantastically cheap. You may find a few welcome suggestions here at www.customerfutures.com/downeconomypublication .

Always check your daughter's homework

This is a wonderful picture which I found here.

The wonderful irony of the girl's drawing is that her mother does not, as you may have reasonably assumed, work at Spearmint Rhino - but at B&Q. The picture is, in fact, a child's depiction of her mother selling an unfeasibly large shovel to a crowd of happy customers. Phew!

But there is a lesson to be learned here. A lesson which perhaps some retailers can learn from Spearmint Rhino. And which agencies can learn from both.

It's about the healthy questioning of what you might call pure P&L capitalism. The reductionist idea that the value created by any organisation can be best understood by ever-greater dissection of its balance sheet.

At the recent Media Festival in Manchester (of which more tomorrow) I was lucky enough to meet Will Page, Chief Economist at the MCPS-PRS Alliance and recent author of a fascinating article questioning some (if not all) of Chris Anderson's assumptions about The Long Tail. One of his earlier projects had been an enquiry into the Scottish Pole Dancing industry (and, whatever your ethical stance on the matter, you have to agree that Scottish Pole Dancing is a good deal more interesting than any other kind of Scottish Dancing).

The business model is apparently complicated. In earlier such businesses, massive drink mark-ups (eg £100 for a bottle of cider masquerading as Champagne) would pay for free naked girls. With the new pole-dancing model, I am told, the girls actually pay the proprietor for use of the pole - earning the cost back in, er, voluntary donations or heaven knows what else. This franchise model apparently produces a greater level of commitment than one involving payment by the hour.

But in both systems a large degree of cross-subsidy takes place. And money isn't necessarily made where value is created. For instance in the first model the bar made all the profits but the "free" women provided the value-add. In the second model you may actually subsidise the drinks to raise the hourly value of the pole.

Most businesses, in short, are ecosystems. There is much more going on than a simple one-off, one-way value exchange. When you go to a pub with a nice view, you pay more for the beer - you don't pay separately for the view.

Retailers generally understand this well. Certain items have far greater price elasticity than others. Some items are simply sold to drive footfall (selling newspapers is not all that profitable for newsagents, for instance, nor is selling petrol nearly as profitable for petrol stations as selling coffee). 

Occasionally, I suspect, some businesses lose sight of the interplay between items. Boots a few years ago became so preoccupied with seeling high-margin beauty products it somehow forgot it was a chemist. In 2001 in Tunbridge Wells they kept baby products upstairs, only reachable via a buggy-defying flight of steps - presumably so that more floorspace could be devoted to perfumes and other such fripperies. I stopped shopping there for five years. Woolworths, too, may have been led astray by an obsession with high margin categories - to a point where it sold 600 kinds of Bratz merchandise but not string. After a while, people forgot what it was for (and would not much miss its absence were it to vanish). Now M&S has an issue in that the success of its Simply Food concept means people use M&S to buy, er, simply food - for, as there now a diminishing need to go into its larger stores, you are rarely exposed to its clothes. And, according to a loyalty programme legend, one large supermarket hastily abandoned its decision to delist feta cheese: while selling the cheese itself made them no money, its few regular buyers were shown by loyalty-card data to be the top spenders in the shop.

Now advertising agencies are no less an ecosystem than is any other kind of "shop". Effectively, like any other kind of  shop, we do not always make most of our money where we add most of our value. Boots adds most value in Pharmacy and other essentials; it makes most margin in perfumes. An ad agency adds most value in creating ideas - something which may take a matter of minutes - but makes most money in the laborious and time-consuming business of execution. (Similarly an agency probably makes a small margin on its senior staff but a large one selling more junior staff.)

This is all fine - let's face it all businesses work that way. Or at least it's fine until you get exposed to the boneheaded people who refuse to acknowledge it. The more stupid procurement staff, say, or people with recent MBAs. They become obsessed with splitting the business into more and more watertight compartments, in order to facilitate the measurement of anything and to allow them to compile ever more elaborate spreadsheets. This is dumb. Every great business has interdependencies: it adds value in some places and makes money in others.

It's only a problem when people start treating a balance sheet as a substitute for judgement. There are too few creative people, proportionately in almost every agency in London. Why? Is it because they are less valuable? Or is it because they are harder to sell on retainer?

Follow the logic in this way and you have a bar selling cider for £100 a bottle but no girls. It's a high margin business, I grant you, but you don't get many customers.

A scientific approach to queueing - just what I've been waiting for.

Like the late Alan Clarke, who "would not queue for anything under any circumstances" I am driven practically insane by the time-wasting procedures of many service industries. For example the check-in procedure at hotels regularly induces a kind of Tourette's: "You've known I was coming for the last two weeks - why couldn't you have my twatting key ready, you ****s! " *.

If hotels are bad, car rental firms are worse. Far worse. Two weeks before my arrival I have dutifully logged on and, in my own time, typed in to the rental company's database every conceivable detail about myself. My driving licence number, my address, three telephone numbers, the address where we shall be staying, my credit card number and the number of my incoming flight..... so why in God's name does the person at the rentals desk need to spend six minutes incessantly tapping on a keyboard for before handing over the keys? Are they secretly writing a novel while pretending to work at an airport car-hire desk? Maybe a novel drawing heavily on their real life experiences and featuring an angry fat man from England who swears a lot?

Now, at the moment, I am probably unusual in this impatience. But - and here's something every service industry needs to know - my annoyance will become less and less rare in the next ten years. Why? Because one massive effect the Internet has had on all of us, but disproportionately more on the younger amongst us, is that our expectations of immediacy and speed of response have been transformed.

When you are accustomed to living life at an online pace, you live in a world where every action results in an immediate response. Click on the link and, after just a few seconds, up comes the page. Hence when you order a coffee and ten minutes later it hasn't arrived, your first response is no longer "Gosh, they must be quite busy!" No, your autonomic response is that "Something must have gone wrong" - or, if you're me, it's "They've f***ing cocked it up completely, the incompetent, c***ing bastards!"

Recently we at Ogilvy had an HR presentation on the foibles and peculiarities of Generation Y. This impatience, this expectation of instantaneous reaction is high among them. When they send an email, for instance, or text a client, they are reduced to complete befuddlement if they do not get an answer within twenty minutes - or at most an hour. They start emailing and texting incessantly. To older clients, this is unbelievably annoying. To the young, this is normal behaviour.

In the words of one twenty-year-old: "The trouble with McDonald's is it's too bloody slow."

In a few years time, young people may expect to text their burger order when they're ten minutes away.

Now, if you are any kind of service industry, you need to be preparing for this insane new expectation of speed. To do so, what you need to understand is that not all waits are equal. In fact it is possible to transform a customer's perception of speed by some clever behavioural psychology.

 The expert on this is a splendid man called David Maister, and his basic principles of queueing are to be found here:

There are a few splendid principles. For instance, if you let people at least make a start on the process, they mind waiting less. If Starbucks let me place your order when you walked in - ie at the back of the queue - I wouldn't mind waiting for my coffee nearly so much - what I find really annoying is waiting to tell them what I want.

A second principle: people dislike waiting much more when the length of the delay is uncertain. Tell them an expected wait-time and (as the London underground discovered) people are much less paranoid about any delay.

Another great book to read on this subject is Traffic by Tom Vanderbilt. He adds some superb insights into the psychology of traffic jams and why they are so frustrating.

These are both worth reading, especially in a recession. After all, by streamlining service, it's possible to reduce the cost of your service dramatically without reducing the price at all.

___________________________________

* The Beverly Wilshire Hotel has a system where the driver of your Lincoln Towncar furtively texts ahead to the hotel to announce your impending arrival. This meant that, even though I had never been there before in my life, the staff opened my car door for me with the words "Welcome to the Beverly Wilshire, Mr Sutherland." This was so cool I nearly soiled myself with the excitement. 

Is it time to turn wine bars back into banks?

As the great P J O'Rourke once remarked, “a principle is only a principle when it costs you money”.

In other words, everyone can posture around, claiming to believe in CSR, or ethical sourcing or some other fashionable stuff, but unless they actually put some money forward in furtherance of those ideals, it doesn't mean a thing.

The same applies to brands.

In fact the only really acceptable definition of a brand-owner is someone who, if necessary, would rather lose money than lose their reputation.

Reputation is the bedrock of trust. Without it, most transactions simply cannot take place. (Search Wikipedia for Akerloff and Information Asymmetries for more on this).

Be candid now. How many financial services businesses can you think of which would willingly sacrifice a little of this year's margin (and hence a chunk of their bonus) in order to do the right thing by their customers – at least without being threatened by the tabloids first. Nationwide and the Co-Op, maybe? Otherwise I’m not confident most people could name many more.

I’m not saying other financial institutions wouldn’t do the right thing. It’s just that most people no longer have any faith that they will. Faith in the sector is now eroded to the point of invisibility. Which is rather worrying for the future of the economy, since very few of us will be happy to invest in anything but the most banal financial instruments for decades to come.  

Most brands have a spark of idealism somewhere within their DNA. You feel they are motivated to do what they do by something other than naked self interest and greed: perhaps professional pride, social purpose, a belief in serving the community, the intrinsic pleasure of the job.

In finance, unfortunately, customers suspect that professional pride has become largely indistinguishable from personal self-enrichment. You are only as good as the size of your house.

This wasn't always the case. British financial services brands were the product of mutual societies, the Gentlemanly Ideal and the Presbyterian and Quaker religions. In other words they existed in pursuit of aims alongside immediate self-enrichment. They had what you might call a superior motive.

Today I think many people would entrust their money to almost anyone before giving it to a bank. Their failure to conceal their greed means that, however clever they may be, many would rather give their money to someone who knew less about finance and more about ethics. Also, many people - bizarre as it may seem - would prefer to get a return of 6% on their money from which their bank makes a profit of 12% than, say, get 7% on which their bank makes a profit of 50%. Repeated experiments show that people are prepared to pay a price for what they see as justice. 

If this is the case, and that a financial brand’s reputation for straight dealing is more important than its perceived expertise in finance, it seems to me there is a spectacular opportunity for a few new brands to get in on the act. After all a lack of experience in financial services may now be perceived as a competitive advantage.

Who should do it? The Church of England? A few leading charities? The Hare Krishna? Innocent? Your local pub?

In fact Peter Mandelson's suggestion - The Post Office - isn't a bad idea

PS My own favoured bank at the moment is Kiva.org. I get a 0% return, but I trust them completely.

www.kiva.org/team/Ogilvy if you're interested.

My favourite ad of the year - and it's by an Argentinian.

It's the perfect riposte to people who believe that only direct marketers understand segmentation.

For the non-Hispanophones among you, Jugo de Naranja is the Spanish for Orange Juice. Here a savvy Buenos Aires street vendor has cannily worked out that any passing gringo tourists can probably afford to stump up an extra peso for a glass.

The most depressing moments of your working life.

[With photographic credits to turdinabox.com - seriously!]

The most depressing moments?

No, it's not when you lose a pitch. The longer you are in this business, the more phlegmatic you become about this kind of thing.

No, the worst moments in our business always come six months to a year after you lose a pitch.

This is how it happens.

You are invited to solve a problem of some kind for a prospective client. You and a group of other people put a few weeks' unpaid work and quite a few tens of thousands of pounds into coming up with a solution.

And you come up with something which - well, ain't bad.

Maybe it's not a cancer cure, but it will do the job well. The solution includes ads in several media and several disciplines.. You even go beyond the call and explain that there are three or four other things the client can do, perhaps not involving advertising, which might also help solve the problem.

You spend a few thousand pounds more mocking up your proposed work. You argue about whether the headlines should end in a full stop. Whether to write full copy for the third radio script. Whether perhaps you should run another couple of vox-pops featuring the target audience. Or build a replica showroom in the presentation room.

You get up at 6am to rehearse. You are specifically told to bring the real team who will be working on the business because you will need to "hit the ground running". There is clearly no time to lose.

You present. It goes quite well. Although most of the questions come from some entirely unexpected new attendees from the client's sales department who apear to disagree with practically every sentence of the brief you received.

Never mind. Not long now. And you are told you will hear on Thursday week. It needs to be Thursday week because someone is flying over from America on Thursday week and because in clientworld, intriguingly, it's always really important to include as the final arbiter in any agency appointment someone who hasn't seen your presentation at all.

On Thursday week you don't hear a thing. You never hear a f***ing thing on Thursday week. In fact it's rule one of new business - add a week to any date you're told. But it won't be long, you know, because they're "keen to hit the ground running". They said so, didn't they?

Seven weeks later you get a phone call. If you're lucky, this is to tell you that you've lost. If you are unlucky you hear you are "down to the last two". This means you get to spend another 200 unbillable hours at the client's behest while their procurement department gets to treat you as their sex-toy. Before ringing you to tell you you've lost.

Finally they tell you why you've lost. This is never because you are too expensive (that would make them look mean) or because the strategy was wrong (that would look as though you were misbriefed). No, you lose because someone else came up with a "fabulous breakthrough creative route and they just have to work with them".

"Oooh", you think. Well, hats off to the chaps at WGHN or KGHS or whoever. They beat us fair and square. All credit to them. In fact you can't wait to see this breakthrough work. And it can't be long now because you know the client was really "keen to hit the ground running."

Six months pass. Nothing.

Another three months. Not a dickybird.

And then, finally, you see it.

Not the mutimedia integrated campaign you'd been asked to present. Not the breakthrough, blue-water strategy you'd expected....

 No, it's a single ad. It's on a tube card, or perhaps the side of a bus. And it's a total heap of crap. Shameful. Atrocious. In fact all it is a straight call to action but made mildly confusing in the name of creativity.

And that's when you experience one of the worst moments of your working life.

Because four weeks and £50,000 have resulted in an ad any half-competent creative team could have knocked off in an afternoon.

Later in the month you see two more ads the same or even worse. And then you see nothing ever again.

In fairness to the agency that beat you, they may indeed have had a great creative idea. But the odds of it making into the open air were worse than nil. Perhaps it's one of those marvellous Mexican stand-offs beloved of large organisations where the people who can approve advertising don't actually hold a budget - and vice versa.

But, whinge over, this is not a frivolous point. Because if there is one thing which could make advertising (and every other discipline) more efficient, more effective and more creative, it's the one thing we never have the balls to suggest.

The decision-making procedures at perhaps 50% of all client organisations are simply dreadful, and cost them millions by generating pointless and repetitive work to satisfy the demands of internal politics rather than the creation of brand value.

Pizza Hut was recently criticized for renaming a few branches as Pasta Hut. (I don't know why this is such a terrible idea -it seems fairly sensible to me). But one criticism was even more bizarre than most. "It's the sort of idea the Chairman's wife would come up with."

I don't know about you, but working with the Chairman's Wife sounds to me a splendid idea.

In fact outside Utah and the Middle East, the Chairman's wife has the perfect qualification for being a superb client.

There's only one of them.

Clay Shirky on perfectionism

A fascinating answer to a question raised by our own Jonathan Macdonald.

Is TV airtime a Giffen Good?

This was the bizarre question raised in a conversation between me and the wonderful Simeon Duckworth of Mindshare.

 If you don't know what a Giffen Good is, have a look here.

In consumer terms Giffen Goods are believed to be rare and elusive. However in B2B - where the purchaser generally has less discretion to move expenditure - they may well be more common.

Indeed TV airtime may be the best example yet.

Think about it this way. Just as a human needs a certain number of calories to survive, a brand marketer needs a certain number of advertising impressions within a predefined demographic group in order to justify their existence. Mass TV provides these eyeballs at the lowest possible cost per unit.  Hence given a finite budget (a fair assumption) and no freedom of substitution (also true) this means that demand for TV airtime will actually increase as the price goes up, since in order to satisfy the intended reach with the same budget, any increase in its price forces the advertiser to to spend more on TV - using more of the lowest cost-per-eyeball medium at the expense of pricier forms such as magazines or newspapers.

Better buy stock in ITV, then?

The future of the Internet - yours for $179

By now you will have seen the wifi enabled fridge from LG in Korea. In Japan there is even a wifi enabled kettle, which posts to a blog every time it is switched on*. Here in Blighty, I suspect, you will soon be able to buy a network-capable Breville Sandwich toaster 2.0 - which invites random pissed Facebook friends to join you every time you switch it on after 11pm. 

Meanwhile our ingenious colonial chums have had a still better idea. They have added wireless internet connectivity to that old 1970s bedroom staple the clock-radio - and in the process created something quite beautiful and charming.

The result of this spectacular hybridisation is called the Chumby and you can find out more - or even assemble a virtual Chumby - at www.chumby.com.  I initially bought one from eBay; it was faulty. However, in the all too brief ten minutes for which it actually worked I found it so enthralling that I promptly went and bought another one.

Chumby is a clock - or rather it is several clocks, the design of which you can choose at the website (one clock widget - shown below - is charmingly retro; another, inevitably called 'clockr', which randomly selects its individual digits from live flickr updates, qualifies as a minor work of art). The Chumby is also an Internet radio (useful if, like me, you find that US National Public Radio craps on Radio 4). It plays tracks from your iPod. And, as you would expect, it wakes you up in the morning - in my case at the crack of 9am.

But, at the times when the Chumby is not displaying one of your various selected clocks, the small screen displays in rotation your choice of a spectacular variety of Flash widgets, many created by enthusiastic amateurs. Some of these are amazingly useful. One (thank you, Gingerbeardman, whoever you are) displays the live departure times of trains from any UK railway station; as I sit here typing, it is warning me that the next train from Sevenoaks to Charing Cross is running five minutes late. Still more widgets tell you the local weather, the latest news stories from the NY Times and the BBC, the WPP stock price (I might remove that one), a live webcam picture of the Abbey Road pedestrian crossing, the next raising time for Tower Bridge (18:30 tomorrow, since you ask), my Twitter friends' updates (Russell Davies has landed in Helsinki), my latest Facebook photographs and a live photograph of The Golden Gate Bridge. I am also asking the Ogilvy caterers to put out the lunch menu as an RSS feed so I can display that as well. Well, why the hell not?

Very occasionally the device displays advertisements. Not a problem. Some of them are even quite cute, too.

Now, as you read this, the nerdier half of you will be salivating (especially when I tell you it runs on Linux). The other half, I suspect, will be close to vomiting. Not a problem - I know this is exactly the kind of informational device which polarises people. Me, I love the thing to death. I have always been a massive fan of what is now fashionably called "branded utility". This is the perfect way to deliver it. 

* The kettle is not quite as mad as it sounds - it is designed to help you keep a discreet eye on elderly relatives. Like older Brits, older Japanese people only stop making tea when seriously ill or dead.

Time to overthrow the arithmocracy?

"Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist."

J M Keynes

Steiff, the German maker of teddy bears, is re-locating production back to Germany from China because, in their own words: "cost isn't everything".   Ref: Financial Times (UK) - from Brainmail

[On the bailout of AIG]  "It's a little scary that the world's largest insurance company hasn't planned for a rainy day." Tyler Cowen at Marginal Revolution (www.marginalrevolution.com)

"The economic fallout from these events is dominating the headlines.  The intellectual and ideological fallout we are just beginning to contemplate." ibid

Based in Canary Wharf, as we are, it would be impossible for us not to have noticed the change in mood in the last few weeks. It is, in some ways, an improvement. The parking at Sevenoaks station is more plentiful, for a start. And, once in Canary Wharf, there is finally something interesting to look at. My biggest complaint about E14 (aside, that is, from the E and the 14) was there was never any pleasure to be derived from people-watching there. Anywhere else in London, the passing cast of characters provides endless entertainment, even scope for Sherlockian speculation about their lives. Out here the opportunities for detective work are few: "Dr Watson, save that our caller was young, slim, a banker, ambitious, a gym-goer, materialistic, a BMW driver and a bit of a twat, I fear that there is little I can deduce from his general appearance. Now pray pass the syringe......"

Today the mood is a little more self-aware, and the expressions on the faces more interesting. "I notice from your large cardboard box and fraught demeanour that you were until today an employee of the Lehman brothers' once respectable bank." But it is a little too easy to be mean. Occasionally I travel in to work on a 7am train from Kent, a journey which teaches you that for every Master of the Universe with a six-figure bonus there are ranks of overworked, not particularly well-paid drudges living month to month like anyone else.

Yet if there is one welcome casualty of this crisis it is the widespread and unquestioned belief that unending growth is the only proper pursuit of any business, and that a business has no responsibility other than to its shareholders. 

I am not saying this belief is necessarily wrong, by the way. I am merely suggesting it is worth debating - and should not be treated as axiomatic. And it needs to be questioned a little more now, when the businesses who have most enthusiastically espoused this particular ideal seem suddenly to be desperate for government help. 

The economist who seems to have started this whole shareholders-first-and-last assumption is Milton Friedman. Yet even on the Libertarian right his assertion is the subject of much vigorous debate. Here's John Mackey, the avidly pro-free-market founder of Whole Foods.

In 1970 Milton Friedman wrote that “there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” That’s the orthodox view among free market economists: that the only social responsibility a law-abiding business has is to maximize profits for the shareholders.

I strongly disagree. I’m a businessman and a free market libertarian, but I believe that the enlightened corporation should try to create value for all of its constituencies. From an investor’s perspective, the purpose of the business is to maximize profits. But that’s not the purpose for other stakeholders–for customers, employees, suppliers, and the community. Each of those groups will define the purpose of the business in terms of its own needs and desires, and each perspective is valid and legitimate.

He goes on:

I believe [our philanthropic] programs would be completely justifiable even if they produced no profits and no P.R. This is because I believe the entrepreneurs, not the current investors in a company’s stock, have the right and responsibility to define the purpose of the company. It is the entrepreneurs who create a company, who bring all the factors of production together and coordinate it into viable business. It is the entrepreneurs who set the company strategy and who negotiate the terms of trade with all of the voluntarily cooperating stakeholders–including the investors. At Whole Foods we “hired” our original investors. They didn’t hire us.

The shareholders of a public company own their stock voluntarily. If they don’t agree with the philosophy of the business, they can always sell their investment, just as the customers and employees can exit their relationships with the company if they don’t like the terms of trade. If that is unacceptable to them, they always have the legal right to submit a resolution at our annual shareholders meeting to change the company’s philanthropic philosophy.

And.....

....turn to one of the fathers of free-market economics, Adam Smith. The Wealth of Nations was a tremendous achievement, but economists would be well served to read Smith’s other great book, The Theory of Moral Sentiments. There he explains that human nature isn’t just about self-interest. It also includes sympathy, empathy, friendship, love, and the desire for social approval. As motives for human behavior, these are at least as important as self-interest. For many people, they are more important.

He is suggesting that the assumption that a business can be judged on its recent financial performance and nothing else seems open to question on several levels. I would add a few more.....

1. The reductionist "it's all about the money" view will always prove especially popular with stupid people. In other words, even if it is true, it has the dangerous effect of disproportionately empowering a small caste of Aspergerish people whose outlook on the world is unsubtle, amoral and uber-rational. There is no need for refined judgment, taste, morality or any other human virtues when your spreadsheet provides you with all the answers you need.
   
   
2. Most people, as Adam Smith observed (and as the superb Indexed blog shows - see right), are not solely motivated by material wealth, with many valuing social capital more highly.  This, incidentally, may be true of investors as well as of most employees. Institutional investors, it's true, only seem to justify their performance in numerical terms. However I suspect some individual investors (whose money it really is) would prefer to support businesses whose aims they shared. What would happen if you disintermediated investment just as, say, Kiva.org has disintermediated charity?
   
   
3. The profits-only approach is a licence to be amoral. Not unreasonably, people do not want to do business with amoral people. If you want to know why this country has always had high house prices and low rates of savings, it may just be because people trust bricks a lot more than they trust bankers. The Friedman belief, if pursued excessively, destroys consumer trust in your business. 
   
   
4. A business bent on only one end may be an uncreative business. What makes a business and a brand interesting (Virgin, Apple, Nike, blah.....) is the tension between its pursuit of money and its pursuit of some other wider aim. This conflict allows for diversity of opinion - and diversity of people. One of the problems with banking's naked and unalloyed greed is that it risks disproportionately attracting a dangerously homogeneous group of people. Last week I saw a presentation by an HR specialist on Generation-Y; the Gen-Y people going into banking and finance, she remarked, were completely unrepresentative of their age group - and disproportionately self-interested.  All this is a pity when thinks of the ethical origins of most financial organisations, often created with a social purpose as well as a financial one: Quakers, interestingly, seem especially good at building long-lived brands.

Most of us pay in advertising pay unquestioning lip-service to the idea of shareholder value being the one desirable purpose for any business, our own included. Are we right? Or are we just the "unwitting slaves of some defunct economist"? Let me know what you think.

Is advertising the problem? Or is advertising the solution?

There is a universally-held belief that advertising makes people want more things. This may indeed be true. But an equally important (and perhaps even more lucrative) use of advertising is to make people content with less. 

This year I have been mostly reading about behavioural economics.

I find the subject endlessly fascinating. Partly because the subject offers up endless counter-intuitive insights into human behaviour of the kind which research companies should generate but frankly never do (the fact, for instance, that in defiance of economic rationality, prostitutes almost always end up losing any clients whom they offer to serve for free* - I mean you don't generally get that from Millward Brown, do you?) 

The other reason I am captivated is a more self-interested one: I suspect it is the new behavioural-economic models which will form the model for the most successful (or at least the most interesting) agencies in the next ten years.

Why? Partly because this subject provides a robust intellectual link between understanding human nature and knowing how to make money, which is the only proper area of study for anyone in marketing (remember when we used to sell things?) Secondly, unlike the models prevalent in marketing, behavioural economics hasn't been designed to suit the needs of one media solution. Thirdly, I like it because it offers a practical alternative to the "messaging model" of advertising which everyone good in this business (see Russell Davies in last week's Campaign, or Paul Feldwick and Robert Heath passim) admits is a heap of old crap.

In fact behavioural economics offers the only current model I see capable of displacing the current lazy consensus around "how advertising works". As such it is vitally important since, as scientific historian knows, the only way to kill off an entrenched model is by replacing it with a new one.   

There is another reason it's useful. Quite simply economics has an extensive and precisely defined vocabulary (in stark contrast to marketing language where the word "brand" can mean three entirely different things within the same sentence).

For instance in the last month I have learned about "Veblen Goods", "Inferior Goods" and "Giffen Goods". (The idea of the Giffen Good is fascinating, but I don't propose to cover it here. Have a shufti at Wikipedia here if you want to know more.) 

The Veblen good, meanwhile, is a kind of product or service named after the rather austere looking Norwegian-American cove to the left, one Thorstein B. Veblen, a distinguished economist perhaps most famous for coining the phrase Conspicuous Consumption.

Veblen goods are those items which defy the usual price-laws of supply and demand because demand for them seemingly increases as their price goes up; indeed it is their high price and corresponding rarity which largely gives them their value. Caviar, an immensely expensive product which is decidedly less enjoyable to eat than, say, a packet of salt 'n' vinegar crisps, would be a good example of such an item. "Reassuringly expensive", the 30-year-old strapline for Stella Artois, is an elegant attempt to create a Veblen good using two words.

Sometimes the value of a Veblen good lies in its display or status value - the "I am rich" iPhone application would be an extreme example of this. Sometimes it may be simple human snobbery which believes that a rarer, pricier item will be better (the American Institute of Wine Economics has found that the safest way to guarantee enjoyment of wine is simply to tell the drinker that it cost a lot of money).

I here quote Wikipedia

"The Veblen effect is one of a family of theoretically possible anomalies in the general theory of demand in microeconomics. Other related effects include:

• the snob effect: preference for goods because they are different from those commonly preferred; in other words, for consumers who want to use exclusive products, price is quality;^[3]
• the bandwagon effect: preference for a good increases as the number of people buying them increases (see network externality);
• although some have suggested (Lea 87) that there is also a 'counter-Veblen' effect: preferences for goods increasing as their price falls, this is in essence merely traditional supply and demand theory " 

An "inferior good", finally, is one which people generally buy less of when they get a bit richer. Polyester or coach travel would be generally regarded as inferior goods. This distinguishes them from normal goods, of which people buy more when they get richer - such as, say, holidays.

Got that?

Right, now an almost universally held criticism of advertising is that most of it exists to amplify Veblen effects, and in particular that it prompts people to want things they don't need and can't afford. Worse, it promotes a kind of consumerist arms-race with everyone seeking to outdo each other in displays of conspicuous consumption.

My own belief? We all believe this - even advertising's most ardent defenders, don't we? And indeed advertising can do this. But in my opinion it very rarely does. In fact it is far more likely to have the opposite effect.

Okay, let's accept there is an economic case to be made for disliking conspicuous consumption, since (intentionally or not) it may create more net envy and misery in bystanders than it creates happiness in the consumer, while leading to elaborate forms of expenditure which are in many ways wasteful and unproductive (eg most women's fashion, two parking spaces at Harrods, that kind of thing). Certainly Veblen himself, being an austere Nordic type, disliked conspicuous consumption.**

But let's assume that Veblen effects are bad. Does advertising do much to create them?

Just a few points.

1. There were Veblen effects long before there was advertising. People have worn extravagant regalia or eaten expensive food to demonstrate status and wealth since the beginnings of hunan life and perhaps before (large antlers are probably a Veblen good). The women's clothes and footwear industries are extraordinary examples of conspicuous consumption, but this predates advertising by a few millennia (sumptuary laws were introduced five hundred years ago to limit which cloths such as silk could be worn by which ranks of society). In some cases mass advertising may actually destroy the rarity value a Veblen good seeks to create.
   
2. People who despise consumerism and advertising are usually just as guilty (possibly far more so) of seeking status through Veblen effects. The Guardian-reader who shops organically and holidays in Macchu Picchu is far more guilty of displaying rarity-snobbery than a Sun reader who goes to Burger King and Benidorm. Even if the first three are not overtly commercial, they are status seeking activities nonetheless.
   
3. Fashion and luxury goods advertising is very rarely done by ad agencies. Nor is most advertising for upmarket or luxury products. In fact for the most part Veblen goods are not promoted through advertising at all, but PR. Why would you spend £20,000 to advertise a $50,000 Ecological Treehouse when the Sunday Times will happily run a stupid article on them, next to a piece on funny-shaped swimming pools and holidays in Uzbekistan. And when the wonderfully non-commercial BBC will run hours of programming dedicated to the proposition that if your house doesn't have decking or a tossy water-feature then you're a loser. 
   
4. Against this backdrop a few purchases stand as a glorious counter to innate materialism. Things which ought to have become inferior goods but somehow aren't. Things which are the very opposite of Veblen goods - indeed they manifest bandwaggon effects or possibly even counter-Veblen effects. They are wonderful social levellers. I'll name some of them now.

 IKEA. McDonald's. CocaCola. Mini. LeviStrauss. The Ford Ka. Marlboro lights. easyJet. Pizza Hut. Gap. M&S. Tropicana. John Lewis. BT. Nokia. BP. Tesco. BA. Heinz Baked Beans. Nike. Kelloggs. Sony. Vodafone. Tabasco. Sky. Toshiba. Apple iPod. Volvo. Google. Centerparks. Virgin. Disney.

Spend a moment comparing, if you will, how incredibly democratic the soft drinks market is (mass production, mass distribution, mass advertising) compared to the market for wine (niche production, niche distribution, no advertising). The first is a model of egalitarianism - the second is riven by snobbery and status seeking. Remember Andy Warhol's beautiful insightful comment "What I like about Coke is that the President of the United States can't get a better Coke than the bum on the street." (True also of Google, incidentally). Do you think the Prime Minister drinks the same wine as the local wino? Fat chance.

Notice also how these democratic mass brands are disproportionately American (with healthily Protestant additions from Scandinavia and the UK).  The egalitarian French, meanwhile, are busy promoting luxury brands.

What fascinates me about these big brands is how astoundingly democratic they are, how devoid of any snobbery. Levi's denim (it's a rough, working man's fabric, for God's sake) should by rights be an inferior good, and yet it is worn equally by millionaire rock stars and impoverished accountants. In fact, amazingly, almost all of these brands enjoys what you might call the Cornwall effect - even if you're a billionaire, it's still okay to go there.

Some of you may quibble about McDonald's. I accept that (and I wouldn't have put it in the list myself until yesterday when I found myself queueing in the Drive-Thru lane behind a Lamborghini Diablo).

More important still, many of these advertised brands actually embody the counter-Veblen effect (IKEA, Tesco, easyJet are kind of cool because they are cheap - a characteristic once described as rational chic). This is also true of the Mini. These are all items which, no matter how rich you are, carry no stigma whatsoever.

So the peculiar irony is that big advertised brands, since they depend on mass distribution, ubiquity and fame, have it in their interests to be universal, democratic and non-Veblen. It is the unadvertised things which are divisive.

Large scale advertising may often work not by persuading people to trade up to more expensive variants, but in persuading them to keep their mass tastes instead. The idea that advertising creates social division may be quite wrong. Diametrically wrong, in fact. Advertising often works by persuading the market to adopt an efficient consensus solution, rather than fragmenting inefficiently and snobbishly.

It is, in a way, persuading people to be happy with less, rather than wanting more (brands, as I have remarked before, are environmentally very friendly - they require only electrons and neurons in their manufacture). Advertising is hence diminishing excess materialism by helping forge a common standard of "what's pretty good for all of us". And it prevents the inefficient creation of Inferior Goods - where people reject perfectly good solutions simply because they are "common" - and of Veblen Goods, the expensive things ehich people don't need.  Advertising is, in its way, pro beer and anti-wine.

So don't apologise, adland. Stick to your guns. And keep up the good work. We need far more advertising - and far more categories of expenditure where mass advertised mass brands render the category socially acceptable to all, destroying pointless and inefficient fragmentation in the pursuit of price discrimination.

Indeed George Monbiot believes part of the solution to global warming is to make coach travel cool (now there's a brand opportunity for someone). For Polyester I suspect it is too late. 

How do I know I'm right? Well I once got a room full of lefties to admit through clenched teeth that Karl Marx would have despised the organic movement, but would have loved McDonald's.  

Remeber Andy Warhol. A mass advertised brands is as close to egalitarianism as we'll ever get.

Yes people are tortured by social anxiety. But these things do not concern mass brands, which are a wonderful source of reassurance. My iPod is just as good as Steve Jobs's iPod. Anxieties and consumerism revolve around the areas where there are too few brands, not too many. Healthcare. Housing. Education. Travel. I wish Stelios would hurry up and open a school. I'd send my kids there in a shot.

__________________________________________________________________

* The suggestion is that any form of discount or freebie moves the trick from the purely transactional realm (where the only currency is financial) into the social realm (where the currency is partly emotional). Clients wish to pay prostitutes in full to make clear that this is purely a financial transaction with no emotional component whatsoever.

** Having said which, it's worth remembering that the commissioning of much of the world's greatest art and architecture was probably motivated by no higher motive than the display of wealth - while the vanity which drives people to buy the latest fashions, cars or gadgetry funds innovation which fairly rapidly permeates to the lower end of the market. I can still remember the review of a new Rolls Royce in my childhood in which the reviewer was almost scandalised by the decadence of remotely adjustable wing-mirrors - something you would now get as standard on an £8,000 car, along with other shameful indulgences such as air conditioning or electric windows.

Was it something I said? Probably not.

It's interesting, when you think about it, that the answer to the question "was it something I said?" is usually No.

Much more likely is the answer "No, it was just the way you said it" or "It was something you did." Or "It was just the way you did it."

People are generally not much bothered by what people say. For proof of this, simply look to the late Alan Clark. A self-professed Nazi with a lovely prose style, he is remembered for the prose not the Naziism*.

Or take the Economist campaign. Take away the humour, remove the twinkle in the eye, and the actual message was really quite offensive. Management trainee, 42 is an ad that says "If you don't read this magazine, you're a loser." (Interestingly a planner would have been laughed out of the room had he written that proposition). The campaign is what is known in the film industry as "execution dependent". And if you want an example of this, go and see Mamma Mia!, which is a fabulous film which says absolutely nothing).

As well as taking offense, we also decide whether or not to be delighted or seduced almost entirely on the grounds of "how it's said" rather than "what's said". The phrase "I finally persuaded her to have sex" is not one which often betokens the start of a long relationship.

And there's a perfectly good evolutionary reason for this. Words are cheap. It is much easier to lie in words than in actions or manner. Everybody trying to sell something will say it's good. We decide whether to buy in the basis of what we feel about the person doing the selling. The subconscious is much less of a sucker than the conscious.

Yet almost all research revolves around the assumption that an ad is there to say something, not to convey something. Like the sensory homunculus above, we are all mouth and no trousers.

Now this is not a new observation. Plenty of people before me have argued that consumers buy with their right brains. And Bill Bernbach knew all about the difficulty of tonality when he asked, "How do you storyboard a smile?"

But it's worth repeating. After all, noone going out for an evening on the pull would approach the problem the way a conventional planner would. "1) decide what to talk about. 2) decide the style in which you wish to come across. You'd do it backwards, wouldn't you? Which may explain why Alan Clark is more famous for enjoying hot troilistic action than, say, Stanley Pollitt.

Plenty of neurological research bears out the idea that what ads say matters less than what they convey. But advertising methodology doesn't. Moreover the bias is worse than we think. Because it causes us to always look to solve problems with words and images, rather than proposing other solutions - for instance behavioural solutions or brand actions. The order of engagement is what do we say followed by how do we say it. We never do this backwards - "let's be charming and then decide what to talk about later" - which, let's face it, is how most humans get their sex. Nor do we ever start with the question "Never mind what we say - how can we just do something really cool and get other people to do the talking - preferably about us."

David Ogilvy claimed that he only failed to sell one big idea in his working life. He was approached by a huge US paper company who wanted a corporate campaign. There were no planners in those days, so David was allowed to have an idea. He suggested that the company should open up a few of its million acres of North American forestry to the public, and should build lightly branded picnic sites in among the sylvan glades for the enjoyment of 200 million Yanks. This was a brand action, not a brand message. The company went to another agency and ran an ad campaign instead.

It's no surprise that this idea failed. Almost all advertising people and clients believe that marketing works by having something to say. Sometimes this is the right thing to do. Often it isn't.

Yet - think about it for a second - what mechanism exists in the current advertising model which allows ideas like this to happen? Ever? There isn't one.

Last week I had an idea for one of our tech clients that they should spend 20% of their ad budget installing wifi in UK churches, driving footfall for the church and creating a few thousand new working areas from precious real-estate that is wasted six days a week.

This may be a rubbish idea, I grant you. But that's not my point. Even before this idea gets killed by a bunch of crooks at the buying agency "''Cos the NI deal's already been done, mate" it doesn't stand a chance in hell. Because it doesn't really say anything specific in the way an ad "should". Or at least what it does convey is not something that would ever be written on a comms strategy chart - or on the brief that may have been already written and signed off before a creative person is even aware that there is a brief at all. More than that, few clients could ever buy it, because, not containing a single-minded (ie monotonous) proposition, it is impossible to research comparatively - since research methodologies also depend on us all buying into the idea of rational persuasion.

I have to ask - and I am entirely in harmony with Dave Trott in asking this...... Has our established agency process and the order of engagement been designed to narrow ideas rather than broaden them? It seems so. And has this process really been secretly designed to secure time-intensive jobs for planners and account people at the expense of creative people, by claiming that creativity is a skill you only deploy for brief, intensive bursts using a small number of specialists after a lot of expensive groundwork has been performed by an awful lot of time-consuming (ie fee-earning), unimaginative people.

If this is the plan, then a glance at the Ogilvy phone list - and at your agency's phone list, too - suggests it's working rather well.

Who make better planners? Planners or creatives?

This was the debate at the IPA on Monday evening. David Golding vs Dave Trott. And, my sweet Lord, was it good! Quite possibly among the best single hours I have spent at an event in my working life.

I also however have a slightly odd take on this argument (if I were a planner I would probably describe my stance as being Feuerabendian).  My position is that I completely accept the value which planners and other specialists can add to the creative output of an agency - and I believe that varied groups of people are a good thing. But I believe our current, sequential approach to using different talents is a dreadful way to use our mix of talents to best effect.

In a single sentence my view is "Planning + Creative = Good. Planning > Creative = Bad". 

In short I believe that the way our business now tends to make "being interesting" subordinate to "being logical" is the single greatest reason why a lot of advertising is awful (and explains why the number of people who "believe the ads are as good as the programmes" has been in constant decline for over 20 years). 

Put another way, when given a choice between post rationalisation and pre-rationalisation, I'd choose post-rationalisation 80% of the time.

Here goes.

1) I think there are really