The future of advertising is rooted in the behavioral sciences


Dissecting an interview with Rory Sutherland, Ogilvy UK’s Vice Chairman and founder of its behavioral psychology unit

“Fame has a value in multiple dimensions.”


Via Addis Ababa

“One of the problems with advertising—it almost certainly gets undervalued when it is measured.”

“40% of the success [of a direct campaign]will be attributable to the targeting. Maybe 20% to the creative. (These are merely averages—a really clever creative insight can have a huge effect.) And there was always this 30% which was ‘something else,’ it wasn’t the targeting and it wasn’t the creative.”

Some light summer reading for you: Sutherland notes several books that influenced his understanding of Behavioral Economics and their application to ideas, advertising and marketing. To them I’ve added Kahneman and Stephens-Davidowitz.

Welcome, Behavioral Sciences

“If our clients know more about this than we do, we’re doomed.”

“By using the language of Economics rather than the language of Marketing, you can elevate your discussion and therefore take your expertise into areas where you had no permission to operate before.”

“My problem with the advertising industry is that the things that make money and the things that add value are very poorly aligned.”

“They can’t help but judge the value of an activity by how much it contributes to agency revenue—rather than the actual economic value that’s created by doing it.”

Creative Briefing

“If you set a brief in attitudinal terms, you’ve automatically restricted the solution set to essentially conventional display advertising.”

“You should look at the purchase process [or outcome process]first, optimize that, and only when you’ve removed any bottlenecks or snags in that last mile should you proceed upstream to advertising.”

“Every problem is a conversion problem in a way, isn’t it?”

Being an Ideas Person

“…And I found the whole process so spectacularly enjoyable—it was effectively like being paid to solve puzzles—and so from that moment on I was fairly much convinced that that was what I wanted to do.”

“By temperament…I’m not a non-control-freak, but I’d rather operate through influence or encouragement or stimulus rather than through direct control.”

Digital Marketing & Advertising’s Purpose

“The attempts to re-create the effects you gain from conventional advertising, in a digital medium, may be completely wrongheaded. Though it’s not to say you can’t do really important things in digital.”

“[Is there] some part of the human brain which essentially attributes conviction to a promise in proportion to the cost of making [the promise]?”

“I would argue a large part of creativity is, in fact, costly signaling.”

“Advertising is a pain in the ass to do because in order to be advertising, it has to be a pain in the ass to do.”

“I don’t think advertising is an enhancement to a good product. I think it’s impossible for a good product to be convincingly perceived as ‘good’ unless it is promoted. Now that doesn’t mean—unless it’s advertised—but unless it is promoted in a way commensurate with being a great product.”

“The extent to which you make yourself distinctive is somehow connected to the extent to which you can be trusted to deliver.”

“Our belief in the significance of a new product is directly proportionate to the amount of noise around its introduction.”

“It’s not a case that advertising adds bells and whistles to existing products, it’s that we don’t perceive the product as ‘good’ in the absence of the P.T. Barnum fanfare. It’s not added value, it’s extracted value.”

“The ads that worked, that David Ogilvy did — that sort of ad — would still work today.”

Explaining Advertising to an Economist

“What I said [at TED]—it should be the bedrock assumption on which all advertising and marketing activity is based. In other words, in any organization the question is, ‘Do we innovate, in other words, do we improve the thing… Or, do we change the way the thing is perceived?’ And marketing should be seen as the sidekick of R&D.”

Case Study from Ogilvy & Mather, Toronto

“Marketing in general (I’m not confining this to advertising) does a terrible job of marketing marketing to people who aren’t in marketing.”

“Economists, by and large, and finance people don’t understand marketing very well because they’re fixated on the idea that things have an intrinsic value which is independent of how they’re perceived.”

Culture, Luck, Timing

“Let’s be honest, we always attribute too much of our success to individual agency, and a huge amount of it is luck and timing.”

Post-Rationalization and the Future

“I think the opportunities in organizations where historically there’s been no marketing function are enormous.”

“The second we do anything we see as important, we post-rationalize our behavior like crazy, then we believe the post-rationalization.”

“We can solve ten problems without a media spend for every one that requires it, and yet no one comes through our door unless they’ve got a million quid to give to Rupert Murdoch. That seems to limit the size, scale, scope and stature of what the advertising industry can be.”

“This is a fantastically liberating opportunity to solve problems which don’t come with a media budget attached. We can go into the McKinsey space, but with far greater creativity, far better instinctive understanding of human motivation and we can solve those problems brilliantly and economically…”

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