It’s good fun and good business sense when our host Peggy Anne Salz catches up with Rory Sutherland, Vice Chairman, Ogilvy UK, and author of “Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life,” a path-breaking book that argues thinking rationally and logically is actually not the way to go. Using real-life examples from his work with some of the world’s biggest brands and influencers, Rory blends behavioral science and case studies to show why marketers who rely on logic may be missing the ideas and inspiration that produce truly effective campaigns. The advertising legend whose TED Talks have been viewed nearly 7 million times also chats candidly about why today’s marketing calls for alchemy and how we can master it to do branding magic.
I am too excited to continue, we’re just going to dive right in – our guest today, the one, the only Don of advertising, Rory Sutherland, Vice Chairman, Ogilvy. Rory, fantastic to have you on the show today.
It’s a great pleasure to be here.
And I said the Don, that’s one of the things I read, done a lot of research but of course we go back a way too.
Is that in a Mafia sense or an academic sense?!
I don’t know, I was reading an article, this is I think from India of all places, saying that you’re the Don and then there’s a picture of you and a picture of Don Draper, so you figure it out.
Ah, the third kind of Don, okay.
I think a new Don as in, yes, Mafia, but also Don Draper, a little play on words. How do you feel about that because of course you have so many multiple hats – TED speaker, published author – we’ll be talking about your book in a moment. The Don, what do you think?
Well, David Ogilvy, at first I think Ogilvy became known as the University of Advertising and David Ogilvy slightly pushed back against that and he always referred to it as the Teaching Hospital of Advertising because he wanted it to be a mixture of learning and practice. In other words, he thought there was a kind of halfway house between pure theory and practice.
And Ogilvy in fairness as an agency culture, I think it’s got that balance mostly right, at least for most of my time there and one of the things in terms of the other kind of Don, one of the things I occasionally said in my more candid moments is that I would quite like to get the marketing services agency or the ad agency slightly back to a little more Draper-ism which is that it was not purely a kind of comms agency – one of the things you’ll notice is some of Don Draper’s best ideas calling the round thing in the middle of a slide projector a carousel, for example, suggesting where Heineken should be sold – I think there’s a great quote in one episode of Mad Men where he says, “I’ll tell you what’s a big idea – 995”.
And agencies of various kinds were repositories of really, really interesting psychological thinking and what happened I think is that they got scared. Patently they made money on commission so they weren’t directly paid, wasn’t a source of profit producing those kind of ideas or researching them. What I think happened is that books like The Hidden Persuaders, films like The Manchurian Candidate, there was a long period of complete paranoia in the United States about brainwashing and underhand manipulation of the unconscious and I think an unfortunate thing happened...
...in the 1950s, perhaps even the early sixties, many agencies might have had an agency psychologist and for some reason, all of that disappeared and essentially what I think they thought is actually we don’t make any money of this and the reputational risk is very high so we’ll simply concentrate on the business of what ad man called, you know, essentially pure rational persuasion in the clear light of day and I always thought that was, in a sense, a cowardly act. It’s patently obvious that advertising works at an unconscious level – that isn’t to say that subliminal advertising necessarily works but patently advertising works not only by direct messaging but also by inference.
And therefore to concentrate entirely if you like on the – what you might call the overt contents of a message without investigating what other forms of persuasion there are other than direct appeal to reason strikes me as a complete failing. I mean, you’re essentially devaluing the power of what we can do by simply suggesting that the only possible way in which advertising works is through placing a rational argument for something in the public space.
I mean, at a very simple level, okay, if you take cigarette advertising before it was banned – it didn’t say anything, okay, I mean, you weren’t allowed to say it’s a really cool relaxing smoke or it helps you on long drives by not getting angry – no-one was allowed to put any positive benefits for nicotine. Nonetheless, I think it’s fair to say that the presence of tobacco advertising normalized smoking but it’s as if something is widely advertised, it is made to seem less weird as a result.
Now, okay, that was a finding that was used to ban tobacco advertising. I’d equally say that you could use exactly that same insight for positive things. If you have a lot of advertising for electric cars, for example, or if solar panels are sold through mainstream retailers like Walmart, okay, the practice of installing a solar panel will come to seem a lot less weird, it will become less mainstream and when the financial cost of a solar panel stops falling, the emotional cost of installing one which is risk of ridicule, whatever it may be, can continue to fall.
You’re talking about exactly that, blending in behavioral science back into advertising in a sense and that’s exactly what you’re talking about in your book but also your mission throughout your career has been to bring the two together.
Yes, absolutely, and I think marketing in general, never mind marketing services, marketing in general has lost in stature and influence through not really having a pet science from which it can draw inspiration but also it’s completely failed to develop any kind of scientific vocabulary. And a brilliantly clever colleague of mine, a very, very good copywriter called Alistair Graham, he always said of marketing language and he said the vocabulary of marketing is a little like the vocabulary of astrology which is it’s absolutely fine when you’re talking to a fellow believer, you know – if you and I were both keen astrologers, we’d go, “Oh yes, my daughter, she was born on the cusp” and you’d sigh and go, “Typical”, you see.
Now, the problem is to anybody who isn’t an astrologer, we both sound completely mad and the analogy I used is to say talking about something like brand iconography is perfectly sane conversation if you’re two marketers, the second you talk to a finance director, you broadly speaking sound insane. And I said, going to a finance director and talking about brand iconography is like going to the head of thoracic surgery at, you know, a large hospital and saying, “Let us all trust to the healing power of the crystal”, okay? It doesn’t reference any recognizable scientific body of work.
And so what I think has often happened is that the very best advertising practitioners including the fictional ones like Don Draper have always been instinctively very, very good behavioral scientists – I think any good creative person has an innate understanding of how persuasion works which they develop through trial and error or imitation or whatever. But in defending their ideas, and interestingly of necessity many of those ideas are going to be counter-intuitive, in defending the seeming irrationality of their approach, they’ve never had a credible vocabulary that they can use to explain what they’re doing.
Now, I’ll give you a very simple example of this –I was talking to Russ Roberts a couple of weeks ago on e-Com Tour, he mentioned another American example which is I think Smucker’s where the name is terrible, we have to make good jam. Another one would be Avis, we’re Number Two so we try harder – in the UK we had a brand of lager called “Stella Artois” which was launched as reassuringly expensive.
Now, quite a lot of great advertising end lines, good things come to those who wait for Guinness which is an incredibly slow pint to pour, okay – quite a lot of those things practice the magic of turning a weakness into a strength and it’s a kind of rhetorical technique where you acknowledge a weakness, flip the frame of reference and turn it into a benefit, okay? And by changing what the human focus is on or changing the frame of reference, you can practice what I call “alchemy” in the book which is literally turning lead into gold.
Now, interestingly, Robert Cialdini who is a very good behavioral scientist at the University of Arizona, he researched this and found that indeed the admission of weakness increases persuasive power. Now, if you go to someone without that research and you say “My intended strapline is we’re number two so we try harder” or “Good things come to those who wait” or “reassuringly expensive”, the reaction of a conventionally rational person who has to defend that line to the board is “Why are we spending our money on reminding people of a negative”?
You see, and so and indeed actually they look for many other things to say when they’re coming up with their Avis line and they said that was the only really convincing story they could tell. Now, what’s fascinating is Avis is number two in rental cars is an ad for Hertz, taken at face value, okay. Once you add those four words underneath, “so we try harder”, in other words you turn the focus away from “we have fewer outlets, lower choice of cars, less chance that your chosen model is available” to the attitude of the staff you deal with, by changing the focus of attention, by changing the context, what you do is you literally turn a weakness into a strength.
And that’s a practice, my point is that you can’t perform alchemy in physics and you can’t perform it in chemistry but you can in psychology.
You can indeed, and you have in your book and we do have to go to a break right now, Rory, so I’m going to stop you right there but listeners, as you can see, an exciting show and we’re going to come back and talk about Alchemy – The Surprising Power of Ideas That Don’t Make Sense, so don’t go away, we’ll be right back.
And we’re back to Mobile Presence. We have Rory Sutherland, Vice Chairman Ogilvy UK and we’re talking about your new book, Rory. So, first of all, you know, it’s very new – when it did come out? I believe in May this year?
It came out in May or June, it may have had a slightly different launch date in the United States, it certainly has a different title in the United States. It’s called “Alchemy” in both countries. In the UK, it’s called “The Surprising Power of Ideas That Don’t Make Sense”, if you’re looking for the US hardback edition, it’s called “The Dark Art and Curious Science of Creating Magic in Brands, Business and Life”.
Oh, that’s a little bit cooler, Rory, actually.
You prefer the American title, in which case...
The dark sounds mystical and magical and in a way it is – I mean...
No, actually the dark art thing was clever in the same way that when David Ogilvy called the book, “Confessions of an Advertising Man”, it aroused a kind of curiosity that a balder title would never have done. And so the slight implication of skulduggery and mischief probably helps sell books, to be honest.
So, we’re talking about your book, I can imagine where you got some of the inspiration because you are there, you’ve been in the industry as I said, you know, the Don, whatever you want to call it, a veteran – what is the takeaway here? It seems to go through a number of ways looking at what brands and companies have done that seems irrational but yet made extremely successful and maybe there is a pattern there, maybe there are some rules there that you want to share. So, maybe just first of all the inspiration – where did it come from?
Well, the impetus for writing it was rather strange in fact which was I was ill with flu for about a week and this would have been about 15 years ago, maybe 12 years ago, and being relatively bored I just took to reading quite a few fairly popular books about economics and it struck me that this was a fascinating theory that bore almost no relation to reality. In fact, the very reason it was fascinating, neat and elegant was precisely because it had abandoned consideration of reality in order to achieve its mathematical elegance.
And what I suddenly realized is that the attitude of mainstream economics – I exclude Austrian economics, I exclude classical economics from this – I think people like Adam Smith would genuinely, as interested in how people behave as they were in creating some sort of weird idealized mathematical model, the Austrian school patently believe that economics should be a subordinate branch of psychology, not a strange kind of perverted lovechild of mathematics and physics – and so what I noticed of course is that once you assume that economics is true, in other words that people have stable preferences, they have perfect information, perfect knowledge of the utility they’ll derive from any purchase and complete trust in the person they’re buying it from, all of which are assumptions of mainstream economic models, you’ve created an idealized world where marketing wouldn’t need to exist.
And it suddenly struck me that a large part of the hostility to advertising was because if your frame of reference for how business in economies exist is derived from that mainstream economic thought, then you’re going to see advertising essentially as a necessary evil or as a necessary cost that has to be minimized, not as a source of value creation.
The Austrians completely disagree, they thought that – and you can see that in the works of Peter Drucker, by the way – Drucker’s father was best friends with the Austrian economist, Schumpeter, Drucker was very familiar with him – and they believed that marketing was as much a source of value creation as manufacturing was because in order to create value, the only place you created it was in the mind of the prospective buyer and that was as much in exercise in how you presented the thing and described it and what you compared it to as it was an exercise in manufacturing the thing in the first place.
So, you’re going into a lot of the value here of going against the tide, you know, being irrational... You’ve given examples, you know, fast food outlets that increase sales by putting the price up, you know – wouldn’t seem logical is the best way to succeed it seems here?
Well, in psychology, this is the vital thing, that if you have a model of the world that’s based on Newtonian Physics, if you think of the second law of thermodynamics, energy cannot be created or destroyed, the economic equivalent of that is Milton Friedman’s “There’s no such thing as a free lunch”. In other words, you’re constrained by the idea that the only way you can actually increase value in any market or service is either by making the product materially better or by reducing the price. And therefore you’ve immediately failed to even consider the creation of magic because you have a model within which magic cannot exist.
And my contention is there lots and lots of things where you can fundamentally change people’s estimation of something, people’s propensity to do something not by changing the thing itself or by changing its price but by changing the frame of reference because there is no single objective view of the world that’s presented to human consciousness, you know, we don’t have the processing power basically and evolution would hardly want us to possess such a thing anyway. You know, we have to have discretionary attention to survive as an animal.
So I’ll give you an example of very, very simple Draper-ism, okay, which is in the UK we have a thing called a TV licence and it’s mandatory and it covers the BBC programming on radio and television and the website and so forth. For a long time, there was no tradition of paying for television at all, it was either advertiser funded pure and simple, or it was covered by the licence. And then Sky comes along and you can actually pay for a reasonably modest amount of money, £17 a month, you would get sort of 150 or 200 extra channels, Discovery, you know the ones, History Channel, Lifetime – in fact we even have PBS over here as well now.
So, I was trying to persuade my father that £17 a month, given that he was retired and had a lot of spare time, to spend £17 on these extra channels and I even offered to pay for him, to be honest, I wasn’t that stingy, and he said, “No, no, it’s too much money” and I tried a very simple Don Draper trick, it’s one of the oldest sort of reframing tricks in the marketer’s armory, I just said, “Well, it’s not £17 a month, think of it as 60p a day”. He said, “Well what difference does that make?” and I said, “Well, you spend £2 a day on newspapers” – he’s an avid newspaper reader – I said, “If you spend £2 a day on newspapers, it’s not that crazy to spend another 60p to get another 200 channels of factual television”.
And he said, “I see what you mean – I never thought of it like that before” and he suddenly paid for himself willingly and has become a kind of weird Sky advocate amongst his elderly friends and the point is that even whether something is cheap or expensive which in mainstream economic thought is something that is – price is something which is entirely - the pain of paying is entirely proportionate to what the cost is and what that reveals is that it isn’t – whether something’s expensive or cheap depends on what you’re comparing it to.
And that’s where the alchemy comes in.
And that’s where the alchemy comes in, very simply. So, if you want to improve the world, broadly speaking you can improve the product, you can reduce the price by more efficient manufacturing but there is also a third course of action which is being completely left off the problem solvers’ toolkit which is to change something between objective reality and perception. Essentially, the assumption of economics is that reality maps onto behavior, change reality, change behavior, don’t change reality, behavior stays the same.
Now, the mapping is absolutely enormously insanely messier than that. This is not science, this is a kind of a description of roughly how the process works which is there is the object, our perception of the object which is determined by context, the meaning we then attach to that, the emotion generated by the meaning and the behavior generated by the emotion. So there are a whole series of steps where changes in any one of those intermediate steps can lead to a change in behavior while the objective reality has been left the same.
So, the task of the alchemist, okay, maybe you can’t turn lead into gold but there are lots and lots of ways in which you could potentially make lead just as valuable as gold if people somehow found lead very desirable.
And that’s of course where the brilliance comes in and also what you have in your book. But we do have to go to a break a final time, Rory, so listeners, don’t go away, we’ll be right back.
And we’re back to Mobile Presence. Of course I’m Peggy Anne Salz, your host, and we have Rory Sutherland, and glad to have you today, Rory, and talking about your book, everyone should go out there and check it out – in fact, I’ve looked around and I’ve seen it has been called a breakthrough book and one of the 16 great books for anyone who wants to get ahead in life and that’s probably just a few of the accolades for your book. So, you’re talking about idea alchemy, you’re talking about how you can turn, why the best ideas don’t make rational sense, so how can our listeners that are listening in, they’re saying, yes, I want to do the magic, I want to be a brand magician – what are some of the points they need to know or something you’re going to leave them with?
The essential thought which we need to get across is that nearly everything that communicates, in other words nearly everything that arouses emotion has some component to it which is not conventionally logical and at a very simple level, I talk about the work of an extraordinary guy, a psycho-physicist called Mark Changizi in the book, and he asked a question which fascinated me, which is, “Why doesn’t water taste of anything?” And his evolutionary explanation is very simple which is “Our tastes are calibrated not to notice the taste of water because what we need to do is to notice anything in water that isn’t water”. In most of our evolutionary history, the only liquid we would have drunk would have been water, beer was probably about 5,000 years ago and so on.
And so, the ability to be highly attuned to anything in water that wasn’t water, like the stench of a decomposing sheep upstream, was vital to our survival. And in the same way, ordinary behavior doesn’t really arouse our attention, something conventionally logical and sensible might be very worthy in an economic sense but it doesn’t get us excited.
An example I give, I think, in the book is they spent half a billion pounds renovating one of London’s major stations and the thing that stuck in everybody’s mind was not the fantastic brickwork or the glorious work they’d done in renovating the undercroft, it was a trivial little seemingly nonsensical fact that the station had Europe’s longest champagne bar.
It’s a bit like – actually, I can give a beautiful American translation of that which is the fact – if I’m right, Grand Central Station has an oyster bar in the middle – is that right?
Ooh, now you’re asking me – I’m based in Europe so I’m going to pass on that one.
Okay, but it’s a kind of weird eccentricity which somehow captures a disproportionate amount of human attention precisely because it’s weird. And so, whereas for example intelligence, logic, efficiency and commonsense may translate into perfect effectiveness in fields of business such as logistics, for example, in marketing, in order to be noticeable, in order to actually stand out, you’ve got to do something that isn’t water, okay?
And that will almost certainly slightly annoy your finance director. It will involve, I mean, a nice American example would be the Doubletree Hotel chain which when you check in has a little oven underneath the check-in desk and they hand you a bag of warm, fresh cookies when you check in. And, okay, there’s no requirement, no procurement officer is demanding cookies from a hotel on check-in, the very fact that it’s quite gratuitously generous and unnecessary, the very fact that it’s what you might call an act of discretionary generosity is what gives it meaning.
And I would argue that in some parts of business, the biggest source of competitive advantage that a company can enjoy is actually the ability to do things that a finance director doesn’t like and so if you have too strong a kind of efficiency mindset in any organisation, it becomes water and people don’t notice it, they don’t care about it, it loses salience and therefore a kind of ability to override your more logical colleagues needs to be one of the privileges accorded to a marketer and there is of course a spectacular example of success in that which is Steve Jobs, in a sense.
Which is he asked a different question. Everybody else was trying to improve telephones, let’s say, mobile telephones objectively and they asked the question, “What can this phone do?” and the measure of what the phone could do was the entirely rational one of its plot speed, its RAD and its memory capacity and so forth and Jobs comes along and instead of looking at the objective reality, he shunts right the way over the perception and asks the question, “Does it matter that much what the phone can do?” In fact, objectively the first iPhone was really pretty poor in quite a few dimensions. The battery barely lasted a single day. When the first iPhone came out, I was with a bunch of people from Nokia who were ridiculing it for that reason, you can’t buy a phone which is dead by 11 o’clock in the evening.
And yet, what Jobs had done is he’d asked a different question which is not what can the phone do but what does it feel like while you’re doing it? And it was one much closer to what people care about, even if it involved a lot of bizarre seemingly trivial things like interface design. Fundamentally, no-one cared what another more powerful phone could do if doing it was half as enjoyable.
Uber I also argue in the book is a psychological innovation. The map is a working genius because it’s not about how long are you waiting for a cab, it’s what does your wait feel like and when you can watch a little car approaching on the map, you’re feelings of frustration, anxiety and powerless are reduced by about 90% even if your wait time, in objective seconds, in SI units, isn’t reduced at all.
Well, there’s lots of examples of how letting go of logic and embracing the irrational is the key to being brilliant and I could talk about it with you, Rory, for another show, so we’ll just bring you back, that’s what we’ll do – we’ll make it easy on ourselves, we do have to stop now, we will bring you back but in the meantime, our listeners are probably saying, “Okay, I want to know about the book”, we’ll have that in the show notes, where to get it, where to order it – how can they keep up with you, Rory, you’re doing a lot out there, you still have TED talks and I’m sure other things you’re doing, all your projects – what’s the best way?
I suppose my sort of font in terms of information would be my Twitter handle which is very simple, @rorysutherland, r-o-r-y and then Sutherland, as in Kiefer, but pretty much where the resemblance ends, by the why. And you’ll find me on Twitter and other materials tend to be tweeted out. There’s also a new publication, I understand, called “Spectator USA” which is the American arm of the British Spectator weekly magazine and so since I write for the British version, fortnightly I probably appear in that as well.
Oh, I wasn’t aware of that one, I do read up on Twitter, I follow you on Twitter, I watch some other projects of yours, I’ll check in there absolutely and we will have you back, that is my promise.
And listeners, if you want to keep up with me throughout the week or find out more about how you can be a guest or sponsor on Mobile Presence, you can email me, email@example.com, Mobile Groove is also where you can find my portfolio of content marketing and app marketing services.
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