Rory Sutherland was the keynote speaker at the Media Research Group annual conference recently. As usual it was a thought-provoking presentation and a whistle-stop tour of a thousand great ideas.
Let me see what I can distil from it for you in this short blog.
Hatred is a strong word, so let’s start there.
Sutherland claimed that, “If your dominant mindset is economic you have a visceral hatred of marketing”. If, like me, you enjoy reading about economics and you enjoy working with marketers, it’s a claim to pique your interest.
He went on to explain:
“Standard economic theory assumes for the purposes of making [mathematical] models that everyone is making decisions as standalone utility maximisers in an atmosphere of perfect information and perfect trust. In that world, that economists have created, marketing needn’t exist.
And because that world is the map they use to make all business decisions they can’t help but frame marketing expenditure not as a source of value creation but as a necessary evil, a cost to be minimised as far as possible.”
It reminded me of a point made in a book I read recently called ‘Adam Smith: what he thought and why it mattered’ by the MP Jesse Norman. Norman writes about the great strides in economic thinking happening at a time when mathematics was the great answer to everything:
“Mathematics was originally intended to be a tool of analysis. Instead it had moved to centre stage, increasingly shaping what questions could be asked…
Homo economicus originally developed over time as a useful fiction, whose purpose was to reduce complex questions down to the bare bones of mathematical structure – that is, to allow the simplifications necessary for mathematics to get some purchase on the problem.
Instead it has been taken over by utilitarian thinking and marginalist mathematics, and transformed into a culturally significant meme shaping the development of economics itself…
Thus too, was born in outline the popular caricature of economic man we see today: as wealth maximising, pleasure seeking, greedy, calculating – and idle to boot”.
In short, mathematics should have been in the toolbox, not the driving seat.
Sutherland believes it created a problem that shapes the thinking of not just economists, but the majority of boardrooms too.
We now live in an age where digital technology, not mathematics, is the great answer to everything and Sutherland described how it too reduces complex questions to overly bare bones.
“The mistake we often make with any [digital] tech is we define something very narrowly, we replace a narrow part of its function with something technological and we point to the cost savings and we declare it a success.”
He illustrated his point by talking about book sales, which were expected to dwindle in the shadow of the Kindle. One of several things forecasters were missing, asserted Sutherland, is the gifting of books, which accounts for a large proportion of book sales.
In our world of media and media research we often talk about the fact that digital media is very measurable. Then we quote Einstein who wrote, “Not everything that counts can be counted, and not everything that can be counted counts.” Sometimes what is measurable shapes our narrow definitions of what media is.
Sutherland warned of the dangers of, “defining media as a way of conveying a message as though those receiving the message completely trust it”. You can see a “popular caricature of economic man” in that mistake.
Sutherland had a rallying cry for marketers:
“The saddest thing about marketing is that when faced with people with numbers marketers tend to go ‘stop it, ooh these people have spreadsheets, they must be superior to me, I will bow to their superior information’.
But what we need in marketers is the ability to say, ‘yep, very convincing but the way you’re looking at things is wrong’. A lot of numbers are not factual they’re a story and the story is fundamentally wrong.”
Market researchers should take heart from these words too when faced with their rival to the Insight crown – digital analytics.
Here’s my example. I was once working for a news website where the digital analytics team had identified very regular users of the site. The ‘story’ they arrived at was that the newsbrand could sell these people branded goods e.g. white labelled financial products.
I suggested we hold focus groups amongst these people, which wasn’t popular. It wasn’t a vey digital idea.
The people we met in the groups were far from ‘brand lovers’, they were newshounds who were reading every news website and were highly critical of the coverage on every site. They weren’t lapping up every word unquestioningly and they weren’t about to buy wine or ISAs from the site just because its name was on it.
So, my take-out from Sutherland’s excellent keynote speech is that we should be wary of situations where mathematics or digital technology has been put in the driving seat and not the toolbox. Instead, champion a realistic understanding of human behaviour and not popular caricatures. And never be afraid to say, “‘yep, very convincing but the way you’re looking at things is wrong”.
We should all be a little more Rory!