In this episode, I spoke with Rory Sutherland, Vice Chairman of Ogilvy, the massively successful advertising company behind brands like American Express, Sears, Ford, IBM and more. He answered questions like “what makes people spend money on luxury goods? What personality traits make a great marketer? Can anyone learn marketing? How many projects can people work on at once? What is costly signaling? The psychology behind marketing and much more.
Rory is the Vice Chairman of Ogilvy UK, and has co-founded a behavioral science practice within the agency. He works with a consulting practice of psychology graduates who look for ‘unseen opportunities’ in consumer behavior – these are the often small contextual changes which can have enormous effects on the decisions people make – for instance tripling the sales rate of a call center by adding just a few sentences to the script. He is the host on the podcast OnBrand with ALF and he has joined forces with MAD//Masters to lead a 12 week CPD accredited personal development program to help marketers adapt, make sense of accelerated disruption and use the tried and tested recipe of using creativity, innovation and behavioral science to their competitive advantage.
Rory’s Business Book ‘Alchemy’ can be found and purchased here – https://a.co/d/dvErPtW
His 12 week CPD-accredited personal development programme can be found here – https://www.madfestlondon.com/masters/about
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—Chapters—
[0:00] Intro
[2:19] The Personality Traits That Make Someone More Adept at Marketing
[5:22] Can You Be Taught Marketing, or Is It an Innate Skill?
[12:49] The Patterns of Behavior and Mindsets You Can Adopt to Increase ‘Luck’
[20:07] Identifying the Absence of an Expected Data Point
[22:21] Is There an Optimal Number of Projects for Someone With a Mind for Marketing?
[27:18] How Luxury Companies Create Valuable Brands Through Costly Signaling
[44:07] The Ethics of Marketing
[52:13] Mandevillian Intelligence
[1:02:37] Marketing the Individual in the Dating Realm
[1:06:05] The Dark Patterns of Misleading Marketing
[1:16:20] The Scam of the University System
[1:28:25] The Rory Sutherland Scottsdale Tour
How do Luxury companies get to the point that those products are so valuable it intrigues me actually because there are two kind of mindsets in the world which is if anything’s very good it should be made abundant and everybody should have the French tend have a mindset that anything that’s any
Good has to be unbelievably scarce there will always be some very rich people who wish to practice costly signaling what are your thoughts on the ethics of marketing there’s a kind of which apparently happens in luxury goods stores where you get extremely attractive women to actually be slightly
Rude to the customers and then the older slightly less attracted women are so Keen to make their point that they buy something really expensive that’s funny it is just really really interesting when you understand the extent to which of course human behavior is mediated by the imagined opinions of Others Rory southernland welcome to my podcast that’s pleasure thank you very much for inviting me on thank you very much for taking the time to come on I have so many questions about marketing for you and psychology I think this could be a very interesting conversation
Hopefully I hope so yes I think it’s um to be honest I think the fundamental observation that goes through all my books my writing is fundamentally quite benal of what is interesting to me is that it comes as so much as a surprise to most people reading it
Uh the idea that actually you know at some fundamental level perception is reality in that we behave in response to what we perceive uh rather than what is factually or objectively accurate and therefore you know there are certain as aspect of problem solving in human behavior where some marketing Le
Approach is inescapable that seems to be basically self-evident but it comes as a complete surprise to people in Fields as versus economics or politics who see it as their obvious duty to improve objective reality um uh with complete disregard for how the actual change or the uh the input is perceived which
Seems to be fundamentally OD that yes this is true do you do you think there are personality traits that play into the role of how good people are naturally at marketing well I think there’s an interesting one which is there’s a fundament distinction which is I don’t think you’re a very good
Marketer if you’re highly dogmatic uh if you insist on having a one siiz fits all uh Dogma or I suppose yeah you might almost call it you know a litany or religion that explains everything okay and you’re unhappy to consider contextual variation in things then you’re not going to be a
Good marketer and it worries me to an extent that what our education system seems to do is it selects for people who can win arguments rather than solve problems and it strikes me that the act of solving problems is fundamentally Messier more experimental more creative and less
Certain than the kill kit you require to win an argument which is effectively construct an artificial model uh win the argument for the model and then walk away s satisfied regardless of how applicable that solution might be in reality and so it does bother me a
Little bit because it strikes me that we probably have a governmental class the administrative class in business which has been selected for its ability to look coherent uh and to maintain logical consistency rather than uh the rather more important question of whether you solve problems or not in
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Linked in the comments enjoy the rest of this episode so do you think this is something somebody can be taught in University like is going to get a marketing degree that’s something people can do and then be successful interesting question I I mean some large part of it I think uh is if
Not innate and it may not be innate at all but it is a kind of tacit scale in that it’s not completely teachable that it requires if you like a refinement of instinct rather than what you might call um hard teaching it’s it’s one of those many fact most of human behavior is
Actually driven by passid learned experience which isn’t necessarily explainable or teachable you know great example is reversing an you if you’re reversing a semi into a narrow gate or opening now a lorry driver truck driver is going to be better at that than the professor of engineering at um Yale okay
Yeah that’s because it’s really much more a kind of learned instinctive skill the words of someone on Clarkson’s far I can’t tell you how to do it you just have to know and I think you know a large part of marketing is probably um T
It it involves as I said you know the refinement of certain instinctive qualities rather than something and in fact I would argue that people who insist on having a process and an absolutely rigid procedure before they can start work on anything probably aren’t very good marketers that’s always you know that’s
Always the worry if you ever have a problem and the first person the first thing the person wants to know are costs and timings you’re probably not cut out for this business and probably you know this is connected to it’s not it’s not exclusively about creativity and other
Skills like humor uh you know again humor being you know something incredibly C it as a scale yeah um it’s connected to that but there’s very experiment in John C’s excellent book which is called creativity a short and cheerful guy he advances some evidence that uh they take a group of Architects
Who are highly prized for their creativity and Imagination and they compare them to a group of Architects in their working methods who have been nominated by their peers anonymously as being worker day extraordinarily uncreative generally uninteresting Architects and the one of the patterns in their work working Behavior which
Completely bated between the two groups was that the uncreative architect started work straight away and the CRA architect kind of had a weird fallow period where to put it one way they they understood that the art of coming up with an idea was not something you can
Force and what they were doing in the S was waiting to get lucky they were waiting for inspiration strike something of that kind okay that’s because we we have a we have a world which is obsessed with kind of what you might call nominal productivity which kind of prizes being busy at all
Costs and one of the things that you know the great John lenon quote time spent doing nothing is very rarely wasted and I think he knew whereof he spoke in the sense that some degree of discretionary uninterrupted time is probably essential to any really significant kind of mental progress now
Don’t get me wrong in a for this production line when you want to do exactly the same thing Time After Time After Time you can narrow it down to an optimal process I I don’t think you can do that with any kind of creative act uh
The best you can do is just increase the odds of getting lucky the great great book on this uh by the way by Rick Rubin which is called the the creative act aware of being I was on Rick’s podcast a few weeks ago and was generally uh extremely uh enthused by reading his
Book beforehand it’s a very very good take on you know quite a lot of the behavior that I think is involved in uh creativity is in a way it’s as I said it’s it’s not only non-logical it’s sometimes paradoxical and by way there are lots of
Fields of activity that work this way in fact I would I would argue that the majority of human decision making has to work this way because what we consider to be science uh where you have all the information you need to arrive at a single right answer where the relations
Between the different variables are all set in stone and where the laws cannot change okay that’s a very very narrow subset of problem solving yeah there are special cases okay we know the relationship between air pressure the boiling point of water and the amount of energy required to heat water to boiling
Point and so you can Pro provide an exact calculation there partly because all the data is commensurable you know the relationship between all the data it’s exact and it doesn’t and it’s Eternal you know I assume so anyway as far as we know you know there’s a Newtonian component to
The world where the laws seem to be pretty much written in stone yeah just real world problems and nothing of that kind and yet what we tend to do is we pretend they are and high used to talk about scientism which is the use of methodologies and patterns of thought
Derived from the Harden physical sciences and then their application for reasons of credibility or indeed winning an argument to fields in which they’re entirely inappropriate and I think that’s an interesting point because an awful lot of human effort nowadays seems to be dedicated to making things look scientific even though that probably
Isn’t the habit of thought you need to the problem in the first place yes I think the concept of scientism is interesting because it you know there isn’t really there are certain words which always bother me because there’s a vocabulary problem in that the opposite of rational is irrational which is
Automatically assumed to be a term of appropriate you are being completely okay IE stupid or foolish okay so there isn’t really a proper term for hyper rational for example there isn’t really a term of criticism that applies to uh things that look rational but really aren’t and there isn’t really
A term of criticism for things well I mean h use scientism but then how what’s the noun you create from that scientistic is the adjective I guess what are you if you practice that a scienti I don’t know but it’s a very useful term but it never took off um and
That really is the appearance of looking scientific um in uh effectively uh solving problems which don’t really submit to the same conditions in which you can practice the scientific method medicine’s kind of interesting because it’s is it a science or is it a craft well it’s kind of a
Mixture yeah okay that’s fascinating uh you talked a little bit about luck so I have I’ve got a bit of experience with marketing and we’re building an app which I told you about offline uh Peterson academ for for online courses and I realized I think a couple years
Ago that I couldn’t sit cuz I’m pretty work oriented so I like to sit down and solve problems and I realized for developing something new I did have to kind of wait and sometimes I’d wake up in the middle of the night and go oh here’s the idea finally but there was no
Point in sitting down and forcing it because it just didn’t work I just had to wait and sometimes it would take months and I’d be like I’ll figure it out something will click eventually and I’ll figure it out so I so I get what you’re saying about waiting but you
Mentioned luck um is there any way to increase that or kind of hone those skills yeah I think I think there are patterns of behavior you can adopt and there are mindsets you can adopt which is almost the act of distracting yourself or listening to the unconscious
Voice I mean a very boring one which is commonly um uh Advanced is the overnight test you know if you think about something you sleep on it and the following morning you know may maybe you have a further bout of inspiration or maybe you realized the idea was kind of dumb all
Along there are interesting there are interesting patterns of decisionmaking the one I’m very fond of mentioned by Herodotus is that the ancient Persians when they had to debate any matter of import they debated it twice once when sober and once when drunk and it was only when they agreed in both states
That they actually adopted the action so if it didn’t appeal to the drunk and in other words if it didn’t in a sense have an emotional appeal to them um and it also so it had to meet two tests in the same way I suppose the jury system is
Interesting in uh in Anglo-Saxon law in that you have to convince not only legal experts that there is a case to answer but you have to convince a you know a representative body of people that what you’re saying is just fundamentally believable and indeed reasonable but I
Had a friend who was on jury where the person was in strictly legal terms guilty of the crime for which they were charged but the jury agreed that given the provocation their behavior was entirely understandable and they basically let them off that’s not supposed to work like that but it’s
Similar to that Persian question where you look at the same thing in two different modes context settings or whatever and it’s by the way it’s a great disadvantage which creativity suffers from so I always make the point that there is in uh in any kind of institutional setting there’s this
Asymmetry where creative people have to present their ideas to rational people for approval but it doesn’t really happen the other way around you don’t get a bunch of account SC well we’ve come to the conclusion that it’s 3.7 million but before we actually make that decision or write the check we’re going
To share our ideas with really wacky people to see if they’ve got an alternative idea you don’t get Engineers going well we want to make the train faster what about you what would you do okay yeah because within any kind of rational self-contained model of the world it’s effectively self- sustaining whereas
Creativity isn’t self- sustaining you’ve always got to win some battle somewhere else before you’re allowed to act and it seems to me that that asymmetry is kind of problematic and that I mean if you want to get really deep in this I don’t know how whether you or indeed your dad
Have ever met um Ian mcgilchrist the author of The Master and hisry yeah definitely that that that’s if you like the vastly more philosophical and neuroscientific um take on what I’m saying that there’s a natural balance between effectively left hemisphere right hemisphere modes of seeing the world in which in many many settings
Probably because of the need to win arguments by the way that’s one reason the left hemisphere view of the world artificially is allowed to predominate huh that would be take on it yeah that there’s there’s a fundamental problem with I with with good ideas which is that they’re often late to the
Party in that the ration what what appears rational and consistent has an instantaneous appeal whereas the better idea first of all takes time to be accepted but also takes time to be generated in many cases you know that I mean there are cases in point where you know I was given a brief
And you know in the advertising world and being candid this happens I failed completely and then six months later inspiration struck I go oh God why the hell did I think of that then but the simple fact is I didn’t because there’s a kind of probabilistic I I’ll tell you
A little story which I I shared with Rick Rubin as well which was I’ve got a friend who runs a business called aore doio which I jokingly call Air B2B because it’s effectively uh home rental for homes where people intend to work so every every home of your rent
Will be kitted out with two retina screens two very good desks two ergonomic chairs an espresso machine and it’ll have hot Wi-Fi and probably electric car charging okay it’s going BB for a particular application and I said look I can’t think of anything that will help you
Advertise your product but if I get lucky I’ll let you know okay and about six months after I was aware of this business I was staying in a hotel room with my wife and it was actually my wife’s observation not mine well she said why is it which is a brilliant
Brilliant piece of observation which had never occurred why is it that hotels have this sexist idea that only one party in the room will want to use a desk okay so there’s this fundamental sexism in hotel rooms which is there’s a chap signing million dollar check sitting at the kind of Napoleonic scale
Death whereas meanwhile his lady wife is in the bathroom kind of you know powdering her face or you know putting on a poka dot bow you know this about 1950s conception of what a what a partnership is like and F enough I mean there’s a reason my wife noticed this
Cuz I think I was hogging the desk and she was forced to spraw sprawl on some totally inappropriate item of furniture while trying to CH and I said thank you because you’ve just solved the problem for a sure and the basic question is which is a very good question how come
Hotel rooms have two wash basins and only one death I mean you spend a hell of a lot longer typing than you knew cleaning your teeth but for some weird reason they’ve decided that two wash basins absolute essential okay but but one desk is absolutely
Fine and so that’s I say you know in many cases you’ve just got to wait to get lucky and the reason is often I think there are several reasons some ideas arise through um a different a very difficult form of observation which is the dog that doesn’t bark in the
Night in other words you have to notice the absence I you must know the Sherlock Holmes story I hope you are were versed in the um what holes notices is that the theft of a race force is probably an inside job because the dog didn’t bark
Now that is if you like not a data point it’s actually the absence of an expected data point which is hard to notice um Often by the way Often by the way ideas that generate uh interesting uh things arrive anecdotally they’re surprisingly tangential or irrelevant
The the inspiration you get is um in a sense is is is not something that arises when you’re actively looking for it it’s almost in some ways creative ideas are almost the act of distracting yourself um I do have a kind of favored thing which is that I noticed that
You’re more likely to have um an idea or an inspiration when you’re in a lional point so in other words if you go from doing one thing to another now it it just to make that point Archimedes didn’t have the idea sitting in the bath as is commonly believed he had the idea
When he got into the bath and you know one one of the things I quite like about working from Power inable working is that um when you have 10 minutes to spare at home you go and put the dishwasher on you do something entirely different okay and weirdly it’s
At the moment when you flip from one mode of activity to another that inspiration is more likely to strike I think so you know I think there are tools I think you can improve the Arts I think you can to borrow a kind of the talad phrase you could increase your
Surface area exposure to possible upside optionality okay I think you can do that but you can’t necessarily force it okay I like that I think I feel like I’ve noticed the same thing I have like in my life I have a number of different projects going on and I need a number of
Different projects because if I only have one I’m bored and it just tortures me so I have way too many things going on so I can work on one and say okay I’m done I’m tapped out here and move on to the other one and then move on to the
Other one is there like for for people who are inclined to go into marketing do you think there’s an optimal number of projects they could work on at the same time so they’d be switching tasks it’s interesting because one of the reasons for the existence of for example the
Advertising agency as an entity is that there’s a certain sort of person who would find it painful to work on one thing all the time so there’s a certain kind of mindset which thrives on variety which an agency provides which working in the house may not generally I’d say working
In marketing in the house will provide you with a hell of a lot more variety than but having an act jury or something um you know I would recommend it for people of a particular mindset if you can cope with and thrive on and even relish a certain degree of mess if
You’re obsessed if you’re obsessed with if you’re obsessed with having a universal framework which answers all questions go to become an economist or something dangerous like that instead you know but if you actually are happy with the fact that um correct answers are scale and context dependent and that
Psychology is a deeply perverse thing where the opposite of a good idea can be another good idea if you’re comfortable with that kind of thing then i’ highly recommend it what worries me a little bit is no yeah I i’ I’ve spent 30 years in advertising I think advertising is
Actually probably a bit more important than people think and it’s qu it’s highly entertaining and very enjoyable what started to worry me is it what’s significant about an advertising agency and some extent marketing as well in general is there are very very few modes of employment in which this type
Of thinking is incouraged rewarded or tolerated okay so once J said that the great thing about working in advertising agency is the one job where you can make a DFT suggestion and still get promoted because something that’s interesting eccentric counterintuitive or odd is prized in that atmosphere and
Encouraged and rewarded in a way that it’s often punished anywhere else you know in many other forms of employment you’d be seen as you know fundamentally Whimsical and not a safe of hands now you know to Echo mcil Christ what worries me I know him quite well
Actually he’s a great guy what what he’s actually interestingly quite interested in advertising for this reason in that there are worryingly few areas of activity where that kind of creative thought is properly rewarded or encouraged I think because in many ways you know there’s a you know great any
Good creative person will have some very strange acutes they don’t really have a sense of proportion because they know that inspiration is just as likely to come from something trivial or something big you know noticing the two words sound similar okay which is you know seemingly irrelevant can be a
Breakthrough in that kind of problem solving and it do it does worry me that if you like that politics doesn’t really have a cretive department that you know that actually a a sensible healthy organization would encourage a degree of what you might call at least creative descent from the mainstream
Narrative and yeah I jokingly said look if I’d been in charge of of an investment Bank in 2007 okay um I would have been fired long beforehand as an appalling person to run an investment bank but the one thing I would have done is I would have been immune from the financial crisis
Because in my outer office I would have employed sort of three marxists or Austrian School economists or anybody who effectively had a Counterpoint to what was an overdominant kind of narrative of uh effectively A self-confirming Narrative of how the economy Works um and so you know I I think I
Think there is a you know there’s a natural kind of perversity there’s a lack of sense of proportion in Creative people there’s kind of whimsicality there’s a reluctance to get started all those things I think are a virtue in a creative setting but not a great career move in most forms of employment
Yeah this is this is definitely true I think I was probably just fortunate choosing I I had like a a normal job that was very rational and then I kind of did the creative things on the side until they grew enough to to overtake which I’m I’m happy about I’m
Grateful for I have a question that’s completely unrelated to what we were talking about I’ve always I’ve I’ve always wondered how do Luxury companies get to the point like say Hermes for example how do they get to the point that those products are so valuable are they all doing something
Similar I mean There are rules you can’t break I mean one of the things which of course is interesting is that many of them are privately owned uh there’s a very interesting thing which is that I think there are two there are two kind of mindsets in
The world which is the Anglo-Saxon work which you find in North America which is anything’s very good it should be made abundant and everybody should have it which is why the United States produced Coke okay you know as said all the cokes are the same and all the co Cokes are
Good and the president of the United States can’t get a better Coke than the bum on the corner of the street okay and for a long time particularly now the French T have a mindset that anything that’s any good has to be unbelievably scarce okay ah okay one of the things
That both threaten you know snobby French bastards combined with a privately owned company have an advantage is that they they resist the temptation to overproduce now it also helps if you’ve been doing it for a 100 years if you have an extraordinary of Heritage and authenticity it also requires remarkable
Creative Talent over long periods I’m not suggesting easy but it is a kind of fascinating fact that of the most valuable companies in the world certainly the ones that are most profitable in terms of margins if you discount one or two pharmaceutical firms and apple the rest of them tend to be
Luxury goods businesses but it’s also not a bad business to be in in one respect okay uh in that whatever happens in the world economy and this applies by the way even under communism okay whatever happens politically there will always be some very rich people who wish to practice costly singling you also
Have the advantage you also costly singling right it’s a concept from biology originally from an is biologist called amot zahavi to explain things like the peacock’s tale which is that effectively a costly signal is one which is a is a reliable indicator of Fitness because you couldn’t afford to carry
This decorative baggage around on your back if you weren a pretty fit peacock to begin with okay elk aners are another example in other words there are things that actually grow the guy to read here is a brilliant um econ well econ naturalist called Robert H Frank who’s
Written a book called The Darwin economy but a large part of human consumption is actually positional it’s not really about utility at all it’s about your relative position and status and of course certain things demonstrate um status very reliably because they certain things demonstrate wealth very well Because unless you were
Rich you couldn’t afford to do them you know and so you might argue that sporting ability is a form of costly signal because it’s a reliable indicator of your Fitness and so that’s as distinct from cheap talk which is merely an unsubstantiated claim a costly signal is
Kind of a proof point now you know we we use this kind of mechanism all the time I guarantee for example that you have never left a FedEx or UPS envelope velope unopened on your desk for 3 Days okay because your inference is someone spent $20 to send me something therefore
I can infer from that that it’s something of reasonable importance okay you know when you send out a wedding invitation you don’t do it by email you know there are all these kind of ways in which we signal through discretionary effort discretionary expenditure discretionary attention to detail you know discretionary
Perfectionism you know the things that are difficult to do just carry more informational Freight than things that are easy to do yes same exent good manners is really the display of discretionary effort you know um and so costly signaling is something which you know exists in the Animal World um
Actually exists in flowers uh interestingly in the sense that uh bees tend to be more attracted to plants with larger flowers on the ground that you wouldn’t bother spending all that money advertising your wees if you didn’t have quite a lot of nectar because if you did false
Advertising where you had very big petals but no nectar you wouldn’t get any repeat business and so your investment in flowers would not in petals would not be repaid and so hummingbirds certainly I think use this as an inference point which is the more you spend on advertising in this case
Petals the more likely it is you have something worthwhile and so that you know that’s another form of reliable costly signal but luxury goods really cater for people’s positional urges um and you know one of the things are you know those bags are not only rare and expensive by the way if you
Want to buy a Kelly bag they won’t even sell you one until you’ve established your Bona Ides with the luxury goods retailer by buying a whole load of other products which can’t be resell at a profit so if you try and just go in and buy one
I think there was an incid with Oprah where she complained about sort of racist treatment um from a luxury goods bag store in Switzerland okay I’m not sure it was actually because I mean uh any person working in one of those uh stores would learn fairly quickly I would have thought not
To discriminate by race because there are very very rich people of all ethnicities you know whatever you think there there are dly forms of ethnic inequality and wealth at the aggregate level but there are very very rich people in all ethnic groups and I suspect what that was was
Genuinely something like that going on which is you make the product difficult to buy um there’s a kind of game which apparently happens in luxury good stores where you get extremely attractive women to actually be slightly rude to the customers and then the older slightly less attractive women are so Keen to
Make their point that they buy something really expensive in a kind of pretty woman kind of gesture you know you know you you’ve dissed me to now humiliate you bizar I’m going to buy off the content of wow this is the kind of weird gamesmanship this is why would say the
Opposite of a good idea can be another good idea because in many fields really good friendly customer service is a great thing to recommend in other fields weirdly it pays to be bizarrely disdainful and disrespectful of your target audience okay so this is why it’s so fascinating because context changes
Perception I mean effectively our our behavior is driven by our feelings our feelings are driven by our perception and our perception is driven by context and so if you can if you change the context in which someone sees the same thing they perceive it and emotionally respond completely
Differently now I’ll give you a lovely example of this which I only learned today which is there was a Dominican and a Jesuit who both wanted to know the answer to the question secretly hoping it’ll be yes uh can I smoke when I’m praying and the Dominican comes back and
Says I asked my Abbot or whoever it was okay can I smoke when I’m praying and he said no he said oh mine’s fine with it the Jesuit replied said what did you ask I said can I smoke when I’m praying I was told no he saidou are asked the
Wrong question he said you should have asked the question can I pray while I’m smoking he’s fine with that so that’s an example of how contextual reframing completely changes a our response that’s funny I I I didn’t think I I mean I I know now that you’ve said
It but there’s definitely a pattern between American brands and mass marketing and European Brands and very Niche marketing making products difficult to buy that is definitely a European thing I mean it’s interesting that American luxury Brands like Tumi for example pretend not to be American
And a thought Got Away In some cases is not an American brand I didn’t know that I assumed that was Italian or something yeah it’s actually American um but there’s a general pattern where the French are very the French in anything food stuffs whatever they believe that scarcity and quality wine obviously are
Basically intimately connected where the Americans have much more of a forest mentality which is if if this is any good we should produce L of it that’s partly the difference of having a market of 350 million people you know and so on but the clever thing of course about
Being a luxury goods maker is whatever the economy does they will always be absurdly rich people who will want these markers now there’s going to be there’s a lot of talking I I don’t know if you’re a fan of succession I love that show the dialogue
Is just beautiful L it I’m not a fash Easter as you’ve probably guessed from just looking at me but apparently there’s a lot of kind of Max Mara and stuff like that that’s worn by a kind of billionaire class which wants to Signal quiet wealth and those kind of you know
Those kind of cashmere zipneck things that yeah Logan Roy used to wear all that stuff and so you know you do need a multiple Brands depending on what the person is trying to do I made a very mischevous comment the other day where I said actually I said all these Brands
Like you know Prada okay Max Mara I said they’re not really luxury Brands because they’re taste said you know which suggests that you still care what other people think I said the only real luxury brand to me is just Versace where you just go I’m minty and I don’t care who knows
It and there’s an element to me which says that are you genuinely really really rich and successful if you’re still agonizing about other people’s appreciation of your own taste or or is there actually a certain Freedom that comes with vulgarity you know I always think everybody would have
A hot tub deep down wouldn’t they okay the only obstacle to having a hot tub is middle class angst about you know taste and discernment and all you know and all that and she being middle class a massive disadvantage because of course you’re massively worried about what
Other people think of you which I suppose both both very Posh people and workingclass people are far Freer to pursue their own enjoyment without endless concern for the opinion of others H everybody wants a you know yeah they should yeah you know that it intrigues me actually because um you know the
Obstacles you know one of the things I always say that marketing often makes a mistake it asks how can we persuade people to do this I go don’t know before you start doing that look at what are the obstacles to doing it and see if you can remove any of
Them and that it stries me that the removal of negatives is actually probably more potent in terms of Behavioral change than heaping on kind of claims positives and it’s right you know there are really interesting things that emerge when you look at it backward so every time I meet Coke I always make
This point that coke has this UT which I mean the drink okay Coke has this utterly magical property which is you can AR it absolute everywhere without it seeming weird and if they haven’t got it it’s their fault not yours okay now when you think about how rare that is that’s
Kind of true of water just about okay but you can go to a Misha St restaurant you can ask for a Diet Coke you can go to a beach Shack in Barbados you can ask for a Diet Coke you can go to an African shanty town and they’ve got Diet Coke
And as you ask for it by the way there’s no possible kind of aoam or embarrassment that’s you know comes cross now you know if you went to a m Star Restaurant and asked for Dr Pepper which is you know not all that right the whole thing is going to be f with
Embarrassment awkwardness you know no expectations so on is it is just really really interesting when you understand that the extent to which of course human behavior is mediated by the imagined opinions of others there great quote from I think Abraham Lincoln where he made the point
Which was also made um by the way by the same who was the guy you all know the guy who performed that extraordinary experiment where people pretended to be prismas and pretended to be Stanford Stanford experiment the Stanford yeah the same academic who did that experiment also did an experiment with
His own pupils where he just told them to go on the subway and asked people to give up their seat with no visible disability and the point of the experiment was not to see how many people gave up their seat it was the fact that the majority of students came
Back and just said I’m sorry I’m quitting that I can’t stand this anymore that the act of asking someone for their seat on the subway was just so socially embarrass embarrassing transgressive and weird that they experienced something not other likee pain and and Abraham Lincoln’s part was I think sightly more sort
Of probably different 19th century um take on this was if you asked to walk around your town wearing your wife’s Bonnet you know without being able to explain that it was for a bet or a charity or something like that you would experience just extraordinary pay I first it’s it’s kind of
Interesting because what these social norms do and I was talking to David slen Wilson that day who’s an evolutionary biologist is of course when you establish social norms and conventions of that kind it changes the nature of evolution so that it doesn’t only happen at the individual level it’s not just a
Matter of individual selection it becomes a matter of group selection because our Behavior innately has become conditioned by group dynamics not by individual self-interest yeah so there’s I think I think his R proponents by way I’m GNA you know all half my um doist friends
Are going to disown me at this point but David’s a kind of fan of multi-level selection where he believes that selection and effectively takes place at concentric different levels of both the individual and the uh you know and and then the family and then the wider group
And there’s a kind of level of cultural selection I don’t know why Dar interesting I don’t know why darwinists hate the suggestion that Darwinism might work in multiple ways but they uh the gene centered view seems to sort of predominate anyway interesting hey guys it’s if you’re
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Episode um what are your what are your thoughts on the like ethics of marketing like the the more I learn about marketing the more I realize well okay for instance this is what happened to like my family in the last couple weeks so dad put out his new book and then a
Couple weeks ago it turns out one of the quotes on the book that was a very positive quote was written by someone who had written this incredibly negative review and the book like it was just a toxic review and the book publisher had taken two half sentences melded them together and put
Her name on his book obviously she wasn’t happy about that we had no idea that was going on and when we approached the publisher they said oh we do that for everyone it’s just the norm no I mean there was a famous case of a London play where the um the cast effectively
Just played for the audience were playing for Applause all the time and apparently an absolutely horrible play because the cast would just basically Applause hungry and someone wrote an absolutely dabbing review which ended with with which basically described as one long Curtain Call and two weeks later above the theater one long call
Was posted along the billboard Marquee now unly reate I mean uh it is absolutely possible to mark it unethically uh it’s perfectly possible I think to mark it unethically without being aware you’re doing so I do hope that things like Behavioral Science make it easier to spot dark patterns as you
Might call it and that’s that’s an extraordinary trick I can’t believe they do that for everyone because it seems to me to risk reputation embarrassment upon the public well it certainly did in this case it didn’t go well at all it was all over the news everywhere and we’re like
We didn’t we didn’t ask for like fake reviews but apparently it’s normal it’s like that’s lying no no certainly grotesque misrepresentation I mean you know I mean you know totally totally artificial selection of data I mean to some extent of course all advertising is to some extent a distortion of an already
Distorted reality in the sense that advertising comes from the Latin adim adver which is to direct someone’s attention to and what you generally do is you you you direct the attention of the um viewer or the audience to that aspect of the product in which it has a comparative advantage over its
Competitors and by A peculiar quality of psychology whereas logically we should pay attention to what’s important actually the process works in Reverse we think important what attracts our attention that certainly explains the news cycle okay because you have this awful problem I think in the news cycle where effectively news generates its own
News now you know if you take a case but I I do not condone the kiss of the Spanish fa um uh uh head at all I think it was an atrocious act okay right so I’m not condoning the guy he obviously must be a very unpleasant guy because
The only person who defends him is his own M okay but equally at the same time I don’t think it warrants the colum Ines that it it it’s currently get you know there’s a war in Ukraine and we’re talking about you know freeze framing a video to determine now you know I you
Know also important by the way because there’s an interesting question there which is the only person who can really determine and judge that act is the woman herself okay because there are relationships and contexts in which that is an acceptable thing to do and and cultures instead it’s a bit weird
Actually I don’t know I don’t know how North Americans reacting to this because it’s more normal to kiss on the lips people with whom you’re not romantically engaged in North America apparently than it is in Europe oh my gosh I can’t imagine most extraordinarily okay um Ronald Reagan
Kissed the Queen Mother on the lips okay when they met and she was actually horrified because no one had done that since her late husband but to a Californian of that era Reagan who I venerates so I’m not I’m not having a dig you know okay uh um but do
California that era that wasn’t that weird a thing to do apparent I don’t know so there’s a whole cultural aspect to it there’s also a relational aspect to it and so the only person who can really speak meaningfully about that act is the person to whom it was done
Because yeah to everybody else we’re really just bringing our own prejudices to the party so it’s quite it’s quite interesting in that respect but it certainly doesn’t want the Press attention it’s been getting you know it’s absurd okay and so you have this thing where we deem important those things which attract our
Attention uh you know in other words things it’s something that works backwards in a way you know that that um we don’t actually pay attention to what’s important we’re just as likely to deem important there’s a great line in Citizen Cane where Kane says make the headline big enough and I’ll make the
Story big enough um that um and actually by the way most media bias works that way it doesn’t work people who are trying to call out media bias always talk about the opinion that is attached to a story but the greater part of media bias is actually the prominence that’s attached
To the story okay now to put it another way I think if you’d had three newspapers in collusion you could have buried Watergate okay you could have reported Watergate put it on page five and everyone would have gone yeah they’re all at it whatever right yeah you know so the
Greater part of media bias manifests itself in where in in what is is what is given prominence not in what opinion is attached to the reporting of events and you know I I see obvious cases where um you know there is extraordinary selectivity in which stories to pursue and which to downplay
Um that’s for sure uh you know and you know there are large you know if you’re a middle-aged old blo like me there are a large number of stories where you just get I I don’t really get this you know I just don’t you know I don’t you know
What why is this even the story you know but but but it is interesting because obviously now this is interesting because you there’s one way of looking at at this which is it distorts perception okay okay because by making someone look at something differently they appraise it differently like the
Jesuit priest okay yep it’s absolutely fine to pray while you’re smoking okay and they arrive at a different judgment but then if you accept that there isn’t a single objective right answer to the question of which air fryer should I buy okay um you I by the way one of the most
Extreme cases of this was I nearly bought a Tesla because had dog mode okay so dog mode is where you can leave your dog and stop pet activist smashing your car windows on the assumption that you’re dog in a car in a car par in scotdale Arizona when you approach the
Car the screen displays a big picture of a dog and says uh I’m comfortable at a temperature of 702 degrees fit my owner will be back soon okay to stop activist smashing your car window yeah because they assume if the engine isn’t running in the early days of electric cars uh
People wouldn’t have ploted the fact that the air conditioning could work while the car was silent now what was weird is I always born at Tesla for that reason Lear I don’t even have a dock here’s here’s the Counterpoint to this which I think is interesting okay
Now I only discovered this concept A few weeks ago while reading about Berard de Manderville who is the world’s most interesting and mischievous Economist from I think the early 18th century and he wrote I think all the fable of the bees which suggested that effectively private vices Amalgamated to public
Goods that it was actually extravagant self the precursor of Adam Smith in some ways and you know was an influence on later economics because he understood that individual self-interest could um trans mography into a collective benefit effectively there’s this concept called mandilion intelligence which is that the aggregate of lots of different silly
People actually adds up to something intelligent okay democracy is a kind of mandilion intelligence that that you know that some forms of foolishness cancel out some you know but if you have lots of different people buying a thing for different reasons at the level of the marketplace you end up with much
Better products that if everybody bought a car according to a formula of fuel econ divided by you know multiplied by maximum speed divided by cost or whatever okay if you had a single rational way of buying cars cars would actually be awful because they’d all be optimized for four or five dimensions
And they’d end up being really ugly or really dangerous or something else okay because the things we weren’t optimizing for would effectively get neglected the fact that people all choose to buy cars for a different uh panoply of totally nutty you know Americans kind kind of ke
On the number of cup holders on you you’re Canadian sorry par that one but but North Americans are you know seem to be much more interested than Europeans in the number of cup holders and so on that’s funny but where when you amalgamate all those different preferences you arrive at a market which
Has a kind of collective intelligence kind of aggregate intelligence Mandan intelligence now what worries me oddly is new internet enabled markets where we all choose the same way okay and I talk about my my concern is I have a really major concern with property websites because everybody goes place number of
Bedrooms price high low and then they search right yeah now the all because everybody’s actually effectively doing elimination by attribute in the same order okay this is going to lead to Absolute absurdities in the property Market which it does by the way because apparently you can’t sell a haris for £850,000
Okay because people are either searching 800,000 an AR or 900,000 down and they won’t find you till too late or the 900,000 people think they’re a bit too cheap and the 800,000 people think they’re a bit too expensive so you don’t have a price demand curve you have a
Kind of price demand zigurat in the housing market but also architectural quality architectural quality is ludicrously under prioritized yes right because you end up with a choice of six houses and you buy the least ugly one right now my argument is now there are two websites in the UK there’s the
Modern house.net there’s also Inigo Inigo sells kind of classically beautiful homes you know from Victorian Georgia Etc and the modern house is obviously as it says the modern house there’s also by the way a website in North America called right on the market which simply lists Frank Lo right homers
Which of that’s cool W okay now now the interesting thing there is that it’s a different it’s a different approach to the state it what it’s doing is it’s directing attention to Aesthetics rather than location price square footage and it strikes me that those websites are a very necessary corrective
Because if we all choose in the same way the market will become stupid and houses will become uglier yes and so now if you have if you have the modern house.net there is a greater incentive to actually build a fantastic modern piece of architecture because you actually know
You might be able to sell it whereas if you go to right move I don’t know what the Canadian equivalent is you know moose.com or okay but you know if you go to the Canadian equivalent okay um then uh you know effectively you know the equivalent of right move nobody’s going
To find the likelihood that someone who loves modern architecture finds a modern hat is actually as i j you said imagine if we B up that way okay if we said I want something 6 feet by three and mostly blue with a bit of green um portrait not
Landscape and it want I wanted to feature two cows and a goat okay and then your art dealer came out and I said I’ve got these three okay well in that world picassos would be really cheap because nobody ever found them because nobody’s going in and saying you
Going to let a prostitutes in AV of you where they’re kind of wearing Africa bu no one’s ever going to ask for that okay so the danger is that the unas for component of the product becomes ludicrously devalued and deprioritized yeah whereas a few fairly arbitrary criteria then dominate in the decision
So there’s another argument I’ll make which is an interesting one now bear in mind I’m giving Pro marketing advertising answers I also have some anti- ones I think the housing market will be much more effective if all real estate agents listed negatives by the way yeah because
If it were mandatory that any major negatives listed people like me who didn’t care about certain negatives will be able to find a bargain by finding a house next to a pup you know to 90% of people the house being next to a pup is a source of disturbance I mean to me
That’s a positive boom okay now you know the ability to actually navigate the housing market where you look for things which are devalued by other people but are irrelevant to you would be an additional efficiency in the housing market but instead real estate agents just list the positives one exception Roy Brooks in
The 1960s and 70s who wrote incredibly rude um patronizing reviews of the property he had to sell and then put them in the Sunday typ it was a complete um completely you can research him um broel in pimo is um a collection of his various property Investments which are
All a list of negatives effectively very very interesting advertising approach by the way but but actually the there’s another interesting thing which we never mention which is that competitive capitalism through serving a load of desperate needs okay completely without anyone intending it creates a form of resilience that you don’t get in a
Control economy so it prevents if you like if a whole industry is optimized around certain things it it acquires vulnerabilities dependencies uh you know because it’s over optimized for efficiency and therefore under now the very fact that you know this is okay this is a mischievous suggestion so bear with me
Okay but if doctors were allowed to choose their own surgical masks okay we wouldn’t have had a mask shortage right of surgical masks are bought by bureaucrats who have some some sort of flaming stupid bureaucratic you know SN 254 standard three okay and they all B
The same place and it turned out there was a shortage of the machines not not of the Mas but of the machines that could staple the elastic oh now if now the interesting thing is if marks had been a fashion item and some people had gone around with their cath Kinston
Floral masks and other people that had a new mask okay now the mask in industry as a whole would be less efficient most of the time but it would also be a lot more resilient because you’d end up with M multiple suppliers effectively serving disperate consumer needs which as as an
Unintended byproduct of that activity actually creates a kind of resilience and ability to adaptability within the market anything that’s traded as a anything that’s traded as a commodity becomes basically it just becomes aace to the bottom on a kind of price quality scale we just meet we meet the
Lowest possible definition of quality okay at the lowest possible price and I don’t know what is like in Canada but milk was kind of traded this way now the problem is is that when you’re trading as a commodity there’s no incentive to incentivize because you don’t have a brand to which superior
Quality draws customers and so the feedback mechanism between quality of experience and repeat purchase doesn’t this is why the Soviet Union had this huge problem because yeah why why would you make any good bread because the only thing you had to bear was the cost of making better bread there was no
Material reward in terms of people choosing your bread over somebody else’s and when I have Brands as effectively the unit of selection of um product purchase actually capitalism doesn’t really work very well uh you know you don’t actually get much innovation H I think we overlooked that I think we
Overlooked the central role and what was interesting in the Soviet Union is they thought Brands were UNM Marxist and tried to do without them but they eventually were forced to make factories stamp their Identity On The Rivers because otherwise if rivets were all bundled together in a central repository
Everybody had an incentive to make as many rivets as possible at as shitty a level of quality as they could get away with yeah so without know without without that fundamental mechanism as a unit of selection on which you know consumer choice and experience operates uh you you really you really didn’t
Really have an economy something you said reminded me of dating apps so you were talking about the housing market and how people plug in a certain number yeah so is that that’s happening the same way right because it’s it’s very difficult to judge something like
You can kind of Judge it but it’s hard to judge intelligence uh humor if it’s just six feet and up you’re over undoubtedly overweighting appearance aren’t you yeah I mean you’re you’re also overweighting static appearance by the way because there are people who are attractive ENT the way they move yeah as
Much as how they look okay uh my wife my wife is very I find my wife extremely attractive least photogenic person it’s almost impossible to take a still photo because she always like put her hand up or frown or whatever and you know if I were only presented with still
Photographing think I would have we’ been married for kind of 34 years no um so undoubtedly yeah it’s not a it doesn’t it doesn’t really practice sort of mandav Vilan intelligence where people have different opportunities to assess your various virtues and so messy in some senses messy decision making um
Interfaces or or or or processes seem to lead to better Collective outcomes over time than decision- making that’s kind of seems to be neat because the of course the tragic thing is that when you’re looking for a house using that standard Place price number of bedrooms Etc okay you’re completely unaware of
The things you haven’t seen and what’s also interesting about it is talking to real estate agents or um if you to a real estate agent they’ll say that everybody comes to the list of criteria and they know to Discount those criteria because the majority of people
End up buying a house which meets few or none in some cases of the initial criteria they stipulated because they fall in love with the house for completely different reasons and the practice of house buying should be recursive it shouldn’t be a kind of decision-making funnel and I think it’s one of those
Dangerous things which seems rational while you’re doing it because this stupid element is kept is effectively hidden from you yeah definitely okay and in dating in dating and dating I think it’s highly I think dating apps are highly problematic as a choice architecture question yeah and it’s the way they’re designed
Really well I I got married in 1989 so as one other person said to me they said they also got married before dating apps existed and they said I feel like I caught the last helicopter out of yeah well I I think it I think it really gives like more Psychopathic
People an area to thrive which is just terrifying interesting yeah my my dad’s figured the same thing because you get these you know extroverted narcissistic Attractive people on there and they get all the attention and the people who are maybe slightly less attractive but more attractive in other ways like humorous
Smart they get less attention so I don’t know how they even manage dating apps but I mean one of the important things is acknowledging that marketing can be undoubtedly pricious misleading that there are dark patterns uh should I think uh one thing behavioral SS can do
And one thing marketers should do by the way is call it out because it isn’t in the interest of a recable brand for people to actually discredit um now an example of this okay is that the um the whole business of online subscription to Publications is such a dark pattern what what Richard
Taylor calls a sludge Affair where it’s very easy to sign up to the introductory offer it’s very easy for them to suddenly upgrade you to the £99.99 a month uh full full fee for the subscri destion that’s all very easy but when it comes to cancelling you’ve got a phone
Up blasted phone line the number for which is actually very deep on the site now what those people are doing when they do that is they are discrediting and destroying the whole business of subscription as a mode by which people might pay for media yep because essentially you know I
Go to be honest I wouldn’t mind paying $4 a month for this and I’d pay $4 a month in per ity provided I knew I could cancel on a win uh what these dark patterns have done I think is they’ve actually destroyed the whole yep um charging mechanism you know
Um I think you know it’s you know and the fact that this isn’t called out and there isn’t some sort of kite Mark for cancellation that’s a you know a promisory method that can and I think there’s legislation going through one I think it might be the European Parliament
Which basically says that canceling a subscription must be as easy as instigating it good um and I think there’s also an issue which is that um uh it’s incredibly difficult to cancel a recurring credit card payment uh by calling your credit card op now this is an interesting one
Because I think what what you notice is they’re quite eager for people to subscribe by credit card because yeah if you subscribe through a kind of Bank standing order you can just go to your online bank account and cancel them okay yeah it’s incredibly difficult to do the same thing using a credit
Card and I think that I think you know I would favor legislation where recurring payments on it on your credit card bill appear at the top are listed separately and where there’s a you know there’s a three click mode of cancelling any of them and the reason I the reason I’m
Saying that is not because I’m a you know a massive consumer Champion it’s because you know I think that capitalism when it discredits itself harms far more people than it benefits and that is a kind of that’s a toxic externality ready from the practice Yeah I completely
Agree I think that’s so rampant now like there’s distrust in everything now the news mainstream media I mean I certainly don’t trust very many marketing ads I see online that are you know somebody’s review or somebody’s quote I’m like that’s probably just manufactured it’s really not good for
Everyone where I’ll defend this is working with pretty reputable Brands over the last 32 years I’ve never been in the room where someone suggests something where I go Yu more important perhaps I’ve never I’ve never been in the room when someone suggests doing something where my mom
Would have gone Yu okay or my wife who’s a clergy woman would go no no that’s kind of horrible I have heard stories there was a case long be Cloud nothing to do with me where someone pointed out that if you if you change the date at
Which bank charges were levied you could drive more people into a um uh into an uh uh an overdraft over their overdraft limit and therefore find them wowow yeah okay that’s crooked now some someone not a colleague of mine but someone working in the same industry was in a room that
Was suggested now in in defense I don’t think it was implemented but that was made as a kind of serious suggestion now that’s seriously young and it’s very interesting because um contrary to what economists think I mean economists have kind of created a a model of the economy
Which is kind of morally neutral and completely auman okay you know in other words they’ve reduced it to a kind of mathematical model of efficiency which uh all psycholog is basically banished from economics it’s reduced to a kind of artificial Newtonian problem and uh as a result they’ kind of
Bypass questions like ethics or indeed just perceive fairs okay very very interesting here’s a very interesting P thing if you’re interested in this there’s a paper written in 69 about John lck which is called venditio and it’s not a question which used to absolutely bedevil kind of actually um
The church okay the notion of the just price and he makes a very interesting assertion which is that to challenge what something is worth to you subjectively so he said imagine you have a horse okay and the hor is really on the open market uh only worth three or
Four pounds but you’re very fond of this horse so You’ be reluctant to part with it for Less than5 it is perfectly ethical for you to demand 5s for the horse because that’s the compensation that you would accept to hand over the horse if however someone is absolutely
Desperate for a horse he doesn’t really explain why lock but let’s assume they they’re desperate to visit a dying relative okay and they say I’ll pay you anything you like for your horse ethically you should charge them5 for the horse because that’s what you’d sell it for under other circumstances if
However you take advantage of their perceived distress and ask them for £25 knowing that that’s what they would pay in extremists that’s unethical pricing it’s a very very interesting distinction because I think as human beings that’s how we see it the Char you know charging a reasonable amount of
Money for something when the person is effectively free to take it or leave it we regard as basically Fair taking advantage of another Misfortune to profit yeah now what’s interesting is that Walmart effectively I don’t know if the people at Walmart read John L okay but Walmart very interestingly when you
Have a hurricane or when you have a massive snowfall no they do not increase the prices of shovels okay and they don’t increase the prices of nails and bits of wood that you bang on your windows instead what they have is they have a hurricane prediction center which
Ships enormous quantities of show sh snow shovels to the areas where they’re required and they then sold the effectively the just price okay and Walmart knows what economists don’t know which is that if you gouge customers and exploit their predicament they’re not your customers anymore because we react to that as
Humans not as economists do by going more naturally there’s an imbalance in supply and demand so we must you know I would expect to pay five you know $50 for a plastic snow shovel that’s how an economist would think was a perfectly reasonable solution to the problem most non-economists don’t think that’s fair
As Richard sailor said about Ski Resort pricing uh basically if you gouge them at Christmas they don’t come back in Spring and so in the attempt to kind of to create this kind of reductionist Economics a whole facet of things that basically make us human and were probably essential in the environmental
In The evolutionary environment for actually our functioning as a social species have been completely neglected and of course the road of reputation is interesting too because you know a very large part of um uh economic success is that down to trust in other words you know do people trust
You to fulfill your promises okay and of course economics again has frozen that out of the equation by assuming complete trust no information as symmetry perfect information okay and it achieves a kind of mathematical neatness at the price of making assumptions which are utterly ridiculous literally assuming conditions
That never pertain in the real world and that strikes me as a you know pretty given the influence of the discipline that strikes me as a fairly horrific thing to do yeah because you only need your model to deviate from reality in very small ways for the whole
Model to become worthless but we seem to have created a world where people’s attachment to their models of the world their allegiance to a particular way of thinking um is somehow tied up with their identity which is a is a terribly and you see it by the way on the right
With neoliberal economics you see it on the on the left with wokery but the unwillingness to actually hey to provide some degree of mental Hospitality to ideas which might cause you to revise your particular expect ations or your belief set strikes me as very very weird and comparatively
A bit recent really I you know I mean it’s interesting question as to maybe maybe there always be aspects of this there have always been kind of bipartisan Tendencies and politics but it does seem to have got a bit worse I think it’s gotten worse I not that I
Have vast amounts of experience over vast periods of time but that that reminds me of the the university system part of the reason we’re doing this Peters Academy project is because the University Systems really bothered me um morally with how much it’s charging for a degree that doesn’t necessarily lead
You to a job you want and in the US like I’m from Canada and it’s less insane there but then us it’s asadi universities what’s happened with particularly the IV League okay now think of it like this okay the if you want to talk about luxury goods as we
Talked earlier about Hermes and Louis V and so forth the greatest luxury goods manufacturers of the lot are the American IB league universities which maintain scarcity despite the fact that technology means that actually the teaching they provide need no longer be scarce yeah they’re really real estate businesses with a pedagogical
Sideline but they also exploit an incredible kind of path dependency in terms of the career parts of people who want to go to work for golden sacks or whatever I don’t know why you want to do that but people seem to want to do that okay now let me explain there’s a really
Weird thing that happens in the London property Market okay it’s the most depressing thing you can do is to be a very very high-end kitchen fitter in central London and the reason is you’re brought in okay to install a 120,000 Kitchen in A5 billion pound house okay and the reason you’re installing that
Kitchen is to sell the house right because the house has to look Immaculate because the people looking around the house are you know probably Russian Crooks who’ve honey tracked the local demen chbs are selling them a bloody you know aluminium smelting works for 7 50 they’re a bunch of crooks probably but
They’re they’re demanding of perfection and they just wouldn’t buy a house if the kitchen was a bit Banky now so you have to install £120,000 kitchen to sell the house to the Russian oligarch and his mistress okay but here’s the thing the second they buy the house they rip
The kitchen out and replace it with one of their okay so apparently it’s unbelievably depressing because you have to install this kitchen to an extraordinary level of anal Perfection and then you know that six weeks later you’ll be called in to trash the kitchen and replace it with a slightly different
One because lud Miller didn’t actually like green or something right yeah now in some ways there’s an analogy there which is the the qualification you get at a university very rarely translates into the actual job you do obviously not through of medicine law and a few other disciplines okay what
You have to do is to jump through this prior hoop at enormous expense to prove your employability and to make yourself salable even though for years in Goldman Sachs don’t care what degree you got a some wasn’t Goldman Sachs you know aome you know aome at what point in your
Career now they said the value of my double first in maths from Cambridge basically in my employment had a half life you know it probably never dips down to complete relevance it’s something you know a bit like radioactive decay but they said basically F five years into my job
Everybody wanted to know what I’d done who i’ worked for you know how I equ myself and oh yes by the way you’ve got a degree okay but the time you first get accepted and this is where the path dependency comes in that degree is all they’ve got to go
On so it’s exactly like the kitchen it’s done for display purposes not for its long-term long-term residual value because you know what you learn University largely becomes irrelevant you know within a very short time of you starting work it becomes less and less relevant but it’s necess to make the
Sale not to improve the house and it strikes me that education’s become a little bit like that which is actually the way it should so we have at ogal v a program called the pipe which is specifically designed to be a non-graduate recruitment program because we think that the obsession with
Graduate recruitment is effectively at the collective level spurning 50% of the population who may have very very great talents which just don’t manifest themselves yeah in academic ways but they’re very very bright people in advertising who if you give them something theoretical to do they’ll lose interest immediately but if you give
Them a real world problem they manifest uh you know uh displays of Genius you know there certain people who just hate theoretical you know you know that you know okay and those people are not very well treated by the academic um proxy metric of your intellectual capability by the way
The way I’d argue it okay is that academic ability is a one-way indicator okay if you’re very good academically you’re probably quite bright okay if you’re not very good academically it does not mean you are not bright now just to give an analogy which is a clear thing which everybody understands chess
Is like that okay if you’re a really good chess player in some respect you’re quite clever okay but it would be monstrously unfair to say that bad chess players are stupid okay my brother’s an astrophysicist he’s at jet he’s not as as I am I do cryptic crosswords
I do cryptic crosswords till the cows come home I can’t I just can’t mentally I just don’t understand why youd want to play you know I mean you know I I I think of you know virtually anything I’d rather do but this is the interesting thing it’s a one-way proxy measure which works
In One Direction but doesn’t really work in the other so discounting people who who have poorer qualifications is not necess necessarily a safe decision but then what happens is we offer these people a job that we don’t prevent people who’ve got a degree from applying to the course that would be
Silly we just say that this is a a you know a mode of entry into ogbe where you can go from there to being chief executive if you’re talented up okay there’s you we don’t have any qualification barriers once you’re employed um and so what happens is we
Then offer occasionally we offer a job to someone who has got a degree and they say I’m really uncomfortable at accepting this and you say why it’s you know it’s it’s an entry-level job in advertising for God’s sake you know they’re Oxbridge graduates who fail to get that you know what the
Hell are you complaining about game and they say because I’ve just spent £27,000 getting a degree and if I then go on to get a job which doesn’t require a degree I’ll feel I’ve wasted my money yeah I it’s not supposed to work like that it
Should be thanks to the three years I spent at the UN and blah I was able to improve my thinking and cognitive Styles decision making ability to such an extent that I could impress the people at over who wanted to give me a job that’s how it should work exactly but
Instead it’s I paid 27 grand for some parchment and if the job I get doesn’t require the parchment are being done now that’s not educ that’s education as a positional good it’s not education as absolute good it’s not human capital at all it’s just being used as a mechanism
For lazy sortition by you know the people who do the recruitment who are probably the people who are mostly to blame you know those people who go to one and above we only you know enloy people from these five universities I mean those are the people who are really
To blame because they’ve made it possible for effectively universities to profit from their lazy decision making I didn’t consider that my God they profit I mean if you want a if you want a Bloody Business that absolutely kinds it in American University is for thing to yeah I mean
Louis Von can’t even touch that wild well that was interesting there’s a Brian Kaplan book called the case against education which is emphatically worth reading um uh there are a few other people who are um there’s also an interesting thing which is that it may be a misrepresentation by the way
Complete meritocracy may be a mistake anyway because you don’t you don’t go to university to be surrounded by a homogeneous group of similarly nerdy people um so there are all sorts of there are all sorts of tough questions to be asked about this one one suggestion by the way was that you know
Actually the top 20% of IV places should be allocated on pure meritocracy and the other 80% should be by lot okay um which is kind of interesting um but we’re in danger of creating a kind of you know effectively an arms race and uh I I think it’s the guy um who’s the
Philosopher uh at uh Harvard who’s called Michael sandal who describes many of his pupils as wounded winners in other words they have actually succeeded but the price they’ve had to pay to get there has had some you know deleterious effects and Hyper competition is bad by the way competition is good competition
Where you know broadly speaking the terms of success are quite Broad and where you can out witht the opposition through creative thinking okay that kind of competition is very healthy the kind of competition which is effectively The Hunger Games type of competition is actually bad because actually the the
Overall price paid is greater than the priz well if you include the people who fail alongside it you ultimately say look we’re actually exacting a greater price than we are actually conferring a benefit and there’s a very interesting guy called I think fishbach check his name he’s a
But he argues that the whole concept of equality of opportunity is wrong and that what a society should aspire to offer is diversity of opportunity in other words what we’ve done to M to produce the illusion of fairness and meritocracy is we have to apply the same
Criteria to everybody and when you apply the same criteria to everybody only some people can win and it turns into a kind of H games death match if you say what we want as a society where lots of people can be successful in lots of different ways that’s not a negative SU
Game and it strikes me that that concept of of broadening opportunity rather than actually uh F the other thing is you might argue which is this wonderful talk about you know meritocracy and you know and equality of opportunity equality of outcome all of that presumes a society which is
Hierarchical because when the term meritocracy was finded by Michael Young later Lord young okay he meant it as a criticism oh so meritocracy is often used particularly in North America as a as a term of approbation it’s a meritocracy here yeah okay Michael Young coined the word in England used it as
Basically a warning that in many ways it’s worse being governed by people who think they deserve to be there okay and believe themselves possessed of Superior ability to the people who whom they govern that it is being governed by people who you know the kind of slightly random aristocracy who can’t help deny
The fact that they kind of lock into the oh yeah I like that keep it humble it’s interesting interesting Canadian you’ll understand the value of monarchy which is that you know there is a value to the monarchy which is precisely that the role is arbitrary yeah and it’s and is known to
Be arbit straight that that that’s very true yeah American politics is strange even being being here is is strange it’s very theatrical in a way that I haven’t seen where are you in the US I’m in the US now I’m actually in Scottdale oh wonderful place yeah have
You been to the hotel Valley Ho fantastic mid-century place I haven’t I go to stay there it’s the kind of place where the Rat Pack would engage it you know but it but scotdale the other place you must which I imagine you have been to have you been to the Desert
Botanical Gardens no not yet right okay you got you got a book that visit it’s one of my favorite places in the whole world because now bear in mind I’m British okay so the very fact I the reason I love Phoenix okay is that if you’re British a desert is magical
Because we live in a country where there’s green all over the place you got to do is some dirt out in the street and something goes green on it so have your hotel room window and having a cat just a rock and some sound is to is
To me absolutely magical I I Adore the place and the the botanical gardens is a fantastic collection of cactus succulents and if you go I’m really plugging this face if you go at Su that you also get the hummingbirds coming in to feed off various kind of agave plants
Or whatever but it’s one of the most enchanting places on the planet really really fabulous okay I need I need to check that out and and the other you’re going to do the other do is the Frankl right tour so you’ve got the Grady gamage Auditorium um you’ve got a bunch of
Houses on the outskirts of Scotsdale which which are by right and then of course the other one is tales in West which is right it’s it he he moved in the winter from Wisconsin tallin and actually started a kind of architectural school um uh basically outside Scottsdale called talas in West that
It’s fantastic that’s I had no idea Rory expect me to be the uh key member of the Arizona tourist Authority no no I didn’t at all I’m I’m a fan it’s a bit hot right now but it’s other that are winter and darkness that’s what they say yeah
Don’t worry it’s a dry heat it’s 120 but it’s dry like you Liars [Laughter] yeah okay Rory thank you very much for coming on that was fascinating SI pleasure any time that went way deeper than I was expecting N
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“It is only the behaviour that matters, not the reasons for adopting it. Give people a reason and they may not supply the behaviour; but give people a behaviour and they’ll have no problem supplying the reasons themselves.”
—Rory Sutherland
This was a great conversation. I really enjoyed it.
You look like Suki Waterhouse
Interesting
Anybody can summarise the main points? I can't seem to gather his points
I worked in high fashion and there would be a waiting list for the thing, and only about three would arrive and then the wait for the thing was on again. They could have ordered 100 but they didn’t.
I never wanted the thing, I knew it cost about £10 to make.
how to spend money? – Have money.
With inflation where it is at and going….this is the least important topic on my mind. My income and basic living expenses haven’t cared about how luxury companies set out to entice me to buy their products. All I’ve cared about is how the basics of living companies (utilities) have made it hard to buy the other basics of living called food and fuel so I can work and make money to buy the other basics of living (Utilities).
The luxury products companies topic and their sales tactics may have been worth spending over an hour viewing perhaps oh, say 30 years ago in the 80s and early 90s.
My biggest inspiration is my insomnia. I have lots of ideas now but don't have enough time to turn them into reality
This was enjoyable to watch. My business provides online advertising (running Google Ads) full time and I came away with new paradigms and ideas. Thank you Mikhaila & Rory for an entertaining and illuminating discussion! I’m glad so much of the discussion centred around ethics. Trust is low online and for good reason.
We need a part 2 interview with Rory, going in-depth about luxury marketing
Very very interesting !!
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18:56 "Sexist idea"? Perhaps it actually mirrors the mindset of the speaker.
the nose job tho
i would pay good money to listen to this cat talk about british colonialism
Great insights, but want to augment the thinking on universities. We have to consider the education, life experiences, and maturation that happens in a university beyond the degree program/ classroom. Yes, the classroom education might not show up much in your job, but consider these factors:
– Critical thinking developed in the classroom
– ability to argue, consider alternative views, form your thoughts with clarity
– discipline of adapting to teacher expectations to prepare to adapt to manager's expectations later
– maturity through the community experience
– living away from home and making your own decisions
– joining clubs and organizations and doing initiatives, etc.
There are more factors, but you get the point….
MO hit this one out the park. ⚾️🏏
Rory could make any interview good, despite how shite the interviewer is. I'd love to see him interviewed by her father.
3:00 – The Ed system train people to win arguments producing self-righteous idiots with good manipulation skills.
So are there people are resistant to marketing techniques???
🎯 Key Takeaways for quick navigation:
💡 Luxury brands create value through scarcity, appealing to wealthy individuals' desire for exclusive, costly signaling.
🎭 Marketing ethics in luxury goods can involve tactics like using attractiveness and perceived rudeness to influence purchases.
🧠 Rory Sutherland emphasizes the surprising power of perception over objective reality in influencing human behavior and decision-making.
🚀 Effective marketing requires flexibility and creativity, avoiding dogmatic one-size-fits-all approaches and valuing problem-solving over winning arguments.
🎨 Creativity in marketing is likened to an instinctive skill, enhanced by experiences and not entirely teachable through conventional education.
🍀 Luck and inspiration are crucial in marketing; creating an environment conducive to inspiration can increase the chances of innovative ideas.
🔄 The concept of "scientism" criticizes the misapplication of scientific methods to areas where they are not suitable, advocating for a balance between rational and creative thinking.
🌟 Unique insights often emerge from unconventional observations or waiting for the "right moment," highlighting the importance of patience and openness to serendipity in creative endeavors.
🔄 Embracing multiple projects can prevent boredom and enhance creativity, particularly beneficial in marketing for those who thrive on variety.
🎨 Advertising agencies offer a diverse work environment, ideal for those uncomfortable with monotony and who relish in creative chaos.
🧠 Successful marketers often reject universal frameworks, instead recognizing that correct answers depend on scale and context.
🏆 In creative industries like advertising, eccentric and unconventional ideas are often rewarded, unlike in more traditional employment sectors.
📈 Creative thinking is undervalued and under-rewarded in many professional fields, limiting innovation and problem-solving.
🛍️ Luxury brands like Hermès maintain high value through scarcity, heritage, and exceptional creative talent, catering to the wealthy's desire for exclusive status symbols.
🔍 Costly signaling in luxury goods acts as a proof of wealth and status, leveraging human behavioral tendencies for positional consumption.
📊 Understanding and manipulating context can significantly alter perception and behavior, emphasizing the importance of creative thinking in marketing and beyond.
🌡️ Infrared sauna blankets offer portability and convenience for health-conscious travelers, with a satisfaction guarantee and warranty.
📚 Marketing ethics can be complex, highlighted by instances of publishers manipulating quotes for book endorsements, raising questions about honesty in advertising.
🔍 Behavioral science can help identify and mitigate unethical marketing practices, such as deceptive quote manipulation.
🎭 Highlighting specific product features in advertising directs consumer attention, potentially distorting perception but also influencing decision-making.
🤔 The ethics of marketing involve navigating between persuasive communication and misleading representation, with the responsibility to maintain integrity.
🏠 Internet-enabled markets, like real estate websites, can lead to homogeneous consumer choices, diminishing diversity and innovation in offerings.
📉 Over-reliance on standardized criteria for selecting products or services, such as houses, can overlook important subjective or qualitative factors.
💔 Dating apps may oversimplify the complexity of human attraction, prioritizing superficial criteria over deeper, more meaningful connections.
🤖 Dating apps can disproportionately favor extroverted, narcissistic individuals, overshadowing those with other attractive qualities like humor or intelligence.
🚫 Acknowledging and calling out unethical marketing practices is crucial for maintaining the credibility of reputable brands.
📜 Online subscription models often employ "dark patterns" to make cancellation difficult, undermining trust in subscription-based services.
🛑 Legislation may be needed to make canceling subscriptions as easy as initiating them, promoting fairness and trust in digital transactions.
🏦 Capitalism discredits itself when companies exploit customers, leading to a toxic environment that harms trust and long-term relationships.
📉 Consumer distrust in marketing, news, and mainstream media is growing, underscoring the need for ethical practices in all forms of communication.
🎓 The university system, especially in the U.S., is criticized for its high costs and the questionable value of degrees in relation to employment opportunities.
🔄 The recruitment process should value diverse talents and experiences beyond academic achievements, promoting a broader definition of intellectual capability.
🔄 The concept of "diversity of opportunity" suggests society should allow for multiple paths to success, rather than a singular, competitive standard.
🏹 Applying the same criteria to everyone creates a competitive environment where only a few can succeed, akin to a "Hunger Games" scenario.
🏰 The term "meritocracy" was originally used critically to warn against a society ruled by those who believe they deserve power due to their abilities.
🤔 Governed by a merit-based elite might be more problematic than a society led by a random or hereditary aristocracy, as it can lead to entitlement and lack of humility.
👑 The value of a monarchy lies in the acknowledgment of its arbitrary nature, contrasting with the self-righteousness of a meritocracy.
🎭 American politics observed as theatrical and distinctively intense, especially from an outsider's perspective.
🌵 Scottsdale, Arizona, highlighted for its mid-century modern Hotel Valley Ho and the enchanting Desert Botanical Gardens, offering a magical desert landscape unfamiliar to those from greener climates.
🍃 The novelty of a desert environment to a British visitor underscores the beauty of diverse natural landscapes and the allure of starkly different ecosystems.
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Re: the book quote; that is literally the antithesis of Jordan’s truth-seeking and bs decoding ethos. Almost comical, but not.
Good conversation.
Thanks for the content