I'm Rory Sutherland and I'm on Help Bank. And I'm going to answer a series of questions. The first one is, what is the biggest marketing lie? The biggest marketing lie is that marketing is a cost.
Once you frame marketing as a cost, you've got the wrong mindset. Marketing is a way of avoiding opportunity cost. It's completely wrong to frame it that way.
The second biggest lie is that you should only do marketing when it's completely measurable or accountable or quantifiable Because that's simply setting the bar too high and a lot of very valuable things you can do to distinguish yourself are rendered Impossible by that rule don't follow that rule measure what you can but don't demand that you measure everything That's simply a limitation. How can you make a boring product interesting? Don't ever think of a product as boring because if it's solving someone's problem It may seem boring to random passers-by, but when something goes wrong with your boiler boiler parts suddenly take on an extreme level of interest.
There is a way in which I think it pays to make them distinctive, eccentric, even to the point of seeming slightly gratuitous. If you just add some unusual feature, I'll give you an example, okay? Not a boring product at all, a very interesting product, but the wonderful foil cap they used to put on the lid of San Pellegrino cans was notionally pointless, but it made it completely different from every carbonated drink. Suddenly, because you had this foil cap on the top, it was like an access... all areas pass, you could actually have cans of San Pellegrino at your wedding, which you probably wouldn't do with, say, Fanta, perhaps.
It can be a packaging detail, it can be a service detail, you can always bundle products with service, by the way, if you think your product is a commodity, you can decommoditize it by adding interesting, distinctive and remarkable service levels to it. A great book you should read on this, by the way, it's Unreasonable Hospitality by Will Goddara, who's a restaurateur. And it's an absolutely fantastic book on how to differentiate yourself. How do big companies manipulate us to buy?
It's a bit unfair, this phrase of manipulation. The value of anything depends on how we contextualize it. You can make really good things worthless by marketing in the wrong way. You can make boring things exciting by marketing in the right way. It's not reasonable to suggest that there's an objective view and valuation attached to a product that marketing interferes with.
Everything only has a value to the extent to which we perceive it as valuable. That is not to say, by the way, you cannot do bad things with marketing techniques. You can undoubtedly mislead. You can obviously lie. You can use cunning behavioural science tricks to malicious intent.
I mean, it's very interesting that generally very successful con men have usually discovered something of that kind. Bernie Madoff, for example, had the ingenious marketing idea of making his fund really difficult to invest in. If you're a billionaire, you're not used to people saying no to you.
So this drove people practically insane with their desire to invest in the fund to a point that they suspended most of their... usual healthy skepticism. Absolutely not saying for a second that marketing is evil, but it's completely inaccurate to say that marketing by its nature misrepresents something. There is no objective value attached to anything that's independent of your perception. You're marketing whether you like it or not.
What human behaviors are the easiest to exploit? Habit and social proof because they're innate. So getting people to do the same again and getting people to do the same as other people are doing. are undoubtedly kind of, they're hardwired.
When I say that habit... and social proof are very easy to exploit. We have these two mental default settings, which are kind of do what everybody else does, do what I've done before.
I was assumed that Jenna just came up with the smallpox vaccination. Everybody celebrated it. Brilliant, we've cracked this one, we're off to the races.
He had to contend with huge opposition, people saying it was unbiblical, people saying they'd never done it before, it was untested, untried. Every one of those things from, say, drink driving to same-sex marriage to the adoption of the internet to the adoption of mobile phones has required Extraordinary levels of marketing It seems extraordinary now to anybody in 2024, the idea that you have to advertise home electricity. Trust me, for the end of the 19th century all the way through to the middle of the 20th century, there were advertising campaigns by electricity boards extolling the benefit of having electricity in the home. In retrospect, we forget marketing because we don't say I was marketed into doing this.
We say I bought it because I wanted to, because it was a great product. But that very reaction, the fact that you're doing something different is actually very largely the product of marketing activity. Why do people get addicted to products very similar to I think habituation and ritual? There are certain products which actually acquire a kind of ritualistic thing where we just don't want them to change. We're familiar with them.
Now you could argue for instance that people are addicted to the iPhone to the extent that if you switch from iOS to Android there are a whole load of familiar system one behaviors that you've acquired ...in using the iPhone, which you will have to relearn if you switch to Android. Now, Android isn't very different to iOS. Conceptually, it's pretty damn similar.
But enough of it is different that something that goes from being instinctive to actually requiring some cognitive effort, we find inherently painful. So, ritual, in a sense, and the fact that things become system-one-ized, in other words, they become automatic, autonomic. actually creates a behavior which is very very similar to an addiction. What marketing campaign results have been the most surprising?
Actually lots of them. And this is why, as I've said, don't demand that all your marketing is quantifiable. That's simply an unreasonable aspiration.
A surprising number of direct marketing campaigns I've been involved in, where we test, you find that seemingly trivial things have a huge effect. Seemingly important and logical things are sometimes counterproductive. So testing things where for example when you put the price up demand goes up. It's completely seemingly illogical.
It's only when you understand that the psychological is not the same as the narrowly logical and rational that you realize that that actually makes sense. No one who's got a budget of £5,000 to spend on a painting wants to buy a £2,000 painting. So quite a lot of the experiments that I found particularly surprising and interesting relates to price. To economists, price is a number, but to consumers, price is a feeling.
You can actually make the same thing feel expensive or feel good value for money simply by changing what people compare it to. Famously, I've always told the story, Rolls-Royce and Maserati stopped exhibiting their cars at car shows because they look really expensive and they switched instead to exhibiting their cars at yacht and aircraft shows now if you're alongside a learjet or a sunseeker yacht both of which run into many millions bizarrely a 300 000 euro car almost becomes an impulse buy what's your most controversial marketing take i would argue that there is no objective perception of value whatsoever that our valuation of something is internally constructed, it's a product of internal perception and is therefore the product of mental processes which are highly influenced by context. But the fact that actually nothing is context independent and therefore nothing can be completely marketing free. When you decide to go into one cafe rather than another cafe, well in theory yes you'd look at reviews of the food, how reliable those reviews are.
In fact what you're doing is you're unconsciously reading a whole load of things about the design of the cafe, the furniture. the layout, the location, and you're making predictions based on what can only be said are kind of correlations, you know, expectations, but largely most of what we perceive is actually a prediction. I find that very, very interesting because it explains, I think, to a large extent why it's very, very dangerous to solve problems without a market at present, because you will look at solving the problems that seem important to you. In the mind of a consumer, however...
What they actually perceive is hugely contextually dependent. So you could spend an absolute fortune trying to improve objective reality and get absolutely nowhere in terms of changing customer behaviour. I don't think it's actually controversial. Nobody disagrees with me. It's just something that people find hard to act on in their day-to-day lives.
What is the marketing secret big companies don't want us to know? I genuinely don't think there are any. I mean, there are strange things which companies wouldn't go public about. The fact that you have to make Diet Coke taste a little bit more bitter than regular Coke because otherwise people don't believe it's a diet drink.
The fact that, you know, some medicinal products are deliberately made to taste unpleasant because it increases our belief in the efficacy of the product if it tastes weird and slightly unpalatable. There are things companies do which they don't make public. One of the things I would make an ethical consideration if I were using behavioural science to solve a business, problem would be, would I be happy presenting this on the stage to an audience which would include both journalists and the public?
If I thought a significant number of people would be outraged if they discovered what was going on behind the scenes, I wouldn't be comfortable doing it. Now, remember that most of the companies we work with are big companies that have a reputation to protect. It's not in their interests to risk being seen to be deceiving customers.
That does not mean, and if you want to study the darker side of this, there are plenty of con men, hucksters, shisters, etc. out there who are undoubtedly using marketing tricks to mislead people. It's absolutely possible. One good reason to learn behavioural science is that you learn to spot it.
There is an area which I regard as being fundamentally dubious, which big companies do and should have learnt not to do, which is the business of making things very easy to subscribe to and almost impossible to cancel. Now the reason I think they should stop doing this is I think this is damaging to the economy as a whole. because so many consumers have now been Once bitten, twice shy through a subscription to something. I think I was still paying for something like Club Penguin when my children were in the sixth form.
Those things need to stop because it's eroding trust in the whole system of subscription. Someone should have done something about that years ago, not just because it was unfair to the consumer. It's actually damaging to businesses as a whole because there are some services you can only sell that way. 50% of consumers basically reach a point where they go, I'm no longer subscribing to anything ever again. It basically makes it impossible for you to start a streaming service or anything of that kind.
And that's fundamentally anti-competitive and not even in the business interest, never mind anybody else. How will marketing be done in the future? A few cynics have said it'll be the same, only more and worse.
I can see a future. This would be the radical take where marketing reverses direction completely. where a consumer appoints an AI-powered advertising agency to go out and find interesting products and services that they think may be of relevance.
So in other words, rather than companies trying to reach people, you would actually it's almost that that story I told about the people who wrote to people saying, would you be willing to sell our house? Reversal of polarity, the reversal of the direction of travel. It's doing it backwards.
I can envisage a future for marketing. In fact, with AI generated content, the volume of marketing material may simply become utterly intolerable. And what companies will do is affect effectively appoint AIs of their own to act for filtration.
stimulation, curation. In other words, it's that thing I mentioned earlier, which is I'm quite interested in going to the Philippines in the first quarter of 2025. Over the next few months, can you send me interesting information that you think might be particularly pertinent? And so that will be advertising in reverse, where effectively you go, I need a toaster, go and find out the most interesting toasters you can find. In other words, it's marketing done backwards. I don't see any reason why this shouldn't become popular in the next five to 10 years.
It's possible that if the volume of marketing material automatically generated becomes ridiculously high, it won't only be popular, it will be unavoidable. What inspires you as a marketer? Oh, just a few things. The fact that you're always learning.
There's a lovely, lovely thing about marketing in general. And that's the one thing I'll always recommend about people going into advertising or marketing. There aren't that many jobs where doing anything can make you better at your job.
You know, if you're an actor and you sit outside a cafe or you, you know, you observe the queue at Yale. it doesn't make you a better actuary. If you're in marketing or advertising or indeed sales to some extent I'd say, if you're in one of those psychologically informed disciplines, anything you do, going and seeing a French arthouse film, going to the cinema, going to a restaurant, riding on the top deck of a bus, eavesdropping on other people's conversations, anything, even the seemingly trivial, can make you a lot better at your job. That's still rewarding 35 years on.