Highlights
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2023-12-05 15:22 I don’t know which part of the brain that is. I’d love more research, and obviously you can understand there’s a notion that says that actually the advertising industry is kind of cheating, that you add perceived value to something. It isn’t really value. If you make people like something more without changing its real objective qualities, is that cheating or is it value creation. By changing the intangibles of how we think? I mean, if you take a very extreme case, purists in the tech industry kind of hated Steve Jobs because they’d look at Apple products and say, well, look, if you look at the objective measures of clock speed or processor power or whatever, they’re actually less impressive than you’ll get in this new LG Android phone or whatever. And therefore they kind of thought that Steve was a bit of a snake oil salesman. What Steve was doing was saying, actually, beyond a certain point, you hit the law of diminishing returns with all this clock speed, objective stuff. Actually, let’s focus the market on something like the loveliness of the interface and the joy that results from using it, and we’ll create psychological value rather than objective value. Now, if you’re a Purist engineer, you regard that as a bit of a cop out.
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2023-12-05 15:23 I mean, you do see that divide in different schools of economics. So that in the Austrian school, one of my favorite quotations is from Ludwig von Mises, who, in his book, I think, on human action, says there is no sensible distinction to be made in a restaurant between the value created by the man who cooks the food and the value created by the man who sweeps the floor. Now, in this metaphor, in this kind of parable by the man who sweeps the floor, he means, quite literally, advertising and marketing the enjoyment of a restaurant. The value created by a restaurant is a product of, and I probably mean product almost in the mathematical sense, the intrinsic qualities of the food that’s being produced and the context in which you consume it. If you produce Michelin starred food in a restaurant that smells slightly of sewage, you can make the food as good as you like. No one will really enjoy it. Rather, I always give the example if one of the tines on your fork is misaligned. It’s impossible to enjoy any meal if just one prong is slightly out of alignment. And I think that once you accept the fact that humans haven’t evolved to deal with perfect information and therefore the chance of making a purely objective decision is going to be difficult anyway. But secondly, we perceive the world in a way which aggregates a lot of information to form a unified impression, and actually the taste of the food will be affected by the decor of the restaurant. Once you accept that, you have to get a bit a little bit more forgiving of intangible value. I’d also argue, by the way, if you’re an environmentalist, intangible value is the most environmentally friendly way of creating value. You don’t have to chop down any trees, you don’t have to burn any coal. You generate value simply by getting people to look at something that already exists in a more favorable light.
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2023-12-05 15:24 Nonetheless, I’m interested by the fact that we intrinsically tend to think that marketing value is kind of cheating, whereas engineering value is the real deal. And it’s worth remembering that the way we actually perceive the world, as I said, actually, we don’t separate what we taste from what we smell, from what we hear, from what we see. Wine will taste better if you pour it from a heavier bottle. Wine will taste better if you tell people it’s expensive, it has a story to it, and essentially, we drink. It was always said of lager that no one could distinguish between lagers in blind tastings and effectively, they were drinking the advertising. And you may argue that the way to add value to lager isn’t through brewing. It’s through storytelling. Now, I think, in truth, whether you think that’s cheating or not? I think it is inescapable. I think that if you poured someone a perfect beer and said, actually, I just pissed in that it would be impossible for you. If we look at negative examples, we see they’re all over the place. That actually one negative story about something. You know that lovely sweater you bought on ebay?
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2023-12-05 15:25 I think this is a post rationalization and it may even be wrong, but it’s a theory of mine that part of what went wrong with video conferencing was it was sold as the poor man’s alternative to air travel, not the rich man’s phone call. Right? So video conferencing was like owning a pager in about 1989. It was what your company gave you when they didn’t trust you with a mobile phone and a video conference was what your company allowed you to do when they didn’t allow you to board a flight to Frankfurt. It’s kind of the idea, well, Sutherland actually go to Frankfurt because he might raid the minibar and watch a pornographic film in the hotel. We’ll allow him to go down to a basement room in the office, sit in front of a Breeze brock wall in some windowless room and talk to Juergen over a screen. Now, if you’d made Video Conferencing the way that chief executives made phone calls, I think you could have sold it much, much more. You could have made it something aspirational rather than a zat substitute for something better. It should have been the rich man’s British Telecom, not the poor man’s British Airways. Maybe I’m wrong, but I would assume that the CEOs were still traveling to meet people face to face. And so it also became a class or hierarchy distinction as well. And there’s possibly, and this is a fairly large part of air travel may be driven by costly signaling. Possibly if you’d made video conferencing cost 4000 pounds an hour, possibly you would have replaced air travel more effectively. Because a large part of the reason for air travel is not that you couldn’t do what you do in a phone call. It signals through both the cost of the tickets and the effort required to make the journey, the importance of a client’s business. Right. It also signals how important you are that you have to go. That you have to go. So it signals actually, it may be self signaling to a large part that you’re signaling to yourself. Well, since my company spends a fortune moving around the place, I must be an indispensable human being. Yeah, exactly. And I suppose it also signals the importance of the job at hand. So if you fly in from London to Frankfurt or London to New York, it effectively says, right, someone spent an air ticket on this project. So we’re going to devote the whole day to focusing on this project while Bob is over from London. If you have a 1 hour video conference, it’s something you kind of cram in in between doing your emails.
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2023-12-05 15:26 He being German. The Germans have a general view that you have to be qualified before you can do anything. They’re obsessed with vocational qualifications. I always joke that in Frankfurt Airport, there’s actually a sex shop called Dr Muller’s because the Germans are incapable of buying sex toys from someone who doesn’t have adequate medical know. In Britain, we’re not that know.
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2023-12-05 15:26 Great book here, by the way, if you want a book recommendation. Robert Frank and I think the strategic value of the emotions robert H. Frank at Cornell.
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2023-12-05 09:02 That means without the traffic lights, it’s simply a stripy area of road where the cars traditionally stop for pedestrians. It’s a useful hack in London that you wait for a black cab and you walk out in front of the black cab.
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2023-12-05 15:28 Now, how much of driving depends on unconscious social awareness in the UK more than it does in the US. The US drives, if you want to get into hofstedter’s dimensions here the UK and Ireland and Sweden and Holland and I think Norway, Finland, New Zealand, Australia also are countries marked out by fairly high tolerance of ambiguity, by which I mean is they’re not totally rule driven. So, weirdly, the accent statistics for Holland are much better than they are for Germany. There’s no genetic difference. Dutch friends will go crazy, but there’s not much genetic difference between Dutch people and Germans. But the cultural difference is one of giving other people the benefit of the doubt. Why is that guy doing that? Oh, I’ll just let he shouldn’t have done that. I’ll let him go. Now, Ireland or Sweden, you would assume, might have quite a high accident rate. I won’t explain why you might assume that in the case of Ireland, but lots of windy roads, okay, quite a heavy drinking culture. Sweden has heavy drinking culture, snow all over the place, yet they have a very low rate of accidents because they’re highly tolerant of ambiguity. It’s what my Danish friend calls the benefit of the doubt. Well, maybe he meant to do that. But we all make mistakes, don’t we? Germany and the US are slightly more teutonic in that they say, this is my right of way and I’m going to stick to it. And if you get in the way or you do anything that interferes with my rights, I’m basically not going to make allowances for it. So there does seem to me there’s a paper on this about hofsteller’s cultural dimensions and how it affects driving style.
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2023-12-05 15:29 I’d like to take credit for this. I have to admit that in the last two or three years I’ve probably fallen behind. I don’t know why that is. Partly I partly blame email. I had a friend who was a barrister who, as part of his job, would effectively have to read hundreds of pages of sort of court papers and transcripts. And the biggest resentment he had about this was he said that when you have to read for work, it slightly kills reading for pleasure. Because by the time you get home at the end of the day, your mode is to zonk out in front of the television like a zombie simply because you’ve read enough that day and you’ve been paid to do it. I’m less good than I was. I think I was very, very lucky in who I chose. The Early Inferences robert Frank, Bob Cialdini nudge was obviously a very important book, some slightly unusual things, quite a lot of evolutionary biology and evolutionary psychology. Jeffrey Miller’s. The mating mind was one of those game changing books. Then he wrote spent. We invited him, actually, to give a talk at the Institute of Practitioners and Advertising on the links between evolutionary psychology, sexual selection and signaling and consumerism. That sort of stuff has fascinated me, some of the happiness literature, but now I probably was just lucky. Tim Harford another very good British writer whom you must meet and interview, by the way. But there have been very good writings on the hinterland of kind of economics and biology, evolutionary thought and psychology, which fairly obvious for someone working in advertising, should interest me. I was lucky because back in 1989, I had a kind of Road to Damascus moment where I said, okay, however elegant economic theory may be, it patently doesn’t describe individual, real world human behavior very well. Now, my luck was when I went into the advertising industry with Ogilvy. I first started working at a place now called Ogilvy One, which was then called Ogilvy and May, the direct which was the direct marketing wing of the agency.
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2023-12-05 15:30 I love Richard Thaler’s thought experiment about the beach and the difference between transaction utility and acquisition utility. I think it’s one of the most fantastic it’s not quite a thought experiment because he did actually ask people. So this is you’re on a beach, and you’ve been there with your friend, and it’s a pretty hot day, and you’ve been there for a few hours, and both of you getting pretty thirsty. And you mentioned the fact that you really could do with a drink. And your friend just says, well, actually, I happen to notice that about three quarters of a mile down the beach, there’s a blank selling bottles of chilled Heineken. Tell me how much you’re prepared to pay for a bottle of chilled Heineken, and if the price is lower than that, I’ll buy you a bottle and bring it back. And if they’re quoting a higher price, I won’t buy you a bottle because it’s obviously too high a price. So tell me what you’re prepared to pay. And in experiments with admittedly weird Western students, but nonetheless, in those experiments, if you describe the place down the beach as a boutique hotel now, this is an experiment from, I think, the late eighty s or early 90s, so we’ll have to multiply by two. But from a boutique hotel, people were prepared to pay perhaps the modern equivalent of 300 to 150 or whatever. I don’t know what shoes Richard wears. I might have been either vastly too extravagant there or too stingy.
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2023-12-06 10:31 And you’ll know him as the man who did the great work on reciprocal altruism and some extent was behind the whole selfish gene idea. But his recent work on self deception that of course self deception is evolutionary advantageous and that we deceive ourselves, the better to deceive others.
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2023-12-06 10:31 Because the best way to bullshit is to start by believing your own bullshit. How do you as an outsider then recognize that, well, I might be bullshitting.
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2023-12-06 11:58 And the UK is a bit more Trumpy than the rest of Europe generally, okay? I have never met anybody in the UK who is so right wing they think we should have less vacation.
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2023-12-06 12:00 I’m not even sure that the United States wouldn’t be economically better off with more vacation simply because when people spend leisure money, it generally generates more labor and more work and more locally than if you buy manufactured goods. I mean, Henry Ford created the two day weekend so that people would buy cars.
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2023-12-06 12:10 Decision 95% of the time, but in the 5% where something goes wrong, they might blame you. You can’t ring your secretary from Heathrow and say, well, hell were you thinking, booking on a flight to the world’s third busiest international airport?
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2023-12-06 12:13 And his argument is that the way in which a scientific paper is written dishonestly misrepresents the mental processes that were involved in generating the insight in the first place because you downplayed the imagination bit and you pretend that it was reason that got you there on its own.
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2023-12-06 12:20 And in advertising, you may say it’s, we want people to do this thing. What prior stimuli will we need in order to get them to that place? It’s almost like seeing people won’t use moist lavatory paper. That’s one of my total obsessions, by the way. Why the hell I mean, what is it about the west that thinks that it’s okay to wipe your ass with dry paper? We need toilets. You know, if I were Trump, that’d be day fucking one, okay? Japanese toilets in every single building. It’s disgraceful. You know, the Islamic world’s right on that they have a proper tap. Okay? It’s only some weird Western thing. The idea that I mean, you wouldn’t clean your hands when they were mudy with dry paper, would you? So why’d you do the same with your ass? But for whatever reason, people don’t really buy moist lavatory paper. So I’ve got to ask, as an advertising person, what prior conditions might make this more likely?
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2023-12-06 12:22 You know, I’ve said I’ve tried to persuade someone to do this. Kimberly Clunk why don’t you just take one supermarket and have three times as much wet paper as there is dry and see how people buy loo paper, then if they think the social norm is wet.