Transcription
And advertising has often been portrayed as evil. Uh, is it? And couldn't you easily change the image?
It's an interesting question that, uh, to what extent, uh, working in advertising and marketing is promoted as being evil. The fact is that advertising itself is neither good nor evil. It's individual advertisements and actions that can be good or bad. It also, I think, reflects an interesting bias, which is that we tend to regard the production of tangible goods as being inherently virtuous, even when, to be honest, those goods may be actually fairly useless or inefficiently produced or produced at some external cost. Whereas we tend to regard the creation of intangible value or perceived value as somehow fairly dubious. And this is based on the assumption that everything has an intrinsic value. And marketing or other activities simply tamper with that intrinsic value by adding some magic dust of some kind or another.
I think there's another way of looking at it, which is to say that actually there's no sensible distinction to be made, as the Austrian school of economists would say, between, um, the value in a restaurant you create by cooking the food and the value you create by sweeping the floor. One creates the food itself; the other creates the context and the environment in which you can enjoy the food. And since I genuinely believe that value is subjective and is the product of all kinds of biases and influences, including the frame we attach to things, I don't think there's anything inherently wrong, um, with, uh, adding perceptual value to things. Uh, so whereas you can say, yes, undoubtedly, you know, uh, we have been the cause of some possibly some pointless or unhealthy consumerism. Um, I think it's equally true to say that if you want this world which people claim they aspire to, in which actually, uh, you know, you can be prouder of owning less rather than more, what that actually requires is a perception shift.
So, is everything perception then? Uh, in terms of economic value, I mean, obviously there are things where there's a greater degree of necessity, but I think if you look at, um, uh, if if you look at most forms of value, I think then you can pick things apart and realize that actually what we think of as having an objective value actually has a value because of some sort of frame we place it on. Now, if you take fashion goods, luxury goods, for example, patently they have a symbolic or sign value, not just a use value. And that partly resides, very largely resides, psychologically.
Now, I would argue actually that the biggest problems caused in in perceptual value are not in those areas of people going out to buy shampoo or beer or whatever it may be, where actually I think consumers choose fairly well and where the effects, after all, of making a bad choice are relatively small, and where, thanks actually to to the existence of major brands, the level of trust in marketplaces is very high. It is worth remembering, by the way, and I ought to qualify this, that having a brand reputation is a double-edged sword. We tend to see it as an unfair advantage in the marketplace, which it is, so long as you live up to that reputation with your behavior. But it's equally true to say that people with a reputation are much more vulnerable to reputational threat if their behavior fails to live up to their promise. And so to some extent, if you look at it in a game theoretic way, actually what a brand is is something of value to the producer which is held hostage by the consumer to be abused or damaged in, um, in in times or moments when the producer doesn't live up to his word. So there is that interesting thing in that brand reputation is to some extent, we we mustn't forget it's actually used by consumers to keep producers honest.
So, are you saying that the consumer has as much power as the producer?
Well, if you, most purchases involve a high degree of uncertainty. How do you know the person isn't simply selling you a dodgy television in order to make a quick buck? And consumers seem to look for, as I do, not just consumers. I mean, everybody looks for indications that this isn't the case. Why on earth should I depend on that person or trust them? And actually, a reputation is one thing we can use because it's fragile, and because a reputation actually, even though built over many years, can be destroyed very, very quickly, is one of the things we look for as a sign that the seller has something to lose by ripping us off. And so, you know, you could almost look at hostage situations as analogous to this. How can I check? What can I do to hurt the man if he doesn't deliver the goods as promised? And a reputation is arguably the least violent way in which you can actually do damage to someone who's let you down. And so there there are all sorts of sort of, I think, I think un as yet unperformed work into reputational game theory and how brands actually to some extent keep markets honest, uh, which is which is yet to be done.
But then there's this other question, as I said, about behavior change and attitudinal change. I was saying that the biggest problems aren't really where we buy shampoo or where we buy beer. When you get a collective delusion about something, for example, if you look at the property market, um, there was a very peculiar thing that went on, which wasn't perpetrated by the advertising industry or by marketing, or indeed wasn't even perpetrated, um, deliberately with any necessary suspicion of self-interest. It was just a universal belief that a rise in property prices was good news. And on the news at 10 or whatever, you'd have a good news story of property prices had gone up. And it was considered terrible news if property prices had gone down. Now, hold on a second. You know, property isn't just an investment vehicle. It's a form of consumption. Young people have much less of it than old people do. Why are you favoring the interests of property owners over non-property owners in your coverage?
And that was interesting because, in a sense, we were far less people in general were far less suspicious of what was going on there precisely because it didn't have any naked self-interest behind it. When people see an advertisement, they accept the fact that it is an advertisement and that, uh, uh, they understand the job it's trying to do. So actually, what you might call unintentional propaganda is far by far the more dangerous thing. Now, nobody nobody announces a good news story on the news when petrol prices go up. Nobody says, "Great news for those of you who've got half a tank full of petrol. The price of petrol, hence the value of your car, is going up tomorrow." That would be considered an absurd thing to do. And yet property was treated as this entirely separate category for a period of about 20 years as if the only thing it could do was go up, and that was an entirely desirable result with no deleterious consequences for anybody else. That's the thing you've really got to be frightened of in terms of psychological, uh, what you might call collective delusion.