New: The Best Rory Sutherland Interview You'll Ever Watch

I don't think attention spans are actually dwindling. I think they're polarizing.

And what we see is we see YouTube shorts and we see TikTok and info snacking. And we also see actually people paying extraordinary attention for quite a long time to subjects that really interest them.

I'd like lower prices and more choice. That's Tesco Extra, right? The counter-trend is a farmer's market.

Interestingly, influencer marketing, if you have someone who has high credibility in an area, so if James Hoffman recommends a coffee, you don't know that's the best coffee in the world actually, but you do know it certainly can't be a piece of [ __ ]. You can actually lose your credibility completely overnight. A Caribbean proverb: trust grows at the speed of the coconut tree and falls at the speed of a coconut.

I always said there were three kinds of content that are always particularly appealing.

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>> Rory, welcome back to the show.

>> It's a joy to be back. Lovely to see you.

>> Especially as we're here in Bromley.

>> Exactly. We came to you this time.

>> No, no, no. It's it's absolutely fab. One of the things that's underrated actually by young people is suburbia.

>> Yes.

>> Because the image quality of it is terrible, but the actual utility of living in suburbia is fantastic. It's in other words, it's completely uncool, but it's utterly brilliant.

>> I agree. You know,

>> you're talking to a man who lives in in Shaftesbury in Dorset, so I I get it. I get it.

>> Um, so following on from the last time you've had lots and lots of questions, there's probably a lot of things we want to ask you about. I'm going to start off with a with a big question. So, as attention spans are dwindling and brands are trying to gain attention, what tools have they got that are actually working?

I don't think attention spans are actually dwindling. I think they're polarizing. So, one of the best bits of advice I ever had from a futurologist, and there isn't much because futurologists do talk an awful lot of nonsense sometimes, but one fantastic bit of advice is there aren't trends, there are vectors. In other words, there's always a counter-trend. And if you look at, for example, I mean, one of the weirdest things about television was that all programs were roughly the same length. Okay? If you if you like what was what's anomalous is not what's happening now in terms of our attention but the slightly weird artificial form of attention we had, you know, perhaps between, you know, 1955 and, uh, and, you know, 2005. You know, in in the in the scheme of things, that might seem to be more of an anomaly than what we're seeing now. And what we see is we see YouTube Shorts and we see TikTok and info snacking. Um, that's always existed in a form. And we also see actually people paying extraordinary attention for quite a long time to subjects that really interest them. And so it's a little bit like, I suppose, collective ADHD in that ADHD is often misunderstood in that people with ADHD tend to also have extraordinary powers of concentration for very long periods of time if they can actually immerse themselves in something. So, you know, quite often these things are misunderstood. However, in terms of creating content, uh, and I'm a very, very big fan of influencer marketing, of, uh, of, uh, of YouTube in general, by the way. I think I think of all the things that that the tech world has given us, that's an unalloyed good. YouTube is not far off. Uh, you know, the thing for which, by the way, YouTube Premium is even better. M but of all the things you can be really grateful for without having to worry too much about the possible downsides, I find YouTube YouTube Premium utterly astounding. Generally, people who've done research on this, including my friend Brian Miller, said that there I always said there were three kinds of content that are always particularly appealing, which is I used to call it cortège, court jester, courtesan. Cortège is be useful. Okay. Uh, court jester is be funny, and courtesan is be sexy. Uh, Brian Miller also added a fourth kind of content, which I think he's right to add. Um, which is content that is massively uplifting. It's hard to describe, but you might call it, um, sublime. You know, it has something of the, you know, something of religiosity about it, if you like. In other words, the kind of feeling it arouses, uh, doesn't fit into the other three categories. It's not useful, sexy, funny, but it it leads to a feeling of kind of, um, I suppose, just mental enrichment. And, um, generally speaking, if you look at content that goes viral, content that goes shared, that's shared, content that's watched repeatedly, it will have at least, you know, one of those elements will be present. I think that's probably fair.

>> And I mean, one of the things that I absolutely love, uh, about YouTube, um, is that there is content there, sort of problem-solving, useful content. Uh, it YouTube has become effectively the when when I was a kid, when you bought electronic devices, they came with an instruction manual and you know, it would often be, you know, 30, 40 pages. If you lost that manual, you often had no idea. This is, you know, back in the '90s. If you lost the manual, you would have no idea how to operate some part of that equipment. YouTube has become the operating manual, the instruction manual for literally millions of devices. And there's There's content there which always intrigues me because it's in a sense unbelievably boring. You know, it's how to, how to unblock a frozen boiler vent pipe in extremely cold weather. Okay, which you wouldn't really watch for entertainment value, but at the moment when your boiler vent pipe actually freezes up, it's more compelling, you know, than Last Year at Marienbad. It's just spectacular content. And so, you know, YouTube, one of the things I love about YouTube is it's incredibly useful. One of my proposals is I think we should take 1% of the UK's education budget, uh, and just give the entire population YouTube Premium. I'd also make a condition on that, uh, which is that in return for getting free YouTube Premium from, you know, it's better than the BBC. Let's be honest, okay? BBC is mostly a load of people making cakes, right? I don't, by the way, I don't see the point about that anyway, because there's the Victoria sponge and everything else is an unnecessary elaboration in my opinion in terms of cake world. But but if you did this, the other requirement I'd make is that everybody has to watch 10 minutes of just factual, informative, useful, entirely politically uncontentious content, educational content, uh, every week. M

>> And that would be equivalent to, okay, the the collective equivalent of a speed awareness course. Have you ever been on one?

>> A few. And the funny thing about the speed awareness course is like you, I I'm I'm predicting this. You probably turned up going, "This is a load of bollocks, but it'll avoid three penalty points."

>> Exactly. And my insurance company doesn't know. Okay. And actually, you went away going, "Actually, that was a pretty worthwhile use of an afternoon." Now, I think there is quite a lot of educational stuff for adults, just informative, factual stuff, which if the entire population was just better informed, um, you know, uh, everybody would make better decisions. I mean, it occurs to me, for example, most people, when you have something like an energy crisis, most people haven't got a clue what devices in their home cost money and use electricity and what don't. So you will get people literally going around turning off LED lights energetically, but then leaving a heater on.

>> And so for situations like that, where what we do not have a government information service, we have a massive education budget, but we don't have the equivalent of what used to be the COI, the Central Office of Information. Now, there's always the danger that the content gets politicized. And my argument is that you only put the content up there if it is universally agreed to be true by, uh, you know, a panel of experts.

>> Fact, I'll tell you a fact, okay, which everybody, this is why I always show the paceometer when I give a talk.

>> Because my argument is, once people see a paceometer, they understand speed differently and therefore they're less likely to go at extreme speed. The speed awareness course. There's a story in the speed awareness course which everybody should know. As I get older, I think more and more want advertising to perform a useful social function. When you're 25, it's just a fun place to work and you're happy to flog stuff. But the longer I spend in this game, the more I get interested in areas where bad decisions are made simply through lack of information. And when you're on the speed awareness course, they may have told you this story, um, uh, which is that you have two cars, uh, that are parallel on a motorway. One of them is traveling at 70 mph. The other one's traveling at 100 miles an hour. They come around a corner and simultaneously see that there's a tree right across the road. And they both brake at the same moment when they see the tree. The car that was traveling at 70 mph screeches to a halt half an inch from the tree, saving its occupant any energy. What speed is the car that was going at 100 miles an hour doing when it hits the tree? And nearly everybody goes, "Well, it'll be 30 miles an hour because if the other car decelerated by 70 miles..." No, the actual answer is 70 mph.

>> Because don't forget your reaction time. You've covered a greater distance while you're reacting.

>> And then braking distance is exponential. Now, when people know things like that, they tend to think of risk as being linear, okay, with speed, it's absolutely not. Now, that's not to say that speed is is the only dangerous thing. Speed isn't always dangerous. You know, obviously it's rapid deceleration that's dangerous. But nonetheless, I I think there are literally thousands of things which if the populace knew. And I, you know, one of the things I would love is to start again a government. In now, funny enough, the very libertarian economist Deirdre McCloskey also argues that look, government must have loads and loads of data from things it buys on, for example, what laptops are really reliable. You know, in other words, government procurement functions must have a load of data on, you know, how to buy things. Deirdre, libertarian though she is, thinks that information should be put in the public domain because it's a useful, um, uh, you know, it's a useful side effect of government. It it enables informed decisions. And so that's one of the things that interests me. Now, one of the great things about our info diet changing is I'm not entirely sure that some of that content people wouldn't watch voluntarily. Now, trying trying to get that through ITV's entertainment division in 1975, you know, we want a program on this would have been quite hard. I think actually if you produce worthwhile educa I spend this is slightly embarrassing, by the way. I probably spend about an hour a week on YouTube watching people solve equations.

>> Wow. Now this is a I last did maths, I did maths A-level and S-level, uh, last did any maths apart from a bit of statistical stuff, uh, in 1984. And suddenly at the age of 59, I've rediscovered an interest in maths. This guy called Pretzel Walker, I think his name is, who does a lot of mathematical puzzles, he's brilliant. And then I suddenly go, well, look, this should be understanding this should be part of our our education budget, okay? Part of our education budget budget should be feeding curious people useful information, useful skills, uh, particularly people who who are over the age of 23, because our education system is ludicrously front-end weighted.

>> So this whole change in in attention, actually, I regard it as, you know, obviously we're talking about fleeting attention where everybody talks about TikTok, da da da. Sacha has had a theory of continuous partial attention. I think there's also, I think there's also a counter-trend to that, which is people being genuinely absorbed in things that massively interest them to the point of, to the point where I think it reaches self-education. I think there are people who've taught themselves to code online. I think there are people who've taught themselves do all sorts of things online. And we ought to be actually, um, uh, rather than spending all our time bemoning the negative, which isn't necessarily negative, by the way. I mean, jokes were always like short, you know, a joke was always effectively a TikTok for the 1980s, right? You know, people would come into work and they'd tell a joke. Well, you know, that's that's not a long-form form of content. Pop songs were pretty, you know, were probably derided by people who loved symphonies as being absurdly short-form. Um, I think that the plurality of stuff is what matters. Um, and actually I think there is, you know, I think there are huge counter-trends. This is the weirdest one, by the way, and I've asked people this because it doesn't make sense. I drove in this morning listening to an audiobook. She'd said to me in 1994 that in 2025, uh, you'll be on a one-hour drive and in your car, you'll be able to listen to the whole of world music. Now, I know you young people think that's normal. Okay, that would have seemed totally surreal. If you wanted to have the whole of world music, you'd have to have a, you know, a massive Mac truck packed full of vinyl, right? Or CDs by then. But if you told me then that you'll have a car with a whole of world music in it, but most of your journeys you'll spend listening to people talking [ __ ] off. Right? If you look at the popularity of podcasts, that's not a short-form thing. What the [ __ ] is going on there? And the only conclusion I can come to is that TV lost interest in conversation with the single exception of the kind of talk show, okay? That the people who made TV programs lost interest in that format long before the public did because if you think about it, what we're doing now is cort, I don't know, quarter of a million, half a million years old in evolutionary terms. And so, um, that that fact that I, you know, I drove in listening to an audiobook, I'll drive home listening to a podcast. If you'd asked me to predict that, I was no, no chance. I I would have thought that music would predominate.

>> In the car.

>> But for a lot, for a lot of people, it does. But the the explosion of the podcast, uh, is something that genuinely surprises me.

>> It feels like what you talked about then. You talked about a trend emerging and the counter-trend.

>> The trend might be deliberate. So it might be a brand trying to start a trend to sell something, but the counter-trend is the piece that's kind of unpredictable.

>> The counter-trend is the thing that often emerges more organically because it often the trend often meets a a thought-spoken need of the consumer. I'd like lower prices and more choice. That's Tesco Extra, right? The counter-trend is a farmer's market. Right. Right. Now, if you think about it, no one would really describe a farmer's market as something they wanted. So, I'd like to buy direct from the manufacturer and pay higher prices. And I'd like it to be outdoors and I have to go to seven different stalls to buy what I need, paying separately every time. Okay. Right. All of that stuff in the farmer's market is to some extent seemingly illogical, but it seems to meet some weird unmet human need. Is it theater? Is it authenticity? Is it that actually we as humans enjoy personalized transactions and that actually the growth of Tesco Extra has left us feeling slightly bereft because you know we we you know we want to no, you know, nobody's going to buy 100% of their calories in the farmer's market, but somehow it meets it occupies a market space which has been vacated by the trend. So what tends to happen is there's a trend which is sort of logical, which would make sense in terms of consumer market research or stated preference, and the counter-trend then satisfies unstated preference, as economists call it, which is the kind of preference which is generally unspoken but is revealed through behavior. Yeah, I mean, you know, one of the one of the most interesting things would be to say, you know, that's what marketing is for, ultimately. Marketing is there to the most valuable role of marketing is not actually discovering the things that consumers say they want. The really valuable role of marketing is discovering those things which consumers really, really want but don't know how to ask for. That's that's marketing at its valuable best, I would argue. And you might argue that actually that's why free market capitalism has an advantage because it will be very difficult in a communist command and control economy to make the case, okay, for many of the irrational things that consumer revealed preferences reveal that consumers really, really like. And, you know, Red Bull being the example I always gave in my book, you know, nobody would say, "I'd like a really expensive drink in a small can that tastes kind of disgusting, right?" I mean, Red Bull is pure revealed preference in a way. Jeans, by the way, are, you know, it's always famous, you know, that communist Russia, the thing that was most valuable was an imported pair of jeans. And I have to admit, I don't own a pair of jeans, by the way. And I have to admit, I don't really get it as an item of clothing. I mean, it's not particularly comfortable. It fades. Okay. It's not particularly easy to maintain.

>> There's a dilemma about whether you iron it or not. Okay. Right. I mean, in a way, the fact that denim became this absolutely dominant fabric is, you know, no one would have been I mean, actually, no, I know this because where I grew up, not far from Pontypool, there were a lot of people who had often retired from ICI at the ICI nylon factory in Pontypool. And there was an R&D function there. And one of the things these people bemoaned is they said, "We went and we developed tons and tons of remarkable fabrics. Fabrics that stayed clean, fabrics that kept you cool. Uh, you know, they said scientifically, we were, you know, at the cutting edge of effectively using artificial fibers to produce really, really remarkable." I mean, they could produce, I know they produced, um, things that felt like silk because one of the people told me that they could produce artificial silk. They said, "And then everybody went and wore jeans." So we were there basically thinking, "What do consumers want logically?" And meanwhile, what the consumer wanted from a pair of trousers was some weird psychological connection with the American West. I mean, go figure. I don't own any. I mean, I've got my best, one of my best friends, Ray Fairguy, who founded the White Festivals, he's never owned them either. He doesn't understand them. But we're in a tiny minority. Really, really tiny minority. What's going on there? If we're thinking about not knowing what we want until it comes to us, maybe in the form of marketing. You mentioned earlier about influencer marketing. Why, why do you think that that is so powerful, and can you think of maybe some brands?

>> Let me give a big plug to influencer marketing and I mean it very largely when the inverted commas celebrity. And of course, celebrity is now kind of scalable. You know, there always used to be the joke, "World famous in Reading." But there is James Hoffman, he's world famous in coffee. Right? So within his particular super-consumer niche, James Hoffman is, you know, Mick Jagger. Right? Now, what is going on there? Generally, the thing that digital marketing completely failed to capture because it was generally driven by logical tech people who are slightly on the spectrum, who believe that advertising is all about efficiency. It's all about getting a message most effectively at the right time to the right person with a minimum of waste. Uh, a very large part of advertising is the opposite of that. By which I mean, it's costly signaling. Um, and the very expense that is devoted into the construction of the ad or its transmission is part of the efficiency of the communication because it's skin in the game. I've spent a load of money telling everybody about this. I wouldn't bother doing this if the product wasn't good. Therefore, you can rely on my advertising expenditure as a proxy measure for trustworthiness. It's often described by someone as if you spend 20 million launching a car, it does say to the consumer, "It's probably worth test driving this car because if everybody who test drove this car said, 'Jesus, this is a crock of [ __ ]', they wouldn't spend 20 million pounds." You see what I mean? It's kind of reverse reverse calculus, if you like. Not irrational, by the way, because it's a costly signal and therefore difficult to fake. Uh, it's perfectly possible by hyper-concentrating digital advertising in a tiny target audience to make people think you're a huge advertiser when you're not. Okay? Whereas indiscriminate mass media advertising, which by definition is expensive to do, is a costly signal. Now, the the main part of advertising online, uh, whether it be, you know, performance marketing, search, etc., was very, very good at the bottom of the funnel transactional stuff. But it but it was absolutely hopeless with one notable exception, actually, at conveying what you might call, uh, "We're putting our money where our mouth is." Because efficiency, okay, is in some in signaling terms, the efficiency of your communication diminishes its value. But you wouldn't invite someone to your wedding, okay, by email. You get a load of cards printed. Do you see what I mean? Because you want people to think this is a major event. Okay? And therefore, if you want to signal generosity, I've always said Amazon has a weakness as a gift-giving platform because the very fact that it's low prices and convenient makes it, you know, it's bit the equivalent of buying your wife flowers from a petrol station. Right? It's like, "I didn't really put much thought into this, did I? I just typed in socks and got Amazon to send them to you." Right? Now, there was one exception to that, which was the kind, the only display ads I ever saw on the internet were WeTransfer. If you ever used WeTransfer and you go to WeTransfer and there's this huge, I mean, I use because I'm old, my eyesight's [ __ ] getting [ __ ]. Um, I'm getting a bit long-sighted. I actually watch use the web on a, what is it, 55-inch 4K TV. Okay. A lot of the time. And there you get an ad that's the equivalent of the back page of Vogue. You know, it's a big display, "Look at me, this is important," whoop-de-doo ad, as opposed to a, "Would you like to buy this at 20% off?" ad. Okay. Now, WeTransfer, interestingly, was founded by an ad guy. I didn't, I only discovered that recently when I had a a Zoom call with him, 'cause I thought, "This is strange." Now, interestingly, influencer marketing, if you have someone who has high credibility in an area, David Ogilvy always said this, he he liked testaments, he didn't like sort of testimonials. He always thought that testimonials were potent when the person giving the recommendation had some sort of known invested expertise in the in the product area where they were making a recommendation. Okay. So, if James Hoffman recommends a coffee, it doesn't, let's say he's been paid to recommend the coffee. I don't know if I don't know how it works with James. I'm not going to make any, uh, you know, intimations about his business model. You don't know that's the best coffee in the world actually. But you do know it certainly can't be a piece of [ __ ].

>> Because if James Hoffman recommended an absolutely shite coffee, okay, all of his effort in building up his reputation as a coffee expert, uh, would be there's a great thing about reputation. Uh, it's similar to actually, it's trust, but same thing. Okay, a Caribbean proverb: Trust grows at the speed of the coconut tree and falls at the speed of a coconut. You can actually lose your credibility completely overnight. Uh, if, for example, it will prove that you'd taken a stack of money from a rubbish coffee manufacturer just to recommend a coffee. Also, when I'm watching Hoffman, okay, I don't know that much about coffee. I'll be honest. Okay. Here now, the the guy who's written most eloquently about this is a guy called Don Marti, uh, who used to work for Firefox. And he's he's one of these people who you encounter who's just a genius in understanding this. His particular passion, I think, is woodworking. And he says, "When I read a woodworking magazine, I know that a lot of the people reading that magazine know more about woodworking than I do." I think I think he knows quite a lot about woodworking, but there are people reading Woodworking Monthly who know everything about it. Okay. Said, "I can therefore reliably trust the advertisements in that magazine because I know the advertiser is exposing his claims to people with a very high degree of expertise who would call them out if they talked complete crap." In fact, the biggest, one of the biggest human instincts is taking the people down a peg when they make a false claim. It's a human instinct to actually effectively punish the person who, uh, makes a, you know, makes a claim, uh, to which they have, you know, no right to make. And so influencer marketing is very, very beautiful in the sense that there are two things going on. The person making the recommendation, let's take one of those sort of travel influencers, okay? The person making the recommendation, uh, has skin in the game because their entire reputation and audience depends on their credibility. But also, I know that it's not just a a a transmission between them and me, as is the case with most banner advertising. I know that Hoffman is exposing himself to a load of other baristas, okay, who would call him out if he were to make a claim that was erroneous or likely to be, uh, dishonest. And so what we've done is we've looked at the whole information economy as an efficiency optim. We've looked at it as if it's DHL or UPS, as if it's like a logistics operation. How can I get message A to person B as inexpensively and as in as timely a fashion as possible? Not an irrelevant question, by the way, except that in the process of optimizing for efficient transmission, we've completely de-optimized for credibility and trustworthiness. And I see, as I said, with the lone exception of WeTransfer, which I think is a, you know, a unique advertising medium online because it actually has some sort of stature to it. What banners don't, you know, pop-ups don't, you know, Google search terms are almost an inverse. I being top of the Google search algorithm is almost now becoming a heuristic of who to avoid, right? Because the person who, well, I'll give you an example of this, right? I I use a paid-for search engine. I've just, we were just talking, I came into Bromley, I was just saying, I've now started using TomTom, a paid-for, uh, alternative to Google Maps. And I'm now using a paid-for search engine, Kagi.com, K A G I, happy to plug, uh, because the advertiser interest in Google is starting to actually totally overshadow the consumer interest, the user interest. Google is a B2B company, okay, which, uh, sells, it's a large business selling attention to smaller businesses. Um, and my argument there, okay, is that I'm I'm not on my A-game. I'm in a hotel room. I've got COVID, right? I know that in a month's time I've got to go to Canada. So I go, well, I'm stuck in this sorting hotel room. I might as well put the time to good use. I'll buy one of those CTAs, Canadian Traveler Authorization. It's the equivalent of an ESTA for maple syrup, right? I go on Google and it says, you know, "Get your CTA, Canadian government, da da da approved." Click on that, right? That's the top search term. End up paying $60 Canadian dollars for the CTA. If you go straight to the legitimate Canadian government site, it's 14 Canadian. That's seven quid. Now, sorry, Google, mate, you're a billion-dollar company, okay? You should know that one of the problems you have with an auction system is one, high-margin players will always be able to outbid lower-margin players, which is not in the consumer's interest. But worst of all, these people were not a totally dishonest player. I think they're not illegal because I did get my CTA. I I didn't turn up in Canada and get put into a Canadian jail. Um, which I suppose would be a lot better than an American jail, but I didn't get put in a Canadian jail for three months or anything. It was a legitimate CTA they issued, but they charged me $60, whereas the the, uh, lovely government of Canada would only have charged 14. Sorry, Google. Right, you need to be alert to this. Come on, let's have a little bit of consumer interest here. Similarly, when I search for a specific hotel, I want a link to that hotel, not five competing hotels, followed by six online travel agents trying to get me to stay somewhere completely different. Okay, now, sorry, I've now started paying for my search because I know I've worked in advertising for 36 years, but I think there's an entirely legitimate use of advertising which is bringing people's attention to things which they may not otherwise know. And I also think there's a totally illegitimate use of advertising which is distracting people from what they need to know in order to actually try and plug something else. So consequently, one of the reasons I like influencer advertising and I think one of the reasons I think consumers like it is because intuitively, without necessarily knowing the kind of information or calculus they're going through, they know they can trust this. If I recommend a car, um, and I'm a car expert, that guy for Carwow, okay, I mean, you know, that's the new Top Gear, right?

>> Okay. That Brummy guy, he's probably a relative. Is he Anna? The Brummy on Carwow. Obviously, he has instant car credibility because weirdly, things to do with cars have more credibility if said in a Brummy accent. I don't know why. It's like now Coventry, nice. Good night. You know, you got I don't know why that is, by the way. But actually, it's a benefit, isn't it? But that guy, you know, I mean, okay. I mean, he's trying to sell cars for Carwow, and he plugs Carwow in the thing, but basically, I take what he has to say at face value. And I think in a world in which more and more information has an ulterior motive, we're going to seek out authenticity.

>> We're going to go to Kagi. We're going to buy our TomTom app. Now, by the way, I'm not suggesting Google Maps is, um, is currently trying to route me on a stupid route so that I go and buy a McDonald's, but it's only a matter of time, isn't it?

>> It's only a matter of time before you go, "That's a bit of a dog leg, isn't it?" Oh, it suspiciously takes me past, um, the location of a major advertiser. Now, you know, would that be a legitimate form of advertising? I would argue no. David Ogilvy didn't even approve of posters, by the way. You want to know this?

>> Why?

>> Right. This is worth knowing because nobody in advertising, because everybody thinks that the purpose of advertising is efficiency, including people who work in advertising. Uh, which is they have bought into advertising metrics which have actually been, um, effectively, which are actually a mind virus planted in client companies by the by tech companies because tech companies have done everything they can to promulgate marketing metrics which favor the expenditure of your marketing budget with tech companies. And they've done that with their running dog lackey in management consultancy. So a lot of the metrics that are being actively chased by marketers now are not there to serve the interest of the brand, the interest of the consumer, or the interest of the business. They're metrics which are highly convenient if you want to sell tech stacks to gullible marketers.

>> Mhm.

>> A lot of the metrics which people chase are unbelievably poor proxy metrics. It's nothing to do with long-term brand building. It's nothing to do with fame because those things are slow feedback, hard to attribute, and therefore they don't suit the application of tech solutions. So what the tech people have done is they've pretended that marketing is all about the thing that tech companies happen to be good at, at the expense of almost everything else. I see, um, what's going on here as first of all, the quest for authenticity. And I, um, and I think that people looking for, uh, influencer marketing are looking for authentic information. How often do you buy something? You go to Wikipedia, right? Let's be honest about this. We do that all the time, right? Because you go, "I can't get any sense out of this marketplace. Everybody's got an ulterior motive." And obviously, the person who is doing, you know, the Brummy on Carwow, who's bloody good, actually, um, uh, he is trying to sell something, but nonetheless, he's doing it in a way which maintains some sort of authenticity. He's got some sort of reputational skin in the game.

>> Do we, we have a lot of entrepreneurs listen to this podcast thinking about that coconut tree analogy. If you were consulting a startup and you're thinking, "What is the quickest way to build trust with your audience?" How would you approach it?

>> I'd do two contradictory things. You probably at the moment need Facebook, Meta, and Google to build your business simply because of the reach and frequency they have. However, do not get trapped into a death spiral where your entire marketing activity is all about, "How can I give money to Google and Meta in a slightly more efficient way?" Because I would argue that ultimately those things are a duopolistic extractive business. Which I'm a, okay, I got to go back one. I'm a Georgist, okay? I believe there should be land value tax should be a principal form of taxation. I believe there are two forms of capitalistic activity: there's generative and there's extractive. And I believe that land ownership, not property building, not property development, not land development, not farming, okay, but land ownership is largely extractive. If you buy a, I, I sold a property in Bayswater on principle in London in 1996, 'cause I don't believe in being a Bayswater landlord. It cost me £700,000 in [ __ ] tax-free capital gains. Right. But I, it's not my job to be a landlord. That's not adding value. What I've done is I've bought the right to tax the younger generation. And I don't think that's a right I should have. Okay. Now, I would also argue that to a large part of Meta and Alphabet, not all of, not all of it, is largely extractive. It's in other words, we can know enough about who's making money that we can basically extract just enough, it's a parasite. Okay, enough of their profit so that they still survive, but where they can never actually become rich. Okay. I mean, there are there are forms of advertising on Amazon where if you give us money as Amazon, we won't put the Amazon Basics product on top of your own. I don't think that's advertising. Okay. So, part of what I want people to do is all the while you've got to be working out ways in which you can make money without going repeatedly going through, uh, Meta and Google because they are the digital equivalent of the Duke of Westminster, right? They're the digital, well, I ought to be harsh on my own. The digital equivalent of the Duke of Sutherland. Okay. Right. Okay. They're a big great extractive landowner who takes the greater part of the gains to the labor of the people working the digital land.

>> Mhm.

>> And therefore, things like influencer marketing. Okay. Uh, things like, one of the best ways you could do it is by investing in customer service. By saying, "It is now really expensive to acquire a customer because we have to bribe these two monopolistic entities in order to acquire a new customer." Therefore, my logic is, okay. Now, I think there are loads and loads of people. I think 50% of people in my business are there going, "How can we be even more efficient at giving money to..." I mean, this is what pissed me off about the back-to-the-office mandate, right? Because what it said, it was your employer saying, "We think our landlord's interests are more important than our employees' interests." That's what it was effectively saying. I would be saying, "Go and all work from home. We'll take our bloody rent bill and we'll give it to you in the form of a salary." Right?

>> It was effectively prioritizing the interest of the of land over labor.

>> Mhm.

>> So, one of the things I I would absolutely obsess about if I were a new age business is the only metric that really matters, if I'm being honest, is repeat business. It's it's it's customer retention. Mhm.

>> Um, that's a really because it means that people who have complete information all the way down from first discovering your existence to actually experiencing your product. Okay? Those people, uh, knowing everything they know and having experienced everything they've experienced, go back and buy from you again. That's a really, really reliable indicator of how good a business you are. It it's an indicator of how good you are at creating, you know, uh, intangible value, tangible value, providing customer service. You know, one of the things I, you know, one of the things I've always said is one of the worst ever framings that's happened in business is the idea of the call center as a cost center. It's not a really good call center is more important than your advertising budget in many, many businesses. I Well, I'll give you an extreme example of this, right? I think humans overweight human experience relative to artificial experience. Here's a weird one, right? I think, uh, as of last weekend, I think Southern Water is a brilliant company. Okay. Don't know anything about them. Okay. Haven't read about them in the Financial Times. They don't. Okay. But my wife was walking down the street in Deal and there was a massive fountain coming out of the out of the pavement and, um, she rings me and she gives the exact location on What3Words of where there's water spraying out of the street and she says, "Can you ring the water company?" And I go online and I ring up the Southern Water call center and ironically, the one was Northern, really, but Northerners, it makes sense 'cause Northerners are nicer than you know, they're better call center employees, aren't they? Like the Welsh, you know, you would, wouldn't you? You wouldn't have Southerners on the bloody call center. Miserable bastards. Anyway, anyway, the woman on the call center was just charming. She was just really effective. She was really grateful. She said, "They put it out. It's an emergency. Somebody else has reported this." She was absolutely brilliant. And now, I'm not making this up, okay? I think I don't know anything about the brand. I think they're fantastic. Now, in the same way, Alex Batchelor, who is the marketing director of Royal Mail, okay, they did loads and loads of research about the brand, um, you know, Royal Mail's brand attributes and they can never really make sense of it because people's attitude to Royal Mail seemed to be like completely random and polarized. And then they thought of one bit of research and they did one extra bit of research and discovered your attitude to Royal Mail as a brand was almost entirely predicated, not exclusively, almost entirely predicated on whether you like your postman. And my argument is that in brand terms, the personal actually carries much more weight. There's much more opportunity which calls something a brand quake. In other words, I can't remember who coined that phrase. It might be the people in Category Pirates. But a brand quake is where you create a moment where it's so remarkable that you actually rethink your entire relationship and perception of the whole business. I absolutely adore, uh, our postman. I think he's absolutely fantastic. Uh, and as a result, I've, you know, if anybody criticizes Royal Mail, I'll actually leap to their defense. Um, and actually, let's be honest, I've never had anything go missing in I've lived in the same place for 20 years. I've never had a few things are late. I've never had anything go missing. Okay, which is pretty amazing when you think about it all. Now, yeah. I mean, there are a lot of things, by the way, where companies are really good, but in a way that's invisible 'cause you notice the letter that goes missing, but you don't notice the 6,000 that arrived. That's one of the reasons you need marketing because the the world, the world is full of informational asymmetries. Really, really important to know that because there are things we notice and there are things we don't notice. There are things we talk about. There are things we don't talk about. And the world is absolutely played with these informational asymmetries. And one of the reasons you need marketing is to actually redirect people's attention sometimes to the things they're ignoring because they're not very salient. You know, the fact that your post arrives, nobody ever says, "You're amazing this morning. All my letters arrived." I mean, there are all there loads of reasons you need marketing. Okay? And the definition of marketing that's sort of prevalent, uh, today is really a completely mythical oversimplification created by the tech industry to, uh, effectively maximize its own influence and opportunities to sell. Um, you know, as simple as that. I spoke to someone just, uh, yesterday actually, at a pub lunch with someone who runs a, uh, marketing director of a big pubco. I won't give away, give the game away, um, but they spend 6 million a year on leafleting.

>> Wow.

>> And their argument is that's we, you know, we've done the measurement of efficacy over the long term. Okay. That's what works. Everybody in the finance function goes crazy about it because they say you should be doing this digitally. And their argument is this is an effectiveness measure. It's not an efficiency measure, right?

>> So, so let's let's stay on that then for a second. So the

>> So I wouldn't rule that out, by the way. I if if I'm if I'm an entrepreneur, go and do direct mail. Go and do physical direct mail 'cause your competitors won't.

>> 'Cause they're all a bunch of geeks who go, "Why would I use a 19th-century technology?" But the point is that a lot of marketing is game theory. It's just what's nobody else doing? I'll do that.

>> Yeah. We've done it loads of times, haven't we? We got our top 20 dream clients and got their faces printed on $100 bills.

>> Brilliant. And sent it to them in the post and, uh, it was all about

>> Let me guess, you got about three bits of, did you get three?

>> It's it's incredible for we we have an outbound agency, right? So we're like a sales agency effectively that has the best follow-up hit rate out of anything we do. And it costs us the least amount of money. So in terms of if I had 10 of those and I was to follow up and say, "I sent you something strange in the post," we're probably guaranteed 50% of those are going to book meetings with us straight away on that phone. They don't necessarily need like, "Who are you? Where are you calling from?" No, there's not none of that needed. So

>> There's also a thing which is reciprocation bias, which is in sales. Okay. I'm I'm I don't really distinguish between sales and marketing to be honest, because, uh, uh, and actually, I don't even distinguish anymore between marketing and R&D. I think they're the two fat-tailed parts of the business. Which when we say they're fat-tailed, there are, and this is Nassim Taleb, the, you know, world's most greatest proponent of the fat-tailed distribution in terms of black swans, okay? The main reason you market is not actually to optimize efficiency over time. It's to look for black white swans, sorry, um, black swans. And actually, marketing is fat-tailed in that 10% of what you do probably delivers 120% of the value. And therefore, judging it on a day-by-day granular level is a totally mistaken approach to marketing because like R&D, like venture capital, your 10% of major hits, okay, pay for all the losses and then some. That's how you should look at it. And that's

How you should look at it. I think you know the whole process of where a business interacts with the real world has to be fat-tailed because real life is fat-tailed.

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The mythical bit of the business which is dominated by procurement and finance where everything's neat, proportionate, predictable, deterministic. Okay, that's just a lie which is created for managerial convenience. A real business, assuming it operates in the real world, is an interface with a world which is chaotic, plagued by anomalies in human perception, plagued by trends, plagued by, you know, competitor behavior, loads and loads of random events. And the phrase I always use, right, is you don't find many entrepreneurs at a chess club. Where you find entrepreneurs is bridge clubs, poker tables, casinos, blackjack. Probably the greatest, I would argue, maybe the greatest entrepreneurial analog might be poker.

Which is thinking in bets, if you've read Annie Duke's book, by the way. Thinking in bets. It might even be backgammon. But entrepreneurs want to play a game which is like real life, where it is how you respond to chance events that determine success. They don't want to play a reductionist game like chess, where the rules are all already written and where you know effectively what you know. In other words, what's a legitimate move at the beginning of a chess game. Also with chess. Okay, there's another reason why an entrepreneur is interested in chess. What happens if you play the most brilliant chess game of your life? You get one point, right? Okay, you get one point for a win. Huh? Okay, it's Jeff Bezos made this point. He said, in baseball, you can only score four. In business, you can score a hundred, a thousand.

If you're a brilliant, if you're an entrepreneur, poker's interesting because when you play the best poker hand of your life, you get to retire, right? It's major, right? Chess game, you get one point. Nobody, nobody who's interested in entrepreneurialism is going to play a game where you get one point for being a total genius, right? Yeah. What's the point?

So then is the, that's an interesting moment. So is the universal shared factor of being an entrepreneur just that decision-making is viewed differently? The thing I always notice is that entrepreneurs are effectively interested in actually, they're very, very happy to get lucky. They don't necessarily want to be right. They're just happy to get lucky. I mean, you could write a whole book on effectively the essential role that entrepreneurs play in any business ecosystem, because it is effectively R&D. And they're more, you know, they're more interested in outcome than they are in argument. The quality of the outcome is what matters. What I always notice about them is that if you go to someone in a large corporation and you point out an anomaly, it annoys them or they try and ignore it. If you go to an entrepreneur and you point out an anomaly, they get excited by it because they see it as an, you know, arbitrage opportunity or an opportunity to game the system or, you know, whatever. Property developers are like that. They're always looking at, you know, what's everybody else missed. They're not interested. You see, if you're in a corporate environment, you want to know what everybody else knows so that you can demonstrate your rightness. If you're an entrepreneur, you want to know what nobody else knows so you can actually outplay the [ __ ].

I think it was J. Paul Getty. There's a wonderful thing in that documentary. It's a drama entry about the Getty kidnapping where I think the Getty family originally got rich because they noticed a train struggling to cross a patch of desert and they thought, "That's strange. What's going on?" Clearly, the fact that the train is struggling means there's a dome in the land, which suggests there might be oil. Now, in the same way, entrepreneurs are totally happy to take on board utterly trivial anecdotal information because they're not in the world of proof, which is argumentation. They're in the world of discovery.

And I mean, there is a criticism of the scientific movement that the scientific movement has all been about doing things you prove rather than discovering things you wouldn't expect. And therefore, it involves a massive misdirection of effort in terms of, you know, endless incremental refinement rather than penicillin, Viagra. I mean, how did they, okay, how did they not know that COVID was airborne for nobody? That's crazy.

Okay. Right. I thought it was airborne. Right. Uh, for various reasons. Okay. It was obviously getting. Okay, this is my totally shambolic, totally [ __ ] unscientific approach. Okay. I've got a friend who's a nephologist in Canada. She was getting all her Amazon deliveries, getting the postman to put them in the garage and leaving them for four days and then she'd bring them in and unwrap them because she thought, "It's a coronavirus. It's therefore spread by fomites and physical contact." And after I listened to that and then after about three weeks, I said, "If that were right, postmen would be getting really ill." Right? We haven't seen any data that says that, you know, postmen turning up every day. He's not saying, "Oh, sorry, I'm rushed off my feet because everybody else is sick with COVID." Maybe it's not. Okay. So, I went and bought a Philips air purifier. And I got completely rubbish when I said I bought the Philips air purifier because I thought it might reduce the chance of transmission within the home. It's not airborne. It's not airborne. In any case, they said the HEPA filter isn't fine enough to remove the virus from the air. I said, "Well, hold on a second. Does the virus travel around in the air on its own, or does it float in the air on bits of sputum?" Because if it travels in the air in bits of sputum, they... Oh, no. No. If it's that big, it can't be airborne. Right? Don't know where they got this from. And I said, "Have you ever smoked a cigarette?" Right? If you smoke a cigarette, there are massive particles in cigarette smoke. I mean, they're huge, right? You don't need a microscope to see them. They're huge. And what do they do? They float around all over the [ __ ] place because at a small level, the properties of air, it's almost like a bit of. Have you ever seen those spiders that actually they throw out a huge bit of spiderweb and they basically surf on it? They catch a breeze and they can travel like huge distances by just riding on the wind by throwing out. So spiders knew this.

And all I'm saying is I think everybody was so frightened of putting their neck out and going, "What if?" They're evidence-based just as bollocks. Right? This is Roger L. Martin, my personal guru in Selengari in the business world. So don't listen to me. [ __ ] waste of time. Go and read the books written by Roger L. Martin. He was the dean of the Rotman business school in Toronto. Okay? Go and read his medium posts. He's, I think, the best, you know, strategy thinker. He's the heir to Peter Drucker, basically. And he says this whole evidence-based thing is a ridiculous barrier because there's no evidence about the future. What was complicated about the bloody coronavirus was novel. It was novel. Okay? It wasn't the same as other coronaviruses. Therefore, the evidence you had about past coronaviruses may or may not have had any bearing on the behavior and transmission of this one. But I, you know, I think it's time. I think it's time we occasionally have the right to say, "I think science is a bit [ __ ]." Okay? Because we fetishize science completely. "Oh, it's scientific." "Oh, it looks scientific." There are fields in which that is entirely legitimate. I'm sure in cosmology, okay, the science is pretty legit. I'm absolutely sure that in elements of engineering, okay, it's totally legitimate to be scientific. This is what Roger Martin said in his nudge talk. Aristotle specifically said, you can only use the scientific method in fields where things cannot be different from the way they are. So tomorrow, gravity is going to be the same as it was yesterday, or else we've got far bigger problems to worry about. Okay. Right. Okay. Right. You know, there are certain aspects where the rules don't change. There are enormous parts of life, and Aristotle would say the greater part of life involves decision-making in fields where things are different. And therefore, demanding that everything you do in a fat-tailed chaotic world necessarily meets the rules you have laid down for operating in a totally deterministic and predictable world is a complete misapplication of the scientific method. I think, okay, cops would have been done a better job of solving the COVID problem than scientists would have done. Two things about, few things about cops. One, they know that they don't have all the information they need. Secondly, they accept the fact that some of the information they get is misinformation because people are lying to them. "Wasn't me, officer." "Didn't notice a thing." Right? So, cops are used to operating, detectives are used to operating in a world of imperfect, asymmetric information with a high degree of uncertainty and where every situation is slightly different from the last one. Now, there are good checklists cops go through. Door-to-door inquiries, collect DNA, look for fingerprints, right? But cops effectively follow a two-phase process, which is there's the investigative phase, and then eventually you have to arrive at an evidential phase. You have to find out who did it, and then you have to prove they did it. Now, in the investigative phase, they will make use of anecdotal information. They'll make use of information that has no evidential value. You know, "Did you notice anything unusual?" "Well, there's a bloke in a white van who drove past six times." Sometimes you don't rely on the evidence you already have. You do things to generate more. So, in the pure scientific method, you can only do something based on evidence. In police world, you do something to generate evidence. Like you stake out a house, right? Or you stage a, you know, um, uh, you know, honey trap or whatever you do. Sometimes you do to know rather than know to do.

And cops are totally happy. And I think do a pretty good job here actually, eventually. Not so happy about the Lucy Letby conviction, but I think we'll park that right. I don't think that's safe. Not saying it is. I'm not saying it's wrong. I just, you know, I think there is enough dissenting expert opinion here that we have to actually rethink that one, or at the very least, she deserves a retrial because I, I mean, I could have, I could have mounted a better defense case. Right. Right. Now, I would have gone on a bit. But um, but actually, I think they mostly do a pretty good job. And they're happy operating in what a friend of mine, JP Castlin, calls dynamic uncertainty. Okay, so, you know, what is uncertain is constantly changing. What you know is constantly changing. The context in which you are making the decision is constantly changing. And that's what, that's the world in which entrepreneurs operate. Cops operate. I would argue that's the world in which marketers should operate. That's the world in which good scientific research should operate. Um, because actually, the bit of the science that appears in the scientific paper is actually a reverse-engineered narrative of what actually happened in the route to making the discovery.

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So, I suppose, so. Let's take that thinking then. We don't live in London, right? But when we come back, there's a new artisan coffee shop or burger place or something. Some of them really stick and they just become institutions, and some disappear immediately. What's the difference between the ones that stick and the ones that don't?

Some of it's luck, some of it's timing, some of it's the competitive environment. It's always worth remembering. Okay, any business, there are elements beyond your control. That's why finance people retreat into a world of artificial certainty of, "Let's optimize for internal operational efficiency." Because once we actually factor the real world into our equations, it all becomes too messy, and my brain hurts, and it doesn't fit on a spreadsheet. Right? Let's be absolutely honest about this. Right? If we're being brutally honest, in any business startup, um, timing, over which you don't generally have control, plays a remarkable part in whether you succeed or fail. You know, if you happen to be the first gourmet burger chain versus the second one, you know, the consequences are going to be very different. The brilliant documentary, I think it's a BBC documentary on the history of the British sandwich, which is really, really interesting because it, in other words, it went from the joke of the British Rail sandwich to kind of Pâté and gourmet sandwiches. But it's an extraordinarily complicated, um, and path-dependent process. There was someone at Marks & Spencer who was decisive because he worked with Allied Bakeries to work out bread that would survive overnight, therefore you can produce sandwiches centrally rather than having to make them on-site. And so, you know, the person who really understands all this is Matt Ridley and his, and actually my late colleague Sam Tatum, with his book "Evolutionary Ideas." There's a path dependency to things. You can launch something too soon and nobody, nobody can get their head around it, you know, literally. So there's a path dependency that a lot of things, a lot of ducks have to either accidentally or intentionally be lined up before you can succeed in something. You don't necessarily fully control those variables or control them at all. Um, some of it will be luck. Some of it will be probably, you know, psychological branding. Some of it may be unbelievably trivial, by the way. And there's a guy I recommend here called Mark McCullik, who's like a quick service restaurant, um, hospitality marketing guru. And one of the things he points out is that a lot of cafes and restaurants fail to do the obvious because they know that they sell salads or they sell premium burgers. But the person walking by, unless they're an avid reader of Time Out, doesn't know that. So we have this interesting discussion in the office. We were talking about Wajaka, and nobody knows what's a chimichanga, what's a, you know, what's a burrito. People get muddled. And I suddenly said, "Actually, how many random punters in a London location, particularly if they're not even native, will know that Wajaka is a Mexican restaurant in the first place?" And Mark McCullik told me the story of a woman who walked for nine years, every day, walked 200 yards past a branch of Chop'd to buy salad for lunch. Now, now she just assumed, she saw Chop'd, she assumed chopsticks. She thought, "I don't like spicy food. I'm going to ignore that." Right? So, literally nine years of her life, that was like the person who worked at Ogilvy when they were at Lancaster Bridge who asked somebody, "What's the closest tube to the office?" And they said Embankment. And for the first two years at work, she traveled down to travel Charing Cross. And literally after two years of this, she was walking back to Embankment and someone says, "You go and live in, you know, you live in Finsbury Park or wherever it was. Why the hell don't you just walk to Charing Cross?" She goes, "Well, I change at Charing Cross every morning." And she, she was literally changing trains. She did that 400 times before she realized that effectively they're more or less, I think, you know, it's an extra two yards walk to get to Charing Cross versus the other one. Quite often it might be something. It might be a bottleneck, a mental bottleneck where loads of people are walking past and they don't know what you do. Now, I'm talking to Mark McCullik on a Zoom call with the guys who run Chiwala, and they said, "We, we realize this and we're going to put 'Indian Street Food Cafe' on the outside of all the restaurants." And Mark McCullik, this is where I go, "Okay, this is one of my, you, I am not worthy moments." Okay, because I don't think I would have thought of this in 100 years. Martin just without pausing just says, "Put Indian street food and cafe," because then people who don't like Indian street food can still use you as a cafe. Interesting. And you're now, you now are solving two jobs to be done rather than just one.

Now, sometimes I suspect major businesses fall or succeed on the basis of things they've never even noticed. This is why I think marketer as detective. There's a very brilliant planner at BBH who wrote this fantastic piece called "The Planner as Detective," effectively saying that, you know, one of the things, you know, have you read all the Sherlock Holmes short stories? If you read nothing else, seriously. The other person who is hugely influenced by them, I discovered as a kid, was Rick Rubin. He had an aunt who introduced him to all the Sherlock Holmes stories, and he just fell in love with them. And I just, seriously, they're brilliantly written in like the 19th century. They're written in perfect English prose. They're unbelievably readable and enjoyable. And they're everything. I mean, interestingly, of course, Conan Doyle was a doc. He trained as a doctor. So I think what he's doing is kind of applying the skills of a diagnostician to detective work. But it all comes under this category of detective work. Sometimes, you know, in the Sherlock Holmes stories, what Holmes often does is he notices something that nobody else thinks is important. The dog that didn't bark in the night. And that, that's why, by the way, I mean, one of the things I think that's really valuable in any entrepreneur is curiosity and no sense of proportion. Because if you're in a big business and you start talking, one of the things I noticed, you start talking about like the design of the website in a board meeting. You, we're here to be talking about, you know, whether we buy 747s or, you know, Airbuses. A bit out of date there, aren't I? 787s or Airbus. What are you talking about this trivial thing? But you can change the design of an airline website and it'll make you 20 million a year.

And so quite often it's a bottleneck that means success. It may be some random psychological factor. It could be a comp. Read a book. Everybody read a book. Okay, you can buy it for four quid. It was written in 1916 by a guy called Robert Updegraff. It's called "Obvious Adams." It was one of David Ogilvy's favorite books. And if you read nothing else as a business book, it's literally 60 pages. You will start reading the first two or three pages and you'll think, "Why has Rory recommended this hokey [ __ ]?" By page eight, you'll go, "This is better than the Harvard Business Review." It's just a, it's just a book, funnily enough, featuring an advertising guy, but it doesn't have to be an advertising guy. He's really a marketing problem solver who achieves his amazing success by noticing things that are too obvious for other people to talk about. And I think, I think that book is an absolute prize. Amusingly, which really delights me, is every now and then I plug it on a podcast, and I go onto Amazon, and "Obvious Adams" is number three in advertising or marketing on Amazon, and it fills me with joy to think that this book written in 1916 has achieved this, you know, is still being bought, and it deserves to be bought because, you know, like Ogilvy on advertising, like Claude Hopkins, um, all of those old advertising books are still worth reading. James Webb Young, all of those books are still worth reading because those people were going, basically, they were going far enough up to uncover truths that are really universal human truths about how we react to communication, not fanciful tech models of how humans should decide and act.

Two more copies sold this afternoon. Definitely. Did we think about the? You can read it in a single [ __ ]. I mean, it is literally 60 pages. There we go. That's this afternoon's plan. Um, so we think about the traditional current-day marketer, and we're thinking about this kind of unpredictable world. There'll be young marketers now. There's probably a few different poster boys. We've got Rory Sutherland. You can be pinned up on my wall. I'm just a [ __ ] man. Look, seriously, there's a lot of people know this stuff. But what I don't understand is why what the advertising and marketing world failed to notice is they're much more interesting to people who aren't in marketing and advertising than the people inside those worlds actually notice.

And my all I'm all I'm trying to do really is if some of this information just enters. I'm not, I'm not claiming to be right about anything. This is why I'm dissing the scientific method because it's all about being inarguably right rather than solving a problem. And you know, I'm dissing the misapplication of the. My brother's an astrophysicist. I'm perfectly happy for him to get on with whatever he does. Um, but the misapplication of what is pseudoscience. In other words, something that has the appearance of being scientific and logical, which actually is a gross misdirection of effort, or at least is only works over the shorter term before it starts being gamed or creating distortions. And I think, you know, one of the things entrepreneurs do actually is they wait for big companies to get trapped by their own metrics. The pursuit of those same metrics then effectively drives them into a corner, which leaves a market space available for somebody else fundamentally. And, you know, um, so all I want people to do really is to go, every time I've got a problem, there may be a psychological solution to it. Maybe the problem is perceptual. It's to do with, um, psychological perception. It's to do with, um, people's own epistemology. Uh, maybe the solution is a creative thing. Maybe the problem is a trivial thing because psychology doesn't have a sense of proportion. Uh, you know, in the sense, it's a bit like poker in that in poker, you have a thing called a tell. Yeah. Which is usually a very small thing that the signaler is unaware of, but which the other poker player spots. What I'm saying is that if we demand this ludicrous burden of proof that you can only actually try something if you can already prove it works, we're basically turning our back on any business has now decided that whatever I want to be in the future is, I'd rather be certain than get lucky. Now, I'll give you an example of this. One really valuable but almost impossible to predict and to evaluate quality of a business is just being really [ __ ] famous, right? Because people can't buy something if they don't know it exists. And they're less likely to buy something if they've never heard of it before. But also, if you're indiscriminately famous, you discover who your target audience really is, rather than being focused on those people who your algorithm tells you it is.

Now, if you get more and more focused on marketing efficiency, you get trapped in a local maximum. You never discover new markets. I would argue that the, that the market for lots of things, there's a lot of actually consumer plurality. I talked to a guy who sells very high-end organic food, and he looked at his existing customers and said, "What's interesting about it is you'd think you'd be able to stereotype the kind of houses my customers would look in." He had a deco at Google Street View. No, actually, one great thing about being famous is that people come to you with opportunities you never even envisaged. If you're not famous, you have to make all the opportunities for yourself. It's a one-way street. And one of the things I noticed about accidentally being famous is people invite me to speak at conferences that how would I have targeted? I didn't even know they existed. Right? They go and actually sometimes these conferences are really massive, but they're in a different field that I'm just not aware of. And if you're so there, you know, one of the things is if you demand that everything is quantifiable, you can't do valuable things that aren't precisely quantifiable. But those might be the most valuable things you can do.

So when you think of the traditional marketer, obviously I'm sure you're getting peppered with questions about AI. How do you think that is going to change?

It all depends on what we, we shouldn't, we should remember we still have some degree of agency, and it all depends on what we ask the AI to optimize for. And my concern is that AI will fall into the hands of people in procurement, in finance, right, and they will ask it to optimize for short-term profitability. Now, I would argue that AI when used speculatively in the world of, right, okay, this all comes down to a philosophical distinction about what a business is for. And since about 1970, no, since 1980 something, actually since 1990 something, the overwhelming dominant assumption about what is the purpose of a business is shareholder value creation. Mhm. And therefore, the short-term pursuit, never mind the fact that it's incoherent because it doesn't ask which shareholder over what time horizon, because everybody's taking that to mean the next financial quarter. Okay. Generally, the way you will achieve those things will weight you disproportionately towards cost-cutting to a point which works at first, by the way, and then proves catastrophic because it actually, you. Okay, Octopus Energy is now bigger than Centrica, than British Gas, right, as an energy provider. I think that's true. What are they focused on? Customer service. All their ads talk about their customer service. What are they doing? They're doing radio ads, brilliant, because radio is totally underexploited as a medium. Okay. You know what they will do is they will overestimate, overoptimize for efficiency and underoptimize for discovery. It's all to do with the explore-exploit trade-off. It's an algorithmic thing. And if you go back a bit earlier, before Milton Friedman came up with this idea of shareholder value, um, generally what that means is that the senior management of an organization create incentives that align them with the shareholders' own interests. Those incentives do not trickle down to anybody much below the C-suite. So you end up with a fundamental misalignment in a corporation where there's a group of people at the front, at the top, who are kind of managerial Ponzi scheme who have massive share options and things aligned with the shareholder interest. Meanwhile, the people who are trying to do a good job for the customers or look after the workforce are entirely at odds with the management because nobody normal gets up in the morning and wants to enrich shareholders. You might want to serve customers or make sales or add value, but nobody's motivated by that. No, nobody normal. Okay. So you create this autocracy at the top. If you go back a bit earlier to a guy who won the Nobel Prize for economics, actually, called, um, Herbert Simon. Herbert Simon had a completely different view of what a business was for. And his view was that profit was not an objective of a business. It was a necessary constraint. That in order for a business to do its business, it had to make a profit to maintain its own existence and to justify its existence and to attract a reasonable degree of future investment. But that the purpose of a business was the discovery of new sources of value. New sources of value mostly to the consumer, but you could equally argue new sources of value to the workforce because you, you would argue that if you can find a way of rewarding your employees which doesn't involve money, flexibility of work, you've discovered a new source of value creation. You've discovered a new value exchange. So the purpose of an organization was to look at its resources and ask how it, how its present and future resources could be deployed towards the creation of new forms of valuable exchange. If you look at Peter Drucker, he said the only two valuable activities in a business are marketing and innovation. Everything else is a cost. That chimes completely with the Drucker. Um, and without getting personal, you know, um, Milton Friedman was weird, right? He literally, I mean, you know, I mean, very, very great writer, very, very interesting man, very persuasive man. Uh, interestingly, he couldn't, fascinatingly, had a very rare condition. He couldn't tell the difference between music and random noise. Never heard of that before. There's somebody else famous. It might have been Che Guevara or somebody else or Simon Bolivar or some weird, but apparently it's incredibly rare, which always strikes me as a bit interesting. But, um, but anyway, I digress. Uh, but that strikes me, okay, the quest for new forms of creative value exchange strikes me as something that everybody in business can get interested in and motivated by. The employees going to find it motivating. You know, R&D people, you know, it fundamentally focuses you towards the future and also towards the customer. The shareholder value movement fundamentally will always focus you towards short-term operational efficiency improvements, which are fine as far as it goes, but that's not a 10-year, that's not a five-year ambition, is it? The shareholder value movement has also been a gift to tech because tech comes in on the back of basically, "We can get rid of your staff and replace them with some form of automated alternative." Now, I would argue that in the Drucker, in the Drucker-Simon model of the world, your call center should be seen as a major source of interesting customer information and competitive advantage, and a source of customer loyalty. In the modern vision of the world, it's something to be replaced with AI. Now, by the way, I think customer service can be massively amplified by AI, but that requires an opportunistic mindset, not an efficiency-driven mindset. What we've done, and the Labour Party's hardly helped in this by basically spreading a doom, you know, spreading a narrative of doom over the entire economy, is that if the AI is in the hands of people who have an efficiency mindset, it will actually be catastrophically bad and awful. And those people, by dint of the power they have by alignment with the dominant shareholder value paradigm, have most of the decision-making power. So actually, AI will just make [ __ ] decisions faster.

M. I was going to say, so if you've got short-term? Because it all depends where you start, right? If you take, and this is totally gross and over-implication, but if you take large language models as a very sophisticated form of predictive text, the thing we all know about predictive text, right, is if you start with the wrong letter, you'll never get the word you want. I literally searched on Google Maps for "above," but I typed the "A" as a "Q." Now, to any normal human, it was pretty obvious I was looking. No, it was coming up with places in [ __ ] in Iraq. Right. Okay. Right. Because if you get the first, I'm so sorry, I'm swearing. I'm Okay. But if you get the first letter wrong in that model, okay, you'll never get what you want. If your foundational assumptions are wrong and you use AI, you'll just get to a stupid place faster. And the worst thing about it is everybody will think it makes perfect sense.

Yeah. Yeah. Yeah. I think that's the danger that we. I mean, there was a study done recently about critical thinking is on the decline. The skill of critical thinking because more people are doing computer science degrees. I heard in the US than are doing all humanities degrees put together. Wow. Actually, in the future world, we actually want philosophy graduates, classics graduates. I'm self-interested there. But it worries me. I mean, it really, really worries me because you have this really weird world where lots and lots of people are being trained in a deterministic mindset. You know, it's like, it's like the school's been taken over by the chess club, you know, and that's a valuable form of intelligence, don't get me wrong, but it's not particularly well-suited to the majority, I think, of problems we face in the world. Let me give you an example. This might be [ __ ]. I have no evidence why it will work, right? No evidence at all. I don't think anybody will try it. I think you could reduce unnecessary GP visits by 50%. Well, very simple. At the moment, if you want to see your GP, you ring up at 8:00 in the morning and it's a [ __ ] show. You simply make it publicly known that pharmacists are allowed to book GP's appointments for tomorrow. Only pharmacists. So, if you want a GP's appointment for tomorrow, you go to the pharmacist. Now, the pharmacist will go, "Well, before you go to the GP, let me have a look at that. Ooh, look, here's some ointment. Why didn't you buy a hairbrush and some toothpaste?" Right? Pharmacists can now prescribe antibiotics. Pharmacists can also prescribe a brilliant thing which is delayed antibiotics. A delayed prescription, which is, "Look, here's a prescription post-dated till next Tuesday. If you're still feeling [ __ ] on Tuesday, come along and cash it in." But you now, 95% of those people will get better in the intervening period. They won't want to spend the eight quid on cashing in the prescription, but they've got away with a bit of paper, so they feel reassured. No need to go to the GP. Now, I don't know if that works, right? It's just a hunch.

I think it's worth testing. But if you go, if you have it, literally a bunch of, you know, tragic nerds in procurement and compliance and everything else through whose hurdles we have to pass before you can even try something like that. The McDonald's breakfast and the McDonald's drive-thru window both were massively punished by McDonald's when they first appeared because it was a deviation from their standard model. Nearly all innovation in large companies emerges as an act of corporate disobedience. We actually had some people come in at Ogilvy and they looked at the research and said, "Has it not occurred to you that nearly every time you do something remarkable, something in the fat tail, right, it's because somebody basically deviated from the normal process?" If you look at Nespresso, they only survived because they lied to Nestlé about their profit figures. They went rogue. Okay, it's a. We don't know because we only know. I'm sorry about this. Oh, bugger. I don't know who that is even. Might be a cold call. Probably. Probably. If you look at the really successful things that emerge out of large companies, it's nearly always because someone goes rogue. Now, we need to look at this, you know, just as 80% of scientific discoveries are not made through the conventional approach to science, we need to ask the question, okay, well, if that's true, science doesn't need just to be more scientific, it needs to be better at getting lucky. How do we increase the surface area exposure of scientific discovery to lucky accidents? And in the same way in business, if we've literally find out that the only way in which large corporates produce something significantly different and innovative, what you might call a category-defining innovation, not just a better version of some [ __ ] we're doing already, but I mean something that creates a new category.

If you're a company, we need to say, well, okay, what part of our business activity needs to actually not be subject to the usual constraints and rules, because some part of all this [ __ ] is actually [ __ ] us up. So if you're a leader or a company using psychology, how, how do you start to drive innovation within a company?

Uh, you accept, first and foremost, that you cannot use what you might call this. This is my complaint about marketing, right? So the nerds have come in, the tech people with their lackey in, you know, consulting, because these management consulting firms aren't making any [ __ ] money out of strategy, right? They're total [ __ ] lie. They make all their money. They claim to be strategy consulting firms. They make all their money from basically selling the implementation of tech projects. So it's effectively a kind of Baptists and bootleggers conspiracy between tech firms and consulting firms, which is, we sell the tech, you get the completely unnecessary hours where 200 Oxbridge graduates swarm all over the place producing a load of [ __ ] decks for no readily apparent reason. Right? It's all [ __ ]. Okay? It's just plausible [ __ ]. So everybody buys into it because they've got a plausible story around operational efficiency and cost reduction, and they're mostly dedicated towards efficiency, not opportunity. Now, one of the things the tech people have sold is the idea that marketing should wash its face. But the most valuable things I've done in 35 years in marketing, I've done about 10 things. David, 10 is probably. I've done three or four big things and maybe three or four slightly smaller things that have been valuable in perpetuity. Right? Some guy at Ogilvy in 1968 suggested to American Express that they put "Member Since" on the card. Okay. I would argue that "Member Since" on an American Express card has been worth well in excess of a billion dollars to American Express. Ogilvy for that idea probably got paid 500 bucks, right? Uh, there's an idea that Ogilvy Australia came up with for a large multinational consumer brand which has undoubtedly made them billions of dollars. I won't say what it is. It is still making them millions and millions of dollars 10 years after they had the idea. Out of that idea, what do they make? $350,000 Australian dollars. So you have a billion-dollar idea for a corporation in marketing, right? And you get to buy a flat in a [ __ ] part of Sydney. It's not really. So the risk-reward thing is not really appropriately calibrated for marketers. And let me explain why, okay? Because you are held responsible now in this nerdy world of like procurement and thing for every penny of cost you incur. But you can only claim the value of what you do for a limited time horizon after you do it. So if you have a break. Now, I started off whining about this, saying it's a waste of time working in advertising because it's like being J.K. Rowling where they tell you you can only get the royalties, right? It's like being J.K. Rowling where they say you can only get royalties on the first edition. After that, all the movie rights, all the other stuff we do, that's ours to keep. But we'll pay J.K. Don't worry, we'll pay you royalties on the first edition. So if you have a marketing idea which is literally transformational, right, you're held responsible for all the costs. And by the way, all the times where you fail to come generate one of those breakthrough ideas or they don't work. All of that is on the negative side of the balance sheet. If you create a massive disproportionate unbelievable positive, this also applies not just to agencies, applies to people working in marketing. And this never occurred to me because I've been in an agency for 36 years. It's exactly the same [ __ ] for people in marketing. So the guy, I'm not saying we deserve. We had an idea for a business which changed four lines of a call center script and made them £2 million a year. Right? Not just that year, but every year. Now, at no point can they claim, can they offset a penny of marketing cost in 2025 for the value that was delivered for something they did in 2020, 2019 actually. They made $20 million through marketing overtime by doing better marketing, and yet, okay, as far as the finance function is concerned, yeah, we're not interested in that. You did that in 2020, but it's still making money. Yeah. Yeah. But, but that, that, that came into that came into quarter three 2020. You can't imagine having a pharmaceutical company where you just wander into the laboratory and you go, "Did you invent a blockbuster drug today?" "No, no, we did. We did five years ago." "Yeah, I'm not interested in that." "Did you invent a blockbuster today?" "No." "Well, you're all fired." That's basically what it's like being a marketer. It's [ __ ] because these people effectively are operating on a tech-injected time scale of every single unit of cost has to be matched to a unit of revenue.

Now, the way you do marketing well. David Ogilvy said in his entire life, he only had five really big ideas. I think he's doing himself down because I think he had a sixth idea, which was the creation of the kind of culture within Ogilvy, and that was, you know, as big an idea. But he said, "I only had five really big ideas in my entire working life." It's probably true. Let's face it, we accept this with musicians, you know, the one-hit wonders. I think he died recently, but I think he lived in Croydon, didn't he? Peter Sarstedt, who wrote "Where Do You Go To My Lovely?" One of the greatest songs ever written. I don't know if he ever wrote anything else, to be honest, but he was allowed to make a perfectly decent living out of that. And I think his kids probably inherit some of the royalties. If you have the equivalent idea in marketing, which is the ideas we should be really aspiring to platform ideas, ideas that grow on which you can build, that last, that build value over time, there's no incentive to do that. Whereas, if you say, "We've got a, you know, 3% increase in click-through rate on the so-and-so performance thing," everybody goes, "Well done. Get to keep your job." What a load of [ __ ] bollocks. So these finance people are there throwing out these stupid [ __ ] metrics all over the place, right? They have extraordinary. It's like the Soviet Union. It's Soviet-style capitalism. Okay, you're not working for any sensible end for how do I. Now, the exception to this is family-owned businesses or privately owned businesses. Four out of the five winners of the IPA advertising effectiveness gold awards in the last year. The fifth one was Guinness. And by the way, Diageo is [ __ ] marketers who play the long game, right? This strategy to make Guinness really, there's a great podcast with John Evans on this. This strategy to make Guinness really, really popular and the number one beer in the UK. They started work on that 15 years ago. They're serious, you know. They know what they're doing. You know, if you're going to invest in any large company, those guys are pretty good. Um, however, the other four were Specsavers, McCain, Yorkshire Tea, and the fourth one is also a privately owned business, family-owned business. Now, somebody should be saying, okay, in terms of long-term value creation over time, the great advantage of a family-owned business is one, you're not so obsessed about shareholders because you don't, because they're you. So you focus on the customer. Right? You know, 90% of the intellectual effort in business is basically involved in, you know, inflating the investor community in some shape or form. Secondly, the great thing about a family-owned business is it's free to operate and consider different time horizons simultaneously. What do we do next month? What are we doing next year? What do we do in two years' time? What do we do in three years' time? Ford is still, by the way, sort of a family-owned business. Mars is a family-owned business. Um, I went to Texas and I kept bumping into these really interesting businesses. Buc-ee's. Have you ever been? No. Massive gas station. Oh, the Disneyland of gas stations, if such a thing were possible. It's gloriously mad. Okay. It's got a huge logo of a beaver, right? And it's by which I mean the animal, obviously. Right. Okay.

Okay. Um, where else did I go? Um, there's a there's um an extraordinary thing called HB. A Texan retailer, grocery retailer, which is so good that Sam Walton basically said, "I'm not going to compete with them because they're too good." So Walmart, you know, it's basically the closest the US gets to actually a Sainsbury's, if you like. And it's just fantastic family-owned business, H. But still run by the Butt family, etc. And I'm going, "Is nobody in PLC world actually looking at the success of these companies?" Because they're all comparing themselves with other PLCs, right? Because they've all got the, they publish all their accounts and they've got all it's great for the [ __ ] nerds who want to actually, uh, you know, uh, uh, you know, the, the, in financial organizations because what they want is ease of comparison.

If you're doing a really healthy job of looking at businesses, you go, "Hold on a second. What are the? We don't have metrics on these businesses, but all of them seem to be reliably, you know, McCain." Look at the innovation. They were a Canadian potato farmer who were suppliers to McDonald's in Canada, and McDonald's wanted to expand internationally into, I think, the UK might have been their first market back in the 70s. And they went to their American potato supplier and said, "Would you be willing to supply us with potatoes overseas?" And they went, "Nah." So they go to their Canadian potato supplier, go, "What about you?" And they go, "But Canadians, so they're really polite." Yeah. Okay. Right. And on the back of that, they've turned themselves into this fantastic.

But look at the innovation they do. M. The most significant thing, by the way, do you know the greatest beneficiary of McCain? The insurance industry. The biggest thing to happen in home contents insurance in 30 years was the invention of the oven chip because the biggest bane of any, uh, insurance company was the chip fat fire in the UK.

Wow. Because not it didn't always burn the house down, but in a way it was almost worse than that because it coated all your furniture, all your carpets, all your possessions with a layer of burnt fat, which meant that everything in your home had to be replaced. And chip fat fires, we had one when I was a kid. They were unbelievably the worst thing that could happen for an insurance company. And McCain come along, and I suppose we have to also give some credit to the air fryer here, but McCain come along basically with the oven chip, and it was absolute glorious moment of the happy day for the, uh, Britain's, uh, Britain's home insurers.

Wow. So sometimes this is what I'm saying, events beyond your control.

Rory, thank you so, so much. You, you are incredible and and so articulate. Thank you so much for joining us today. Um, it's been brilliant to have you again.

Anytime. I'm always happy. Yeah.

Beautiful. But I mean, actually, family-owned companies. Let's have a look at them. What do they do that we can't do? Okay. So, let's line this up. Guinness, Laithwaite's, Specsavers, McCain, and Yorkshire Tea.

Yorkshire Tea is owned by the same people who run Betty's Tea Rooms.

Um, and they also own Jackson of Piccadilly. Am I right? It's something. No, maybe it's somebody else. No. So, it's another coffee brand, I think. But they're all, they're family-owned and they actually run businesses the way consumers want businesses to be run, which is multiple time horizons and the search for incremental sources of value. Whereas every time, you know, you go to a business that's been taken over by like venture, you know, by the wrong kind of venture capital, you know, or it's become a PLC, basically, you know, also all those organizations because they're obsessed with with efficiency are basically assuming their customers are much meaner than they are. They're optimizing the business for a kind of mean-spirited [ __ ] who just wants to get something quite bad at as low a price possible. Now, those customers do exist, okay? The customers you're optimizing for when you optimize for efficiency do exist. They're like homo economicus. Now, people have always said in behavioral science, homo economicus doesn't exist. No, in any category, there are people who are like homo economicus. They just want the lowest price possible. There's a name for those people but which but I can't say on a family show. And the other thing about those people, they are the worst customers you can possibly have. If there's any customer you don't want, it's a [ __ ] sting who's just trying to pay as little as possible. Right? I used to talk to coach drivers who did holiday coaches, and they said the passengers you get in peak season on a coach trip are absolutely lovely. There's this group of passengers who would book at the very end of the season, the cheapest possible coach holiday they could possibly have. And they said the coach driver said the last week of the holiday season as a coach driver is the worst week of your entire year because the people are total [ __ ]. He said, "You actually would go, you'd been driving them around all week and you'd put a, you'd put a cap round for tips, right?" He said the tips would literally come to £5.47 and three people had put in a pound, right? The other 45. Now, those people, the people that all the optimization obsessives, the finance people and procurement people, the people they are optimizing the organization for are the very people you do not want as a customer.

M. Homo economicus is a [ __ ]. Right? It's not that they don't exist, it's that they're horrible customers. Right? And therefore, when you pursue efficiency, what you're, and I, I notice this all the time, which is so, you know, I, I've got a car. I've got a lease car at the moment. And I go in and I go, um, okay. Um, uh, I need the tires replaced, and I've got to have the car serviced. The car's being serviced by a Ford garage, right?

Is it a Mustang, Matthew?

And then they say, "Actually, we need the, uh, the rear tires need to be replaced, but it's an amber, not a red." And I go, "That's great. Can you replace the tires then, please?" And, uh, they said, "No, because the lease company will only allow you to replace the tires if it's an amber through Quickfit." Now, I've got nothing against Quickfit, but I've always been very happy with them. They're very good. I'm not having a go at Quickfit. Look, that'll mean another afternoon out of my working life. Couldn't, couldn't I just pay you 20 quid for whatever the difference is and you do the tires and they pay what they would have paid Quickfit and then I pay you 20 quid? No, we can't do that.

So, as a result, I, I then had to spend a whole afternoon effectively doing a video call sitting on a wall outside Quickfit to get my tires replaced because the whole thing was optimized on the assumption. This is where homo economicus is problematic. Homo economicus contains the assumption that everybody is a [ __ ], okay? And that nobody's willing to pay extra for any improvement in quality. All they want is the predefined good that they decided for. Most people in most categories are actually quite nice. They go, "Look, we all, we all need to make a bit of money out of this, right?" You know, I, I get it. I go to Unilever, I buy the toothpaste. I, I don't go and go, "What's the? I go, look, I don't want to start my own toothpaste factory. You've got a toothpaste factory. You can make toothpaste for me really cheaply. It saves me the bother of making my own toothpaste. We're all happy here. Let's not worry about whether it costs two-seventy or two-oh-five. Okay. Most people are kind of like that. You know, you know, it's a value exchange. They're happy for both parties to gain. It's not a zero-sum game. The last people you want to do business with are people who think it's a zero-sum game.

Yeah. The stingy asses.

Absolute [ __ ]. Yeah.