Sunday, September 29, 2019

Ogilvy's Rory Sutherland: "The Next Revolution Will Be Psychological Not Technological"

I was thinking of a tweet from Mr. Sutherland when posting today's "YouTube is experimenting with ways to make its algorithm even more addictive" on the frightening power of recommendation engines:
Here is his Ogilvy mini-bio:
Rory is the Vice Chairman of Ogilvy in the UK, an attractively vague job title which has allowed him to co-found a behavioral science practice within the agency.
He works with a consulting practice of psychology graduates who look for ‘unseen opportunities’ in consumer behaviour - these are the very small contextual changes which can have enormous effects on the decisions people make - for instance tripling the sales rate of a call centre by adding just a few sentences to the script.

Put another way, lots of agencies will talk about "bought, owned and earned" media: we also look for "invented media" and "discovered media": seeking out those unexpected (and inexpensive) contextual tweaks that transform the way that people think and act.

Before founding Ogilvy’s behavioral science practice, Rory was a copywriter and creative director at Ogilvy for over 20 years, having joined as a graduate trainee in 1988. He has variously been President of the IPA, Chair of the Judges for the Direct Jury at Cannes, and has spoken at TED Global. He writes regular columns for the Spectator, Market Leader and Impact, and also occasional pieces for Wired. He is the author of two books: The Wiki Man, available on Amazon at prices between £1.96 and £2,345.54, depending on whether the algorithm is having a bad day, and Alchemy, The surprising Power of Ideas which don't make Sense, to be published in the UK and US in March 2019.

Rory is married to a vicar and has twin daughters of 17. He lives in the former home of Napoleon III - unfortunately in the attic. He is a trustee of the Benjamin Franklin House in London and of Rochester Cathedral.
I'm not sure if he is still vice-chair, I thought I saw somewhere that he had set up another independent group within Ogilvy.
He is definitely a behavioral science/behavioral finance wonk. This post has a video of him talking behavioural economics with Daniel Kahneman and holding up his end of the convo.

And here we have highlights of a 2015 talk Mr. Sutherland gave along with notes/annotations.
If the format is too jumbled, scroll ahead to the jump.

From How to Shape Human Behavior. (Exploring the line between persuasion and manipulation.):
32 important lessons from this talk:

00:00:59 While the internet is the 3rd industrial revolution, Tyler Cowen’s book The Great Stagnation and Robert J. Gordon’s white paper Is US economic growth over? Faltering innovation confronts the six headwinds argue that we shouldn’t put all our money on the technological revolution because you can’t create revolutionary inventions like that twice: home plumbing, sanitation, etc. aren’t likely going to undergo any revolutionary changes any time soon. The airplane took humans from walking speed to +700 miles per hour. To do this again, given the earth’s limitations, would be pointless unless it were for long-haul flights from NYC to Australia.
[EDITOR’S NOTE: In July 2015 Airbus patented a jet that could fly from London to NYC in 1 hour as opposed to the current 7-8 hour flight time.]
00:02:56 One thing all ‘the next big things’ have in common is that they come from a place you wouldn’t expect, and when people do try and predict the future they basically take the most visible form of progress they’ve seen in their own lifetime and extrapolate upon it.
[EDITOR’S NOTE: In the documentary Transcendent Man: When Humans Merge With Technology & Transcend Biology, Ray Kurzweil argues that people routinely underestimate what is achievable in long periods of time because they leave out the radical implications of exponential growth. People can see, even in their own lifetime, how much more quickly technology moves today than it did five years ago. The law of accelerating returns argues that the nature of technological progress is exponential. For example, if I count linearly (1, 2, 3, 4…), if I take 30 steps, I get to 30. If I count exponentially (2, 4, 8,16…),  30 steps later I’m at 1.07 billion.]
 Could it be that the next improvement in economic growth actually comes from improvements in marketing efficiency; particularly in our understanding of human behavioral economics?
00:04:05 Were the percentage of successful startups to increase by a mere 10% while the % of failed startups decrease significantly because we reached a point where we understand and predict humans well enough that we could just slightly increase the odds of success, the world’s Gross Domestic Product (GDP) could be increased by up to 2.6% .
00:05:01 There are two approaches to happiness:
  • Materialistic – amass physical things which meet your needs, thus diminishing your wants
  • Psychological – redefine your needs
This means you can solve this problem in two ways: create more materialistic ‘stuff,’ or you can make people more content with ‘stuff’ that they already have.
[EDITOR’S NOTE: Recall in Annie Leonard’s documentary The Story Of Stuff: How Our Modern Markets Economy Is Destroying Our Planet that the problem with this system is that humans are currently confined to living on Earth, which is a finite planet; and you cannot run a linear system on a finite planet indefinitely. In every step of this linear process, waste is created which diminishes the system’s efficiency, and subsequently, the Earth’s sustainability.]   
 00:06:57 If you give a problem to a bunch of engineers, you’ll get an engineer’s solution, such as spending 6 billion £ renovating the train track line and trains to reduce the journey time between London and Paris by roughly 40 minutes – a perfectly sensible and pragmatic engineering solution that a mere reduction in journey time is the key to happiness. 
If however, you applied a psychological solution to this problem, for roughly 0.01% of that renovation budget you could put wifi on the trains, and for 1 billion £ you could employ top supermodels to walk the length of the train handing out free glasses of Chateau P├ętrus to all the passengers, and passengers would actually ask for the trains to be slowed down.
Why? Because the worst part of a train ride isn’t the ride itself, it’s:
  • Hauling your suitcase(s) through public transportation, or
  • Driving to the train station and finding a place to park, or
  • Finding and paying a taxi
  • Standing in line and buying/printing your ticket
  • Going through customs & immigration
  • Finding the right seat
  • etc.
This is where the train company should be focusing its efforts: reducing pain, not duration.
This is the difference of philosophy in believing we can solve humanity’s problems by measuring them making it more efficient versus simply improving the subjective factors that increase the person’s pleasure derived from it.

Further, the train company competition is the airline and the bus industries. In terms of going from the center of town to the center of town, the railway already wins, so why not do all of the things that airlines cannot do on their airplanes – wifi, quality meals, and large tables – rather than trying to beat the airline industry in their one competitive advantage: being fast....
...MUCH MORE (or view the embedded video)