Warc Blog

Advertising is a System One business

24 October 2014
LONDON: Advertising is a System One business that needs to get better at codifying its learning, according to Rory Sutherland.

The vice chairman of Ogilvy & Mather UK told an audience gathered to celebrate 50 years of Admap - the anniversary issue looks at the future of brand communications  - that Daniel Kahneman, the behavioural economist behind the concept of System One (intuitive) and System Two (rational) thinking, regarded advertising as one of the very few System One businesses.

However, said Sutherland, the advertising world was poor at organising its learning for the industry's wider benefit (click here to view the full video of his talk).

"Once we take the things we already know in this business and do what Admap does large, which is actually codify them and attempt to make sense of them, the areas of the decision-making world where we can actually get involved multiply by an order of magnitude," he said.

He wanted to "get the kind of briefs and solve the kinds of problems that traditionally advertising agencies are never asked to solve".

There was, he insisted, a huge opportunity to be grasped if the sector could free itself from some instinctive ways of thinking.

"There's a natural assumption in agencies to go, 'well we can solve this problem, but first we have to redefine it in such a way that the solution involves a lot of bought media'," he said.

An effective solution could be as simple as adding a couple of sentences to a call centre script. When there was a choice, advising that 'most people choose option B' was enough to encourage hesitant callers – "a little bit of herd effect or social default" – to commit themselves and triple conversion rates.

He also urged people to test counter-intuitive things. Look at Red Bull, he said, which cost three times as much as Coca-Cola for a smaller can.

"Nowhere in market research, nowhere in economic logic will you find the inspiration for this decision," he said. "No-one in research will ever say 'there's no way I'm paying £1.50 for a can of drink, oh wait, I will if you give me less of it'."

Data sourced from Warc ,

 
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