Creativity is wasted if it only sells to the media budget holders and charges by the hour, argues Rory Sutherland. WARC hears how creative agencies are missing a trick.

In the slog of a three-day conference, a Rory Sutherland session doesn’t really feel like work. Ogilvy’s Vice Chairman – an “attractively vague title,” he notes – cuts a donnish figure in stark contrast to the city slickers of other conference sessions. You’re surrounded by others hanging on his every word, having fun. You’re laughing, like, really laughing.

You’re learning about the magical innovations of the most technologically advanced companies ever to have shipped a product, in language mercifully devoid of jargon. Or, just as often, hearing stories about the brands that have attained an almost atmospheric ubiquity, and the creative thinking that got them there.

These stories are reframed, and are no longer about product road maps, numbers, vision, or complicated charts but about the weird alchemy of the human mind, and how the really valuable leaps are made there rather than in the factory. It’s radically different from anything else.

Overground train at platform

The London Overground: an example of bottom-up strategy. Image: TFL

Usually, there isn’t much need for a particular topic focus to the talk, and you wonder the extent to which he’s providing less content than company, but at Advertising Week Europe (London, May 2023) he had a point to make, even if it’s not a totally new addition to the Sutherland canon: that none of this thinking is ever applied to the business model of creative agencies.

Quite simply, “unless creative agencies can work out another way of making money – other than merely being paid by the hour to solve grand communication problems for very large multinational companies – they’re in danger of actually becoming misaligned and becoming much less valuable than they should be.” In other words, creativity is being sold short.

Or, more specifically, agencies are selling themselves short, and that’s largely because incisive creativity doesn’t look a lot like work either. He recalls that one piece of work from Ogilvy’s behavioural practice, which he founded, “took ten minutes, cost £20,000 to implement, and made the company £10m of incremental, high-margin revenue that year and every year thereafter.”

“We got paid £25,000 for it.”

The problem, as he sees it, is that paying by the hour for creative work ignores the kind of multiplying output that it can provide, in a way that leaves agencies without practising what they preach.

“There are about 27 different ways you can buy [Coca-Cola]. We seem to have created only one way you can buy creativity,” he notes. The ability to only make money in one way ends up incentivising the wrong kind of work and radically undervaluing the work that makes a real difference to the business and even the category.

He calls this process “enshittification”, borrowing a term from tech journalist Cory Doctorow, who in January wrote a brilliant essay about the “enshittification” of platform companies like Google, Amazon, Facebook, and increasingly TikTok, as they transition from being user-obsessed to being obsessed about shareholder returns. I could rehash the argument of the piece here, but Sutherland does it better: 

“Usually, the value [the business] creates, or the money it creates, is easy to quantify and comes fast, and the value it destroys – like trust – is hard to quantify and it comes slowly.” 

Sutherland also criticises the limitation of going after the media budget – something of a hangover from agencies’ pre-1990s media commission model – when creativity (and strategy, for that matter, though the two arguably blur here) applies all across businesses, and even categories.

“In order to actually make creativity more valuable, we’ve got to stop being koala bears and only eating eucalyptus leaves: We’ve got to stop only eating effectively a percentage of the media budget,” he argues, and work with other areas of the business. Management consultancies are far better at doing this and have therefore built their profile outside of just one business unit.

The mechanics of selling expensive work also come into play, and even though simple ideas can be transformative, there’s a need to make the work look expensive, complex, requiring extensive decks. “We’re selling creativity as a niche luxury good” – an optional extra – he explains. “We’re selling it as the icing when we should be selling the cake.”

Simple ideas, he says, are very difficult to make money from and, more gallingly, the success of marketing “is often invisible”.

The trouble is that a lot of this stuff can’t be modelled, and a bias toward rationality can often preclude interesting ideas. It also ignores the history of science: that great ideas are usually discovered backward, with a phenomenon observed before it is understood. Agency work, meanwhile, must present itself as linear. It is, after all, rare that people get sacked for being too rational, Sutherland observes.

Ultimately, it comes down to making people want something. If you consider that what really makes the difference takes place in the lab or the factory, you might call it innovation; if you believe it takes place in people’s heads, you might well call it marketing. But it’s a big mistake to see them as exclusive, or to perceive the former as investment and the latter as a cost.

I have left out most of Sutherland’s examples – you can hear them for yourself, particularly at WARC’s Creative Impact track in Cannes (forgive the plug) – but one brilliant instance of the impact (and sheer cost-saving potential) of creativity comes from here in London.

Consider Crossrail, otherwise known as the Elizabeth Line, which connects London and the commuter towns and cities to its east and west and recently opened having cost an eye-watering £19bn. That’s value as created on the factory floor, an example of top-down strategy.

Then consider the Overground, which connects much of outer London – east, west, north and south – and which launched in its modern form in the late 2000s. Its innovation was noticing that there was a way to create new infrastructure out of existing lines, and “rebrand them, put them on the tube map,” Sutherland explains. “That created about £12bn of infrastructure with f**king ink.

“You get huge amounts of people suddenly making really, really easy journeys simply by telling them how to do it. That’s strategy from the bottom. That’s magic, right?”