Ogilvy Verge Coverage | Rory Sutherland’s Main Course

Rory kicked off his talk with something of an autopsy on the age of mass media, pegging it more as an aberration than as a normative way of disseminating messages. Agreed, its not normal, as happened in Britain in the ’70’s, to be able to hold the attention of a an entire country for 45 minutes like clockwork every week just because the tacky gameshow du jour is airing at that time.

Food 2.0

There are food metaphors running through every level of this presentation – the lack of choice in the age of multimedia is like selling breast milk – one flavour only to an undeniably captive audience. User generated content is compared to subsistence farming – a natural order of things restored to its rightful prominence. Sutherland makes reference to the fact that throughout history, art and culture has by and large been a localised product. Again we are seeing this paradigm return with the advent of online communities.

To take the media – food parallels further, Rory introduces the concept of food 2.0 – the secondary benefit of food, besides the nutritional stuff, is that it brings people together as a kind of social bonding agent. This is also true of media in the web 2.0 world – it is an agent of community building, as we’ve seen with sites like flickr, myspace et al.

Reality Entertainment Cannibalises the Made-up Stuff

Another example of more immediate and engaging forms of entertainment Sutherland cites is the way reality tv has begun to eat away at the ersatz manufactured reality of soap operas. True true, reality tv can be dire, but at least its usually unpredictably dire.

Abundence = New Trends in Consumption

When there’s plenty to eat, new eating trends emerge – vegetarianism, fad diets, fusion cuisine and other such evils :) Similarly, when you have an over-abundance of media and media types, filtering what we consume, what we say “no” to , becomes an important factor. Some people refuse to watch TV (me) or have a blackberry. In times like these, targeting people at exactly the right moment in their consumption schedule becomes critical.

Sutherland gives the example of him checking his bank account at 4 in the morning. This is the only time he gives a shit about financial products. So why are banks not capitalising on this window of opportunity?

The Future of Brands

Sutherland feels that we need to be brand focused in our attack. Media fragmentation is only a problem if the message is strategically weak. We need to see brands in a new light, in terms of their potential to tap into new audiences through new channels via new dynamics, rather than in terms of the loss of ability to blast away at the potentially disinterested masses with the big, bold and diluted messages of the last century.

Extracting Value From Users

Not money. Value. The challenge in today’s brand equity economy, is how can you get the users engage with your brand in a positive way, to inject value into it, whilst profiting enough from the exchange themselves that they ideally become fervent brand advocates.

An interesting example of a new online value economy (if that’s the right phraseology) is Zopa, a money lending initiative from the guys behind Egg. The site puts individual borrowers and lenders in touch with each other to facilitate a credit exchange entirely beyond the reach of traditional finance. In this kind of setup, a more personal agreement between customer and brand is forged.

Products Replaced by Experience

Ok, nothing brand spanking new in this, but Rory Sutherland’s take is refreshing. Experience transcends and elevates the mere product. And the nature of customer engagement has an effect on the purchasing impression.

The example Sutherland gives here is EasyJet – the UK’s first low cost airline. When the booking process was telephonic, there was a cheap and nasty stigma attached to the brand. When it moved online, the stigma fell away (although personally I still associate that shade of orange with cheapness).

Product differentiation is another area that has taken a knock. The automotive industry is littered with makes and models that are all “pretty good” in Sutherland’s estimation, whereas in the 70’s and earlier, there was more of an opportunity to stand out.

Nowadays, the opportunity for differentiation has shifted to the touchpoint between brand and consumer – at the Dealer level. Having worked quite a lot on VW, I wholeheartedly agree with this, and would add customer service (CRM?) to this as an opportunity to stand tall above the competition.

To this end Rory has a tip for hotels – the one thing he would like them to be able to do is be aware of his imminent arrival – this would make the check-in process that much quicker and painless after a long trip. So if there was a number to text that alerted desk staff, this would be fairly simple to do.

Exchange – Modular Value Systems

Sutherland cites another culinary example here – Wagamama is an Asian restaurant chain in the UK. Essentially patrons are assured of high quality oriental food, in exchange for back to basics bench seating, and orders arriving in an ad hoc sequence – definitely bringing Olympia Cafe to mind here.

Reviving an age-old bargaining tradition

So the point is the quite traditional market (human?) imperative of forfeiting some of the trimmings in exchange for a deluxe core offering. We’ve seen that the web affords this kind of dynamic structuring of value systems, where more traditional brick and mortar commercial models would not.

The digital example given here is EasyJet again, and the way it motivated consumers for the first time, to consider being flexible with travel dates, deferring to wildly cheaper flights on less popular departure dates. Another obvious and poster-child example that springs to mind is of course Amazon, offering up an infinite long tail of books because their virtual store front affords them the “space” to do so.

Sutherland does actually mention Amazon in this context – Amazon Prime is an annual fee of 50 pounds that assures subscribers of next day delivery for all purchases within a given year.

Why do we need to advertise at all?

So if the product is the experience which in turn fosters the brand equity, why do we need advertising? Well there’s the matter of signalling. A basic example that Sutherland gives is jewellery.. Why do the vast majority of women covet jewellery as the ultimate gift from their man?

The answer lies in its inherent uselessness to the purchaser (thats my take anyway). The guy gets nothing from the exchange, aside from the potential adulation it elicits from the recipient. Buying jewellery is an act of total indulgence for the purchaser and this message is implicit in the wearing of the gift – “Somebody values me enough to indulge me with this useless expensive piece of rock / metal”. Sports cars and peacocks are two other non-utilitarian examples given here signalling for its own sake.

So how has this manifested in the digital sense – well generally speaking signalling can be found in the religious fervour with which some brands head down certain paths. Apple wants to make offer the ultimate user experience (think osx, the iphone, even the Apple II) whilst continuing to “Think Different”. 30 Years ago, Kelloggs threw themselves headlong into making nutritional advances with their breakfast cereals, an intiative that in Sutherland’s view, transcended the immediate market demand for it. Same deal with Nike and their running shoes.

So the point here is that these brands are straying from the hard and fast commercial path, they’re striving to make a more lasting impact in their field because – in the consumers mind – thats what these companies were born to do. In this sense, innovation is one of the ultimate messages to subliminally give you a long-term boost in the public consciousness – it demonstrates you’re in it for the long haul, and that you have a commitment to the customer experience that transcends extracting the cash from their wallets.

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