Rory Sutherland: The value of nothing

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It is probably time for the veterans of the direct marketing industry to write a letter of apology to everyone currently working in advertising and marketing. The letter would have a headline (because, in direct marketing, letters do have headlines) and it would read something like this: “We’re sorry – we really should have warned you about this earlier.”

Allow me to explain. I spent the first 20 years of my career very happily working in a direct marketing agency. Because our work was measurable and results were quantifiable, I learned a great deal in this field. Working in direct marketing in the last century not only exposed you to wonderful luminaries such as Drayton Bird and Steve Harrison, but also taught you about the vagaries of human behaviour.

My joyous years in direct marketing were rather like being paid to conduct social science experiments on a grand scale. The often counterintuitive findings from testing and measurement revealed a great deal about consumer psychology. This is precisely why David Ogilvy always recommended that every advertising copywriter should start their career in direct response.

Alongside lessons on consumer psychology, we also learned about corporate psychology from the equally strange behaviour of direct marketing clients. Unfortunately, when clients got the direct marketing bug, a new problem raised its head – and it is this discovery we should have shared with you all sooner.

Once anyone devoted their attention to activities where you could justify, to the penny, the value of everything you did, they became mentally incapable of doing anything else. It was no longer “is this a good idea?”, but rather “can we prove it’s a good idea to three decimal places?”

There is an enormous hidden price you pay once you become addicted to the crack cocaine of accountability – you become incapable of justifying anything that isn’t immediately measurable, even when it might be eminently sensible to do so.

If you were working as a direct marketing agency for a credit card client, for example, there would be a large amount of money put aside to test acquisition mailings. These very quickly and measurably revealed their return on investment. There was also a generous budget given to a call centre to test the best means of retention of credit card customers, so if someone rang up and said “I’m planning to cancel my card” you knew what to say. But nothing in between got anything like the same amount of money or attention. Acquisition and retention were both cases where you could measure success – not only accurately, but also very rapidly. Any outcome was easily and quickly attributable to a single input.

Here’s what you could never do, however. If anyone suggested, for instance, that it might be a nice idea to send your customers a birthday or Christmas card, or some useful information, the odds of you getting any budget to do this were pretty much zero. Yes, quantification is great – but that doesn’t mean you should never do anything you can’t quantify.

And here’s the conundrum marketing finds itself in today. It’s in the same minefield direct marketing found itself trapped in in 1995. Tragically, naively, we all thought accountability would be our salvation. Instead, it turned into a curse. We had the delusional belief that once you could quantify the value of marketing, the money spent on it would increase and the pain of justifying your existence would fall. What we failed to warn you about was that the price you pay for quantification is that it rapidly turns from servant to tyrant.

Many highly effective and potent forms of marketing activity simply do not – indeed, cannot – deliver their results immediately. It’s why Field and Binet called their study The long and the short of it. Short-term effects are immediate, but may be fleeting; long-term effects, which tend to aggregate exponentially over time, are slower. By the time they emerge, any chance of disentangling one communication’s contribution to the overall return becomes impossible.

But it still pays. You just don’t know how much. And here’s the problem. Perfunctory, wham-bam, transactional exchanges will always be highly amenable to measurement. Almost by definition, longer-term relational exchanges are not.

I would go further. I would argue that, almost by definition, any true relationship requires investment in value exchanges that defy quantification. Generally, we don’t pay our spouses for sex. Relational exchanges are characterised by a form of iterative reciprocation designed to defy financial evaluation. Once something can be quantified, it loses its value. Never tell your spouse what you paid for their birthday present.

We really should have warned you about this, shouldn’t we?

THIS ARTICLE WAS FIRST PUBLISHED IN THE JANUARY 2022 ISSUE OF IMPACT.