June 08, 2020

Carnival Of Hypocrisy

"By 2017, American companies had put at least $2.6 trillion into offshore tax shelters...Nike had $12.2 billion.... The company estimates that if its $12.2 billion was repatriated to the U.S., it would owe $4.1 billion in U.S. taxes... Designating its profits this way allows the company to avoid paying even a dime of U.S. income taxes on these profits..." - The Oregonian. More about this in a minute.

The horrible murder of George Floyd was treated by the marketing industry this week as an opportunity to express sincere desire for change. Sadly, it also exposed our talent for hypocrisy.

While brand marketers were exhorting us to end practices that cause social damage to black Americans, they were themselves deeply engaged in some of the most pernicious practices.

I have my own standard for evaluating a company's true commitment to social justice. It is this: to what extremes does it go to avoid paying taxes?

Taxation may be unpleasant. Tax dollars are often squandered on idiotic schemes. Paying taxes may reduce a corporation's returns to investors. But taxation is by far the most potent source of resources for societies to redress social ills. Taxation funds education. Taxation funds housing. Taxation funds health initiatives. Taxation funds social services.

There is no way around this -- when corporations take extraordinary measures to avoid paying taxes, they are doing extraordinary harm to citizens who have the greatest need for education, housing, health, and social services. If brands really believe that Black Lives Matter they must stop starving our country of the resources to improve black lives by hiding their taxable profits in offshore tax havens. Like it or not, to a substantial degree, taxation is the engine that funds social justice.

There will be those who say that these tax dodges are perfectly legal. In many cases they are. This fact impresses me not one bit. If you're going to use social media or paid media to pound your chest about social justice, you have a higher responsibility than just to obey the letter of the law. There is little honor in being legally compliant and ethically opportunistic.

Dear business colleagues -- if you really want to help heal this country here's step one: Pay your fucking taxes. Until you're willing to do that, please instruct your marketing departments to spare us the high-minded pieties.

Let's make this so simple that even a ceo can understand it: You can't be for social justice and against paying taxes.

April 13, 2020

Puzzles and Mysteries

I was rummaging through old blog posts and came upon this one from almost 13 years ago. Since no one read my blog 13 years ago, and I liked this post, I thought I'd re-post it.

An article by Malcolm Gladwell in The New Yorker leads me to believe that advertising people can learn something from spies about solving business problems.

Gladwell tells us about a national security expert, Gregory Treverton, who distinguished between two kinds of problems: puzzles and mysteries. His distinctions have great value for us.

Puzzles, he wrote, are problems for which there is not enough information. An example of a puzzle: Where is Jimmy Hoffa buried? If we had more information, we would know the answer. If someone told us “Jimmy Hoffa is buried in New Jersey,” we’d know a little more than we know now. If they said,“He’s buried in northern New Jersey,” we’d know even more. If they said,“He’s buried in the Meadowlands,” we’d have an answer to our puzzle.

On the other hand, there are mysteries. Mysteries are problems for which we have plenty of information, but no accurate analysis. An example of a mystery: Why do inner-city schools do such a crappy job of educating kids? There are thousands of studies. Every education department of every university in America has done a study on this; every committee of Congress has done a report on it; every editorial writer has a theory about it, and every pundit has an opinion. And yet, we have no definitive answer. More studies and more information are not likely to yield an answer. What is needed is an accurate analysis of the voluminous information that already exists.

Gladwell gives a wonderful example of the importance of distinguishing between puzzles and mysteries. In 1943, during World War II, the Allies were concerned about Germany’s boast of having developed a “superweapon.” Did they really have a superweapon, or was it just propaganda? There were two ways to deal with this problem. It could be dealt with as a puzzle, and spies could be sent out to gather more information. Or it could be dealt with as a mystery, and information the Allies already had could be analyzed.

Fortunately, American intelligence had a bunch of brainiacs who were known as “the screwball division.” They were “slightly batty geniuses” who were brilliant at analyzing information that was readily available to anyone. So instead of sending out spies disguised in mustaches to infiltrate German munition factories, the intelligence community gave the brainiacs German newspapers and radio broadcasts. These guys pored over the information that already existed and accurately predicted that the Germans had, in fact, developed a new weapon, the V-1 rocket. And they also accurately predicted both that it had been stalled in development and when it would be ready.

As a matter of fact, in retrospective analysis, these guys had been correct an amazing 81% of the time in their analyses during the war. A success rate many times higher than the spies.

How does this apply to us? We ad people are almost always tasked by our clients with solving some variation of the following problem: How do we sell more stuff? Sometimes it is a subset of that question like -- who is our target customer? or, what should our primary ad medium be? or, which of these campaigns should we go with? or, what should our brand position be?

One hundred percent of the time these problems are dealt with as puzzles, not mysteries. We always assume that one more study will yield the magic answer. Research is commissioned. Spies are sent out to live with customers, or to interview them, or hold group discussions with them.

The results of these endeavors are all too frequently disappointing. The methodologies are usually dressed up to appear scientifically bullet-proof. But the initial enthusiasm for the process often recedes when the answers aren't conclusive or unimpressive real-world results start rolling in.

On the other hand, most companies have stacks of research and reams of data about their customers and about their industry. This mountain of existing information is almost never consulted. In my entire career, I have never seen or heard a marketing problem treated as a mystery. I have never once heard a marketing officer say,“You know, we have all this research we’ve done over the years and all this data from the industry. Before we do more research, I want someone to go through this stuff and tell me what it means.”

Why do we prefer to deal with business problems as puzzles rather than mysteries? Because it's easier. Going through thousands of pages and discerning patterns is hard work -- the important patterns are not usually visible on the surface. It requires a special intelligence to be able to examine imprecise, unfiltered, inconclusive, often contradictory information and come up with a correct analysis.

It is much more comforting to send a researcher or planner out with a fake mustache and give her six weeks to come back with an answer. Unfortunately, as we all have experienced, an alarming amount of the research we do yields little of actionable value. The following year the report becomes part of the dusty heap of poorly analyzed information sitting around adding to the mystery.

So what are we to do?

The key is to break down the tyranny of titles and find out who our "slightly batty geniuses" are. Simply because an individual has the title of “account planner” or “research director” or "global strategy guru" or “CMO” doesn’t make him an expert detective. In my experience, planners and researchers tend to be puzzle doers, not mystery solvers.

However, there are people who are just naturally good at solving mysteries. They may come from the accounting department or the creative department or the media department or the sales department. We need to identify these people in our organizations. 

Before spies are sent out, these people need to be exposed to all the information that exists and allowed to weigh in on the questions we’re all trying to solve.

The hard part of solving marketing problems is not getting more information, it’s figuring out what the information we already have means.

April 09, 2020

A Seriously Imperfect Species

I wrote this a few days ago but didn't post it because I felt uncomfortable about posting non-positive things during this unpleasant period.  However, after reading the great Mark Ritson's column today, and seeing that he isn't afraid to be level-headed, I decided to stand with him.

We are a seriously imperfect species, we humans.

For those who think the corona virus experience will "change everything," I have some dispiriting thoughts. It won't. Circumstances change but human nature doesn't.

Did the Bubonic Plague make our species more kind, gentle and selfless? Did the Spanish Flu? Did World War I? Did WWII?

At best, disasters lead to temporary outpourings of kindness, gentility, and good deeds. For those who think the CV-19 experience has made us less selfish and more community-minded, I invite you to come to California and try to buy some toilet paper.

One thing every sensible marketer learns very quickly is that as a rule people act in their own self-interest. You may think this cold and disheartening - and it probably is - but it is nonetheless true.

Are there examples of amazing people doing incredible things for others at the expense of their own safety? Yes, and we should be forever grateful for the existence of these wonderful people.

Are there examples of average people being especially thoughtful in their behavior. Yes, and we should be proud of that.

But will we be a changed and chastened species when this is all over? I doubt it. Our memories are short and soon after the CV-19 experience is gone, I am pretty sure we will revert to the usual norms of unpleasant, irresponsible behavior.

The same is true in advertising. For now, many of our major marketers are trying to put their best feet forward with responsible, gentle advertising. This won't last long. Nor will our industry's self-control. Soon the ad industry will be leveraging the CV-19 experience to our advantage. As I wrote 10 years ago in a piece in Adweek entitled Ads in the Age of Hysteria...

"...if there’s one thing we ad hacks understand, it’s the relationship between anxiety and cash flow. We’ve spent decades creating anxiety in consumers... Now we can apply the same principles to our clients. And so we have created an ongoing hysteria-fest called The Thing That Will Change Everything. The object is to keep marketers in a constant state of anxiety about the future.

The more we can convince them that everything is changing around them — and they need us to interpret the changes — the longer we stay employed."