In a compelling lecture in the School of Communication Arts' Drum Lab, Ogilvy UK Vice-Chairman challenged traditional views of marketing with insightful examples and sharp critiques of the assumptions of modern economics.
Rory Sutherland began his talk by delving into the evolution of Netflix, a company that epitomizes the transformative power of marketing. Before becoming the streaming giant we know today, Netflix struggled to attract customers as its DVD rental service. In the pre-streaming era, they initially innovated not through technology but through marketing by introducing a subscription model that allowed unlimited DVD rentals without late fees.
“Netflix was desperate. They tried one more thing with the subscription model, and it went big,” Sutherland explained. This wasn't just a promotional strategy. This was an important part of our research and development testing new ways to engage consumers and permanently changing media consumption habits.
Sutherland emphasized that marketing should be seen as an important research and development exercise that explores unknown aspects of consumer behavior and tests hypotheses in real-world scenarios. “About 25% of the economy is persuasion. It's not just about making things. It's about persuading people to want things,” he said, noting that marketing plays an important role in economic activity. emphasized.
He pointed to a common mistake in modern business: underestimating things that cannot be readily measured. Sutherland uses the example of British Airways to show how companies focus on measurable outcomes such as ticket sales, often at the expense of aspects such as customer service, which are difficult to quantify. However, we explained that it has a lasting impact on brand awareness and loyalty. “The BA app works great when buying tickets, but it’s a disaster when you try to use it to manage reservations and check-ins,” he says, adding that focusing on quantifiable metrics showed how important elements can be ignored. He delivers on a broader range of customer needs and experiences.
Throughout his talk, Sutherland argued for a broader recognition of the role of marketing as a form of experimental research essential to discovering what truly resonates with customers. He criticized the skewed focus on immediate, quantifiable results that permeates much of today's business thinking. “Most real-world problems are different from physics. They are much trickier and require creative and exploratory approaches,” he advised.
Mr. Sutherland's talk was not only about the importance of marketing, but also a call to action for companies to rethink how they integrate marketing and research and development. By recognizing marketing's role in researching and developing consumer interests and market trends, companies can unlock deep insights and innovation. This approach could lead to groundbreaking changes that redefine industries, similar to Netflix's redefinition of home entertainment, and the ability of marketing's intangible value to actually transform markets. It shows that there is.
