Tom Goodwin and Rory Sutherland Fix Marketing (Part 2)

0:00Hey everyone, just before we get into the show, I just wanted to give a really big shout out to my founding sponsor, System One. As many of you know, I worked at System One and before that, I was actually a client of theirs. Now, the thing I love about System One is when I need to make a big decision, they have been there to help me. Because what System One does is use the power of emotion to help predict the likely impact of my innovation or advertising. So when I've been stuck in the boardroom needing to justify why we're going to pick one creative route over another, or launch this innovation over that one, it has been indispensable.

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0:56so what's going to make the advertising agency of the future um one of the things which is a prediction of mine is that the whole thing works backwards which is that you have production companies that are very very good at high-speed ai production who then hire creative people from agencies. This is absolutely the innovators dilemma, right, which is your suppliers become your competition, because they're actually learning from what you do. And they have the they don't have any particular vested interest to defend. And so a production company could hire two or three very brilliant creative people.

1:32And instead of saying we're going to get clients, it would just say, we're going to produce brilliant ads, and we're going to sell them. So in other words, Fabergé, that model is someone comes in and requests an egg, That's the advertising agency model. OK, and gold was really expensive. Eggs were really time. I'm Fabergé. Eggs were really time consuming to produce. It made sense to do it that way around. Wedgwood and Chippendale. OK, when Wedgwood could produce pottery in huge quantities using clay that wasn't very expensive, they made the plates and they went out and sold them. So one of the things which is going to happen, whether we like it or not, is that companies that are very good at effectively generating at least working prototypes.

2:13could actually spontaneous... Now, we go, that's really weird, right? Okay, how could it possibly work that way that people have an idea first and then sell it to someone? No one went to the Beatles and said, we want to commission a song about a submarine, did they? Okay? Now, you know, the Beatles wrote a song about a submarine and they sold the song. Yeah. Okay? It isn't totally ridiculous that you could... Cadbury's Gorilla basically happened like that. the ad that ran on TV was basically the ad they made for the pitch. Yeah, well, art. Art works that way. Okay, you've got people with, you had patrons in the old days of art.

2:51You had someone who said, you know, Gainsborough, someone, Mr. and Mrs. Andrews, standing by a tree. You get all that, right? But most of the time, artists went and made the stuff and then sold it. And in that model, Cannes would no longer be a retrospective awards fest. It would be a trade fair, which is exactly what it is for TV. if you go to mip tv in can it's not here's an award for a great program that somebody made two years ago okay it's um we've got this tv format and if you want to use it it's three million quid yeah yeah so i mean what what does seem not that weird to me is that a large portion of what happens now i'm talking about ads here but it also applies to behavioral ideas to uh you know to brand partnerships to anything else why don't you have people spontaneously generating ideas and then selling them now an ad agency is never going to do that because it's too much of a threat to its pre-existing relational business model but other companies can and you only need five people in a you know and some tokens yeah this is what i think you've often said this but i think the creative industry should reposition themselves across the whole of business the whole mix right thank you yeah really should right because i mean i remember someone um asked me what percentage of my time as a cmi i spent on advertising that she went through my diary it was five percent five percent yeah rickson reckons it's eight when he's done equivalent across his across his students right and he's right um but he goes look creativity we're in the can festival of creativity he did that famous thing well i learned attending can oh yeah black blank page now he says creativity um is only about three percent of what a cmo does uh you know if you look at the whole gamut of things and therefore claiming this is simple however creativity as broadly applied oh completely pricing yeah and that was that's slightly my frustration with the way ad agencies have kind of painted marketing because they're two four okay marketing actually means two things it means a business function and it's a business philosophy yeah and the reason i got famous totally accidentally it wasn't intended or planned was i stopped talking about what what we did and started talking about how we think yeah yeah fundamentally this is actually a philosophical approach to business which sees value creation as something that happens in the mind not in the factory so end of you know and anything you do that effectively interfaces with the customer by the way an awful lot of marketing i mean the most important marketing isn't the work of marketers or a marketing department okay there's so there's marketing as a zoo which is a lot of animals in a totally artificial setting and there's marketing as an ecosystem now one of the biggest marketing ideas i was joking about okay now i don't think a marketer came up with it some random cafe came up with it and people copied it bottomless brunch right because what is it it's breakfast for alcoholics right do you fancy getting really pissed before 11 o 'clock in the morning now if you called it that no one would go but you call it bottomless brunch and it's completely legitimate healthy way to spend a saturday okay so you know you know if you look at what things are called you know lang i mean you know accidental things in language like for example you know whether it's tax relief or you know uh the language we choose to use in day-to-day is effectively a marketing force the fact that it wasn't actually commissioned or didn't i mean the london overground i always describe as an ingenious marketing idea where marketers had nothing to do with it you take a railway line and pretend it's a tube line and everybody suddenly uses it yeah i've got a couple of things to say on this because i think um you know it's not the job of the advertising industry to employ people.

6:35And we may have to understand that the industry is probably bigger than it should be. You know, that sounds quite outrageous. But every single year I worked in advertising, I would see how many people were employed and how many people were in meetings. And it always seemed like there were too many people. And we have this weird sort of extreme situation now where we've got some people saying that AI is just going to make all the ads. And I think it's absolute nonsense because I think craft is very important. I think to celebrate amazing production values and great ideas is important and that's way too important media is far too expensive to save half a million quid on production and then spend 10 million more on media because it's not a very good ad but at the same time you'll go to a shoot for advertising or you go to a movie shoot and you see catering departments and you see personal assistants and assistants to the assistants and feng shui consultants and you see 200 people on a movie shoot and you think it's not going to be like this for a long time so i think there's this sort of delicious point halfway between the two where we need to recognize this is too important for ai but it's not as important as we think but i think all the growth has to come by essentially what you're saying which is advertising type of thinking to a broader world yeah and my problem is basically that if you were to get every single person that works for a big company and you were to try and figure out where their focal point was their focal point would be in the past and it would be within the company because almost every single job is either about what's happened before or it's about what's just happened.

8:05Very, very, very few jobs in companies are about the future, let alone the far future. And every single company, every single department other than marketing is obsessed with itself and how it buys things and what it buys. And therefore, I think our job is to represent a slight point in the future and to represent people. And when you do that, you realize that actually our job is to come up with ideas or products or services or customer service or different ways of doing things that can create growth in consumers. And when you do that, you realize the products of what we could do could be much better.

8:39Maybe it's different recipes. Maybe it's better customer service. Maybe it's different go-to-market propositions. Maybe it's a different type of business strategy. Different pricing model. Different pricing model. A very, very boring example, but it's amazing to me how many unbelievably wealthy people there are in America. and it's amazing to me how many categories there are where you can't spend that much money. Like it's very, very hard to spend a fortune on a TV. It's very, very hard to spend a fortune on luggage. Well, that's not so difficult. Depends on what you've got by a lot. But there's a massive sort of underserved customer, which is people that want to show off, for example.

9:15You know, a very expensive iPad case. So I find it fascinating because I think we have the people to do this and we have the process to do this. But the one thing that's letting us down is we're obsessed with the word creativity. And I think nothing has done advertising more of a disservice than the word creativity, because I think it means that we lose face with people. People in real business don't want a creative solution. They want a better solution. And the types of clients that I work for and the types of programs and consulting that I do, it's never about creativity. You know, it's a big car company saying buying a car with us is shitty.

9:50How can it be better? It's ironic. I don't need to give them a creative solution. I need to give them competence. I need to give them common sense I need to give them empathy I need to give them imagination but for me we're in the business of aesthetics and imagination and problem solving and not creativity because people don't really want a creative ad and they want they don't want creative customer service I mean there's certain problematic words yeah weirdly brand is problematic because as soon as you utter it anybody who isn't in the marketing department will go it's not my problem that's marketing's problem yeah okay so brand automatically is a phrase that points you into the mark on paints you into the mark on the corner creativity um i think might be john hegarty who's wary about it there's certain people who are david ogley didn't like the word yeah um for example and funnily enough there is a kind of mathematical explanation for what it is which is it's the kind of thinking that's necessary to get you out of a local maximum yes yeah so effectively it is that lateral thing where everybody has currently defined the problem in this way and now we're trapped in a local maximum complexity theory what creativity will do is effectively get you out to get you under the hump to a higher sunlit upland that lies beyond so it is actually a necessary thing in but i think it's the process rather than the result yeah yeah and also i mean it's very interesting what you're saying i mean i think um there's an anthropologist who weirdly was friendly with my great aunt who's also an anthropologist the anthropologist was called Beatrice Powder Maker.

11:19Weird name, okay. And I got a vague idea. She spent a lot of time late in her career studying Madison Avenue and said, this is a completely uninteresting business in most respects, except the culture that it manifests and the thinking that it manifests. And the people. And I think if we'd spent time selling how we, my argument is, when I said, you know, don't make the Eurostar fast to put Wi-Fi on the fucking trains, that's just marketing thinking 101. And much to my amazement, because I'd grown up in an ad agency where that kind of thinking isn't that weird, people seem to view me as some sort of fucking druid.

11:55OK, it seemed pretty obvious to me. But I think there is this way of approaching problems that sits within advertising agencies, sometimes in the creative department, sometimes in the planning department, somewhere else. Yeah. Which culturally and temperamentally is surprisingly rare and valuable. Yes. and this was exactly her view was the business itself was of no interest whatsoever but the culture of the people within it she thought were absolutely amazing questions that we could work on like imagine going to a bank and saying let's come up with a way to get people to pay more for their bank account um imagine going to a hotel chain and going how can we get people to spend more nights a year in a hotel i'll give you one by the way to go to miami and saying how can we make miami a better city you know these are kind of questions that advertising people are suited We're like, so the ad agency is like the fucking panda.

12:43You know that? This is going to totally confuse the American audience. I apologize for that. But Alan Partridge, which is, well, if it's just the potato that's affected, you're going to pay the price for being a fussy eater. You remember that? Okay. Advertising people will be like, they only eat Marcom's budget. They've never gone after anybody else's budget at all. They're terrified of talking to anybody who is either senior to or adjacent to the marketing director because it might put their relationship into jeopardy because they're seen to have gone behind someone's back. Account people are the worst at this.

13:16They're relationship paranoid. They're like an abused spouse, really, the relationship with a senior ad person with their client. You know, it's like an abusive relationship. But they exist in a state of total terror, you see, because their whole career is dependent on this one relationship. And so they're not going to take any risks. but taking how we think and i made this discovery that when i started talking about behavioral science and behavioral change i got you know i didn't get invited to marketing conferences i got invited to 10 downing street yeah okay i suddenly went hold on there's a whole market for this shit that we do that we've never even explored i totally agree with you there you know in in the you know uh i'll give you an example i mean you know the electric car thing all i said very simply was there's range anxiety.

14:02You can either increase range and you can reduce anxiety. It's probably a lot cheaper to do the second than it is to do the first. What was the weirdest thing about all of this? And I thought, what's fantastic about just doing shit, okay, is that when you do shit, bad things happen that you never expected, but good things happen that you never would have planned for. And one of the weirdest things that happened, which I never anticipated, was that the book acquired a kind of fandom in the engineering community because the thing in engineering called human factors basically and then a lot of engineers probably go well i'm always trying to show off to my engineer friends by solving this problem with code maybe i don't need to solve the problem with code i can just solve the problem with psychology which is actually a brilliant example of this an insurance company which was about to spend an absolute fortune speeding up their payment of claims because everybody complained about it and somebody said how long does it take you to pay a claim on average it's about two weeks they said okay i'll solve the problem for you now i said just write to them and say expect your claims check within four weeks and the check got sent out within two weeks all the calls to the call center stopped to be replaced with a small trickle of phone calls from people saying thank you for sending it so quickly how simple so the problem was an uncertainty problem it wasn't a speed problem you see and and so often i think we waste tons and tons of resources effectively trying to move the wrong metric you know moving the psychological metric that's what that's what uber did it just made waiting for a cab not very uncertain anymore because you could see it on the map that's brilliant and actually if we just brought that thinking into general life and by the way i also into government policy i mean government's shit at this government doesn't have a marketing function it spends 45 percent of gdp doesn't have a creative function doesn't have a marketing function as a consequent all it has is a press relations function really yeah now if you think about that your main means of reaching the public who are your customers i.e your constituents or your voters is through the medium of journalists who are trying to catch you out right that's like saying what we're going to do is we're going to advertise this new ford mustang but we're going to have to use Greta Thunberg as our spokesperson.

16:24So government goes, let's talk to journalists because it's the cheap way of reaching the public. But all journalists want to be is to be Woodward and fucking Bernstein. They don't want you to look good. They don't want you to look like a tragic crook. It's like saying, right, Greta, this Mustang, right, V8. It's not going to work. Now, if government learned to talk to people directly as people, there are loads of things you can do one of them very simple thing okay people don't like having shit imposed on them if on the other hand you impose something on people and say but in return we're going to give you something else yeah that's now framed as an exchange not as an imposition and we we react to it so the classic example is i don't oppose even though i'm a bit of a petrol head and i've you know i've got six penalty points i don't actually oppose the 20 mile an hour speed limit in london okay yeah i i don't want children to get killed i'm not a you know i like driving around but i'm you know i'm not total shit right if you just said okay it's 20 miles an hour now in the london side streets but we're going to get rid of speed bumps mostly yeah fair enough yeah okay yeah fair enough okay yeah i'll take that deal i can drive around at 20 but i don't have to trash my suspension okay or you you know even if they just said by the way if you go 25 it's only one penalty point or two penalty points or it's a 50 pound fine not a 100 pound fine but government doesn't have any you know it's almost like something it's on the spectrum in terms of it's dealing with people it doesn't really understand emotional here's a question for you because of all the people in the world that would ever be invited into these meetings you're probably number one on that list like do you ever get invited into these meetings if you do get invited into the meetings do they listen to you and take you seriously because you You would almost be like the poster child for advertising thinking, not in advertising.

18:13I get invited to meetings with reform all the time and my wife won't let me go. Funnily enough, outlier political parties are really interested in this stuff, in a way. There's a party called Grud, which is a Welsh libertarian party. Really? Wow. All three of us can get together next week. They want Wales to become independent and then turn into Singapore, basically. That's quite a good idea, actually. I can't fight for that. But no, I mean, people acknowledge it and they're interested, but I think we've fetishised. Where I'm sympathetic with the word creative, although I define it slightly differently and I define it in mathematical terms, is we fetishise process over outcome.

18:57So we go, unless there's a totally rigorous process, we can't have a good outcome. That's not true of penicillin. It's not true of Viagra. It's not true of Darwin going around the world. You know, none of the really important discoveries happen forwards they happen backwards yeah and yet we're absolutely obsessed with how how you get there not where you get to yeah and my argument is so i was talking to an ai guru in miami three days ago and he was quite taken with this sentence the requirement that everything you do make sense in advance fundamentally limits the size of the solution space yeah so by demanding that you proceed through sequential logic you can only explore about 15 to 20 percent of the available solution space moreover it's probably the part that everybody else knows about already your competitors know about because they've got they're using the same logic as you yeah well someone was arguing that about creativity the reason creativity is not dead is ai is only ever is based on what what's been said in the past you can i think you can there's a novel there's a detective book out of them called the blink of an eye by quite a good detective writer which is about a detective trying to solve a case where there's a human detective and an AI detective.

20:07And it's actually quite interesting as an intellectual exploration, because you can see that in detective work, which is what we do, fundamentally what we're doing is trying to find something out that people won't tell us. We're trying to discover something that, you know, either people don't know or are unwilling to tell us about. You know, that's what we're looking for. and i can see that in detective work an ai plus a human uh each of them will have specific strengths i mean in the ability would ai have caught harold shipman early you know that those are the kind of weird questions uh you know wouldn't ai you know wouldn't ai have convicted lucy let be kind of depends which question you ask i suspect it depends on how you create how you define creativity as well because the ability of ai to basically try an unparalleled number of combinations in a logical way and to dismiss assumptions about what the answer should look like that's not a creative process but it can get to creative outcomes yeah so if you ask an ai to design a formula one car chassis it'll be a very organic structure that no human would ever be able to comprehend or if you ask it to design like the perfect uh aerial it'll be a very different that's beautiful have you seen that aerial yes they produced it using sort of evolution kind of baby the perfect aerial which you would think would have to be symmetrical yeah yeah and actually it was nothing of the kind and this was done like 10 years ago or something so it's kind of weird because i think everyone likes to think they're creative and everyone likes to think the kids in particular creative but if you ask a kid in any country on the planet to draw a house they draw the sort of archetypal house with the kind of four windows and the triangle roof and the and the sort the the the pavement going up to it because even by age eight a kid knows what a house is supposed to look like so you do enter these sort of really fascinating waymo to make houses where they just drive around you just live in a waymo you know commute in you know having a shit while you're riding and almost everything that comes about ai ends up in this place where every conversation which is this is dead or we don't need that anymore or is it better or is it worse we're we're already sort of changing the parameters to assume it's either it or us and actually the answer to almost everything is it's where you use it and where you don't and how you use it and where in the process it is and if we fixate on doing things in a better way rather than a cheap way or a faster way then we're all going to get to about there is i think something which needs to change before marketing marketers in general and i'd include i'd include innovation and marketing is basically the same thing before they can actually achieve the influence they deserve and the framing is basically goes back to effectively a sort of forking of economic thought going back to about 1950 which is if you ask a conventional economist and this is the kind of economics which is taught in all business schools everywhere okay what is the purpose of a business right the standard economic answer is that consumers already know exactly what they want so the only purpose of a business is to provide them with that thing at as low a price as possible as efficiently as possible making as much profit the austrian school which is much much more alert to both complexity and psychology would argue completely the opposite almost they'd say the purpose of a business is it's a discovery mechanism businesses exist for the purpose of exploring adjacent uh you know available adjacencies where new forms of value can be endlessly created and the austrian what's strange is the austrian model of a business is actually much more optimistic and exciting than the chicago school one but for whatever reason this kind of fundamentally this idea of you know competition being there to drive down prices rather than competition being there to to encourage diversity.

24:02You made exactly that point when you said there are whole areas which are not being explored, partly because there's no evidence. I think there's this fascinating divide in advertising now, and there's almost two completely different industries that think they're the same industry. And I think half of that world of advertising is a kind of older world like ours, where if we're honest, I would go so far as to say we don't really know how advertising works. like we have sort of broad ideas we have broad theories we can kind of explain some of it but at the end of the day i can't explain why i own the pair of shoes that i do and therefore i think it's going to be quite hard for someone else to explain why i own the pair of shoes i do and then there's this other part of advertising which is much more contemporary and sort of growing which is based on this understanding that advertising is about something else entirely different and they think they know why people buy and they think that people buy rationally better products.

24:54And I think the job of advertising is to find people that want that thing and get in the way. And I've heard Elon Musk talk about this and I've heard Zuckerberg talk about it. And it seems to fundamentally either not understand advertising or talk about a different form of advertising. And their form of advertising is we have so much data and we've got so much compute and we've got so much of an ability to see patterns in data that we can find people that are really likely to buy your thing and we can get a bit of your message in that journey and then people are going to buy your stuff and I think that is such an engineering way to see the world I think it's a great way to get a media ROI it's a great way to be able to sort of create a data trail and attribution that shows your ads are working but that's just not how advertising works it doesn't build a sense of awareness to a broader group of people it doesn't create a sense of wonder that means I'm going to pay more for something.

25:47It's the engineering of a moment in time that's perfectly designed to allow the technology company to take credit for something that may have already happened. I mean, it's quite weird for somebody who spends$100 million on their wedding to lecture the rest of us on how we make purchase decisions. I think it's sort of disgusting because it shows a complete inability to understand what advertising is about. And apart from everything else, there's some really weird maths out there that shows if you use advertising to get people to double the number of people to buy your product, you probably make less money more than if you persuade the same number of people to buy your product, but pay 30 % extra.

26:26Because the margins in most product categories are so small that by charging extra, it makes it work better. And again, we have this really weird thing where I feel like someone in advertising is my job to generally create a situation where more people are aware of it, more people admire it, more people are seduced by it, more people are excited by it and then some of those people are going to buy in years time some of those people are going to buy quite soon some of those people are going to buy immediately and they're all going to buy a thing perhaps pay a bit more for it perhaps feel a bit better about it perhaps the people in the company that work there are going to feel better every time they go into the office that day that's what advertising is about and these people seem to think that their job is to know that i've just been to a jeep dealership and if they can just put like 49 pixels of image in that corner they can justifiably go into Stellantis head office on Monday and go bang we sold a car for you and it's absolute nonsense doesn't explain why you went into the jeep dealership in the first place it doesn't explain any of it at all so for me the whole performance advertising business has become the sort of art of being able to take credit for something regardless of whether or not you made it happen or not i came across this you guys probably know this one already i didn't know that the gm and toyota had done this joint venture in the u.s and they built the very same car on the very same production line identical specs one was badged to Toyota one was badged I think it was a Chevrolet in the end and what was interesting about it is the Toyota had much higher second-hand residual values and much lower customer complaints the same car because it was basically down to the perception of the brand so people had this halo perception of Toyota of being very reliable and therefore their expectations of it were it didn't break down so when the customer surveys came around, they were delighted with it.

28:09But technically, the same number of faults happened as the GM one, because the GM had a different brand on it. And then resale values, everyone wanted to buy their Toyota, not the GM. The very same car. It's very rare you get that AB comparison. Yeah, exactly. Brand value is very, very easy to discount, because I think Ford had a similar case where there was a Ford and a Volkswagen, uh effectively identical uh cars badged differently uh so that it does it has happened a few times but it i mean it did i mean intriguingly you know if you want to get into real extremes of that the swiss watch industry you know the luxury watch industry is completely whack you know so for example probably you know go on we'll be really careful here you know actually the finest watches made are probably japanese actually okay and then you get the absurdity of course that the more expensive the watch you buy the less accurately it keeps time yes that's true so you know you know a really cheap casio that casio was it fw 90 f91w or whatever it is it's basically a 10 pound one okay um now oh you know obviously it varies depending on but what's fascinating about that is it's not only that people prefer the badge value of a toyota they act their whole perception of the experience is totally coloured.

29:29Exactly. By that brand. Sticking on the car theme, I was interested, I was looking up Tesla performance this quarter. So Q1, they increased market share year on year from 46 % to 56%. That's in the electric car market. In the electric car market. In the US. And they've now retaken number one spot globally from BYD. And everyone was trashing Elon, you know, a year or two ago, dropping prices, no advertising in brands. I just wonder whether Tesla's confounding marketing thinking at the moment. I think, I mean, the weird thing about Tesla is you can make the bull case or the bear case, I guess. So if you assume it's a car company and you know that its market share of cars is about 1.5 to like 1.9%, it's absolutely ludicrous that it's worth more than every single other car company in the world put together.

30:21That doesn't make any sense. And you can kind of say, well, they're going to sell full self-driving car software and that's going to be like 99 % margin. But it still doesn't make any sense. So if you talk about it as a car company. You're right, actually, if you own the platform for all cars. Yes. Then the maths start to work. So the way that you make sense of the Tesla share price is to assume it's not a car company that sells EVs. It's to start moving upwards to bigger categories. So maybe it's a software company that sells mobility through cars, then it's bigger. Maybe it takes over all cars in the world.

30:58So it's just a mobility company. There's nothing to do with ownership. Or you can start to make arguments that because of, you know, Optimus and robots and people's houses, then it becomes a much bigger company. So basically, your ability to think it's an insane valuation depends on how high altitude you're prepared to look at it from. And these days, it's basically impossible actually to value any contemporary company, because it's actually very hard to know what category any company is in. Because the weird thing about software is it means that effectively every company isn't really a vertical thing that owns a category.

31:33It's a horizontal thing. And then it's just a question of like, well, how far does the regulatory body let that company expand into other areas? because actually Google could be the world's largest travel company if it was allowed to use ITA software like it bought it for. Google could be the world's largest healthcare company if it was allowed to go into health. But effectively, it's almost impossible to really value any company because when you can move horizontally, you can kind of be in it. Well, sticking with your famous quote, right? Uber, the world's largest taxi company, owns no vehicles.

32:06Is the world's largest taxi company now going to have no drivers based on the launch of the RoboCab. I want to know what Rory thinks. No, it... This is quite amusing because I'm an absolute... Being here in Miami, I'm an absolute way more obsessive. My wife doesn't like it, not because of the technology or because she feels unsafe, but she prefers talking to drivers. Yeah, yeah, I am. Now, obviously, there's an economic cost to talking to the driver. We're very similar in shopping. I mean, you know, she, like, goes up to the bloody checkout like it's 1972 and i'm there with my mobile phone scanning stuff it's a very very interesting question this which is what happens because one of the great things i was told by a futurologist is that there are no trends there are vectors and there's always a counter trend and what you see is that as retail became more and more kind of efficient and automated and impersonal there was a trend towards people going to farmers markets which are the absolute opposite you know i always joke about this with airports which is as every airport became like skippel or changi people go have you been to london city airports brilliant there are hardly any shops okay and that but it goes back to your idea of surprise yeah i am that we always disproportionately notice the thing that we weren't expecting yeah and it's all it's all you know it goes back to all that stuff sort of joanie mitchellomics you know you don't know what you've got craft beer is quite a good example of this a lot of craft beer tastes like absolute piss but because it's got a story it feels better and and it's surprising yeah craft beer is basically being made by people not good enough to make it at scale you know incredibly unfair actually in america in america um but um uh it's it's it's extremely difficult um i mean complicated even more complicatedly one of the strange findings is people if you measure happiness at a kind of real time level people are actually really really happy while they're driving because it's a flow state so one of the things that was misunderstood there was that okay who developed this idea and got excited about people in silicon valley which has the world's worst traffic and probably let's be absolutely honest a bunch of nerds who aren't actually that good at driving and don't enjoy it very much okay so it's not all i'm saying is i do worry to the extent to which a very small number of extremely non-neurotypical people in a small part of California are allowed to define what the future is like for the rest of humanity to a point where we end up as analog creatures being forced to exist in a digitized world now no one would deny and least of all me that some of those achievements have been miraculous you know both of us I think agree that YouTube premium is one of the greatest things ever you know in the last thousand years yeah by the way I'll say that on an emotional level not just because I enjoy watching documentaries about steam trains.

34:59My father died a couple of years ago at the age of 93. YouTube contributed a significant amount to his happiness, you know, in the last few years of his life. A bit of it was nostalgia, a bit of it was, you know, utility, a bit of it was, you know, documentary footage, etc. So, you know, I'm the last person to say that this stuff hasn't been worthwhile or important. But the extent to which it becomes ideological disturbs me a bit. that efficiency as an ideology generally you know my thing the dormant fallacy what happens is a load of other things that we valued that nobody could quantify end up getting trampled now i'll give you a perfect example of that one of the things that worries me about technology is that in some cases in some cases it just attracts a lot of hostility to begin with because we're worried about it or whatever in other cases it's a little bit of a shape shifter because it arrives as an option and then ends up as an obligation.

35:56Parking apps, okay? There was a nice period where if you wanted to pay with coins, you could pay with coins. If you wanted to pay with a smartphone, you could do that. Then the people noticed that paying with a smartphone is cheaper. You don't have to empty the coin machines. Suddenly what used to be an option is now an imposition. And the extent to which I think that will, you know, that's one reason to be a bit of a Luddite. It's not that the thing is actually undesirable in and of itself. it's what it ends up killing now classic example which also isn't understood most people in urban areas do lead their lives almost to optimize time efficiency so the classic example of that is is what i call the railway station ticket machine brilliant option as a queue at the ticket barrier i know exactly what ticket i want because it's the one i book every single day i'll go to the machine and pay with my contundus credit card and that's all great and then the finance nerds come in and they get rid of the person at the ticket barrier now this is actually quite an important point marketers know that the more ways you sell the more you sell right more channels through which you sell finance people want to drive everybody to buy through the lowest cost channel so they get rid of the person i think you take a counter now in london where everybody's an unfriendly bastard the person behind the ticket counter wasn't probably that valuable if you go to east kent i won't name the station because i don't want to get into trouble okay um you go along and you say actually i'd like a you know day return to london please and they go well actually this train is actually a peak train at the moment but by the time it gets to dover it's an off-peak train so i'll get you a return to a peak return to dover an off-peak day return from dover to St.

37:41Pancras, which you can't get from the machine because you can only buy a ticket from where you started. Now, those little exchanges build trust. You know, they build affection. They build relationships. All kinds of things can be achieved human to human, which don't really yet happen machine to human. I think some of them can be recreated by machines, but not by the people who we've currently put in charge of designing the machines whoever wrote the sentence unidentified object in the bagging area probably wasn't possessed of immense levels of kind of empathy but but you know somebody wrote that sentence unidentified object in the bagging area from which i think we can confidently deduce that you know they weren't getting many of the world's i don't think that was dave trott was it you know i don't think it was david abbott who wrote that to love that you know and so we we are actually rights to be concerned and don't get me wrong i mean i think i think waymo i'm quite excited about it isn't as an addition to my travel repertoire yeah but what what what does it kill and i think i think i i see where your wife's coming from on uber actually when i got picked up from the airport yesterday first thing the first thing he said bro the accent man and then he said to me literally legitimately he just said you should have a podcast i'd listen to you all day again this is the optionality though where it's a bit like a hotel when you go to a hotel where you're forced to check in yourself quite often i absolutely hate that because you kind of want to have like a recognition that you've arrived somewhere but sometimes you don't want that at all but the important thing is that you have the ability to have both so okay apparently mcdonald's in the uk is opening branches of mcdonald's where that you can't order from a human you have to go to a screen now my wife and i are polar opposites here in that you know i go brilliant an opportunity to avoid human interaction my wife will get immediately get into some chat about the you know with the person behind the till and you know i mean we're blokes anyway we never find out anything listen you spend like two hours talking to someone at a party my wife will know their entire backstory they go have they got any children don't know what's their name don't Where do they live?

39:58Dunno. He's got a Tesla Model S. Okay. That's literally the shallow level of which men interact with strangers. You know, it's kind of totally crutchy. I think there's something really interesting about both EVs and self-driving cars. Because in a way, they're two separate technologies. But actually, for many reasons, they're kind of together. And they both have the same ability to kind of be a model for how change works. In that if 5 % of cars on the road are EVs, then actually not that much changes. it's the same with self-driving cars if they're five percent of the vehicles on the road are self-driving cars then you still need parking structures you still need traffic police you still need signs you need all the infrastructure there to allow both forms of a vehicle to exist so there's a really fascinating kind of future scenario where i guess there's probably a tipping point where if a certain percent of cars are evs then actually charging infrastructure is everywhere and actually all of the conditions for the road are kind of based around EVs.

40:57And similar things happens with self-driving cars where if you imagine a future state where most cars are self-driving cars. It would be impossible to drive yourself. It'd be very difficult to drive yourself, although there will always be that choice. There's a theory that at junctions, you wouldn't need traffic lights because the cars would just pass at 70 miles an hour, two feet apart. So when most cars are self-driving, you're actually in a situation where all cars can talk to each other. so there's no crashes because they can all effectively navigate around each other. Cars effectively become a swarm where they're dynamically routed to ensure that all roads have the optimum level of vehicles.

41:32You don't need traffic lights anymore. You can have slipstreaming. You can have slipstreaming. Cars can go much faster and effectively on freeways or motorways, they become trains that have like an automatic distance. You then think, you know what, like you can now choose to live anywhere in a city because where your school is if you're pretentious and you want to send your kids to a fancy school because these cars are everywhere and they're kind of perfect then you can put your seven-year-old kid in a car and actually there's probably never been a safer environment to be in than a kind of locked metal box as you go through the roads and that means that the real estate market changes and that means that the insurance market changes that means that as you look around every single street in miami today or london next week you start to envisage a situation where effectively you can get in any vehicle at any time and go anywhere.

42:17And then you realize, well, actually, if everyone's doing this, then you could have special vehicles that take you to, you know, on camping weekends and you can have special vehicles you can get into when you're trying to impress a girl. And it actually becomes this really exciting state. And I think this is how a lot of technology is, where if you take it and you sort of figure out how to apply it to what we have now, it's pretty good and it's quite exciting and there's a bit of friction. But if you let yourself sort of imagine a world where everything, especially the physical world the moment that the physical world changes around a technology and the moment that sort of cultural culture changes and cultural norms change then you enter this amazing paradigm where everything's different and the big question i guess about but hold on what have you lost at this point because should you optimize for optionality or optimize for optimality yeah and yeah and as your point is very good which is once a certain number of the cars on now by the way this has happened before the reason we have tarmac roads now i don't cycle at all and i'm an avid motorist okay and so my natural inclination is to love motorists and hate cyclists however there's another way of looking at this which is that the whole reason we have tarmac roads in the uk was campaigning from cyclists because there were bicycles long before there were cars and people said the rover safety bike which was this extraordinary amazing leap in technological achievement uh effectively we want smoother roads to ignore cycle around you see and so to something that cyclists gave us a wonderful road network and then these bloody cars came along of which i have to admit you know i'm an enthusiastic adoptee okay but we sort of shatted up for the cyclists at some level if looked at through that lens yeah and the self-driving cars if they start actually impeding your ability so i'll give you one area where I'm a massive Luddite okay when I get home I don't like having the mobile phone in the same room as me yeah okay I just don't want it yeah fuck it is a bloody attention-seeking bloody parasite okay so I put it in the kitchen I plug it in then I go and do some work on a computer and every time I want to do anything I have to go back to my mobile phone to authorize the thing now that imposition 30 second window you've got you're running to the now that that That imposition that you cannot function without a mobile phone on your person is deeply unattractive.

44:37Yeah. OK. And this is my point about everything starts as an option and we welcome it. And then suddenly it's an imposition. And it's, you know, but, you know, I mean, just to be clear, you know, my dad didn't want a smartphone. He was 90 years old. I don't entirely blame him. OK. You know, you don't really need a smartphone if you just go to M &S in Monmouth once every week. OK. And, you know, it was getting to the point where he couldn't park anywhere. Yeah, yeah. Now, this is not reasonable. But there's a marketing point here, which, in fairness, this is something marketers are right about.

45:08What is it? Basically, buying situations, you know, very bar and sharp. One of the things marketers are trying to do is basically maximize possible buying situations. And that means you go for variety. You know, there are times I go into McDonald's, and I don't want to choose from a screen because I want to go to a person and go, what have you got that you've got right now? Okay, I've got to catch a train. what's ready right now i don't care what it is just give me some shit right now you know and the and instead we have this choice architecture imposed on us which is no no no you have to go to the screen and choose and nowhere does the screen say ready right now and so at some level as i said we're analog beings forced to live in this digital world and the way in which we're forced to choose and process information is becoming increasingly kind of bifurcated and binary to a point which isn't really i mean a very interesting question would be a lot of these things are both good and bad so one of the things we tend to treat technologies like football teams which is you love them or you hate them and the great advice from an ai expert the commonwealth ai expert is don't treat ai like a football team you've got to be fundamentally ready to be um yeah if you like a bit ambiguous you know about it the classic example of that would be something a technology i'm totally ambiguous about is airbnb which is if there's a welsh farm and they can turn their stables into a holiday let and make a few extra hundred quid and people get to stay in a night in the countryside i can't really see the downside there it seems you know it seems entirely positive I get to live in places where I wouldn't otherwise be able to feel that I was kind of like a local.

46:50On the other hand, you go to Barcelona and if you basically are Catalan, you cannot live in Barcelona anymore because it's more profitable to let out an apartment for 16 weekends of the year to Airbnbs than it is to have a Catalan live there. which also means that if you do go and rent one of those b &b's for the airbnb's for the weekend you don't get to experience barcelona at all you sit outside a cafe with 27 tourists watching people wheel luggage across yeah you had that experience all people are doing is wheeling luggage across cobbles you sit there you're having a nice coffee you know probably the person running the cafe is still local but they've been shipped in from outside and you just watch people wheeling luggage across the cobbles and it's kind of shit you know and so this is the other thing you know we've just we've just got to accept the fact that a lot of these things at the you know marginally they might be attractive at the extremes they're actually slightly poisonous well maybe to round off um why don't we think about if you were a cmo of a brand today given everything we've talked about what would be the one bit of advice you would offer i think just trusting your instincts I mean, again, I sound a bit like some sort of hippie that talks about, you know, the power of belief or something.