Rory Sutherland: Capital ‘M’ vs. small ‘m’ Marketing & the Big Mistake the Industry Made

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Rory Sutherland: 'Capital M' vs. 'small m' Marketing & the Big Mistake the Industry Made

From David Ogilvy’s secret life in British Intelligence to reclaiming the 'dark art' of behavioral science.

Andrew Mitrak

Jan 15, 2026

A History of Marketing / Episode 45

Today marks exactly one year since I hit publish on the very first episode of A History of Marketing. I wanted to do something special for the anniversary, so I’m happy to share my excellent conversation with Rory Sutherland.

You may know Rory from his Ted Talks which have been viewed by millions, or his TikToks which have been viewed by tens of millions. He is the Vice Chairman at Ogilvy and the founder of their behavioral science practice.

I’m a big fan of his book, Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. As we discuss on the podcast, Alchemy is all about how marketers think, rather than just what we do.

Listen to the podcast: Spotify / Apple Podcasts

We also cover:

The real David Ogilvy: Rory shares about meeting David Ogilvy, and the parts of Ogilvy’s life you won’t find in his books, like his stint as a British spy in Washington during World War II.
The “Capital M” vs. “small m” marketing mistake: Why the industry got marketing wrong by turning it into a department rather than a way of thinking.
Behavioral science and business: How to practically apply behavioral science and “nudge” to marketing strategies.

Rory has a way of using history and behavioral science to reveal “unseen opportunities” that most traditional data misses. This conversation changed how I think about the role of marketing, and I hope it does the same for you.

Special Thanks:

Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.

And thank you to Paul Feldwick, whom you may remember from episode 30 of this podcast, for introducing me to Rory.

Espionage, Aerophobia, and the “Hidden” Psychology of David Ogilvy

Andrew Mitrak: I wanted to ask you about David Ogilvy. I wanted to start with him because he’s such a big figure, and I love his books. I haven’t actually discussed him that much on the podcast, and you’ve worked at Ogilvy since the late ‘80s. I’m wondering if you have an element of David Ogilvy’s success that you’ve learned from working at Ogilvy that I wouldn’t have learned from reading one of his books.

Rory Sutherland: I only met him once, and I can date it more or less exactly because it was after the Eurostar opened—the tunnel train tunnel between France and the UK. David was absolutely terrified of flying. In fact, in later life, he crossed the Atlantic by ship in preference to flying. He was absolutely paranoid about flying. I’ve met people who met him off flights, and he kind of emerged down the jetway as a kind of physical wreck. So, he was only really prepared in later life to travel to London after the train service opened. Consequently, I only met him once. I knew his wife, later widow, quite well subsequently because we used to have Ogilvy events and WPP events indeed at the Château de Touffou where he’s in fact buried.

I think actually there’s a part of his life as well where he will emerge actually even more interesting than he’s believed to be at the moment. Part of his life, which was effectively with British Intelligence in Washington, D.C. during World War II, when he worked with, for example, Ian Fleming and a few other people.

Andrew Mitrak: There’s the book about this called The Irregulars. It’s fantastic.

Rory Sutherland: The Irregulars, which is absolute—yeah, which I think I might have actually discussed this with the author. Of course, he was, whether it was just discretion or he was actually D-noticed or had signed the Official Secrets Act, but I’m fairly sure that during his lifetime he wasn’t really allowed to talk about this period of his life. A large part of which, I think, was effectively persuading the US to enter the war in the very beginning of 1940-41, pre-Pearl Harbor. He was engaged in persuading the US to enter the war, and then presumably also persuading the US to enter the war in Europe before they fully embarked on the war in the Far East. So, a large part of that was probably involved with his previous experience with Gallup; he would have been effectively gauging public opinion and working out the right strategies for getting American support, which was by no means, certainly in terms of the war in Europe, by no means automatic, certainly before Pearl Harbor. It’s very similar to World War I, in fact, where obviously Woodrow Wilson—who bizarrely is my fourth cousin twice removed—where Woodrow Wilson effectively fought an election on the whole basis of isolationism and then had to do an about-face. So, I think there’s a whole part of his life which he couldn’t write about at all, which, being a showman, which he was—and I make no apology for that—he would have undoubtedly loved to have written about, but simply couldn’t.

Ogilvy’s Psychology of Leadership

Rory Sutherland: When I said I met him the once, he presented his work and gave a talk. Interestingly, we’d sort of heard rumors that he was slightly losing his marbles because this would have been—he would have already been in his 80s at that point. But he was completely lucid and fantastically clear in his presentation. I always remember a detail, which is that he’d pinned up a lot of his work, which was then laminated and stuck to the walls. Of course, he then needed it collected, and you had that little awkward social moment where nobody wants to be seen doing the—in a large group of people, no one wants to be seen doing the menial work of collecting the drawing pins and putting everything back in a bag. He simply made the point that he said the work has been pinned up on the wall by the European chairman of Ogilvy, so it shouldn’t be beneath anyone’s stature to help me take it down. So, there was that psychological astuteness, a very, very clever bit of behavioral science. Look, if the second most senior person in the room has pinned this work to the wall, none of you should feel any diminution of status by removing the drawing pins. So, he was clearly that sort of very astute psychologist even in his—I’m trying to work out the date, he was born in 1911, so he would have been in his sort of mid-80s, I’m guessing. He died in ‘99 [sic], I think, if I’ve got that right.

The Limits of Traditional Market Research

Andrew Mitrak: Yeah. So, you mentioned how he has this intuitive behavioral science sort of understanding. He also worked for Gallup, and he really preaches about research, research, research in his books. A lot of your work is sort of where does research fall short, right? A lot of your insights are about what is intuitive or psychological where people aren’t stating their preferences? Marketers are being intuitive and uncovering revealed preferences through behavior. I’m wondering, do you have a heuristic for where research falls short, or where you might disagree with Ogilvy on his take on marketing research?

Rory Sutherland: I mean, we can overstate this, because it’s often taken, my view, that market research is a terrible thing because people don’t know why they do what they do, which is to some extent true. Now, this is not to say that a lot of research can’t be both useful and accurate. If people really hate something and they say they hate it, it’s undoubtedly worth taking that on board. You could learn an awful lot about what you’re getting wrong by simply researching your customers. There are also, which David didn’t have to the same extent, completely free sources of information like call centers, which I always think are a massively underutilized resource because they’re the place where you learn what you’re getting wrong, or what your customers can’t do online, or all manner of things. So, don’t get me wrong. He never said this famous phrase often attributed to him: that the trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say. That’s somebody else who said that. I don’t think David would have said it because he was undoubtedly a research advocate because he preferred the discipline of research to what he called sort of random creative self-indulgence.

Tacit Knowledge and Entrepreneurial Arbitrage

Andrew Mitrak: It’s funny because I want to pause on that line real quick because it’s in your book. It’s in Alchemy, but you say in Alchemy that you don’t think he ever said that, or you can’t confirm whether he ever said that. So you found out that he did not say that?

Rory Sutherland: Well, certainly nobody, and several colleagues of mine had tried to find an accurate attribution. I think if you go to something like Quote Investigator online, it has been attributed to other people, possibly earlier than David. And by the way, I mean, that’s not completely true. A lot of the time we do actually think what we feel, and we say what we think, and we do what we say. What is important, though, is that the tacit information is disproportionately valuable because it’s there that you can find yourself either under a massive illusion about what people really want because it’s what they say they want. Lower prices would be an example. It would be very, very dangerous to take that literally because people always say it because it’s a rational-sounding answer. “I’d do this more often if only it was cheaper.” Well, that’s both true and not true, and in any case, there will also be a chunk of people who will never tell you that they’d do something if it were only more expensive. So, around price, for example, there’s an enormous amount of misinformation. Also, information that’s tacit, which therefore isn’t in the public domain, is disproportionately valuable because it’s a source of kind of entrepreneurial arbitrage. And you know, I mean, okay, if you—nobody when Steve Jobs came along was really actively saying, “I’d buy a computer if only they weren’t so f**king ugly.” Okay? Nobody was really saying that. And so, an awful lot of entrepreneurial activity involves a bet on something which you assume to be felt but not said. Because the things that are said are already in the public domain and there’s no competitive advantage to be gained. It’s a bit like the stock market; it’s already priced in.

I’ll give you an interesting example of this because I’ve been campaigning recently that hotels should provide monitors in the room. Because my argument is, I spend much more time in hotel rooms working than I do watching TV. And so, if either you had a USB-C cable which enabled you to connect reliably to the 4K TV, or you had the option of paying for a monitor in your room, I think a lot of people would go, “That’s great.” What’s weird about that is that until I said it, which was a hypothesis, nobody else was saying this. Because it’s one of those things that’s obvious in retrospect, but because the consumer doesn’t expect there to be a monitor in their hotel room, nobody complains about there not being a monitor in the hotel room. So, you know, all these weird things. I’ve mentioned other things like it really annoys me when I travel with my wife that most hotel rooms either have naught or only one inadequate desk. So one of you always ends up trying to work by propping up a laptop on the bed or on some woefully inadequate table or having to sit outside on a balcony. And the interesting thing about these things is that there are these unmet needs out there in the marketplace, which are really unmet because they’re unsaid, and they’re unsaid because they’re unthought, and they’re unthought because they’re unfelt. However, if you provide these things, my hunch is—and we can disprove this very easily by just charging 20 quid a night for a monitor and seeing what happens—it’s very easy to test that hypothesis.

Why Data Without a Hypothesis Fails

Rory Sutherland: Quite often, I think what we’re trying to do, and Roger Martin is the real guru on this—what we’re trying to do is use pre-existing data as the basis for making a decision. And the problem is pre-existing data is not representative; it’s often completely wrong, or it’s miscategorized, or it’s misunderstood, or it’s simply inaccurate. The proper way to do business is to develop a hypothesis, design an experiment to reliably test the hypothesis, perform the experiment, analyze the data to see whether it refutes or confirms what you believe, and then rinse and repeat. Or act on the information that’s derived. But that starts with a hypothesis, which is an act of imagination. So, David would argue completely—and I wouldn’t disagree for a millisecond—that if the data you already have basically rubbishes a hypothesis, then that data’s really valuable. Or if it likely confirms a hypothesis, then that data could be very valuable in helping you decide what to do next. What isn’t a safe thing to do is this idea of kind of theory-free science where you just rely on the data to tell you what to do.

Rory Sutherland: I have a wonderful story about this. On the basis, someone told me this very lunchtime, fantastic person who works for The Times—that’s the proper Times, not The New York Times. And they invested a huge amount of money in a science publication because they had very reliable data that told them that their readership loved reading things about science, and all the most read articles in The Times were about science. So they went and spent a fairly large sum creating a new sister publication and creating an app for it and publishing—and it went nowhere. And it turned out when they investigated it, that what had happened was that all articles about sex and relationships had been tagged as though they were effectively science articles. Because nobody knew how to define them, so they defined them not as social science, I think they defined them as sort of human science or whatever it was. And so all the articles like “Sex in the Olympic Village,” which was the most read article of ten years, which was talking about sexual practices at the Beijing Olympics, were tagged as being science articles. Brilliant informants said that based on that information, we would have probably been better off launching a pornographic magazine than a science publication. Because people are very interested in sex.

Andrew Mitrak: Especially among Olympians.

Rory Sutherland: Particularly Olympian sex is, of course, massively—you can imagine, that’s the most click-baity, fantastic title imaginable. By contrast, she said, we had a huge success launching a thing called Sun Bingo. And the simple insight was from a single journalist who said, “As soon as they ban smoking in bingo halls, the demand for the online bingo is going to go sky-high.” Now, that was a single anecdotal hypothesis which made them a fortune. And so this idea, I think, this is a product of defensive decision-making. And this is something which is also attributed to David, which he didn’t say, but I’m sure he quoted a lot. It was, funnily enough, originally said by another Scotsman, which is, people use statistics the way a drunk uses a lamp post: for support rather than illumination. And I think what we’ve got to be very careful of is there’s this massive tendency to go, “If you start your presentation with ‘the data tells us...’” Does it mean you’re going to make a very good decision? No. It might help, but I mean, it doesn’t certainly. On the other hand, does it mean you can be absolved of any blame in the event that things go wrong? Yep, absolutely.

Research vs. Showmanship: Hopkins, Ogilvy, and Feldwick

Andrew Mitrak: You mentioned how David Ogilvy was a showman, and of course he’s a showman. We talked to Paul Feldwick about showmanship; that’s a big topic of Paul Feldwick. We also talked about Claude Hopkins and his book Scientific Advertising.

Rory Sutherland: Which Feldwick is less sympathetic to that book than I am, I think. And that’s because he comes from above-the-line advertising, and I come from below-the-line advertising, even though we went to the same school.

Andrew Mitrak: I want to get your reaction to this. This is the thing about why he’s sort of dismisses it partly, is that the book is Scientific Advertising and the book would be like: give facts about the product and don’t be frivolous. But then you look at what Lord & Thomas did at this time, and they were doing big publicity stunts like baking the largest cake in the world, which had nothing to do with the product, and they were doing showmanship, and preaching on the one hand facts and scientific advertising, and then doing very unscientific things in a way it was sort of using science as a way to kind of sell your agency, because that’s what your buyers wanted.

Rory Sutherland: He tells this wonderful story about Sunny Jim, which is the character that was used to promote Force cereal. And the bizarre thing is they went away from absolutely jingle-led entertainment in the US because Lord & Thomas, I think it was, told them they had to be more scientific and talk about the product. In the UK, the marketing department clearly went rogue. In my own childhood, we had a—and by the way, that was not just an advertising campaign, it was a branded merch campaign, because you could send off a certain number of box tops and £2.50 and have your own cuddly Sunny Jim, who was a weird kind of 18th-century roué character whose sunny disposition came from eating large quantities of the product, presumably. And he makes the point that the brand absolutely succeeded in the UK where it continued with its entertainment-based jingle-led platform, whereas the imposition of scientific advertising in the US was something of a catastrophe for the business.

Rory Sutherland: So it ended up being one of those weird things which survived much better in the UK with what you might call a looser advertising regime than in the US. Now, Claude Hopkins, a lot of what he says is absolutely true for bottom-of-the-funnel advertising, direct response, which is before someone can send off a coupon. Okay, it’s very boring to say this, but putting “allow 14 days for delivery,” telling people when to expect their product. In many cases, someone can’t actually buy a product without—they can’t buy a car without knowing how big it is, because they need to know whether it fits in their garage. So at the point of final irreversible commitment, there is a whole lot of factual stuff. And I don’t apologize for this. And by the way, I don’t think internet advertising is always very good at it. A lot of online advertising seems to fall between two stools; that it is neither entertaining nor informative. It’s just transactional. Quite often you go, “Is this thing dishwasher proof?” would be the kind of thing I might want to know before I spend 200 quid on an ice cream making machine. That’s the kind of thing which is really, really important.

Rory Sutherland: So Claude Hopkins wasn’t wrong, by the way. He was just talking about a very particular kind of advertising which was off-the-page, which was obviously—but was Lord & Thomas based in Chicago or New York?

Andrew Mitrak: I think they were Chicago.

Rory Sutherland: Well, you see, there you go. Because Chicago is the world capital of direct marketing. All those great direct marketing powerhouses like Montgomery Ward and I think Sears Roebuck started as a direct marketing house. Chicago, because it was the rail hub, was the direct marketing capital of the US. And so it always had a kind of slightly more Midwestern practical, pragmatic tone of voice because its target audience was farmers. And also it was often doing off-the-page sales or direct marketing of some kind or another, where at that point in the customer journey, there comes a point in the deal where you go, “Okay, I’m happy to buy this car, but when will it be delivered? What color can I get it in?” All that sort of specific stuff. You can leave out of the upper stuff, upper-funnel activity. But at some point, you need to absolutely be clear: okay, what is the deal in which I am now engaging? What am I signing up to? What’s the absolute deal here? What’s the worst-case scenario? Because there’s the creation of desire at the top, you might argue, and there’s the elimination of anxiety at the bottom. And Hopkins was quite largely right, I think, about what you need to do to get someone over the line. There’s a point where you’re looking around a house and the estate agent can crack gags, but when it comes down to the fine print, even someone as frivolous as me would go, “Okay, we do need to get a bit serious about whether the washing machine’s included.”

Andrew Mitrak: Yeah, that’s fair. I think also what I’m just putting together now is Claude Hopkins, David Ogilvy, and you, I think all started in direct response, right? And I think that’s a certain—

Rory Sutherland: Claude Hopkins and David Ogilvy didn’t actually, but he always said that it was the best place to start. That’s what he said. He always said that the best place for an account person to start was Procter & Gamble, and the best place for a creative person or copywriter specifically, I think, to start would be to spend three or four years working in a direct marketing agency where you learn what works. And where also, by the way, you learn one of the things you learn which I think Hopkins is probably right about as well, I think all good creative people understand this instinctively, is that really small things make a huge difference.

The Behavioral Economics of “Small Fees”

Rory Sutherland: I was just reading a piece of behavioral economics by the great George Loewenstein at Carnegie Mellon. It’s a famous paper from quite a few years ago, and he’s identified the population basically divides into unconflicted spenders who spend basically pretty sensibly. Then there’s a group of people which is probably 30% of the population who are skinflints. They find the pain of parting with money at the moment of purchase so agonizing that they don’t even buy things that they should buy that would make them happier in the long term. And then there’s a 20% of people who are spendthrifts. Now, here’s one of the most extraordinary findings, which amazed even me, which is they did an experiment where people had basically won or were given as a reward for some piece of work a box set of their choice. It was kind of like Family Guy, The Simpsons, the first season of whatever it was, some DVD program like Breaking Bad or something of that kind. I can’t remember the details; might have been The Sopranos. And then they were told, “We’ll send this to you free within a month, but we can also rush it to you overnight for a fee of $5.95.” Now, that basically put off the majority of the skinflints; they went, “No way am I paying $5.95 to get it four weeks earlier.” However, if you phrased it as, “We can rush it to you overnight for a small fee of $5.95,” then a large number of the skinflints were actually happy to pay. Brilliant, brilliant experiment. To an economist, they would be pained by that because $5.95 to them is $5.95, but if you refer to it as a small fee, then mean people go, “Okay, it was only $5.95.” If you say a fee of $5.95, “No, I’m not paying that.” Now, that’s even by my enthusiastic adoption of behavioral economics, that struck me as pretty goddamn weird. But nonetheless, it may be that a certain group of people find paying for things really painful, and you have to almost mentally prepare them for the act of parting with $5.95 by saying, “It’s almost, I think the implication is, this isn’t the market price, it’s just obviously it’s just a mere bagatelle.” But I find that so interesting.

Why Marketing is Fat-Tailed

Rory Sutherland: By the way, I think that we’ve got marketing wrong because I think marketing is fat-tailed. We’re judging particularly performance marketing as if it’s thin-tailed, as if one unit of expenditure delivers a unit of value. Every quantum of cost has to be matched to a quantum of incremental value; otherwise, you’re not allowed to do it. That’s just marketing now defers to finance. And my argument is, I don’t think it’s like that at all. I think the reason you do marketing is because one time in 10, 15, 20—if you’re getting it right—every now and then, you just stumble on something which is a complete game-changer. And I would argue that the way to judge—not all of it, but the way to judge a portion of your marketing expenditure should be very close to, well, for example, a Silicon Valley investment fund, a film studio, a pharmaceutical research laboratory, a publisher, an A&R man in music.

Andrew Mitrak: The big hits pay off for the duds, right?

Rory Sutherland: The big hits render everything else irrelevant. But whereas if you’re in music A&R and you’ve signed The Rolling Stones, that’s basically your career taken care of. In marketing, if you do the equivalent thing and you sign the Rolling Stones, well, you just get to work for another six months, and then the credit for all subsequent revenue emerging from that breakthrough goes to somebody else. It’s just swallowed into the balance sheet under the line “revenue.” And so, as a marketer, you’re held responsible for every quantum of cost, but you can only claim a small part of the upside, which is exactly what Steve Jobs noticed when he first joined Pixar.

Why Steve Jobs Hated Making Commercials

He went into making commercials, because Pixar was too expensive to make a feature film using that technology. So he was making commercials. And very rapidly Steve Jobs went, “This is s**t. I don’t want to do this anymore because I can only lay claim to a small, finite and predefined portion of any upside I create. I create a commercial that sells $110 million of product, I get paid $300,000. That’s not the kind of business I want to be in.” And every marketer finds themselves effectively in the same position, and every agency also, by the way, finds themselves in the same position.

Andrew Mitrak: Yeah. It’s funny, you mention these Pixar commercials. They did these Chips Ahoy! commercials, you know, those terrible chocolate chip cookies and all that stuff. And I still think of, like, when I think of Chips Ahoy!, I think of those commercials. And those are from when I was a little kid. And it’s like, that’s still playing dividends today for that company, even though they paid Pixar once.

Rory Sutherland: If Jobs realized, “If I make a film, you know, if you make Toy Story, I’m still earning money from that bad boy ten years later—you know, they’re the DVD sales or the streaming rights and the da-da-da.” Whereas if I make a commercial for Chips Ahoy!, I get paid for making the commercial and the upside—well, actually, it doesn’t even go to the marketing function. It probably goes to the marketing department in the first instance for the first six months of uplift, but the fact that you’re still remembering that ten years later, no one’s getting any credit for that.

Andrew Mitrak: Yeah, I think it’s like 25 years later, 20, 25, something like that. Those were before Toy Story, which is like, what, 30 years old now?

Rory Sutherland: Crikey, you’re right. That is seriously old. Yeah, yeah, yeah. It’s really old.

Why Humanities and History Matter More in a World of AI

Andrew Mitrak: So, I want to ask you also about history, because a lot of your examples in your book, in your talks, they draw from history. Of course, there’s like the Frederick the Great potato example, and you have, you know, going through your book, there’s like pictures of a design of a fencing sword from hundreds of years ago. There’s the Parthenon, and you have a chapter called “There’s Nothing New Under the Sun.” I’m wondering, do you read history a lot to get marketing ideas, or is history underrated? What’s your interest?

Rory Sutherland: I think that you’ll find that people with a humanities degree become weirdly disproportionately valuable in an AI world.

Andrew Mitrak: Totally. I’d like to think so.

Rory Sutherland: And you know, I think that we’ve overvalued technocratic skills in relation to creative skills very, very badly in all the Western—and probably everywhere else—education systems. And actually, people who do hardcore degrees like engineering would probably come to agree with that. Einstein actually made exactly that point, which is that it’s the imagination that ultimately is the magical quality that makes us human. Therefore, if we can to some extent automate all the other stuff, what we’re left with is really a massive need for people who can ask better questions rather than get reliable answers, because the second part has already been done for us. You know, that’s taken care of. It’s a bit like, is there any need in an—just as you could ask the question: is there really any need for people learning log tables in an age of electronic calculators? Is there any need for people—I still, I did quite advanced mathematics, I still have no clue what a cosine is. I can’t remember. Okay? I’ve never had to work out the surface area of a cone. But on the other hand, statistical knowledge, I think, becomes more and more valuable because that’s more nuance-ridden. You know, actually, if you’re a statistician with a bad nose for statistics, you can make catastrophically bad errors while thinking you’re being perfectly logical. And so, as technology, in a sense, takes care of one thing, my ability at addition becomes less and less important—I probably need to understand the principles—but whereas my ability in other fields then becomes more and more valuable. So, AI will also sort of, if you like, further move the goalposts a little bit in terms of what we need.

Rory Sutherland: And also just general, by the way, the great thing about advertising—which I’ll defend working in advertising and marketing on this grounds alone—which is, if you’re an actuary, you don’t really become a better actuary by sitting outside a cafe and watching people, or going to see a French art-house film, or watching people in the pub, or having a chat with some friends. But as a marketer, anything counts. I mean, you seek inspiration from wherever you can find it. David Ogilvy himself said, a good copywriter is characterized by being an extensive browser in all kinds of fields. And it’s kind of pattern recognition at some level. So, the more parallel field—nothing excites me more than to meet a copywriter who’s into jet engines or trains, or indeed a brilliant copywriter I met in Belgium whose main interest is branding in the medieval era. So he’s absolutely fascinated by medieval history, creative director in Brussels. And he draws extraordinary inspiration from things like, you know, why Charlemagne the Great was the first king ever to be crowned by the Pope. Which was effectively a kind of branding exercise which meant that you no longer had to completely defend your position in combat because you were now effectively divinely sanctioned. And therefore, anybody who sought to actually undermine you was actually taking on God rather than—now, he was chatting to me about this. Now, this is the kind of thing which automatically I find wonderfully reassuring. To be honest, there’s probably a high degree of ADHD which you’ll find in a creative department. Because, funnily enough, being distracted—I mean, of course we mustn’t mischaracterize ADHD—it also makes possible extraordinary feats of concentration. But the capacity to be easily distracted is to some extent in that job, it’s a feature, not a bug. It’s more virtue than vice, I would argue.

Modernizing Ogilvy’s ‘Rolls-Royce’ Ad for the EV Era

Rory Sutherland: And people find creative people frustrating for all kinds of reasons. You know, they tend to miss deadlines or they start—more characteristically, they start work late because they’re waiting to get lucky or they’re waiting for inspiration. Or they change the subject, or they obsess about something which seems completely irrelevant. E.g., David Ogilvy is writing an ad, the Rolls-Royce engineers hated that ad because they’d spent a whole load of time improving the drivetrain and the suspension, and David was writing about the clock.

Andrew Mitrak: Yeah, the electric clock that’s quiet.

Rory Sutherland: I was saying a similar thing, which is my 21st-century equivalent of the Rolls-Royce “60 miles an hour, the loudest thing in the new Rolls-Royce is the ticking of the electric clock.” I was talking to a bunch of people involved in climate change awareness and particularly the transition to electric cars. I said, you can talk about efficiency till the cows come home. But the best ad for—I don’t know, have you gone electric in your car?

Andrew Mitrak: I’m still running on dinosaur juice.

Rory Sutherland: You’re on dinosaur juice. It drives, by the way, petrol-heads absolutely insane when you call it dinosaur juice. But I said the best ad I got for my electric car happened when it snowed, and I drove about a hundred miles, and when I arrived, there was still snow on the hood of the car. Now, in any petrol car—now, that’s an ad for the inefficiency of an electric car in a way that humans appreciate because there’s zero waste heat. I was astonished myself, because every time you drive anywhere, you’ve got snow on the hood of the car, and you drive for 10, 15, 20 miles, the heat from the engine melts it, it slides off, it melts, it liquefies, whatever. And then I found myself in a car park and you look at the car park and all the electric cars still have snow on the hood and all the petrol cars, it’s all melted. And that’s a wonderful ad for the extraordinary energy efficiency of the electric motor. But it’s an ad translated into human perception rather than scientific notation.

Capital M Marketing vs. small m marketing: How Rory became accidentally famous

Andrew Mitrak: Something that really resonates with me is this interdisciplinary thinking you bring. You know, you call it alchemy in the book, and really there’s psychology, there’s economics, there’s design, salesmanship, showmanship, culture, history, of course. And something about my podcast, “A History of Marketing,” people say, “Oh, that sounds really niche.” It’s like, well, marketing is kind of everything. It’s kind of all these things, and everything that happened before this moment is history. I’m wondering if you kind of also align with that?

Rory Sutherland: This is the big mistake that marketing made, is it became a department. And it defined itself by what it did. And so people think of marketing as crayons, or it’s the coloring-in department, as it’s often called. Or it performs services like producing marcoms or brochures or hosting exhibitions or doing PR. That’s Capital M marketing, which is a tightly defined discipline and function within an organization. Then there’s small m marketing, which is the application of psychology to wider problems. Which literally, the market for small m marketing is a hundred times larger than the market for big m marketing, and yet we’ve sold ourselves both as marketers and as agencies. And this is—this is why I became accidentally famous. I keep telling people this. I said the reason I became—and I mean accidentally famous, it wasn’t my own strategic genius or insight that led to this. It was simply that I ended up giving a load of talks to people who didn’t work in marketing, which marketers don’t normally do. When marketers talk to people who don’t work in marketing, they immediately adopt the language of finance, which is defensive. It’s the worst possible, I think, way in which to actually communicate the value of marketing, which is to say, “Honestly, some of this stuff actually works. Look, we spend X and we got Y.” And it’s a completely subordinated view of selling your discipline.

Rory Sutherland: Now, what happened is I ended up talking to a load of people, like, I’d talk at a bloody procurement conference or a compliance conference, or I’d go on a podcast which is all about engineering. And pretty quickly I’d go, “Well, there’s no point about talking about ads incessantly.” I’d show a couple of ads because they’re funny and illuminating and illustrate a point. But you know, if I just become a “how to make an ad” person, these people are never—99% of these people are never going to have to make an ad in their life and I become irrelevant; they won’t ask me back. So I just change—I just changed the script without really out of necessity, really, not out of inspiration, which was: let’s not talk about what we do, let’s talk about how we think. And suddenly—and that’s what the book is about—I suddenly realized that’s what Alchemy is about. This isn’t about what marketers do, it’s about how good marketers think.

And suddenly I discovered—I expected Alchemy to sell to, you know, people in, you know, creative businesses and marketing people and, you know, a few curious other people who wanted to get a job in advertising or whatever it might be. But instead, I got bombarded by, like, engineers contacting me, hedge funds, venture capital firms. “What the f**k’s going on here? Right, okay, I wasn’t—I wasn’t expecting this.” You know, I mean, I went on a radio show with Chris Evans, and the book was like, for the next three days, it was like in the top 30 books on Amazon. Not 30 advertising books, not 30 marketing books, top 30 effing books. “This is f**king weird, right?” My argument was it was an accidental discovery that the market for how and the, by the way, the strategic and corporate importance of how we think, which is to look at something as if you’re behind the pupils of a customer, with the mental apparatus of a customer rather than looking at something through the lens of a manager or a, you know, a business operator. Which therefore makes possible, because of the vagaries of human perception, this makes possible a solution to problems which seems intractable in the physical world can be solved psychologically by simply understanding the psychology of the consumer or the, you know, the customer, whoever it may be. Or indeed your own employees, by the way, or your colleagues.

Rory Sutherland: And so, what I—again, I’ll be absolute clear about this, it was a lucky accident, you know, it was born of necessity. And then I suddenly realized we’ve been total idiots because we’ve spent the whole 30 years defending what we are—our existence on the basis of what we do and what we’ve done. Whereas the real story here is how we think. And you know, I’ll give you an example. I think that government is increasingly hated by the population. Not because government is bad on policy or it’s too left-wing or it’s too right-wing or any of those economic or legal things. I think government doesn’t know how to relate to people. I think it’s become so tied up with sort of economics and law that it simply doesn’t know—I’ll give you an example. In London, in London, they introduced 20 mile-an-hour speed limits. Now, generally popular with cyclists, popular with pedestrians, popular with the residents of the road, very, very unpopular with motorists. Now, I support that decision on the basis of life-saving alone, and by the way, there are arguments which say that if you got rid of traffic lights and replaced them with small roundabouts—I know you don’t do roundabouts over there, although Florida has a few, actually—you could actually speed journeys. You could actually reduce journey time because although people are actually traveling more slowly, they’re able to interact with other vehicle drivers without the dirigiste intervention of a set of traffic lights. In other words, you could have much more free-flowing traffic over long distances.

Rory Sutherland: But I said, look, if you said two things, right. One, the fine and the punishment for going 25 in a 20 limit should be less than the punishment you get for going 85 in a 70 limit. That’s the first point. In other words, it’s ridiculous to find—and I’ve just been fined actually for going 25 in a 20 limit on a—on what was actually a dual carriageway. Now, if you said to me, “Okay, because it’s only 25 and because it’s in a 20 limit, you pay two penalty points rather than three and the fine’s 50 quid rather than 90,” what the consumer would go, “Okay, you’re meeting me halfway. You’re being reasonable.” Okay? The second thing I would have said is: we’re going to introduce these 20 limits but we’re going to get rid of speed bumps. Because, okay, look, Mr. Resident, you’ve already got your 20 limit, the cars are driving past safely, you know, the 20 limit’s being enforced. Don’t make people drive over f**king obstacles as well, okay? Now, if you’d done this quid pro quo, consumers aren’t so bothered by the size of the quid and the size of the quo as long as there is a quid—sorry, a quid for the quo. If you just impose a rule with no concession made anywhere else, I think for entirely understandable evolutionary psychology reasons, people view that as being demeaning. Nobody in a free market business would ever conceive of approaching someone with a deal in which the counterpart was only a loser. They might try a deal where you get not very much in return for quite a lot. They might try that on. But no one would try on a deal where you go, “You give me this and I give you f**k-all.” Right? I mean, even to the point where if you make a donation to charity, they give you a little sticker. Right? You get something. It signals. Yeah, I get a bit of signaling value and you know, I don’t get bothered by other charity people because I’m wearing the sticker.

Rory Sutherland: And yet government is basically institutionally autistic. In other words, it just imposes things that it decides are optimal without considering the emotional effect on the person who’s disadvantaged by the legislation or by the policy. It’s completely unlike every other form of transaction that exists between humans on the planet. It’s like Domino’s Pizza going, you know, “Pay us some money and we won’t s**t in your pizza.” It’s kind of like, what the ===? Right? That’s not—that’s not a deal, that’s basically an imposition, okay, yeah. Domino’s, “Oh, yeah, yeah, okay, I’ll have the express delivery. Oh, pay us four pounds and we won’t s**t on it.” Right? That’s basically how government behaves. And then they go, “Nobody likes us.” But—and by the way, I don’t totally blame politicians. I think politicians who are elected have quite a good eye for and actually are quite instinctive marketers in many ways, and some of them are certainly. I think it’s probably the bureaucracy with which they’re dealing which is institutionally autistic. That would be quite fun to do as the experiment. That would be really good fun to do as an experiment. “Yeah, pay us five pounds and we won’t s**t in your pizza.”

The Future of Tipping and Service Incentives

Andrew Mitrak: I sometimes feel that way when I’m offered a tip on a page, because everything offers a tip now, and I kind of think, oh gosh, if I don’t put the tip in, what’s going to happen, right?

Rory Sutherland: By the way, I’m unusual for a Brit in that in many settings I’m pro-tipping, because I think it does provide an incentive to provide better levels of service and so on. It also gives you a discretionary amount with which you can provide financial feedback and so on. Obviously, for reasons of total self-interest, I like to tip in places where I’m a regular, because I don’t want to be known as “Stingy Rory.” So, there are rational reasons. But in the US, I kind of go—like coffee shops—this is getting a bit weird. I am not the guy in the Reservoir Dogs.

Andrew Mitrak: The thing is, now with terminals, you’re presented with the tip option before the service has been rendered. I think it works well as an incentive after, like, “Hey, you’ve done a good job and I’m going to leave a tip after.” Even the Reservoir Dogs scenario is more about that. But now with these Square terminals or whatever, it’s before I’ve even gotten my sandwich from you, I’ve got to tip you 20 percent.

Rory Sutherland: And you haven’t even made the—so a large part of restaurant tipping, the reason you didn’t tip in McDonald’s is you hadn’t got your meal yet, so it was too early to decide whether the actual experience was tip-worthy.

And now as you said, you’re at the terminal and it’s kind of like.

Andrew Mitrak: Are they going to s**t on it? Is that the thing that’s going to happen if I don’t give the tip?

Rory Sutherland: I absolutely agree with that. I think there might be a really interesting technology around tipping which I’ve actually discussed with someone once. I would like a world where you could tip call center staff, because the best five to 10 percent of them are worth their weight in gold. And I think they deserve a lot more money and I don’t think they’re paid nearly enough. So, there are areas where I’d like a mechanism.

This is my idea, you actually have a load of cards with a QR code on them, and you basically hand them the card, which is for an indeterminate amount. Then when you finally check out of the hotel, you can basically apportion a reasonable amount of tipping to everybody in proportion to the value they’ve delivered in the course of your stay, rather than tipping the doorman when you arrive on the fear that they’ll treat you like s**t if you don’t. It also encourages perverse behaviors, like that business of insisting on taking your luggage up to your room. For crying out loud, I can manage a wheelie suitcase and an elevator. I don’t want you to take my laptop. Leave me alone.

Why Behavioral Science Struggles in Corporate Marketing

Andrew Mitrak: I wanted to come back to something that you brought up that was sort of a lightbulb for me, which is “Capital M” marketing, which is more like marketing organizations and how marketing presents itself, and then “lower case m” marketing, which is a little more marketing in practice and marketing thinking. I’m wondering if this is partly why I don’t see behavioral science and nudge really showing up within a marketing org. I feel like it’s somewhat at the margins. It might be a little experiment, it might be a pilot project, it might be something you hire a consultant for, but I don’t really see it embedded into individual roles or into org charts at a company. Do you see that as sort of why it’s a little at the margins of marketing?

Rory Sutherland: Well, I somehow think that I don’t think it’s salvageable with conventional corporate structure. I think the way to solve it in part—but I don’t know if this works or whether it would be any good—is I think businesses should have a customer board where you actually talk about value creation rather than cost control. Because at the moment, what is ostensibly a board meeting is really a kind of exercise in cost reduction. It’s not a proper strategic discussion because it doesn’t include either the customer or the future. You can’t really develop a strategy without considering those two highly nebulous variables.

Rory Sutherland: Of course, people who are certainty-addicted, typically like finance, who are basically variance-averse, they want to live in a low-variance deterministic world. Those people hate discussing those things because of course they are nebulous. It’s rather like I always think that cost reduction is immediate and quantifiable, which is why McKinsey & Company is an enormous business. Whereas value creation is non-immediate, it’s deferred, and it’s to some extent unpredictable. Consequently, people who are variance-averse overweight cost-cutting activity and are never held responsible for the opportunity costs that are incurred. There’s a trade-off between being efficient and being effective. There’s a trade-off between being short-term stingy and long-term rich. There are all these kind of trade-offs going on, but if you turn the thing purely to a kind of financial exercise, I think you’re killing a business in the medium to long term.

The Strategic Advantage of Family-Owned Businesses

Rory Sutherland: When I was tootling around Texas, every time I encountered a really impressive business, I’d make inquiries as to its ownership structure. Nine times out of ten, it was either founder-led or family-owned. I suddenly realized the family-owned businesses have this fantastic advantage over publicly held companies. Because one, they’re free to decide their own time frame. Two, they’re free to decide their own metrics of success. I don’t think you can be a brand unless you can design some of your success metrics that are actually chosen by you, not imposed on you by some investment analyst aged 27.

Rory Sutherland: In order to be a brand, you have to distinguish yourself or differentiate yourself in some way, or at least make yourself distinctive. You’ll only do that by following metrics which are unique to you. I’d apply that to your individual life. I think you’re only a free individual—I don’t know if you’re one of these people whose parents wanted you to become a lawyer or a doctor—you’re only really a free individual if you say, “No, I don’t regard being a doctor as a badge of success. I want to go into contemporary dance.” That’s the definition of a free individual, which is you don’t allow all your targets and metrics to be imposed on you; you devise some of them yourself.

Rory Sutherland: So, that’s a really important distinction. I think family-owned companies can play different time scales; they can play to a one-year, two-year, three-year time scale. They’re not fixated on the next quarter. They can define their own metrics of success and their timeline of success. Also, they’re focused on the customer and to some extent their own staff, more than the narrow preoccupations of not of share owners, by the way, but of shareholders, the institutions that hold the stock. They aren’t there to distract them all the time.

Why Observing Reality Beats Investment Statistics

Rory Sutherland: The final point, which Dan Davies, a wonderful writer who you ought to have on the podcast, makes is that the big advantage of being customer-focused over shareholder-focused is that your customers actually live in the real world. So, you are spending your time actually observing what is happening in reality rather than devising some artificial statistics to keep the investor community happy for the next three months. You are vastly better off devising your inspiration from reality than you are effectively pandering to a bunch of economic theories which were probably considered slightly dated at Harvard Business School in 1971, but which nonetheless pervade the general preoccupations of investment analysts.

Rory Sutherland: I went to Buc-ee’s and I went to H-E-B and I went to all these Texas companies. You go, “Wow, these companies are actually brilliant. What’s going on?” Fortnum & Mason in the UK is just a luxury store, but there’s something about it when you go there. It’s almost imperceptible—it’s not imperceptible, but it’s kind of something you feel as much as you can quantify—which feels that no, these people are actually interested in being themselves and helping me.

Rory Sutherland: The contrast is the economist and writer John Kay, Professor John Kay no less, went out for lunch with a friend of his at a lunch venue which they’d frequented regularly for some years. One day they turn up and he goes, “Something here doesn’t quite feel right. It feels like it’s been bought by private equity.” Sure enough, one of them gets their phone out and sure enough, four months earlier, private equity. Here we go. They’re going to build it up, looking for a way to offload it in a certain time frame, and the customer can go hang.

Why Big Ideas Require More Marketing Effort

Andrew Mitrak: I love your ideas. I love your book and I love your way of thinking. I’ve had a hard time implementing it at scale or getting it through at a large organization. Do you have any advice for marketers like me who work at large organizations?

Rory Sutherland: My contention is that what marketers understand that often tech people don’t is they think the bigger the idea, the faster it’s going to take on and the less marketing it needs. I used to think that. Then I suddenly, because I’m 60, I’ve lived through the mobile phone, I’ve lived through the air fryer, I’ve lived through all these kind of patterns of tech, the microwave oven, I’ve lived through the DVD player. What you realize very quickly is: one, actually the bigger the idea, the slower it is to take off and the more marketing it needs. That’s because the bigger an idea is, the more behavioral change it requires for its adoption. Humans find behavioral change difficult for all kinds of evolutionary reasons. We like doing what we’ve done before and we like doing what everybody else does.

Rory Sutherland: So, there are certain things which marketers are right about, which I think the rest of the business world is too influenced by mainstream economics, which is almost, “If you build it, they will come” stuff. Nah. Everybody quotes this phrase, “If we build it, they will come,” approvingly. But the film, Field of Dreams, was about a mad person who builds a baseball stadium in a cornfield to attract ghosts. It’s not really the basis for business wisdom, is it? I thought his business plan was terrible. You probably had a catchment area of 27 people and you’re the middle of bloody nowhere. Not where you build a baseball stadium, generally.

Andrew Mitrak: It’s an odd one where I think the quote is probably bigger than the movie at this point.

Rory Sutherland: Exactly, yes. Yeah.

Why Video Conferencing Remains Underappreciated

Andrew Mitrak: Is history just a big sequence of over-corrections? That’s what I wonder. Are we just continuously doomed to be swinging too far in one direction versus the other?

Rory Sutherland: Is this even correctable? I don’t know. By the way, a separate talk I’d love to give one day is I don’t understand why we’re talking so much about AI relative to the importance of, well, Google Meet. Because video conferencing is an enormously important technology because it makes physical co-location unnecessary to a discussion. It massively reduces the costs of interaction. It means, for example, that your staff could move not to a low-tax jurisdiction but a low-rent jurisdiction, which would be far better off for them. Actually being able to move to affordable housing would make a bigger difference than a 10% cut in the rate of income tax in some cases.

Rory Sutherland: Now, what everybody’s doing is this stupid thing where they compare like with like. Just to take an analogy with electric cars: the reason I support electric cars is not because electric cars are better than petrol cars in 2025, although they are. Petrol—I think they are better, but we can debate all that. I’m totally happy to have people go, “I go on a skiing holiday once a year and there’s nowhere I’d get 600 miles.” Okay, I buy all that. But the real reason to support electric cars is that in 20 years’ time, electric car technology could spawn a hundred meaningful innovations, and internal combustion engine technology won’t do that because it’s run out of road.

Rory Sutherland: Now, what we’re doing with video conferencing versus physical meetings—which, by the way, is another form of transportation if you think about it laterally—is we’re saying: is a video meeting better than a conventional meeting? Maybe it isn’t quite as good. I don’t generally want to smell our clients; I’m perfectly happy just to talk to them face-to-face. But no, there are a whole load of incidental conversations and serendipity in the workplace; I buy all that stuff. But the point is that video conferencing in five, 10, 15 years’ time, if you reorganize your organization around it, has the potential to be transformative, whereas insisting on physical location does not have the potential to be transformative because we’ve been doing it for a hundred years and we’re not going to get any better at it.

Rory Sutherland: So it’s like evolutionary potential, effectively. That’s the way to look at those two things, not side-by-side comparison on the now. It’s what offers you the biggest optionality and opportunity to innovate. Not what is better right now. In the case of the internal combustion engine, not that much opportunity. Electric vehicles: you’ve got electric scooters, cargo bikes, you have micro-mobility, you’ll have driverless cars, you’ll have all this stuff, none of which could happen with a gasoline engine. So we should be optimizing for optionality, not optimality. Don’t look at short-term optimality; look at long-term optionality. The scope of what you might call the adjacent possible is much, much bigger for video conferencing than it is for everybody in the office in a bloody expensive bit of real estate.

The Failure of the Open-Plan Office

Andrew Mitrak: And also, I want to come full circle back to Ogilvy as well. He did all of his writing at home, right? He’s a work-from-home guy right from the beginning.

Rory Sutherland: Right from the beginning. There are certain things you cannot do in an open-plan office. The open-plan office was imposed; it’s in some ways catastrophic to all sorts of things. It’s neither sociable nor is it solitude. I think to work well, you need sociability and solitude; you want a pub and a library. But actually, what we get is something which isn’t a pub and it isn’t a library; it’s just this sort of weird hinterland sort of thing. It’s a no-man’s land sort of DMZ useless zone in between the two possible spaces.

Rory Sutherland: So my argument is, look, I think what will happen is that if you’re McKinsey, say, 20 people internationally can form a consulting firm with the ability to draw on the 200 people in the world who know more about a subject than anybody else on the planet, and they’re going to out-compete you. Because they’ve got an access to talent that you haven’t got because you’re insisting everybody has to be based here and commute into a stupid building five days a week.

Rory Sutherland: So the point is you’ve got to look at what the technology makes possible ultimately, not what it does right now. And that’s why I find it weird that we’ve effectively invented teleportation and no one’s talking about it. We take it for granted. And that’s just because the technology was old. But all really important technology takes ages to reach its level of full adoption. The fact that the technology is old means we don’t talk about it because it doesn’t make us look very cool. But I mean, the fax machine was a hundred years old before it reached sort of 5% penetration.

In Praise of Paul Feldwick

Andrew Mitrak: Well, this has been great. I’m going to check out Humanocracy, The Unaccountability Machine, and your future talks on teleportation and AI and everything. So, Rory, I could talk with you for hours. This is a real pleasure to speak with you and meet you. Thanks so much for your time.

Rory Sutherland: It’s been an absolute joy. Paul Feldwick recommended you very, very highly. Good name-check. So let’s also mention, if he was too modest, all of his books, including Why Does the Peddler Sing?, are absolutely astonishing.

Andrew Mitrak: Yes.

Rory Sutherland: They’re a tour de force.

Andrew Mitrak: Excellent books, and anybody who enjoyed this conversation and enjoys your work would also certainly enjoy Paul Feldwick’s work because it’s excellent.

Rory Sutherland: Oh, absolutely. Yeah.