198. The Maddest Men of All

[0] I'm Rory Sutherland.

[1] I'm the vice chairman of Ogilvy and Mather in the UK.

[2] Now, that is a pretty impressive title, but we should say you hardly had a typical climb up the corporate ladder, did you?

[3] You've been described as the worst trainee, quote, Oglevy and Mather ever had.

[4] Yes, I was actually so bad that I was booked onto a time management course, and I got the date wrong.

[5] So I turned up at this empty building expecting a time management course only to find it was the following week.

[6] Ogilvy and Mayther is a gigantic global marketing and advertising firm, part of the even more gigantic WPP.

[7] O &M was founded in 1948 by David Ogilvy, a legend on Madison Avenue.

[8] Born in England, as a child, he lived in a house where Lewis Carroll used to live.

[9] The headmaster at his boarding school wrote that Ogilvy had, quote, a distinctly original mind, inclined to argue with his teachers and to try to convince them that he is right and the books are wrong.

[10] David Ogilvie's peers went on to become doctors, lawyers, politicians.

[11] He became, as he would later write, a chef in Paris, a door -to -door salesman, a social worker in the Edinburgh slums, an associate of Dr. Gallup in research for the motion picture industry, and a farmer in Pennsylvania.

[12] Ultimately, he took up advertising.

[13] Ogilvy's firm was responsible for a number of commercials with which you are likely familiar.

[14] Do you know me?

[15] I created the Muppets.

[16] Big deals.

[17] Everybody knows them, but not me. So when I travel, I carry the American Express card.

[18] That's Jim Henson with his Muppets.

[19] Don't leave home without it.

[20] To say that David Ogilvie was an iconoclast is a bit of an understatement.

[21] You get the sense that he would have approved mightily of Rory Sutherland.

[22] Now, interestingly, in market research, you'll occasionally have a group where basically there are 12 people sitting around the table and one of them's a bit of an asshole.

[23] Not long ago, Sutherland co -founded a small unit within Ogilvie and Mayther, called Oglevy Change.

[24] The main purpose of Ogilvy change is really to imbue the agency with the best work that's being done in behavioral science.

[25] I mean, had David Ogilvy been alive, I think, for what you might call Renaissance in behavioral economics, I think he would have been an enthusiastic supporter.

[26] An enthusiastic supporter, that is, of the kind of research we talk about in this program all the time, the work of people like Richard Thaler, Danny Kahneman.

[27] To Rory Sutherland, these men are like gods, not only because they're interesting, but because they're useful.

[28] I'm not a behavioral economist.

[29] I'm not an economist.

[30] I'm not a psychologist.

[31] I've had 25 years experience in the advertising industry.

[32] And really my role here is to be a behavioral economics impresario, which is to make it safe for people.

[33] people within business to have conversations about these topics.

[34] All right, let's have that conversation.

[35] From WNYC, this is Freakonomics Radio, the podcast that explores the hidden side of everything.

[36] Here's your host, Stephen Dubner.

[37] Rory Sutherland is an unabashed fanboy of the new wave of behavioral economics research, which does not make him a fan of standard economics.

[38] The problem with economics is that it's designed for the perfectly rational, perfectly informed person possessed of infinite calculating ability.

[39] It isn't really designed for the human brain as it has currently evolved.

[40] In other words, economists have historically thought about human behavior in a way that very few humans actually behave, except perhaps for economists themselves.

[41] By assuming a world of perfect information where anonymous actors with stable preferences seek to maximize their expected utility in a series of standalone transactions.

[42] I freely admit, in such a world, which may exist in a parallel universe somewhere, there will be no advertising agencies.

[43] Because why, right?

[44] Because all the information is already there, because one's preferences can't be shifted.

[45] Because if everybody knows what they want and is absolutely committed to attaining it and they know perfectly well that they can perfectly trust the person from whom they buy it, you don't need a marketing function.

[46] The fact is that those conditions exist.

[47] in the real world somewhere between very, very rarely and never.

[48] Because those conditions rarely exist, and because most of us make decisions using our emotions as much as, if not more, than a reason, well, that creates opportunities for a man like Rory Sutherland and for his firm.

[49] Good morning, the Times and Sunday Times member services.

[50] You're speaking to Lent today.

[51] How am I out?

[52] We are at a call center in Colchester, England, about an hour east of London, Lynn works for NewsUK, which owns the Times and the Sunday Times.

[53] And could you please confirm to me your name and address?