How advertising broke the gift-giving contract
A view from Tim Lindsay

How advertising broke the gift-giving contract

We need to refocus on creativity.

Recent mergers, acquisitions and reorganisations in our business have focused on a magic triangle of co-ordinates: data, technology and creativity. The big consultancies are tellingly keen to acquire creative capabilities. Yet within the advertising business itself, guess which component appears to lose out with each new development?

In our attempt to get what they have, we’re in danger of losing what they want. And this is happening at a time when standing out from the deluge of mediocrity being inflicted on us has never been more important or more commercially valuable. Have we actually lost the plot? And, if so, how and why?

My friend and Lowe colleague Paul Weinberger read anthropology at the London School of Economics, from where he had derived a simple and compelling theory as to how and why advertising worked. It was simply gift-giving, he said. The advertiser gives the viewer a small gift – usually of entertainment or information – in return for which the viewer or reader gives the advertiser the gift of their attention. After which he or she may or may not change their behaviour. And buy something. This was a contract people understood and advertisers – the good and clever ones – respected. 

The thing that made it so effective was that everyone knew what the deal was. We’re interrupting whatever it is you’ve chosen to do – watch television, read a newspaper, listen to the radio – in order to sell you something. And you can decide on the basis of how well we’ve interrupted you whether or not you want to play.

So the successful interruptions – the gifts – had to be good; funny, clever, emotional, evocative. We became rather expert at this in Britain. Perversely, this was largely down to Lord Reith (he would turn in his grave, of course). He founded a national broadcaster with high standards, with which ITV, when it came along in the 1950s, had to compete. So, in turn, the commercials had to be good. Same story with The Sunday Times Colour Magazine.  

One consequence of all this – an extraordinary one when you think about it – was that most people actually said they liked advertising. And a consequence of that was that it worked very effectively. It was also significant – not just as a marketing tool, but culturally, socially and politically. People talked about ads in pubs, shops, offices and playgrounds. Ads started significant trends. They even swayed elections.

Then what happened?

Now, people hate advertising. We, the people who are meant to know what we’re doing and what works best, have ruined it. How have we let this happen?

There are, as always, many factors. Clients drove down agency remuneration, so agencies had less money and therefore less talent. Everyone ended up working twice as hard for half the pay – and a job in advertising became less attractive as a consequence.  Maybe we were paid too much. But there’s no doubt we’re now paid too little. Talented creative people and others started to look elsewhere for a fulfilling career.

Much more significantly, the internet and the proliferation of platforms – social and otherwise – meant that advertising started to be more in your face, more of the time, ready to ambush you, whatever you were doing, whenever you were awake. Gifts were no longer offered. This broke the contract and people started to actively avoid it. Who can blame them? 

Parts of our business became obsessed by cost and measurability. And because of the alleged effectiveness of digital advertising and the job insecurity of most marketing people, more and more money was pushed into tactical, sales-driving activity. This short-termism will come back to bite its authors, but only when the tech companies are prevented from marking their own homework.

We’re now in a situation where digital platforms are telling the creators what works and what doesn’t – effectively writing the rules for effective communication – rather in the way US FMCG companies did for TV advertising in the 1950s and 1960s and with a similarly deadening effect on creativity and innovation.

It also meant that, because the intended recipients didn’t care much any more, the people making this witless stuff didn’t care much either. Many agencies became sweatshops, churning out ads destined for oblivion. With that went any consideration of creativity and craft, just when those have never been more important. 

Lack of transparency

And then, in an attempt to work around the situation we’d created, we made it worse. We started to make ads that pretended they weren’t ads and called them native advertising, long-form content, branded content. We recruited "influencers". Of course, advertorial and product placement have been around forever. But this lack of transparency further erodes trust – not only in the brands doing it, but in the media platforms supporting and distributing the content, pretty much irrespective of how good that content is. And, of course, it has always been – and remains – pretty crappy.

As Craig Mawdsley of Abbott Mead Vickers BBDO wisely observed: "Advertising becoming a pervasive background force that works without your knowledge is not a good development for commercial life."

Of course, there are still many honourable exceptions: great agencies and great clients. But who said that Christmas is the only time of year when advertisers should try to engage with their audiences with charm and intelligence? People buy stuff all year round. Perhaps it’s a seasonal and vestigial recollection of the old gift-giving contract at work.

So, traditional advertising? Time passes and we move on. We’ll look back on the 40-year period from 1965 to 2005 as a weird aberration. When creative work was done by creative people in creative departments. When it was customary to politely interrupt people going about their daily lives and sell them stuff. When people enjoyed advertising and talked about it to their family, friends and colleagues. When it was an effective sales tool because the contract was clear, gifts were exchanged and it was actually liked.

If this sounds depressing, it’s actually not (and I’m not just trying to avoid the inevitable accusations here). There has never been a better time to be in the creative industries. Creativity is alive and well, and flourishing in all kinds of unexpected places. New technologies create wonderful experiences and will help us solve the world’s pressing problems. Businesses start with lower barriers to entry than ever before. Rupert Murdoch, in a moment of profundity, said: "We don’t know what the biggest company in the world will be in 20 years' time, because it probably hasn’t been started yet."

Creativity and innovation are widely recognised as the most important drivers of business success and the trickle towards "in-housing" (in other words, companies valuing creativity to the extent they want some of it themselves) has become a flood. The big technology companies recruit thousands of creative practitioners every year – creativity is busy dispersing to all points of the business compass. Perhaps most importantly, design is recognised as a crucial element in creating brand relevance, consumer satisfaction and a more sustainable future – and has driven today’s biggest company in the world to a trillion-dollar stock market valuation. It’s mostly good.

All things change, as things must. But the lessons learned in a simpler past still have enormous relevance. Creatively excellent work – work that gifts something to the recipient – produces better outcomes; commercially, socially, politically, culturally, environmentally. It’s still the most important variable in the magic triangle and we’d do well to remember it.

Tim Lindsay is chief executive of D&AD