A view from Rory Sutherland

Perspective: A product without an ad is like a movie without popcorn

When the economist JK Galbraith died, quite a few obituaries mentioned his implacable hatred of advertising. Many earlier economists shared his view.

They were tolerant enough of advertising that provided information - on price, ingredients or so forth - and of classified advertising. But they despised less informative "lifestyle" or image-based advertising, seeing it as something that manipulated human tastes and desires for purely selfish commercial ends.

Some "information economists" disputed this. They pointed out that, although ostensibly uninformative, image ads actually convey very valuable information. For the very act of advertising tells you that the owner of the brand cares enough about his long-term reputation and fame to spend money on it. And, for perfectly rational reasons, people feel much more confident buying products from someone with a reputation to protect, just as you'd feel more confident buying a second-hand car from the Archbishop of York than a bloke you'd met in a pub.

But another argument against Galbraith came from Gary Becker and Kevin Murphy. Interestingly, it provides us with a new and liberating way to think about what defines "an advertisement". Ads do not work by shifting tastes, they say, but create value as "complementary goods".

Murphy, in an interview published by the University of Chicago (http://twurl.nl/whmghj), says: "Think of advertisements as complementary goods that you buy along with the product that's being advertised. Take the example of movies and popcorn. Going to the movies makes you want to eat popcorn, and eating popcorn makes you think of watching movies (a more British example might be free peanuts in pubs). There's a complementarity there between the two items. We believe that advertising is basically the same thing. There is a tie between the product and the advertisement. They are complementary goods."

To me, this is a fabulously useful concept. What if marketers and advertisers stepped back from their assumption that their job is to persuade and instead defined the role of advertising as adding complementarity to a product? Suddenly, all kinds of possibilities appear.

Looked at through this prism, Betjeman's Shell Guides of the 30s are not an anomalous form of branded utility - they are a very pure form of advertising indeed. But so too are a host of new possibilities - for instance, adding a social component to a credit card (Blippy), or Flora's Heart Age mass-testing campaign. The first question is no longer "what do we say?" but "what ketchup can we add to this hot dog?" With the huge range of possibilities now available, this may be a much better place to start.

Rory Sutherland is the IPA president and vice-chairman of Ogilvy Group UK.

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