What's the big idea?

Rory Sutherland, the new president of the IPA, lays out his vision of the future with the focus on promoting a united front for the advertising industry and understanding the consumer.

In 1917, in the midst of the most lethal conflict the world had yet seen, a group of account men, showing that sense of proportion for which the breed is famous, decided that the best way they could respond to the 80,000 casualties sustained at the Battle of Arras was to found an advertising trade association. I am glad to say, this bizarre and untimely idea has survived for more than 90 years, along with its endearingly silly name, and I'm delighted to be its 41st standard-bearer!

I also hope that it will continue to thrive, by doing what it must always do - allowing member agencies to achieve collectively what they can't better achieve alone.

This leaves us a lot to do. The IPA's long-term efforts (its training, for instance, its work on effectiveness, its efforts in opening doors to government, to the City and to boardrooms, its research and development work on "Diagonal Thinking") are very good examples of activities where we are "better together". And, in truth, there is much more we could be doing.

But I don't think we should do it. Not quite yet. Or, rather, I don't think we should take on any more responsibilities until we have addressed ourselves to a vital question.

The vital question

What is it that now unites us?

If the IPA is to promote the value of agencies, we need to ask what it is that we all share; what beliefs and talents distinguish us from other service-businesses; what's different about the way we create value - and how can we work together to create more of it.

We don't talk about this - our category benefit - very much. In fact, if we are not careful we could end up so obsessed with hair-splitting distinctions between different specialisms, that we risk losing sight of the wider value we add. As Jeremy Bullmore remarks: "All agencies compete at the margin. No agency, however big, has more than a small part of the market. None puts the general case for advertising. They all take the act of advertising for granted, then claim they're best at it."

Our industry has been further Balkanised by the separation of media and creative, not to mention the technological blurring of once clear boundaries. We also labour under a ludicrous system of remuneration that uses "time-spent" as a surrogate for "value-added" - when in truth the two values are only vaguely connected. None of this contributes to our clarity of purpose.

Moreover, we probably put more time and effort into carving up budgets than into growing them. Every time a new discipline comes along, it is assumed that it should grow at the expense of older ones. Yet, is it really inconceivable - now that almost everything is a medium - for us to find new, wider applications for our approach to solving problems - and to grow the agency business overall? Or is the only way to pay for a mobile phone application really by cannibalising the TV budget?

Better together

To try to answer this question, the first action for this presidency would be to create a cross-disciplinary group to discuss how the different disciplines within the membership can work together better as complementary organisations - with a view to growing the value we create overall and the money we earn. The group would aim to build useful bridges between those various parts of the agency world which have either grown apart or have grown up separately.

Perhaps this means job-swaps, more cross-training, or new processes. I don't mind what solutions emerge. All I know is that it terrifies me that almost nobody under the age of 35 in a media agency has any experience of working with creative people - and vice versa: hence fewer and fewer people understand what Scott Fitzgerald called "the whole equation" of the business. Likewise, it is bizarre that people in, say, digital and conventional TV agencies often see themselves as competing when the two media are so obviously complementary.

Yet let's not forget that, at root, we are all in the same business. We all do the same thing. We create ideas that turn human understanding into business value for our clients. What unites us is an approach to imaginative problem-solving that starts with people and works backwards from there.

What the world needs now

The world could do with a lot more of this approach to its problems. And the current crisis provides us with a spectacular opportunity to make the case for more human insight-led ideas. Especially now, when we are finally coming to the end of a period of protracted left-brainery, and entering an era when it is acknowledged that emotional intelligence may once again have a role to play in business.

It seems to me, that this is what we should stand for as an industry. We should fight for the idea that the most effective way for any organisation to achieve its ends is often through better human understanding of what people value, how they make decisions and where, when and how their behaviour and attitudes can change.

With a united approach, we could deploy our thinking far more widely than at present, and could be working with businesses and sectors we have scarcely come into contact with to date. We should be committed to seeking out these ideas, to implementing them once found and to measuring their long-term return. And then we should earn a fair reward for it. One that partly reflects the value of what we do and not just the cost of doing it.

Last week, I was in a meeting with a pharmaceutical company. We learned that the biggest problem faced by medicine overall was not a scientific one, but a human one of non-compliance - people not completing their course of antibiotics, and so forth. Easy, we said. Just make 20 of the pills white and four of them blue. Tell people to take the white ones first, followed by the blue ones.

Admittedly we made the mistake of giving that idea away! A consultancy could have dragged things out for months and charged a few hundred thousand. All the same, this example, along with those in recent books such as Thaler and Sunstein's Nudge, suggests that there is a lot of room for ideas rooted in human insight to be more widely adopted than at present.

Do we also need to become better at creating ideas which are independent of any media spend - or at selling ideas to people who haven't got a media budget at all? I think we do. We already have an IPA Effectiveness Award for small budgets, but perhaps for its 30th anniversary next year, we should have one for ideas with no media expenditure at all?

In promoting what we do, we should never underestimate the value our thinking can bring to wider society. Indeed part of the answer to the world's environmental problems may lie in our hands. "Making people more happy with less stuff" is one of the fundamental challenges of the next 20 years, and it is, at heart, a problem we are rather well placed to help solve. Intangible value is probably the most sustainable form you can create.

We also need to remind the world that, when we work for our clients, our activities have a wholly unintended beneficial effect on wider society. There is, in fact, a vast eco-system of media and talent which - as a happy accident of what we do - benefits from our existence.

Never forget that commercial TV, newspapers, much of the internet, not to mention plenty of creative talent, all depend on advertising for their survival (not that you'd know it to speak to them). If you enjoy anything from The Wire to Twitter, remember they only exist because someone once assumed that advertising would one day pay for them.

There will be more battles to fight in the coming years. Advertising has become the whipping boy for any frustrated busybody who hasn't got a clue how to solve the problem, but needs to be seen to be doing something. A raft of single-issue quangos has arisen which give the impression of being impartial, but which in truth are no less self-interested in their motives than any commercial company - but are far less accountable.

But the way to fight their bad ideas is with good ideas. If we are told that childhood obesity can be solved through banning advertising, the only answer is to reply with a better solution to the problem - one rooted in a proper understanding of how people really make decisions about what to eat or when to exercise.

So I propose we work with the Advertising Association to create one or more multi-disciplinary groups charged with looking for ideas which can solve social problems through persuasion rather than legislation. Business4Life is already proof that this can work.

Better ideas from better insights

One last thing we need if we are to improve the breadth and value of our ideas - and our respect for each other - is broader insights into consumer psychology and behaviour.

Our work will only ever be as good as the insights that underpin it. I don't want to turn this into a rant at the research industry, but it alarms me that I can now learn more about the fundamentals of human nature from buying a £15 book at an airport than I seem to learn from the millions spent on conventional market research.

Yet the development of areas of study such as behavioural economics provides us with a really interesting opportunity to re-establish an academic foundation to our business.

It concerns me how limited is the current understanding of how advertising changes behaviour - assuming it acts through conscious, rational persuasion and not much else. There are notable exceptions, but too few agency people have explored the alternatives. This "advertising only works one way" assumption in our business seems to limit the type of problems we are asked to solve, the methods we can use and the way our work is judged.

To quote Paul Feldwick: "The other task for our attention is to build, from experience and reflection, better and more useful models of the processes by which communications influence behaviour.

"It is striking how little enquiry this central question receives in the workplace - at best it is discussed at conferences and in journals, but it should be at the core of what communications experts do. As long as this question remains, for practical purposes, largely undiscussable, we cannot expect to learn or improve our practice."

So I am eager to see the IPA engage in more R&D concerning how advertising works - where we start to appreciate (as academics spotted many years ago) that good advertising can work in many different ways. We have already made a start - Robert Heath's book The Hidden Power Of Advertising or Les Binet and Peter Field's Marketing In An Era Of Accountability or the work we have done with The Future Foundation.

These are all are useful contributions and to build upon and further our understanding, I'd like the IPA to engage with the Royal Society of Arts on its "social brain" project.

This will broaden our appreciation of the ways communications influence behaviour, and help provide a scientific and economic framework to support what we do.

At present, as one colleague said to me recently, the language of marketing is rather like the language of astrology - it has meaning to people who buy into the belief but is entirely unconvincing to anyone outside it. We need to change this.

So, expect to see the IPA more deeply involved in related areas of consumer psychology, behavioural economics, herd theory, social theory and so on. If you want to see what I mean, read the six essays recently published from the IPA Excellence Diploma.

Part of my motivation for this is nostalgic. I would rather like to work in an industry which renames the "circle" in the slide projector as a "carousel". But new models are also essential to future-proofing what we do. I don't want to see us wrong-footed every time a new form of communications emerges - as many were with the internet.

The business we are in, of turning human understanding to our clients' advantage, is to me the most worthwhile non-medical way you can earn a decent living. Our job in the IPA, is to do everything we can to support that approach and promote it confidently.

Before we return to our jobs - and go back to the problem we all face, of generating some sustainable consumer-led demand - I'd just like to remind you again of my first point: the importance of trying to grow the industry, rather than merely one slice of it.

The best lesson against turf wars takes us back to 1917. If you endlessly fight over the same territory, no-one really wins - as even in victory you may find that all you have succeeded in capturing is a few hundred yards of badly churned mud.

- Rory Sutherland is the IPA president and the executive creative director and vice-chairman of OgilvyOne London and Ogilvy Group UK.