Branding — in business and in nature — isn’t going away
To use the analogy of the needle in the haystack, more data does increase the number of needles, but it also increases the volume of hay, as well as the frequency of false needles — things we will believe are significant when really they aren’t. The risk of spurious correlations, ephemeral correlations, confounding variables, or confirmation bias can lead to more dumb decisions than insightful ones, with the data giving us a confidence in these decisions that is simply not warranted.Excerpt from Alchemy, by Rory Sutherland, vice chairman of Ogilvy & Mather
Towards the end of 2017, I published an essay titled: “The Death of Advertising.” The article’s premise was obscured by its title; I didn’t set out to say that advertising would ever truly die, but rather argued that, in a world dominated by data-driven platforms like Facebook and Google, advertising would become less a means of convincing someone to purchase something, and more a means of presenting them with what algorithms already knew they’d need.
Since publishing the essay, that very basic prediction has come to pass. Facebook and Google — both of whom have business models that rely on doing exactly what I outlined above — have grown significantly. Most of that growth has come as of result of ad dollars pouring from traditional advertising avenues — TV, radio, billboards — back into their pockets.
I made another prediction in the essay, however, that hasn’t aged as well. I wrote:
The perfection of data will, eventually, give rise to a world in which every consumer can be paired up with goods that meet his or her biological, rather than consumptive, tendencies. This world will also be devoid of branding, because in a world that relies on perfect information, there will be no need for branded trust.
This was a shaky assertion at best, and my thinking has since evolved. There are two main reasons why.
First, “perfect information,” an idea I truthfully made almost no effort to flesh out clearly in that essay, is a genuine impossibility. Second, because perfect information is impossible, branding will not die.
Let’s take each in turn.
The impossibility of perfect information in a dynamic world
Assuming a static world, “perfect information” would be possible. But our world is not static. Conditions are changing constantly at every level — molecular, cosmic, and everything in between. Even if there were a computer capable of indexing not only everything happening, but everything that has happened, that “perfect information” would be useful only to analyze the past — not to predict the future.
“[All] the behavioral data in 1993 would’ve predicted a great future for the fax machine.”— Rory Sutherland, vice chairman of Ogilvy & Mather
As Vice Chairman of Ogilvy & Mather Rory Sutherland is keen to note in his new book Alchemy, thisis one of the fundamental problems with big data. All of it, he points out, comes from the past. Part of the reason people study history is to understand how many different ways things could’ve gone, and how much context matters when understanding why an innovation did or didn’t work. (Uber, for instance, could never have worked in a pre-mobile phone era.)
Put another way, it’s easy to use data from the past to tell a compelling story about what might happen in the future, but it’s rare for those stories to end up being accurate. As Sutherland notes, “[All] the behavioral data in 1993 would’ve predicted a great future for the fax machine.”
Even when there is good data on our behavior, too, all it tells us is that we did something — it cannot tell us why. The natural reaction to this would be to combine data with information from actual people — that is, take a purchase they made, then ask them why they made it. This seems like it should work, but again, there’s an evolutionary reason why it doesn’t: we are awful at understanding what motivates us.
To understand why this is, imagine you’re a small animal — Sutherland uses the example of a hare — trying to escape a predator. As you’re being chased, you zig-zag instinctually — and thus, randomly — with no conscious understanding of your own behavior. This lack of consciousness may seem like it would hurt your chances of survival, but in fact, the opposite is true: it is only because your zig-zagging is occurring unconsciously that it’s reliable over an evolutionarily significant time period (read: tens of thousands of years) as an evasive maneuver.
If you, as the hare, became conscious of what exactly it was about your specific type of zig-zagging that made it effective, you’d no longer be able to evade predators in random — and thus, unpredictable — ways. This would make you both slower and more predictable, and thus easier to kill.
As Sutherland notes:
[Humans] may be descended from our ancestors who were better at the concealment of their true motives. It is not enough to conceal them from others — to be really convincing, you also have to conceal them from yourself.
Thus, even if we had perfect data on what we were doing, we’d have an incredibly difficult time figuring out whywedid it, let alone what we might do in the future.
This isn’t to say that big data isn’t useful; there are plenty of industries in which it’s being implemented on smaller scales to make society better off. It’s just to say that my initial proposition — that data could ever become “perfect” — is wrong. It follows that branding is here to stay.
To understand why branding is so important, it’s necessary to understand that it doesn’t just occur in the context of products. Far more interesting is how it manifests itself in nature, and there are few better examples of how it does so than the relationship between flowers and the bees that pollinate them.
The importance of branding in a world of imperfect information (read: “data”)
Bees are constantly searching for sources of nectar, and flowers have evolved to be excellent sources of it. Bees thus seek out flowers for their nectar and pollinate them in return — a textbook example of the mutualism that occurs throughout nature.
Unsurprisingly, bees gravitate towards the distinctiveness of colorful blossoms emanating scents they find pleasant. (“A flower,” as Sutherland astutely notes, “is simply a weed with an advertising budget.”)
Once bees reach the blossom, they pollinate it. They also note whether it contains nectar, and how much. Assuming it does, the bee can safely assume that when it’s searching for nectar in the future, flowers resembling the one it just visited will be excellent sources of it.
This is a textbook example of branding, albeit one that uses insects and flowers instead of people and products.
An interesting counterexample to this, and one that illustrates perhaps the darker side of branding, is the orchid. Sutherland notes that many species of orchid are considered nature’s frauds. This is because while they’re both beautiful and sweet-smelling, they’re poor sources of nectar.
This begs the question: Shouldn’t bees have figured this out? And if so, why do orchids still exist?
The answer, as Sutherland notes, is found in asking not why they exist, but when they exist: that is, at the beginning of spring. Every year, bees early to the pollination party are fooled into pollinating orchids, sacrificing time and energy for meager rewards. They quickly wise up, however — hence why orchids bloom at the beginning of spring, and not year round.
What is even more fascinating is that there are businesses that operate this way, too: tourist traps.
Unlike establishments playing the long game, tourist traps know their patrons will likely only visit once. Thus, their best strategy is to extract as much money from tourists as they can while they’re there. Like tourists flocking to San Francisco’s Fisherman’s Wharf for the first (and probably only) time, bees without the necessary experience — call them unseasoned — pollinate orchids at the beginning of spring before deciding not to return.
This, again, is a textbook example of branding, albeit one that illustrates both the benefits and consequences of doing it poorly (read: misleadingly). Both Fisherman’s Wharf and the orchid seem, on the surface, appealing. It becomes clear upon visiting either one that they aren’t.
The success of these examples can be explained by a vital — albeit distinct, and often overlooked — counterpart to Darwin’s theory of evolution by natural selection: sexual selection.
Unlike natural selection, which says species better fit for their environments are more likely to survive long enough to procreate (and thus pass along their genetic material), sexual selection says species that have an easier time finding mates will be more likely to reproduce than those who don’t.
Now, if this sounds similar to natural selection, it’s because it is; the two are similar and often confused. But natural selection is about the survival that leads to reproduction — you could be a rather unappealing animal, for instance, but if you’re strong and fast, you’ll likely find a mate somewhere, and thus pass along your genetic material.
Sexual selection, on the other hand, is about reproduction itself. There are certain animal species that are unfit from the perspective of natural selection (read: attacking prey or evading predators), but immensely fit from the perspective of sexual selection (read: attracting mates). This should make it clear that natural selection and sexual selection, while linked, are still quite different.
Perhaps appropriately, both successful species and successful businesses often employ a combination of both.
For an example of sexual selection operating in daily life, take Big Star, Chicago’s premier outdoor taco spot. Ask anyone who’s lived in the city for any length of time where to get tipsy and taco’d — hell, ask anyone who’s visited — and it’s where they’ll direct you.
The restaurant is an institution in Wicker Park, helped by its immediate proximity to a major stop along Chicago’s heavily trafficked Blue Line “El” train — the intersection of Damen, Milwaukee, and North Avenue — or simply, “Damen.” And even if you’re not conscious it’s there, you’ll both smell the meat and hear the buzz of the patio upon getting off the train at the Damen stop.
Perhaps unsurprisingly, this patio is Big Star’s claim to fame. On a summer day, the Chicago sun and good company — not to mention a few pitchers of margaritas — make it, in a word, transcendent. The patio seats roughly 50 people, but there are tables inside when it’s packed, along with a full bar and endless supply of waitstaff.
Most noticeable about the restaurant, though — and the reason I’m mentioning it — is its general decor, including its color. The entire place is covered in yellow — the umbrellas, the chairs, all of it. There are knick-knacks and assorted art scattered along the walls, too, along with neon signs like you’d find at any other Instagram-friendly establishment in Chicago.
Big Star’s massive investment into the appearance of its restaurant does not guarantee that the product they’re selling is good, but it does indicate that they were confident enough in its eventual success (read: ROI) to have invested heavily into its frame — that is, the restaurant’s appearance.
Knowing how good Big Star is, it’s easy to ask the question: Why would a restaurant with such a great product and such a great place to serve it — its patio is without a doubt one of the best in Chicago — spend such an absurd amount of time and money on seemingly needless decor?
The answer goes back to sexual selection.
Imagine Big Star had just opened, you hadn’t tried it, and neither had anyone you knew. What would signal to you that it was worth visiting? The answer would be the same as what would attract a bee to a flower they’d never encountered: its appearance (read: visual aesthetic, smell).
Crucially, Big Star’s massive investment into the appearance of its restaurant does not guarantee a quality product, but it does indicate they were confident enough in said product’s eventual success (read: ROI) to have invested heavily into its frame — that is, the restaurant’s appearance.
Being in even close proximity to Big Star proves this strategy has worked. Every day, like bees to a flower, hordes of people flock to it, “pollinating” it with cash. Every good experience, too, reminds them that Big Star is an excellent source of “nectar” (read: margaritas, al pastor, vibes), and that it, unlike the orchid, can be trusted.
Perhaps the reason I’m opposed to my initial proposition about big data, then — aside from it simply being wrong — is that there’s comfort in understanding that beauty does have a functional purpose in both nature and society.
There is a respect to be had for the businesses and species who, by nature of certain traits, are adept at either survival via evasion or confrontation. But there should be a similar reverence for the businesses and species who understand the role of beauty and opulence in signaling themselves as destinations for those whose repeat visits determine their success.
Some might look at the opulence of restaurants like Big Star — or species like the peacock — and shake their heads. But those people are failing to consider how a world in which said opulence was pointless would actually look. It would be a world of perfect information, yes, but it would also be a world devoid of all the beauty we’ve come to know.
Branding, then, isn’t just a signal; it’s a symptom of a world in which things are dynamic, and thus evolve and improve. A world in which this isn’t the case — a static world of perfect information, in which branding would, in fact, die — would be quite dreary indeed.