This is an interview excerpt in which Rory Sutherland diagnoses a central problem in modern branding: an overreliance on precise ROI measurement and finance-led decision-making that discourages speculative, high-up-the-funnel investment. Drawing on his background in direct marketing, he argues this creates an efficiency-driven "race to the bottom" instead of pursuing opportunity-driven improvements.
What do you think the biggest problem that's facing branding right now that you're seeing at the biggest, the highest level?
I think the biggest problem is the roi false God of perfect ROI calculation and prediction in advance that effectively it's very, very good to measure. My origins are in direct marketing. Measuring is fantastic. Okay? The downside of working in direct marketing was always that you weren't allowed to do anything you couldn't perfectly measure, and so you were confined to doing things at the bottom of the funnel. And I think the biggest problem in business, and I would argue in government, is that the treasury, or indeed the finance function, is extremely unwilling to invest in anything which has the slightest degree of speculative value. And so we end up, particularly in the Anglo Saxon world, I think, with a kind of efficiency driven race to the bottom rather than an opportunity driven race to the top. This idea that actually your job is to do the same for less rather than to do better for more.
It's the opportunity cost.
And your, your identification there of the phrase opportunity cost is fascinating because here's the problem, okay? Finance people don't really want to make the company money over time. They just thrive on certainty. They just love predictability. And they try and they try and make the world resemble their fantasy of perfect certainty, perfect quantification, perfect measurement. Now here's the problem, okay? A cost is really quantifiable and really visible. And if you cut a cost, it delivers predictable gains almost instantaneously. An opportunity cost, a missed opportunity, by its very nature, is somewhat nebulous. Now, if you're completely unwilling to embrace the uncertain, you will never pursue any opportunity, any incremental opportunity at all. All you will try and do is serve your existing customer base ever more cheaply until a weird crunch point where they get pissed off and go away.
