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Facing the future with confidence

  • Date:

    01 July 2022

Facing the future with confidence

Rory Sutherland speaks to Creative Salon’s Claire Beale about the importance of trust, quality and targeting new revenue levers

Prognosticating on business fortunes for the next year or two is a fool’s work. But if you know as much about human behaviour as Rory Sutherland does, you’ll know there’s cause for cautious optimism within the publishing industry.

Sutherland’s vantage point is pretty unique. As vice chairman of Ogilvy he works in advertising, as a creative practitioner, so he sees publishing through the lens of a professional marketer. He’s a journalist himself – a columnist for the Spectator and Management Today. And as one of the world’s leading thinkers in behavioural science he’s also got a unique understanding of what real people are thinking and feeling and – crucially – how they’re behaving. At a time of unprecedented change and uncertainty, his thoughts on our industry are fascinating.

Social glue

The good news is that Sutherland reckons that our very human need for shared experiences and passions – amplified during the lockdowns and now ingrained as we adjust to remote, flexible working – has elevated the role that magazines can play in people’s lives.

“People are making up for lost time when it comes to looking for shared experiences,” Sutherland told this year’s PPA Festival. That goes for indulging our passions and interests as a community of magazine readers, but also in seeking out opportunities to come together in real life. And this new enthusiasm for IRL experiences is an opportunity for magazine owners to reassert their role as a social glue.

“When it comes to live events, that’s a way for publishers to monetise what they weirdly gave away in digital advertising: their convening power. In other words, the power to convene a homogeneous audience, and basically attract it to either a place or a space,” he explains.

But it’s too early to call a new normal on post-pandemic consumer behaviour, Sutherland cautions. “The one bit of advice I always give is don’t look at averages, because averages are the marketer’s worst enemy. Actually, the response of consumers to events like the pandemic and possibly rising inflation and the cost of living crisis, will vary enormously by individual and by category.

Certain behaviours, by the way, will very heavily revert, and possibly actually overcompensate after the pandemic; socialisation and so forth may well do so. But I would argue that the discovery of flexible working is a stickier behaviour, one that will stay.”

New revenue models

Still, there’s no question that economic uncertainty could hit publishers’ traditional business models and Sutherland reckons subscriptions are increasingly vulnerable.

“One thing that always terrifies me about the entire world of publications is the over-dependence on monthly subscriptions; it’s really dangerous.

Subscriptions suddenly became a much riskier source of revenue when online banking happened. And that’s because you could go on to your online banking, ask for a list of your current monthly direct debits and standing orders and basically just go: cancel, cancel, cancel.”

So Sutherland urges publishers to look for more alternatives to the traditional subscription model.

“When it comes to micro-payments you can have some clever offers, like once you’ve read 47 articles the rest of the month is free, because you’ve effectively paid the same as a subscriber. I think Transport for London does something like that with the Oyster card, right?

There are loads and loads of clever little pricing ceilings and things you can bring in. Little cross-sale offers you can bring in. I think if you make this subscription or nothing, you’re missing out on the other tail of revenue, which is there’s a small number of people who read you unbelievably often, but there’s a huge number of people who want to read you occasionally.”

“Nobody would go to Starbucks if they invoiced you once a month and then at the end of the month, you got billed for £74. But because it’s an impulse buy, it comes out of a different mental budget and different mental cookie jar.

You know, we have money for big, committed purchases, but then we also have money for discretionary impulse buys. So if you’re not targeting both mental cookie jars, you’re leaving revenue on the table.”

Quality and value

Sutherland’s also frustrated that publishers seem to have too often ceded the value of the quality environment they deliver, particularly online.

“Patently part of the value of advertising is not just the fact that you see an advertisement, but where you see it, the context in which you see it, and the other people you assume are also seeing it,” Sutherland argues.

“If you take luxury or prestige goods, it’s perfectly fine for any of you to think that going around wearing a Primark bag on your head is high fashion. But unless that becomes a widespread belief, it isn’t.

Conventional mass media advertising had all these magical side effects to shape public opinions, alongside simply acting as carriers of messages. And all of that’s been discounted, I think.

The internet has disconnected what the medium was from the ads that appeared there, and I think that’s undoubtedly increased the perceived efficiency of advertising but at the price of its ultimate effectiveness. That still kind of annoys me. Performance marketing has resulted in a complete overemphasis on things simply because they deliver rapid quantification, rapid measurement, at the expense of almost everything else advertising can do.”

Trusted environments

And although printed magazines are not the mainstay of the publishing industry that they once were, Sutherland urges publishers to remember the value of the printed product to advertisers.

“Print is inherently a more trustworthy medium than a screen is. Because when you print something, you print a promise, it’s very, very likely you’re making the same promise to everybody else. We make our marriage vows in front of everybody we know simultaneously. We don’t go door to door, promising to love, cherish and obey one friend at a time. And actually, you know, a mass simultaneous promise in a medium where you know that lots of other people are seeing the same thing does carry a weight that individual promises don’t.”

Trust, as we know, has never been more important or more powerful, Sutherland says. And in a world of relentless fake news, trusted sources of information and even entertainment are more valued than ever – to consumers and, vitally, to advertisers.

Whatever the next year or two holds for our economy and our society, loved and trusted magazine brands are empowering the conversations we are all having around change and possibility. And publishers should be facing forwards with confidence.