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The Myth of Scientific Marketing

2010 June 6

The time has come when advertising has in some hands reached the status of a science. It is based on fixed principles and is reasonably exact. The causes and effects have been analyzed until they are well understood.”

That’s how Claude Hopkins unfortunately began his 1923 classic, Scientific Advertising, which has had an enormous effect on not just advertising, but the marketing profession as a whole.

What Mr. Hopkins describes is neither marketing nor science.  Good marketing, like good science, is about the questions you ask not the answers you give nor the knowledge you think you have.

Unproven Science

In actuality, science is full of doubt and uncertainty.  Let’s take the two most influential scientific advances of the past few centuries: Einstein’s relativity and Darwin’s theory of natural selection.

Are these theories proven? Certainly not.  Do they have principles that are “fixed and exact?”  Not really.

These ideas are important not because they are true without a doubt, but because they produce useful predictions.  They allow us to make things that improve our society, like antibiotics, nuclear power and GPS devices.

As Nassim Taleb points out, all swans are white until you see a black one.  In a similar vein, there is nothing in a turkey’s experience that would indicate an imminent Thanksgiving dinner.  Science is inductive, and therefore neither fixed nor exact.

We humans don’t live for millions of years, nor can we travel at light speed, so we have no way of observing the forces these theories describe first hand.  Therefore, we make do with what little information we have.  It is in the dark, uncertain areas where progress is made.

Illogical Science

“God doesn’t play dice with the universe,” Einstein said.  “Einstein, stop telling God what to do!” Niels Bohr retorted.  Bohr not only won the argument, he won the day.

At issue was Heisenberg’s uncertainty principle, which said that you can’t ever know the position of a subatomic particle, only its probability (or, to be more exact, its wave function).

Erwin Schrödinger, Einstein’s ally came up with a counter example using a cat in a chamber that contained cyanide in a closed flask.  If a particle is detected, the poison is released.  Obviously, he argued, the cat can’t be both dead and alive at the same time.  That would defy logic.

Yet, that’s what science predicts. We don’t understand it, but accept that it’s true because that’s what best fits the evidence that we are aware of.   

As Richard Feynman said of his QED theory “If you don’t like it, go somewhere else!”  (See video below). The theory doesn’t make much sense, but yielded the most accurate predictions in the history of science.

The Marketing Equivalent of Financial Engineering?

The myth of scientific advertising is eerily similar to the myth of financial engineering.  In the early 70′s, men came up with complex models with names like CAPM and Black-Scholes.  The originators revolutionized finance and won Nobel Prizes.

The formulas were logical and mathematically sophisticated, but their predictions were wildly off the mark.  The models predict that a stock market move of more than 3% should happen roughly every 2 years (we recently had 3 such moves in a week).  A real crash should occur only once every 300,000 years or so.  We’ve had two in the last decade.

The problem is that statistical models assume independent events, but most real world phenomena are linked in some way.  These linkages create feedback loops which cause the uncertainty we are familiar with in our everyday lives.

Benoit Mandelbrot pointed these problems out early on and traders on the floor knew from experience that volatility was underestimated in their models.  However, the fiction of financial engineering was a useful and profitable one (until recently, of course).

Many marketers are guided by the same need for false certainty.

How About Mathematical Marketing?

Of course, marketing has become much more mathematical in recent decades.  We have seen the rise of optimizers for TV buying, econometrics for planning and digital media is chock full of algorithms fueled by massive computing power.

Surely all that math must deliver the kind of certainty that Hopkins promised?

Unfortunately, no.  High level math tends to be highly subjective.  Model fitting and algorithms involve making assumptions which reflect the biases and preferences of the people who create them.  As I wrote before, there’s a big difference between math and numbers.

Even when the numbers are fairly simple and clear cut, they are only useful in the context of objectives such as awareness, sales, loyalty, market share, etc.  Which objective is primary?  Well, you just have to make a judgment.  There are no rules that can bestow certainty, somebody has to take responsibility.

Pseudoscience and False Gurus

The misunderstanding about scientific marketing is not merely semantic or academic.   Real damage is done.

False gurus are everywhere telling us ridiculous things like that it is now “all about the conversation,” or that traditional media is dead and lots of other nonsense.  They have no doubt because they ask no questions.  They only have answers.

Of course, they can find some data that supports their argument.  It’s not that hard.  The world is full of contradictory facts.  We live in a muddled universe.  What’s really important is how much we don’t know and how we intend to go about learning more.

100 years from now, all of our slick marketing ideas will seem as quaint as Hopkin’s world in 1923 looks to us today.

The Reality of Scientific Marketing

In truth, I haven’t been quite fair to the late, great Mr. Hopkins. Much of the rest of the book is actually quite scientific –  an iterative process of trial, error, measurement and hard won progress.  Despite the unfortunate opening, it is a highly worthwhile read.

(You can download the pdf here.)

Marketing and science, much like Zeno’s famous paradox is a process of constantly advancing half the distance towards a goal we will never reach.  Occasionally we even have to go back a few steps.  There is, and probably always will be, much more that we don’t know about marketing than what we do.

I, for one, am glad.  How else would we ever have any fun?

- Greg

16 Responses leave one →
  1. June 6, 2010

    So true.

    Management have fundamentally misunderstood what science is (Kuhn etc) and confused it with engineering.

    Science is about uncertainty and the null hypothesis
    Science is about peer to peer activity
    martin king´s last blog post ..timekord: @timkastelle your post combined well this morning with Harvard on Dan Pink http://bit.ly/cwfVXn

    [Reply]

    Greg Reply:

    Martin,

    Obviously, I couldn’t agree more. Everybody wants answers instead of questions.

    Have a great week.

    - Greg

    [Reply]

  2. June 6, 2010

    Great post! I particularly like your insight about False Gurus (which I believe applies to all domains of fundamentalism): “They have no doubt because they ask no questions. They only have answers.”

    I’m reminded of an interview with Daniel Simons and Chris Chabris on KUOW (a Seattle NPR affiliate) I heard last week. They talked about their work and recent book, The Invisible Gorilla, in which they highlight – among other things – the illusions of memory, causation and certainty, the latter two being particularly relevant to the issues you raise here.
    Joe McCarthy´s last blog post ..Preemptive Self-Disclosure: Still Unpacking Privacy for a Networked World

    [Reply]

    Greg Reply:

    Joe,

    Thanks for the tip on Invisible Gorillas. I’ve pout it on my amazon list.

    - Greg

    [Reply]

  3. June 8, 2010

    Uuhh… I defer to David Ogilvy on this one.

    http://budurl.com/djtl

    Greg, I love what you have to say but I think it’s fairly narrowly presented. You’re trashing science because it’s not perfect? That’s simply not a practical view of science as it relates to the state of advertising today — ineffective — versus direct response — measurably more effective and based on probability.
    Jeff Molander´s last blog post ..Start capturing demand with ’social’STOP ‘branding conversations’

    [Reply]

    Greg Reply:

    Jeff,

    Actually, I’m not trashing science.. Scientists themselves are fanatical about preserving doubt.

    As for direct marketing, I beg to differ. In many categories it is far less effective (which is why most major marketers spend less money on it).

    - Greg

    [Reply]

    Jeff Molander Reply:

    Hi, Greg.
    I’m actually agreeable on that with you. A Slovenian colleague recently schooled me a bit on the subject. But he comes from direct TV (“home shopping”). Direct marketing. So he’s biased — yet agrees violently with you and can argue very well to your point.

    That stated, how do you respond to my belief system? Clearly your concerns intersect with mine on a few levels. And that excites me. Summarized here…

    http://vimeo.com/12248449

    Thanks for considering — and for your earlier thoughtful response that I’ve not had time to react to :)
    Jeff Molander´s last blog post ..Start capturing demand with ’social’STOP ‘branding conversations’

    [Reply]

    Greg Reply:

    Jeff,

    It really comes down to objectives. I have nothing against direct response, if that’s really the objective (it almost always is in part, but not in whole).

    Two examples:

    Let’s say a car buying cycle is 3 years. Customers are actively shopping for the last 6 months or so and for that stage direct response is extremely important. Things like test drives, price offers, etc. get people to the dealerships cheaper and faster than anything else.

    The problem is that by that point, customers already have a mental “consideration list” (usually 3-5 brands) and rarely will buy anything that they are not considering. So you have to build up some kind of consumer preference (sorry, I know you hate that word) before they actually start shopping.

    It’s very obvious for durable goods, because a purchase is a real event. Ask anybody who is shopping for a car or expensive appliance and he’ll be able to rattle of 3-5 brands he’s considering.

    But it’s also true with non-durable goods as well. Some years ago I was helping out on a fast food account. The operations people always wanted to do sales promotions, because that delivered an immediate response. However, the problem was that the response kept decaying. When they did a brand campaign, sales would fall, but future sales promotions would improve.

    So it really isn’t “brand vs. direct response,” but identifying objectives and finding the proper mix. There’s no real formula except to monitor as best as you can and execute well.

    However, I do agree with you that brand marketing often devolves into mindless babble. There’s no point in talking about brand awareness, preference, loyalty, etc. unless you are actually monitoring those things, see a real need for improvement and have a clear objective in mind.

    (btw – the real problem I have with all the social media people is that most actually don’t know much about social networking – unfortunately, there’s math involved)

    - Greg

  4. June 8, 2010

    Very insightful, and timeless. Creating meaningful impressions, that have impact, and that last is the name of the game! Advertising, Marketing have endured through the millennium, and the more entertaining the better! Thanks for this post!

    [Reply]

    Greg Reply:

    Thanks David. Have a great week!

    - Greg

    [Reply]

  5. June 8, 2010

    Greg–

    Love these words “There are no rules that can bestow certainty”… so true.

    On the other hand, I think what marketers really seek is “confidence” more than certainty. Confidence to make the “right call” in the face of uncertainty … they rely on the science, math and metrics to guide what they believe will be informed decisions. Considering the commodization of advertising agencies, most marketers don’t believe their advertising agency is the place to expect science or certainty.

    Thomson Dawson http://www.pullinc.com
    Thomson Dawson´s last blog post ..If you register your site for free at

    [Reply]

    Greg Reply:

    Thomson,

    Good point about agencies. Now that I work for a global agency network, I have adopted the convention of instantly agreeing whenever anybody slags them off (when I was on the supplier side, I was an agency apologist).

    I understand your point about confidence, but what I think is even more important is the knowledge that every investment is a crap shoot. If you make judgments, you’re inevitably going to get it wrong sometimes and, most likely, the world will not end.

    The real damage is done when people fail to account for mistakes and let them perpetuate until they become real disasters. If you are monitoring your activity, you should be able to get things back on track before any real damage is done.

    As David Hume said, we only expect the sun to rise tomorrow out of expediency. It was this view that Einstein said greatly influence him and the development of relativity theory.

    Thanks for your comment.

    - Greg

    [Reply]

  6. June 8, 2010

    Marketing and science, much like Zeno’s famous paradox is a process of constantly advancing half the distance towards a goal we will never reach. Occasionally we even have to go back a few steps….. beautifully put. Great read! Thanks. Suresh Ramaswamy

    [Reply]

    Greg Reply:

    Suresh,

    Thanks. That’s very kind of you to say.

    - Greg

    [Reply]

  7. June 8, 2010

    Greg,

    I do agree with the general premise of your article and there is way too much faith in things just because a guy in a lab-coat says it’s right. I do have to take issue with what you said about the financial models.

    “The models predict that a stock market move of more than 3% should happen roughly every 2 years (we recently had 3 such moves in a week). A real crash should occur only once every 300,000 years or so. We’ve had two in the last decade.”

    The only thing the Black-Scholes model does is establish a price for an option. What made it worthy of a nobel prize is it was the first option pricing model that exclusively used quantifiable inputs. It requires the person using the formula to calculate the current market volatility to establish the price based on current risk.

    CAPM does have some larger flaws and the way it is applied under estimates the risk in a traditional portfolio that is almost exclusively highly correlated investments in stocks & bonds. The model works much better on portfolios with real diversification.

    Neither model predicts future volatility or price moves. All the models can do is give a snapshot of the current market.
    Bob Firestone´s last blog post ..If you register your site for free at

    [Reply]

    Greg Reply:

    Bob,

    In a sense you are right, because your description of the models and their purpose is spot on (although I would quibble with your assertion that Black-Scholes doesn’t predict volatility. If it didn’t, how could it price assuming that the market is efficient.)

    However, I wasn’t referring to their purpose, but the method in which they are structured. They are based on the assumption that volatility in markets is distributed normally according to a Gaussian curve. The predictions I mentioned are based on the same assumption (I actually stole them from Mandelbrot).

    So while the models don’t explicitly predict those numbers, implicitly they do. Inherent in this type of model is that events are independent. There is a long lineage dating back to Bachelier at the beginning of the century, rediscovered by Samuelson, taken further by Markowitz, Fama, etc.

    The assumption is absurd on its face, but the models explained much better about how markets work than anything before, so they were adopted enthusiastically and probably did their share of good. It wasn’t their fault that Wall St switched from partnerships to shorter term compensation (well, Scholes and Merton deserve some blame).

    However, I think the point still stands. The models work well enough as long as you don’t take them too seriously (also, as I understand, there are a variety of “fat tailed” models that do a better job of accounting for extreme events but I’m getting seriously out of my depth here).

    Which brings me back to the guys “in the white coats.” Actually, I think most of those guys have a healthy respect for uncertainty. Einstein was greatly influenced by Hume’s assertion that we only expect the sun to come up tomorrow as an expedience. We can recognize the possibility that it won’t and also recognize the impracticality of acting on that possibility.

    Most scientists take a similar view to their work (at least they’re supposed to). Darwin could well have been wrong, but if you are trying to design a solution for antibiotic resistant bacteria, Darwin’s theory is extremely useful and yields better results than anything else.

    So my point wasn’t to knock Nobel-prizewinning economists or scientists, but overconfident marketers.

    Thanks for a very rigorous comment (I need to be kept honest:-)

    - Greg

    [Reply]

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