The Importance of Paying Attention
While much business discourse focuses on high concepts and complicated theories, a lot can be accomplished simply by paying attention. Unfortunately many people, even CEO’s, consultants and other “experts” often don’t even make a minimal effort to check their facts.
The reality is that a lot of people who should know better, don’t. Many well known “truths” are actually false. The following is a guide to my favorite fallacies.
“We all know it’s true because everyone says so”
Just because something is repeated often, doesn’t make it true. An amazing example is the widely held opinion among magazine publishers that magazine advertising is considerably more expensive than other media, particularly TV.
This is actually the official position of the industry. A few years ago I attended a talk given by the president of the international magazine association (FIPP). He declared that magazines could never compete with TV on price which is why magazines need to sell their superior value.
He suggested that publishers need to do their own calculation of “cost per qualified consumer” because magazine audiences are so special that they defy conventional measurement.
It would have been inspiring advice, were it not completely false. The WARC, publishes a summary of cost comparisons in their Global Media Cost Comparisons. Go to their site, pay a few hundred dollars and media cost comparisons for virtually every country in the world are at your fingertips.
Even a casual inspection would quickly discover that magazine advertising is in fact 1/3 the cost of TV on a CPP basis in every demographic in major developed countries. A more detailed analysis would reveal that magazines are cheaper in virtually every country with over $10,000 of GDP per capita.
In effect, a multi-billion dollar industry lives under a mistaken illusion because they fail to spend a few hundred dollars and check some facts.
One would think that this would be welcome news among publishers. My experience has been the opposite. When informed of the truth, magazine people are usually angry (yes, angry!) that anyone would defy the well established zeitgeist.
Rather than avoiding the price issue, magazine publishers could profit by using efficiency as a key selling point. However, they don’t because somehow they all decided to agree that they are more expensive.
Not very smart.
“I know the facts so don’t confuse me with data”
Often, facts that were once true aren’t anymore. Nevertheless, that doesn’t stop people from repeating data without checking whether it is still valid.
Some years ago, the Managing Director of a major media agency asked me to prepare briefing materials for a panel discussion on billboard advertising that he was invited to take part in.
At the time, the central issue was an upcoming ban on tobacco advertising which, at one time, accounted for 40% of spending in the medium. As I prepared the briefing materials, I was careful to include a detailed analysis on the tobacco issue.
As the tobacco industry had begun to diversify its marketing efforts and the billboard industry expanded tobacco spending had sharply decreased as a share of the market. By the time the ban would come into effect, tobacco share would be around 15%, significant, but hardly a death knell.
Of course, no one feels that they need to check facts that they already know. When the time for the panel discussion came, my friend repeated the erroneous 40% number and predicted the industry’s demise (he was wrong).
In a world that changes rapidly, no one can afford to rely on outdated information.
“I’m so smart that reading the summary is enough”
Research reports have summaries, and they can be a useful guide. However, professionals should be able to go beyond the first few paragraphs summarizing data and actually be able to make their own conclusions.
A cousin of mine, now a successful management consultant, once did an internship at a big company that made soup. There was expensive consumer research done and a big meeting was held to discuss the results and strategic implications. After some high level discussion, they were kind enough to ask my cousin what he thought.
“Well,” he said, “it seems to me that we package our soup in family size containers, yet many people live alone and can’t finish it all. Maybe we should market some individual sized packages.” The executives were amazed at my cousin’s supernatural powers of insight.
Of course, in the survey the company had paid for, there was a question, “Do you finish the container?” A large percentage of people responded that they didn’t and said specifically that it was too big for one person. This was no “eureka!” moment, one only had to read the report.
Years later, the company actually did launch individual servings and it was a big hit.
“I can point out various facts that prove the general principle”
This is my favorite, because the people who make this mistake are usually so self-righteous. Anecdotal evidence is often put forward as clear evidence proving a universal rule.
A rule is only universal if there is a complete absence of contrary evidence. That’s actually very rare, which is why so few principles apply globally. Most concepts are situational.
A great example is that “old media is dead.” Some new media gurus will point to a statistic showing digital growth and extrapolate the trend. Or they will point out that an unsuccessful magazine or TV station closed, while ignoring the plethora of web sites that fail regularly.
New media evangelists then usually say something like “the proof is there for anybody who wants to see!” and adoring brethren nod there heads accordingly. Of course, no contrary evidence is considered. Why spoil a good story with the facts.
Roughly 10% of global media expenditure goes to Digital Media. A fairly simple calculation would reveal that 90% goes to the supposedly “irrelevant old media.”
In fact, most media have continued to grow since the birth of the internet and some are actually increasing their piece of the pie. Outdoor, the oldest of the old media, has actually increased global market share over the past decade, and so have magazines in North America and some other regions. Anybody who wants to check can buy ZenithOptimedia Global Expenditure Forecasts.
Most media continue to grow their revenues every year (except, of course, during recessions). Moreover, the great majority of media companies have digital initiatives, so at least part of the money comes back to them anyway.
The failure to take contrary evidence into account was a driving reason behind the first dotcom bust. How many billions will be wasted this time around?
A Simple Solution
A lot of time, effort and money could be saved simply by paying attention. If more people asked, “what do I think I know and why do I think I know it?” a lot of misconceptions can be avoided.
Checking facts isn’t always fun. Alas, that’s why they’re called jobs and that’s why people get paid for them.