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Re:signalRe:signal

Rory Sutherland Interview with Re:signal's CEO Kevin Gibbons at Re:commerce 2026

In this exclusive follow-up interview from Re:commerce 2026, Re:signal CEO & Founder Kevin Gibbons sits down with Rory Sutherland, Vice Chairman of Ogilvy UK, to tackle the future of AI, the threat of digital trust collapse, and the…

Kevin GibbonshostRory Sutherlandguest
May 29, 202634mWatch on YouTube

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Transcript

  1. 0:00 – 1:05

    AI risk isn’t the tech—it’s cost-cutting deployments inside big organizations

    1. KG

      Okay, brilliant. Thanks a lot for doing this, Rory. Um, I want to start by asking you about kind of where you see the future going in terms of AI, because of... Is there a risk that-

    2. RS

      Uh, there-

    3. KG

      ... they could overdo this?

    4. RS

      There's a huge risk which may not come from AI at all, but from the people who deploy it.

    5. KG

      Mm-hmm.

    6. RS

      Um, and the thing that really frightens me is that when the bill comes due, and of course it will come due, these data centers don't come for free, the energy costs aren't negligible. Um, uh, what will happen is that how do you sell AI to an organization? You sell it... The easiest and fastest way to sell it is on the promise of cost savings, not on the promise of opportunity creation. And so the fact that apparently large numbers of people are trying to sabotage their own employer's AI efforts, uh, in a kind of Luddite way isn't particularly irrational to me. Because what they can see is that, yes, theoretically there's this future parallel universe-

    7. KG

      Yeah

    8. RS

      ... this alternative reality where AI investment goes into value creation, enrichment, uh, entrepreneurialism, the invention of entirely new forms of value exchange.

    9. KG

      Yeah.

  2. 1:05 – 2:04

    Bureaucratic veto power and perverse incentives: the “four horsemen” problem

    1. RS

      But these people have been in these companies long enough to realize that that's never what happens. Unless you're in a family company, a founder-led company, some company that's privately held, the two chief preoccupations of large organizations are cost-cutting and, uh, regulatory paranoia. And so what you have is organizations where, uh, I would say finance, compliance, um, procurement and HR are the four horsemen of the bureaucratic apocalypse.

    2. KG

      [laughs]

    3. RS

      And they have a right of veto over more or less everything, and those are all people-

    4. KG

      Yeah

    5. RS

      ... who in a sense are disproportionately punished if anything goes wrong, and therefore are massively incentivized against trying anything new. But also they can claim the credit for any reduction in costs without being held responsible for any loss of opportunity or destruction of long-term value. So they're fundamentally dishonest entities which have an asymmetric measure which distorts their priorities.

  3. 2:04 – 3:02

    Self-checkout as a cautionary tale: short-term savings, long-term harms

    1. KG

      Yeah, 'cause the risk is you can then use AI for absolutely everything, but the quality might-

    2. RS

      The quality. But they-

    3. KG

      Yeah

    4. RS

      ... you see, those people aren't really held... Okay.

    5. KG

      Yeah.

    6. RS

      Those are the same people who imposed self-checkout on supermarkets.

    7. KG

      Mm-hmm.

    8. RS

      Probably got a nice bonus 'cause they'd reduced the headcount of the supermarket. Six months later there's a massive epidemic of shoplifting 'cause it turns out nobody feels that bad nicking from a machine.

    9. KG

      Yeah.

    10. RS

      Okay? Now, those same people who claim the credit for the cost saving, along with their running dog lackeys in McKinsey or whatever, uh, they're, they're not held responsible for the consequences, the long-term consequences, but they can claim credit for the short-term gains. It's, it's, it's a perverse incentive, and it shouldn't be allowed because the whole point about a business is you only optimize the whole by suboptimizing the parts.

    11. KG

      Yeah.

    12. RS

      And we've created businesses where we've siloed them into lots of people who are optimizing the parts, and meanwhile, the whole is turning to shit.

    13. KG

      Yeah. And you always get... I mean, even like pre-AI-

  4. 3:02 – 4:17

    “Shitification” beyond digital: search results, scams, and paying for a second opinion

    1. RS

      It's in shitification-

    2. KG

      Yeah

    3. RS

      ... by the way, Cory Doctorow's thing.

    4. KG

      Yeah.

    5. RS

      He talks about it in terms of digital and shitification. Uh, I don't think he went far enough. It's no, it's n- by no means confined to, although it's possibly most visible in digital businesses.

    6. KG

      Right.

    7. RS

      I mean, the fact that Google, um, will often put a dishonest actor as the number one search result because unsurprisingly dishonest actors can pay rather more than honest ones can. You know, the Canadian government, which sells its little entry permits at 14 Canadian dollars, which is about seven quid, isn't going to be able to outbid someone who's pretending to be an official website. S- I got done for this. This is why I'm bitter. I, I had-

    8. KG

      Yeah

    9. RS

      ... COVID. I wasn't on my A-game, but I got scammed by that, and I thought, "Well, okay, I've been using the internet since, the web since 1994." Okay? I write a technology column. If I fall victim to this occasionally, imagine how bad it is for everybody else.

    10. KG

      Yeah.

    11. RS

      Now, I use a paid-for search engine called caggy.com, uh, which I recommend everybody else uses. Not all the time.

    12. KG

      Okay.

    13. RS

      You can still use Google, but you need a second opinion.

    14. KG

      Right.

    15. RS

      And eventually you need a search engine that tells you what you want to see, not what somebody else wants you to see.

    16. KG

      Yeah, and that's a risk if it's an auction, and that it's not being policed-

  5. 4:17 – 5:21

    How ad auctions skew what we see: high-margin brands outbid low-margin essentials

    1. RS

      If it's an auction, the dishonest actors-

    2. KG

      Yeah

    3. RS

      ... or for example, there's an even wider distortion, which is that, uh, vendors of high-margin goods like clothing-

    4. KG

      Yeah

    5. RS

      ... will always be able to outbid vendors of low-margin, low-attribution goods like shampoo. So Unilever and Procter & Gamble are the largest advertisers in the world notionally.

    6. KG

      Mm-hmm.

    7. RS

      Okay? But online, I never see any advertisements for their product. Why? Because ASOS will always be able to outbid them because it has... It's a direct seller, uh, high margin because-

    8. KG

      Yeah

    9. RS

      ... it's direct. High level of attribution 'cause they can measure the effect of the ad in a way that Unilever can't.

    10. KG

      Yep.

    11. RS

      Okay? Uh, imme- And, and also possibly an impulse buy, so you can claim that the purchase was actually incremental. If, if they hadn't bought now, they wouldn't have bought at all. Now, all those things mean that the things we see advertised online aren't representative of the things we actually buy.

    12. KG

      Mm-hmm.

    13. RS

      And I think we've just created this, you know, it's effectively like a weird parallel economy.

    14. KG

      It's really interesting actually. Yeah, you're right, and yeah, it's about the margin because-

    15. RS

      Yeah

    16. KG

      ... if you've-

    17. RS

      Yeah

    18. KG

      ... if you're not making that return, then you wouldn't spend-

  6. 5:21 – 6:26

    The “Walford effect”: why one purchase can dominate your ad feed

    1. RS

      I, I once called this the Walford effect 'cause I bought from the Walford website. Uh, my daughter... Just to be clear, I'm not a hosiery fetishist, well, I might be, but this wasn't the reason.

    2. KG

      [laughs]

    3. RS

      Um, uh, the reason was that my daughters had, had to wear tights for their school uniform, and they kept laddering, and a friend of my wife said, "Look, buy the expensive ones," 'cause, you know, in one way, they're a total rip-off, on the other hand, they're not because they last a lot longer. Go to this website, it's like 20 quid a pair for these things or 25 quid. They did last actually. They were worth it.

    4. KG

      Yeah.

    5. RS

      It-- But the margin on that is going to be... I mean, put it this way, they ship them by FedEx, so I think that gives you some idea of the margin. Um, but the margin on that's gonna be monumental, okay? And consequently, after I'd bought those two things, for the next few months, I barely saw advertising for anything else.

    6. KG

      Yeah.

    7. RS

      'Cause I was one of this tiny niche number of people who might buy direct from the manufacturer, da, da, da, da, da. And so they could effectively spend another 30 pounds on reaching me, and if I only bought once, it was still worth doing.

    8. KG

      Yep.

    9. RS

      Weirdly, I see very little car advertising online, and I don't understand why that is. But maybe that's a low-margin business actually. I don't, um-

    10. KG

      Quite possibly.

    11. RS

      Quite possibly.

    12. KG

      Yeah.

    13. RS

      Yeah.

  7. 6:26 – 7:25

    Not advertising can be ideology, not evidence: Tesla, Starbucks, and word-of-mouth categories

    1. KG

      Well, uh, Tesla are a good example of they've never done advertising. It's always been-

    2. RS

      But by the way, uh-

    3. KG

      Yeah

    4. RS

      ... by the way, a total mistake.

    5. KG

      Yeah.

    6. RS

      Um, uh, and he would sell a lot more cars if they advertised.

    7. KG

      Yeah.

    8. RS

      Uh, but I don't always say that because I'm a dr- I, I'm now in the behavioral science practice. I have no particular vested interest in advertising. Starbucks have started advertising. They resisted it for ages.

    9. KG

      Mm-hmm.

    10. RS

      It works.

    11. KG

      Yeah.

    12. RS

      You know. But by the way, if you have that kind of scale, you know. And actually, there, you know, an awful lot of Tesla marketing is word-of-mouth marketing, and it's because you're in a rich conversational category. And also, don't forget, they started off almost as a natural monopoly, so they didn't need to. If you wanted an electric car-

    13. KG

      Yeah, of course

    14. RS

      ... you went straight to Tesla. Now, with the Chinese, the advent of Chinese cars, uh, if you have a f- an 18-month advantage over the low-cost competition, you better start telling people about that.

    15. KG

      Yeah.

    16. RS

      And, uh, with a lot of digital businesses, it's not advertising is, or, or not doing conventional advertising is ideological. It's not, not doing direct mail is ideological. It's nothing to do with efficacy.

  8. 7:25 – 9:29

    AI-driven outreach and the looming collapse of online trust

    1. KG

      It's interesting you were saying earlier about will this flip? So if everyone's using AI, and let's say they're automating outreach, and again, like, obviously there's positives to AI, but if everyone's kind of doing the same, does that bring back direct mail? Does it bring back, like, different ways of-

    2. RS

      Well, well, well-

    3. KG

      How do you stand out?

    4. RS

      There's, there's a possibility of a complete collapse of trust in the online world.

    5. KG

      Yep.

    6. RS

      Um, I, I, I, I genuinely mean this because legislation is too slow. We should have had legislation on the ease of canceling subscriptions five years ago.

    7. KG

      Right.

    8. RS

      It sh- you should be able to go to your credit card website, and your recurring payments should appear separately on your credit card website, and if you want to cancel one of those recurring payments, you can just cancel them without affecting your credit rating.

    9. KG

      Yeah.

    10. RS

      Okay? This is not ethical. Now, the reason ... Why is an advertising person getting angry about this? I'll tell you why. Because although it's great for a few of our individual clients who love subscription revenue, and the finance department particularly loves subscription revenue. Uh, when I s- when I advise Taggi, they have a subscription system which is if you don't use the service in a month, you don't pay.

    11. KG

      Mm-hmm.

    12. RS

      So it automatically goes to sleep if you don't use it. That is an ethical form of subscription, right? Now, why am I campaigning for this? Uh, I appreciate that we probably have clients who are doing very nicely out of inertia selling-

    13. KG

      Sure

    14. RS

      ... through subscription. However, overall, I'm interested in the overall health of the economy. We now have a consumer base who are preternaturally reluctant to subscribe to anything because they're once bitten, twice shy. In other words, they've all ended up paying for things for two years after they've actually used them. Consequently, you now see a subscription offer and you go, "No, I'm not getting done like that before." So the legitimate actors, the honest actors, are suffering along with the dishonest actors. And, uh, consequently, you see, people don't buy things according to what they are. They buy things according to their expectation of what they are.

    15. KG

      Yeah.

    16. RS

      And if your expectation of any subscription, someone who comes along with a new streaming service is gonna find it almost impossible to get started. 'Cause we, okay, we've gotta have Amazon Prime, we've gotta have Netflix, maybe we've got Apple TV.

    17. KG

      There's now so many.

    18. RS

      Okay.

    19. KG

      Yeah.

  9. 9:29 – 11:04

    Why subscription-heavy valuations are fragile: cancellation becomes easier, value collapses

    1. RS

      But now, hold on. You go, first of all, there's a limit to the number of things I'm happy to subscribe to as well. I don't w- particularly want my salary to come in one day and walk straight out the next.

    2. KG

      Mm-hmm.

    3. RS

      Okay? You know, we've already got mobile phones, we've got broadband, we've got this, that and the other, okay? Those, you know, finance people love that model 'cause it's f- predictable forward revenue.

    4. KG

      Yeah.

    5. RS

      And people like, you know, venture capital and, and private equity love that shit. Um, I would argue those c- some of those companies are sitting on a burning platform because legislation or technological change could kibosh your business model overnight, and the reason is you used to be able to subscribe to things by direct debit.

    6. KG

      Mm-hmm.

    7. RS

      Now, we can still subscribe to utilities by direct debit, and that's because you've gotta keep paying utilities, okay? Um, what's very interesting is that nobody lets you pay by direct debit for things other than utilities, for the simple reason it's too easy to cancel.

    8. KG

      Right.

    9. RS

      And so they force you to pay by credit card.

    10. KG

      Yeah.

    11. RS

      And, uh, I would argue that either technological change comes along ... I've got a vague idea that Monzo lets you just cancel payments. I've got a-

    12. KG

      Someone with Monzo does.

    13. RS

      It is Monzo.

    14. KG

      Yeah.

    15. RS

      Okay. Big plug there.

    16. KG

      Yep. [laughs]

    17. RS

      Send me a free hamper.

    18. KG

      Exactly.

    19. RS

      No complaints. Okay. But more and more of these card companies, either pressurized by legislation, as is happening in Germany, or just of their own accord, will make it easier to cancel. Eventually, government legislation will say it has to be as easy to cancel, it has to be two-click process.

    20. KG

      Right.

    21. RS

      And once that happens, you've got a whole load of businesses that have a valuation of X million that are suddenly gonna be worth half.

  10. 11:04 – 13:58

    The Olympics, “wasted effort,” and the psychology of aspiration and comparison

    1. KG

      I think the challenge is, I remember having this conversation with someone ages ago, and it's to do with the Olympics. It is the big-

    2. RS

      I'm sorry to say the Olympics is shit, by the way.

    3. KG

      [laughs]

    4. RS

      But I'm the only person who actually looks at sport and says, "If you factor in the wasted effort-

    5. KG

      Yeah

    6. RS

      ... involved by the people who never make it to the podium, sport nets out as a massive catastrophe."

    7. KG

      I thought, yeah, I thought that was a fascinating point. The, the wasted effort. [laughs]

    8. RS

      So we're not looking at that, are we?

    9. KG

      Yeah.

    10. RS

      We're looking at the people who succeed.

    11. KG

      Yeah.

    12. RS

      And actually, you know, uh, fundamentally, i, you know, the number of people who ... I mean, uh, there's a book called Hoop Dreams about aspiring basketball players.

    13. KG

      Mm-hmm.

    14. RS

      And actually the book is kind of a tragedy because effectively you get these people who are, you know, high school heroes, and then they just get one injury, or they're, they're, they're injured for the day in which the coach, you know, you know, the-

    15. KG

      Yeah

    16. RS

      ... the talent scout comes round from a particular university. And you go from being a hero with a Corvette in your local town to kind of pumping gas.

    17. KG

      It's all unloved.

    18. RS

      Yeah.

    19. KG

      Yeah.

    20. RS

      It's not a good thing.

    21. KG

      Yeah.

    22. RS

      Daniel Kahneman, by the way, just if you want a bit of background, Daniel Kahneman said to me, this is not recorded, he said this to me in person, um, uh, he thinks that the worst thing you can be for your happiness is to aspire to be an actor. And he said the reason is that, one, you're almost certainly gonna fail. Two, you will fail Um, while people who are not necessarily better than you succeed-

    23. KG

      Right

    24. RS

      ... because it's very arbitrary. Thirdly, you are constantly exposed to the successful people. If you're not a very successful dentist, all right, you don't open the Sunday Times Colour Magazine every weekend and there's like a six-page spread on-

    25. KG

      Right

    26. RS

      ... Britain's most successful dentists.

    27. KG

      Right.

    28. RS

      Let's rub it in your face. Whereas if you're a not very successful actor, the really famous actors who probably aren't better than you are get rubbed in your face all the time.

    29. KG

      I've heard that about Harvard. If you're in the bottom 10% of a Harvard class-

    30. RS

      Oh, terrible

  11. 13:58 – 15:45

    Padel, intrinsic enjoyment, and globalization’s winner-takes-all economics

    1. KG

      Yeah, I like that. As a Padel player, I definitely liked your point earlier. Um, one thing I wanted to ask you about-

    2. RS

      But Padel, this is fascinating.

    3. KG

      Yeah.

    4. RS

      'Cause I mean-

    5. KG

      It's taken off

    6. RS

      ... uh, so tell me about it. It, it, it's ... Because I met somebody who was big in Adidas, and he said-

    7. KG

      Mm

    8. RS

      ... "We, we spotted Padel really early and we had the opportunity to, to own it and we left it a bit too late."

    9. KG

      Yeah, I mean, Padel in Spain, they've got more courts than they have in, um, have tennis courts now.

    10. RS

      Is it the same as pickleball in the US? Sorry, it's a bit of a digression, but, you know.

    11. KG

      Similar. Um-

    12. RS

      Not that you're signing up to.

    13. KG

      Padel players-

    14. RS

      Similar

    15. KG

      ... will tell you they don't particularly like pickleball, and I'm sure it goes the other way around. But yeah, pickleball is kind of, uh, the popular thing in the US for New York.

    16. RS

      It's just got it.

    17. KG

      Yeah.

    18. RS

      Fantastic.

    19. KG

      Yeah. Yeah. Um-

    20. RS

      And by the way, I mean, it is interestingly, it's a sport where it's mostly about intrinsic enjoyment.

    21. KG

      Yeah.

    22. RS

      Which I think is really important.

    23. KG

      Oh, it's great fun.

    24. RS

      My one caveat with that sport thing is if you're just insanely good, you know, you're Usain Bolt where-

    25. KG

      Yeah

    26. RS

      ... you could break a roll, world record without even trying.

    27. KG

      Yeah.

    28. RS

      Okay. Um, uh, then, I mean, the guy obviously has trained very hard, but he has in- incredible innate advantages, okay? And it's probably to do with joint symmetry, by the way, which is something inherited. Fine, and if you really enjoy it, that's great. But if you're actually banking on this to provide you with a living, the problem is that globalization e- emphasizes winner takes all effect.

    29. KG

      Yeah.

    30. RS

      And that's something we s- we failed to spot with the internet, that when you connect everybody together, the gains become disproportionately concentrated.

  12. 15:45 – 18:15

    How agency pay models changed creativity: commissions, alignment, and capturing upside

    1. KG

      Yeah, yeah. Yeah. Um, yeah, so one thing I wanted to ask you about was to do with agencies. Um, I listened to you on the podcast with Shane Parrish, Farnam Street, and, uh-

    2. RS

      Yes. We're huge-- What a wonderful podcast that is, by the way.

    3. KG

      Yeah, it's great. I listened to it quite a lot.

    4. RS

      Shout out to Shane there.

    5. KG

      It's very good.

    6. RS

      Fantastic.

    7. KG

      And, um, what I found really interesting is you were talking about what this looked like in the Mad Men era. So how if you run an ad, you get a commission for that ad over a period of time.

    8. RS

      Yes.

    9. KG

      And you got your example of-

    10. RS

      So the Mad Men era-

    11. KG

      Yeah

    12. RS

      ... the interests, rather like, um, uh, Watt and Boulton, the interests of the seller and the interests of the buyer were aligned.

    13. KG

      Yeah.

    14. RS

      Rather like Rolls-Royce and their aero-engine pricing model, okay? So you've got an alignment of interest. Rolls-Royce want to keep the planes in the air because that's how they make money. The airline wants to keep the planes in the air because that's how they make money.

    15. KG

      Yeah.

    16. RS

      With Watt and Boulton, it was we'll give you the steam engine for free. You pay us a third of the money you save on coal.

    17. KG

      Right.

    18. RS

      I mean, for, if you look at 18th century marketing, there's almost no record ... Well, there is a record of it, fortunately, but it's very little studied. Those people were fucking geniuses-

    19. KG

      Yeah

    20. RS

      ... in some ways, those marketers, and we've never given them any credit. I mean, re- that pricing model is bloody clever. You know, it's bloody-

    21. KG

      Yes

    22. RS

      ... 18th century, for crying out loud.

    23. KG

      It feels like we've gone backwards. It's kind of-

    24. RS

      We have

    25. KG

      ... day, day rates and stuff. Yeah.

    26. RS

      So, so the, the, the Mad Men era, you wanted to produce a long ru- running campaign because it was a meal ticket.

    27. KG

      Right.

    28. RS

      And therefore, if you produced a campaign which was enduringly successful, you got the commission over time, and you were paid for the idea, not only in the quarter in which you had it, but in proportion to its subsequent value to your client. So you got to capture some of the upside.

    29. KG

      Yeah.

    30. RS

      Steve Jobs briefly worked in advertising. He didn't work for an agency, but in the early days after he'd bought, um, what became Pixar, which I think was called Lucas Digital ... Was it Lucasfilm Digital or something?

  13. 18:15 – 19:55

    Loose vs tight measurement: speed cameras, team performance, and why bonuses backfire

    1. RS

      Okay. Now, the advertising industry, when it was paid on commission, it was a loose fitness function. I, I won't recap the whole thing with Stephen Wolfram. What-- When you're paid by the hour, it's a tight business function.

    2. KG

      Right.

    3. RS

      A tight fitness function. I think, by the way, just to give an example of loose fitness functions rather than tight fitness functions, I've started to look at this whole thing more widely. An average speed camera is a loose fitness function.

    4. KG

      Mm-hmm.

    5. RS

      You're free to exercise judgment. You know, if you need to go at 55 to overtake a lorry just for 10 seconds, that's fine, as long as between these two cameras, on average, you don't go more than 58 miles an hour.

    6. KG

      Right.

    7. RS

      Right? That's a loose fitness function, which leaves you free to use discretionary judgment within wide parameters. A tight fitness function is a fixed-speed camera where if at this moment on the road you're going at 56 miles an hour, you're fined 100 quid.

    8. KG

      Yeah.

    9. RS

      Regardless of context. I would also argue that in business you should only measure the performance of teams, not of individuals.

    10. KG

      Right.

    11. RS

      Because it's up to a team to play to its own internal strengths, free of the constraints of each individual member of the team having to justify their own existence.

    12. KG

      Makes sense.

    13. RS

      That's a loose fitness function.

    14. KG

      Yeah.

    15. RS

      Uh, Greg Jackson at Octopus argues that one of the reasons their business is so extraordinary is that they don't pay bonuses.

    16. KG

      Right.

    17. RS

      And he says, "As soon as you pay bonuses, you start to have bonus metrics in order to make it fair. As soon as you have metrics, Goodhart's law kicks in, and people start gaming the metrics, or they start fixating on what they're mea- what's measured at the expense of everything that's important."

    18. KG

      That's really interesting.

    19. RS

      Really interesting.

    20. KG

      Yeah.

    21. RS

      He's, he's a total flaming genius guy, by the way.

    22. KG

      And there's a lot to be said for-

    23. RS

      Well, he, he-

    24. KG

      ... about focusing on short-term targets

  14. 19:55 – 22:07

    Why the UK under-celebrates great companies—and how journalism incentives distort coverage

    1. RS

      ... this guy, I know him, and so I'm biased 'cause he's a mate of mine. But he, he, he, he-- One of the problems of Britain is we don't big up our best companies.

    2. KG

      Mm-hmm.

    3. RS

      Journalists are such a miserable bunch of cynical, totally pinko, embittered fucking ... Admittedly, they did choose, they did make the worst career choice imaginable in about [chuckles] 2007, didn't they?

    4. KG

      Yeah.

    5. RS

      That's what a journalist is, [chuckles] okay? It's someone who made a really bad career decision.

    6. KG

      Yeah, fair enough.

    7. RS

      Okay.

    8. KG

      Yeah.

    9. RS

      But, um, in the United States, when you have a really good business, people he- you know, hero worship him too much.

    10. KG

      Yeah.

    11. RS

      Right? [chuckles]

    12. KG

      Yeah, yeah.

    13. RS

      In the US it's excessive. In the UK it's not sufficient. And there are people who whatever, whatever ultimately ends up happening, they've, you know, they've changed the world through business and, you know, you, you can include in that, you know, obviously, you know, there's Dyson we should make more of a hero of, you know, we sh- you know, there's obviously, I think Octopus Energy is an extraordinary success story.

    14. KG

      Mm-hmm.

    15. RS

      AO is another one I cite, and we should make much more of these. Ocado.

    16. KG

      Yep.

    17. RS

      You know, they're all world-leading companies. We, uh, yeah, yeah, right, you know.

    18. KG

      It's true, actually, yeah.

    19. RS

      And, and it really, it's, it's really unfair because, you know, um, okay, it's probably 'cause the BBC set this, you know, you know, sticky back plastic fucking, you know... W- what was the other one? Uh, oh, yeah, um, you know, you can never name brand names on the BBC.

    20. KG

      Right.

    21. RS

      And also that journalists, if they write anything nice, people assume it's PR, so they're discredited.

    22. KG

      Yeah.

    23. RS

      Except for travel journalists, by the way, where travel journalism is basically a branch of prostitution.

    24. KG

      [laughs]

    25. RS

      You write nice things in exchange for free holidays.

    26. KG

      Yeah, yeah. Yeah, that's true.

    27. RS

      But that creates, by the way, very perverse effects, travel journalism, because n- look, with the best will in the world, right, if you and I were offered a free stay in a five-star hotel in the Maldives-

    28. KG

      Sounds great

    29. RS

      ... um, or we could check out the new Butlins, right, for free.

    30. KG

      Yeah.

  15. 22:07 – 24:42

    AI may flip the agency model: selling pre-made ads, not waiting for briefs

    1. KG

      Yeah, of course. Yeah, no, and, um, one last question I've got actually is, again, looking at it from a agency lens, you talk quite a lot about brand perception.

    2. RS

      Mm-hmm.

    3. KG

      Are there areas you see that agencies under invest in that they don't see are valuable? And-

    4. RS

      Okay. So we've got the whole system about how we're paid.

    5. KG

      Yeah.

    6. RS

      Okay? Which is we used to be paid in a way that made it advantageous to us to come up with new ideas unasked for.

    7. KG

      Right.

    8. RS

      When you're paid by the hour, you only come up with ideas on demand.

    9. KG

      Mm-hmm.

    10. RS

      Now, nobody went to The Beatles and said, "We'd like to commission a song about a submarine." Okay?

    11. KG

      Yeah.

    12. RS

      The best creative ideas emerge out of nowhere, and you sell them on up.

    13. KG

      Right.

    14. RS

      You know? Okay. I mean, you know, I can't imagine anybody writing a commission, um, okay, I Want to Hold Your Hand, you might have said, "We'd like a song-

    15. KG

      Yeah

    16. RS

      ... about handholding." But you can't imagine anybody writing a brief-

    17. KG

      They didn't do keyword research-

    18. RS

      ... for any of those songs

    19. KG

      ... around a yellow submarine.

    20. RS

      No, no, no, no.

    21. KG

      No.

    22. RS

      We've done research that shows that submarines really play well with, you know, a key demographic.

    23. KG

      Yeah.

    24. RS

      Okay? I think that AI will mean that ad agencies, or rather production companies that reinvent themselves as ad agencies, ad agencies were originally media brokers who then offered creative services as an added value, uh, to justify the commission they got from the media owner.

    25. KG

      Mm-hmm.

    26. RS

      I think that ad agencies will get out-competed by production companies that produce ads spontaneously and are asked for, and then go and sell them to clients.

    27. KG

      Right.

    28. RS

      So I think that can in 20 years' time will be a trade fair, not an awards show. Not a retrospective awards show. It will be, "Here's a great ad for a fried chicken brand. Um, uh, uh, if, if you wanna run it, it's half a million dollars per market."

    29. KG

      Right.

    30. RS

      Okay?

  16. 24:42 – 32:04

    AI, empathy, layoffs, and the next interface: from Alexa lessons to shopping on TV and specs

    1. RS

      ... than something they imagine. The, by the way, one fascinating AI finding is that, um, uh, the Reddit group for women who have an AI boyfriend is inordinately larger than the Reddit group for the men who have an AI girlfriend.

    2. KG

      Oh, really? [laughs]

    3. RS

      I, I, I, I was married for 35 years before I discovered this, which is actually, there's this thing called empathy-

    4. KG

      [laughs] Right

    5. RS

      ... which, which it took me a long time to get my head around it, which is that if your partner comes home and says, you know, "I've been having a hard time at work because so-and-so, so-and-so did this, and so-and-so happened," took me 30 years to, you're not supposed to solve the problem, okay? That's mansplaining. What you should go, "Ooh, I know. It's terrible, isn't it?"

    6. KG

      [laughs]

    7. RS

      "Oh, I know." And AI is brilliant at that, you see. You know, going, "Yes, I can quite understand. You must feel-"

    8. KG

      Right. Yeah, of course

    9. RS

      ... Was my natural reaction was, well, you know, if your boss is a problem, Terry down the pub, he knows people, you know, we could probably sort something out. [laughs] You know?

    10. KG

      Yeah, yeah.

    11. RS

      Right? Okay. But no, no, you're not supposed to do that.

    12. KG

      [laughs]

    13. RS

      You're supposed to make someone... Anyway, anyway, but the, the other prediction I made, which turned out to be already true, was that what, what we really gotta think about with AI, in the corporate setting, people are gonna, just gonna use it for cost-cutting, 'cause that's the easiest business case to make.

    14. KG

      Yeah.

    15. RS

      Now, AI has the potential to produce fantastic new businesses, which it will do, but there'll be new independent entrepreneurial businesses because the existing businesses are just gonna get addicted to the crack of using it to reduce headcount.

    16. KG

      Yep.

    17. RS

      With, by the way, unbelievably negative effects on corporate culture, 'cause for 150, 200 years, there was an unspoken assumption if you worked for a business that if the business does well, we all do get, we all do well.

    18. KG

      Mm-hmm.

    19. RS

      The very least, if the business does well, we get to keep our jobs.

    20. KG

      Yeah.

    21. RS

      Right? Okay?

    22. KG

      That's right. Yep

    23. RS

      That was implicitly understood, and then if the business does really well, maybe we'll get quite rich, or I'll get promoted, or we'll expand, and, or I'll get, you know, posted to the Reykjavik sub-office with a pay rise.

    24. KG

      Sure.

    25. RS

      Okay? And suddenly that implicit promise has been completely exploded by technology, with the result that the motivation of the employee and the motivation of the em- employer have basically diverged. At any company, there are about 15 people at the top who are given such a large bonus if they do well, that they are genuinely motivated by s- you know, uh, shareholder value.

    26. KG

      Mm-hmm.

    27. RS

      Most people in a business, I don't get up for WPP and go, "Ooh, the Wisconsin Department of Transportation Pension Fund." You know, I really care about that. I don't fucking care about shareholder value-

    28. KG

      Yeah

    29. RS

      ... really, okay? You want to do a good job for your clients.

    30. KG

      Absolutely.

  17. 32:04 – 34:18

    Interface-driven behavior: price-first comparisons, ordering anonymity, and why merch survives

    1. RS

      No, no, uh, and by the way, and it also worries me because a lot of the intermediaries, um, hotel intermediaries which are prioritized by search engines, uh, watch this, kids, okay? Overweight price as a discriminator, okay? So because of the way the information is presented, you are in a mental state which goes, "How can I get the cheapest possible flights?" Particularly if I'm flying with my wife and kids-

    2. KG

      Mm

    3. RS

      ... 'cause there are four of us.

    4. KG

      Yeah.

    5. RS

      You know. And the number of times I go, "Oh, fine, it's 47 pounds on that flight, and the other one was 53. I have to buy the 47 pound flight." And then you book it, and then you realize the fucking thing like leaves at 5:30 in the morning, and you end up all staying in a hotel the night beforehand, and you're vastly worse off.

    6. KG

      That's a really good point.

    7. RS

      But you have saved 39 pounds 50 on the flights.

    8. KG

      Yeah.

    9. RS

      So, so we've gotta be really careful because the way in which information is presented, as with the pace-o-meter, totally affects the de- the decisions we make.

    10. KG

      Yeah.

    11. RS

      And I find that absolutely fascinating. And I, you know, um, uh, so people shop at... People eat McDonald's in a totally different way because the screens exist. M- Do you know the biggest one? Far more men now order a meal with two burgers 'cause it's anonymous.

    12. KG

      Ah, right. So if you go to the counter you might-

    13. RS

      If you, if you, if you're obviously a lone man, and you go up and you go, "Cheeseburger, Big Mac, fries," you feel, I'm sure the guy doesn't care, right? But you feel the guy's going, "Bit of a lard ass," right?

    14. KG

      [laughs]

    15. RS

      Whereas on a screen, it's totally anonymous, so loads and loads of people order a meal with two burgers.

    16. KG

      Yeah. Makes a lot of sense. Okay, Rory, that's brilliant.

    17. RS

      Absolute joy.

    18. KG

      Thank you so much.

    19. RS

      Always a pleasure.

    20. KG

      Love-

    21. RS

      More power to your elbow, 'cause what I like about you guys is you're actually, obviously you make money doing what you do, but you care about it from a wider contextual level. You care about the health of the overall ecosystem.

    22. KG

      Absolutely.

    23. RS

      Not just your part of it.

    24. KG

      No, that's really-

    25. RS

      Which I find really admirable and really nice.

    26. KG

      Yeah, appreciate that. Thanks, Rory.

    27. RS

      A plug. There we go.

    28. KG

      [laughs]

    29. RS

      Can I have some branded merch now, please?

    30. KG

      Yeah, exactly. Yeah.

Episode duration: 34:21

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