Volume 158: Follow The Money.

Follow The Money.

tl;dr: Casting a critical eye.

Earlier this week, I had dinner with a client who originally found me via this newsletter. As we ate, he asked an interesting question:

“I subscribe to several paid newsletters that I find much less insightful and useful than yours. Why don’t you charge for it?”

My answer was that I don’t want to charge for Off Kilter because if it’s at all useful to someone, especially someone earlier in their career, then I’d rather they benefit without payment. As far as monetization goes, if I get a couple of consulting projects a year from it, then it more than pays for itself. And I view that as a win for everyone.

Of course, this neatly brings me to the subject of this week's edition: Following the money.

There’s been a lot of money to follow lately. Whether it be the farcical scenes over at OpenAI, where firing the CEO led to an open revolt by employees deeply upset at the rug being pulled out from under an imminent payday. Or the ANA reporting that only 36 cents of each programmatic media dollar makes it to the consumer. Or Elon Musk telling advertisers exactly what to do with their money. Or Saudi-backed LIV Golf, which barely anyone watches, poaching world no.3 Jon Rahm from the PGA Tour on a package rumored to be worth somewhere north of $500m. (He’s in good company on the not-being-seen front. The promise of riches has lured many prominent soccer stars to the Saudi Pro League, where the average attendance is less than half that of a high school football game in Ohio).

Anyway, way back when I first started my career, I was a voracious reader of books, white papers, and articles on pretty much anything related to business, strategy, marketing, and branding (my chosen field at the time). I had an insatiable appetite for learning.

But very quickly, it became apparent that there are agendas out there and that for every commentator who says one thing, you can easily find another saying the opposite. So, I figured that in order to make sense of this seeming incompatibility, maybe I should look deeper into the economic incentives. Figuring, rightly as it turned out, that money talks and bullshit walks.

This has stood me in good stead over the years as we must increasingly parse everything we experience through a lens of economic incentive.

In the public square, a steep decline in journalists has been more than made up for by a steep increase in PR professionals. According to the US Bureau of Labor Statistics, there are now twice as many people employed in PR than there are in journalism, with the former projected to grow 8% by 2031 and the latter to decline by 3%. The net effect is that the news we consume will be mediated by corporate and political interests to an even greater extent than it already is.

As an aside, I once had dinner with a former journalist turned gun-for-hire at the Economist Intelligence Unit, which had been retained by a shared client to deliver a series of thought leadership reports. I’ve never met anyone so depressed at how deeply their professional life had slipped from youthful journalistic ideals to middle-aged pragmatism. At one point, he simply shrugged and mumbled in a defeated tone, “I have a mortgage to pay.”

In the business sphere, where consulting firms like McKinsey, PwC, Deloitte, and others used to treat thought leadership as exactly that - a brand equity building opportunity to present their smarts and intellectual leadership, a shift to lead-generation means that what were once great resources are now little more than low-value advertorials. (FYI, this is also why HBR.org is the HBR magazine’s dumb Internet cousin. An online business model incentivized by click quantity over article quality can’t afford meaningful editorial rigor, so instead, we must put up with its brand-dilutive mediocrity).

Technology firms have proven particularly adept at using their financial muscle to place concepts into our psyches that have dubious validity yet obvious economic benefit to themselves. For example, information never wanted to be free. Information is inanimate; it doesn’t want anything. Rather, technology companies wanted information to be free because it suited their own business interests. Or take the “sharing economy,” initially presented to us through a lens of innovation, idealism, and economic progressivism. However, the poster child for the concept has turned out to be little more than a taxi company with an exploitative business model that arbitrages labor laws and may never make an actual profit. (And by actual profit, I mean a real one, not the fan-fiction of adjusted EBITDA)

Equally, marketers themselves have faced an onslaught of dubious concepts, advice, and thought leadership from Silicon Valley firms in recent years. Everything from last-click attribution to impressions to performance marketing. It’s almost impossible these days to reliably find the signal amid all the noise, not because it isn’t there but because it’s being so heavily drowned out by the economic incentives of the technology firms themselves.

I read recently (sorry, I forgot to save the link) that the most likely impact of AI in augmenting knowledge workers won’t be to turn them into productivity superhumans but to de-skill entire professions, which will likely create significant downward pressure on wages. Evidence of this is already showing up among freelance content writers, where both the volume and value of opportunities have declined since the release of ChatGPT.

I’d argue that this isn’t at all new; technology has always done this. It makes things that were hard easy. Things that were slow, fast. And things that were expensive, cheap. In other words, the primary impact of technology on any economy is commoditization. But this isn’t necessarily a bad thing at a macro level because when we commoditize things that are slow, hard, and expensive by making them fast, easy, and cheap, we then get to build entirely new value-creating industries atop. I often joke that not only would you struggle to find anyone willing to work in a typing pool, but they’d be horrified to find out what a typing pool even did.

As a single contemporary example of this in practice, there’d be no Starlink without the smartphone. Mass smartphone adoption commoditized advanced, miniaturized computing hardware that’s now available off the shelf at an exceptionally low historical cost due to economies of scale. Without smartphones, not only would a tiny satellite be nigh on impossible to build, but the cost would render the economics of having 5,100 floating in low Earth orbit entirely non-viable.

Getting back to marketing for a second, I’d argue that while digital technologies have massively increased what we’re capable of executing in a narrow sense, the downside has been a widespread de-skilling of marketing at a strategic level and an associated lack of understanding of the total system. The negative side of seamless, easy-to-use, integrated software that’s capable of the seemingly magical being our inevitable dependence upon it, followed by an equally inevitable failure to question it in the context of the broader systems that are in play.

This is why I’ve talked before about the likes of Google acting like a drug dealer with marketers as its addicts. Put simply, it has a strong and entirely rational economic incentive to maximize our dependence upon its tools at the expense of alternatives. As do thousands of Martech and AdTech vendors out there.

This brings me, at long last, to the actual point of this piece.

After I wrote about the weaponization of the Wanamaker Paradox last week, Thomas Rasmussen kindly shared it on LinkedIn, highlighting the paragraph stating that less than 30% of US marketers have any training.

Predictably, yet depressingly, the vast majority of comments were of the confirmation bias variety, stating that marketing training is unnecessary and irrelevant, that they’ve never been trained and they’re doing all right, and that a marketing degree is about as useful as used toilet paper. You get the gist.

While I find the “less than 30%” statistic problematic because it ignores autodidacts and people who’ve learned excellent habits on the job from others with more experience and, likely, education, any response that advocates for wilful ignorance doesn’t sit well with me.

Why? Well, let’s follow the money. Who benefits financially from there being a broad cohort of largely untrained and undereducated marketers? The technology companies. Who benefits financially from there being downward pressure on marketing wages? Again, technology companies because these lost wages can now be viewed as their future profit pools.

Now, don’t get me wrong, this isn't an anti-technology polemic, far from it. I’m a huge believer in technologically driven progress, and I fully accept that there’s a vast array of things marketers can do today that were simply impossible in the past. However, we must also recognize that technology companies aren’t philanthropic entities out for our benefit and nothing else. They exist to pursue the rational economic interests of their shareholders. And in response, we should do the same for ourselves.

I have no dog in the marketing education fight. I don’t sell it, I don’t contribute to it beyond what I write here, and I have no economic incentive tied up in it. I simply ask that you follow the money and think for yourself about which path best fits your own economic incentives.

Pundit/used-marketing-course-salesman Mark Ritson writes on the subject of marketing training often, including a recent haranguing of US marketing ineffectiveness. There’s a clear economic incentive for him to do so. Educating marketers is how he makes a living. So, of course, he’s going to find a way to highlight, and perhaps exaggerate, marketing ineffectiveness in the world’s largest economy. It’s in his own economic interests to do so.

So forget all the BS you see spouted online on the subject from both sides of the argument because everyone has an agenda. Instead, ask yourself the following:

Which agenda better aligns with my own economic interests? If technology is already de-skilling my profession, and the advent of AI is likely to de-skill it yet further, is it in my own best interests to have a broad knowledge of how things work at a systemic level so that I can seek ways to create new value atop, or is in my own best interests to have a narrow understanding focused on the tools that I use and risk becoming a victim of commoditization?

Am I better served by seeking out marketing and broader business education and training, or am I better served by depending on what the toolmakers tell me? Would I rather control the tools I use, for what, and when, or have them control me? Would I rather take my learnings exclusively from technology companies whose economic interests are best served by my ongoing dependence upon them, or would I rather seek out educators whose economic interests are best served by upskilling the profession? (And yes, ironically, an AI may very well come along that becomes best in class at doing just that)

This is all I ask. If you do nothing else, follow the money and make your own choices.