Advertising != Engineering

Posted on April 4, 2008
Filed Under Web 2.0 Kool Aid |

on entitled “Why most geeks shouldn’t be marketers” I laid out some of my thoughts on why injecting too much science into the advertising business was not a good idea.

My post was “inspired” by kool aid sipper Hank Williams, who in a post entitled “In 10 Years, Marketing Will Be Taught In Engineering School,” stated:

Marketing is still primarily perceived as a fuzzy touchy feely discipline. But the Internet is bringing this to an end rapidly. In ten years our current perspectives on this will seem quaint.

Marketing will be much more like what Wall Street quant guys do. Everything will be math. There will be few “soft” taste judgments.

While I believe that science has its place, I also still believe that the role of art in advertising cannot be overlooked. That’s difficult for people who can’t accept that we’re not entirely rational beings and that there are underlying psychological and sociological dynamics that successful advertising leverages.

I was reminded of Hank’s reference to “Wall Street quant guys” while watching a recent Charlie Rose interview with former Federal Reserve Chairman Paul Volcker in which Volcker discusses the ongoing financial crisis. At about 16 minutes and 25 seconds into the interview, the issue of mathematics enters the conversation.

Volcker: The market had convinced itself that with all the financial engineering that they were doing based upon mathematical models and historical relationships that they had protected the stability of the market. Well obviously that turned out to be a very flawed concept.

Rose: Somebody said to me that we entered a period in which they were worshipping mathematical models and the mathematical models had no business sense.

Volcker: That is my view. I wish I had that particular quotation. The market was being run by mathematicians that didn’t know financial markets and you keep hearing, “God that event should only happen once every 100 years according to my model but those 100 year events are coming along every 3 years” which should raise some questions.


The trouble is that financial markets are not physical phenomenon like looking at the stars or something, flipping coins. It’s got human beings…

It’s a fascinating discussion in and of itself because the drama in the financial markets has in large part been caused by the “Wall Street quants” Hank Williams seems to admire.

One need look no further than the growing realization that the Black-Scholes pricing model is “very wrong” for “certain kinds of risk.” Unfortunately, it’s precisely that kind of risk that it was designed to protect against. Even more unfortunately, the assumption that mathematicians know what they’re talking about makes it difficult for those who would argue that there are obvious flaws:

Oddly, this failure of financial theory didn’t lead Wall Street to question Black-Scholes in general. “If you try to attack it,” says one longtime trader of abstruse financial options, “you’re making a case for your own unintelligence.” The math was too advanced, the theorists too smart; the debate, for anyone without a degree in mathematics, was bound to end badly.

Although it’s not an apples to apples comparison, there are parallels between the overemphasis on science in the financial markets and the growing overemphasis of science in the advertising business.

The notion that Silicon Valley geeks with little experience in advertising are somehow going to revolutionize the advertising business with their engineering prowess ignores the fact that while science is a part of advertising, there is no “formula” for creating marketing messages that will resonate with consumers.

While the consequences of giving geeks too much control in the advertising world probably won’t be anywhere near as disastrous as the consequences of giving geeks too much control in the financial world, brands shouldn’t short the “touchy feely” portions of advertising while over-allocating too much of their portfolio to the “scientific” portions. Those portions, in my opinion, have been significantly overvalued and wise brands might even purchase some puts on them.

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One Response to “Advertising != Engineering”

  1. alisalmeo on April 8th, 2008 4:38 pm

    now, why do i find myself agreeing with you on some of this and how interesting that you tout the fuzzy…you the “marketing is like f-ing” one. hrm. note: i have not read the whole post, not much past the first 3 paragraphs as i rarely read any blog post longer than three paragraphs due to….oh look another blog has caught my eye

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