Despite increased awareness of behavioral economics in the industry, little advertising is shaped by using it. Does the future lies in attention economics instead.
In 2011, Jim Stengel, former CMO of Procter & Gamble, published his book Grow. In it, he analyzed 50 brands with the highest Millward-Brown loyalty scores to determine what might connect them. His answer was brand purpose, the shared intent of everyone at the company to improve lives. He compared this Stengel 50 index with the S&P 500 between 2000 and 2011 and saw that his index had grown 393% compared with a 7% loss in the S&P. It seemed that brand purpose was driving significant alpha (the financial term for outperforming the market).
The idea spread influentially. Marketers and agencies suddenly found themselves seeking out their brands’ higher purpose to inform communications in the hope of driving outsized returns.
However, a book by Richard Shotton called The Choice Factory contains a robust rebuttal of the thesis. In it, among a number of challenges, he points out that in the five years following 2011, only nine of the brands outperformed the market, which suggests that “ideals weren’t the panacea Stengel suggested”.
Companies should rise above just making money and have a higher purpose — to galvanize employees, guide decisions and because it is the right thing to do…
