Rory Sutherland: The Psychology of Advertising

In this episode of The Knowledge Project, Shane Parrish interviews Rory Sutherland, the vice chairman of Ogilvy & Mather, about applying behavioral sciences to advertising and problem-solving. They discuss how intangible value can be created, using the example of an airport resolving security backlog by changing passenger perception rather than adding infrastructure. Sutherland argues that marketing value is often undervalued compared to engineering value, even though human perception integrates various sensory inputs. The conversation explores costly signaling, the importance of context in decision-making, and the limitations of rationality. Sutherland shares anecdotes and theories on consumer behavior, the role of emotion, and the potential pitfalls of over-reliance on data and algorithms in business and policy decisions. The discussion touches on diverse topics such as self-driving cars, the value of difficulty, and the psychology behind consumer choices, ultimately emphasizing the importance of understanding human behavior and testing counterintuitive ideas.