"Change has become our pornography": Tom Goodwin on the power of simplification

Anyone who follows Tom Goodwin on LinkedIn (that’s more than 730,000 people) or has read his bestselling book Digital Darwinism, knows he is not short of an opinion or two on where so many businesses are going wrong today.

But, for a man whose consultancy All We Have Is Now helps ‘companies unleash the power of new technology’, Goodwin is critical about its fetishisation in the marketing industry, claiming it has driven businesses to be more short-term by demanding immediate measurement and muddying the waters with creative executions and media buys.

“I think we've lost a lot of confidence and focus on what really matters,” he explains. “Change has become our pornography where we're all trying to compete for sympathy on the fact that everything's changing really fast and it’s more complicated than ever, and I'm not entirely sure it really is.

“The one big caveat I would say about this is I think AI has the potential to have a really extraordinary impact, and I do think it's well worth people spending much more time understanding AI than they might expect to with any other technology.”

He says the industry has “done itself a disservice by getting far too technical”, explaining: “We have technology that tracks the weather in real time and knows it's going to be slightly sunnier than normal in Adelaide. We have technology that knows someone's been browsing for a car, and we have technology to make an advert for the car based on the person's favourite colour, making the car a convertible with the top down in real-time. But the reality is that won't perform any better than just a picture of a really nice-looking car.”

The simple fact, he says, is that marketers have actually never had it better when it comes to the ability to get messages in front of potential customers. Despite the best devices, data and technology being available to them, the industry is too hung up on “celebrating stuff that’s been done in the past”.

For Goodwin too many businesses settle for an inadequate customer experience, especially when it comes to the digital realm which, he says, is due to a lack of bravery from marketers: "Considering we're supposed to be a creative, edgy, tech-forward, data-loving, creatively driven, radically experimental, wild creative industry, we've really done remarkably little compared with what's possible."

Goodwin gained prominence for many with his 2015 analysis of the emergent business ecosystem as a “battle for the user interface”, famously writing in Digiday: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”

But, nearly a decade on, he admits that disruption did not play into the hands of the challenger brands as much as the incumbent businesses. He explains: “It turned out, pretty much, it wasn't like everything changed. You still wanted to bank with a company that you trusted, and that meant them spending money on TV ads, having some locations and a banking licence.

“So we've seen this false dawn where there was this assumption that somehow big businesses were going to be usurped and disrupted from below, but that's happened remarkably little.

“But, I think AI in many shapes and forms can bring about another cycle of change. And I do think companies that have even more sophisticated technology at the core, that automate even more stuff, that can create best in class customer experience and a genuinely better service can really thrive.”

While technology platforms have opened up a world of opportunities for marketers, Goodwin questions whether a fundamental misunderstanding of marketing from the people building them has also created severe limitations.

He explains: "I saw an amazing comment from Elon Musk at Cannes, where he was talking about his thoughts on advertising. He basically said, 'You know what we all know, advertising works by showing people something they're interested in and making them buy it there and then.' And I thought, 'This person has no understanding of advertising whatsoever’.

“Advertising works in about 50 different ways. Advertising works because it helps you get distribution. Advertising works because it makes people feel better about the thing they've already bought. Advertising works by making you less price sensitive. Advertising works by making you, 25 years later, decide to buy that thing again.

“Advertising is a very weak, big force, and I think fundamentally, it seems almost everyone in technology has no idea how advertising works at all, and therefore we're constantly being led into logical, mathematical ways to do advertising, rather than thoughtful, seductive, empathetic ways to do it.”

While Goodwin has come up through a series of roles in big media agencies, his work as a consultant today sees him work with a wide range of clients, from entertainment behemoth Netflix to pharma giant Bayer. Asked what common challenges he sees across a diverse client base, Goodwin cites “short-termism” driven by the need for justification.

He explains: “There's a real problem with short-termism. Everyone is being asked to ensure that there are results from everything that can be attributed to them, and that those results happen quite quickly and that doesn't really work very well.

“In most industries we trust people to just be good at their jobs. If you're making a TV show you're not expected to show an ROI for the lighting crew. If you make a song, you're not expected to justify why you're using a real violin rather than a synthesiser. We really are mired in this world where we're all being asked to justify our existence through the logic of science.”

One impact of this trend, he says, is the shift of dollars down the purchase funnel and away from broader brand-building activity.

“People have realised that the closer you can get to where people buy it, the quicker you can show success, and the more pure that calculation will be,” he adds.

“The growth of retail media is entirely dependent on taking success for something that may well have happened anyway. Search is another great example where we're just paying to reach people who’ve already shown interest. So the shift towards less risky, more immediate, more directly attributable methods could have a very dangerous effect on the longer term success of brands.”

Tom Goodwin is a keynote speaker at the ADMA Global Forum on August 20, alongside industry luminaries including Uber’s Lucinda Barlow, Holly Ransom and Professors Scott Galloway and Mark Ritson. Tom will be highlighting the things that marketers should really be focused on in their roles. See the full lineup and get tickets here.