In a scene from "This is Spinal Tap", the character Nigel Tufnel, played by Christopher Guest, reflects on his life and the band's future. For younger readers, the movie is a mockumentary satire from 1984 that follows the spoof British heavy metal band Spinal Tap as they embark on a tour in the United States. It captures the mishaps, misunderstandings, and egos often stereotypically associated with rock bands. Nigel discusses the possibility of the band no longer performing or existing, expressing a rather philosophical and introspective view before summing up, "Yeah. Too much perspective, though."
Like much of the film, the humour in this scene comes from the juxtaposition of Nigel's generally dim-witted character suddenly attempting to be deep and philosophical, only to end up with a somewhat nonsensical statement like "too much perspective."
In another world, he could have been an advertising planner.
How much perspective is too much? Let’s have a go.
First, putting my political cards on the table, I’d say I come at things from an old-school centre-left perspective. I mean economic left, of course. Taking a centre-left view means getting a balance of the efficiency and innovation driven by market economies and advocating for policies aimed at some form of welfare state, worker rights and promoting equal opportunities. Very unfashionable these days, sadly.
It also seems unfashionable with our current government, supposedly in that centre-left position. Hanlon's Razor, as stated by Robert. J. Hanlon (a joke writer whose aphorisms have been adopted by philosophers) is a heuristic advising us to ‘never attribute to malice that which is adequately explained by stupidity.’ But as a paid-up sceptic, I wouldn’t rule out malice…
Cozzie Livs (cost of living) popped up as a candidate for word of the year, narrowly pipped by Rizz (meaning attractiveness/style). I can’t honestly say I’ve heard either used, but the actual word (or acronym) of the year should have been RBA.
And connected to that is what I’ve named the logical fallacy of the year: the false necessity.
This fallacy often justifies a course of action by suggesting that no other choice is possible, even when this isn't the case.
As we have experienced, the RBA, like all central banks, views consumer spending as a driver of inflation. The key reason is what they call demand-pull inflation. In this scenario, the demand for goods and services exceeds their supply, ergo higher prices. The reasoning goes that if consumers are optimistic about the future, they are more likely to spend rather than save. This increased consumer spending can contribute to higher demand.
With increased demand, which, if not matched by a proportional increase in supply, could mean more money circulating in the economy, again leading to inflation if it outpaces the growth in goods and services. Central banks will then raise interest rates, cooling down demand. Higher rates make borrowing more expensive, reduce the money supply in the economy and make saving more attractive. For those who can, of course.
Job done? False necessity.
A guy around the corner from me actually works as an analyst for the RBA. He told me the work of central banks is *sniff* ‘highly technical and involves complex economic modelling and forecasting [note: too technical for plebs like me, clearly]. This complexity can create a perception of the RBA being detached from everyday concerns, but it’s all about maintaining a stable and efficient economic environment’.
Roughly translated, that means ‘Shut it, do as you’re told, and pay up.’
As you and I spend on interest payments, we have less disposable income for other purchases. But it's just a shift from spending on goods and services to paying interest to financial institutions. The bank always wins.
If the government were interested in stabilising the Economy AND looking after the interests of ordinary people, then there are alternatives to the false necessity of interest hikes.
One is higher taxes on the wealthiest individuals and corporations to redistribute income and reduce excessive consumer spending among the highest earners.And Instead of relying on monetary policy alone, the government could reduce its own expenditure, particularly paying a gazillion dollars for the privilege of building American nuclear submarines, while maybe protecting essential services like health and education – before four-day school weeks become endemic from lack of teachers.
Whilst Albo and co would argue that the RBA's interest rate hikes are different to ‘austerity measures’– monetary vs fiscal - much of the unpleasant outcomes of both disproportionately affect ordinary working people. Reduced disposable income, Lack of housing affordability, employment uncertainty, lack of access to services (health and education in particular), rising income inequality and extreme economic uncertainty. None of this sounds like outcomes that a centre-left government should perpetuate. Cock up? Or conspiracy? It’s hard to tell. One thing is for sure, governments of all flavours are adept at employing divisive social or political campaigns to shift public focus from contentious or unpopular policies and we’ve just come out the other side of one of those.
What’s all this got to do with us? In advertising?
Ask any CMO (or perhaps the CFO, remembering the golden rule; whoever has the gold makes the rules) what marketing is for. To sell more, to more people, more often and for more money. That’s all.
And so, the primary goal of the advertising industry is to stimulate demand for products and services. By influencing consumer preferences, advertising can increase consumer spending. In a roundabout way, this contributes to the RBA's feared demand-pull inflation, especially in scenarios where the demand stimulated by advertising outpaces the supply of goods and services. Effective advertising and brand building can lead consumers to pay higher prices for branded products, contributing to higher overall price levels in the economy.
Contrast this with Central Bank objectives. Banks like the RBA want to stabilise prices and control inflation. When consumer spending and demand are high, potentially spurred by effective advertising, central banks respond with interest rate hikes to cool down the economy.
In this way, the goals of the advertising industry (to increase demand and prices) are directly at odds with the central bank's objectives of maintaining price stability.
This is a double jeopardy for brands and advertising agencies. Not only are we battling to get our clients' brands noticed with mostly disinterested consumers, but we are battling with our financial overlords, answerable to no one other than themselves, protecting their own interests at the expense of our customers, the ordinary hard-working Aussies.
In agency world, I’d posit Multinationals with huge corporate clients have the most to fear from the continued war on demand-pull inflation than their smaller and more nimble, indie cousins. I’d wager that in the boardrooms of WPP, Omnicom and the rest, the bean counters secretly pray for more data breaches, service outages and product failures. At least this gives their clients something to advertise about with full-page broadsheet apology ads.
Never make predictions, particularly about the future, but it’s not a stretch to say that 2024 will bring more of the same, with the added pantomime of the US Presidential election to keep us distracted.
Too much perspective?
Eaon Pritchard CSO | Bray&Co | brayand.co
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