Poker is a game of incomplete information. Most people think that this fact, along with its random nature, make it a game of luck. But in actuality, poker is a game not just of luck, but of psychology and statistics. This is because if you know the odds of hitting your next card, and you understand the body language and psychology of your opponent, then theoretically over time you will win more pots than you lose.
Viewed within this context, I would argue that the discipline of advertising is more akin to poker than we might care to admit. We play against our brand’s competition for the many pots that represent all the wallets of their customers, and we make big and creative bets to win them. We believe that if we craft the right message and deliver it at the right place at the right time, our prospects and customers will be influenced to buy from us.
As digital communication strategists, we believe ourselves to be quite sophisticated. However, at a fundamental level, we are engaged in what is essentially just another game of incomplete information, albeit within a much larger and much more luck-based construct. There is far more complexity in the human psyche than within a relatively simple game of poker, I should think.
Take just one person at random out of your target audience. Despite all the research that’s been done on this target, do we really have any clue what is happening within this individual in terms of behavior, motivations, life history, or any other of the multitude of random things that might be running through his brain at any given time? The one dimensional persona we built about his “active lifestyle” just doesn’t cut it in real life, nor do some of the more sophisticated predictive models we’ve built. There are still too many unknown factors about him, much less an entire target audience. So we make our best guess based on some reasonable, yet inherently flawed, assumptions.
Now imagine for a moment that all the cards at the table are magically turned over, and we are suddenly granted a perfect, omniscient perspective into who this person is, what this person does all day, what he thinks, where he shares and what he wants. Then, according to our original maxim, we should be able to craft and deliver up the perfect message, at the perfect time, at the perfect place for him. Then, we should win his business every time, which is basically why we are playing this game in the first place, and thus we would be the greatest advertisers in the history of the world, and likely rich and famous.
The whole prospect of personal victory-fame-fortune thus lends impetus to propose a new, unifying theory of advertising to help guide us, based heavily on David Sklansky’s fundamental theory of poker, and rooted in the idea of advertising = luck, and data/ information = victory.
Hence, here is the fundamental theory of advertising: Every time we take action differently than if we had complete information about our target, we lose, and every time we respond the same as if we had complete information about our target, we win. Conversely, every time our competition takes action differently towards our target audience than if they had complete information about our target, we win, and every time our competition takes action the same as if they had complete information about our target, we lose.
Indeed, quite a mouthful, but in other words, all advertising can essentially be viewed as an uncertainty reduction exercise via information (data) gathering and intelligent digital optimization. Every activity we do that doesn’t conform to the fundamental theory can essentially be viewed as wasted effort.
For ad agencies who accept the fundamental theory, the only orientation going forward must lie in an increasingly mathematical, data-oriented, optimization-focused, technology-based approach. As technology and data acquisition continues to advance more rapidly in the years to come, those with the ability to derive greater insight and reduce unknown information from the increasingly mountainous deluge of data should in theory become increasingly more effective in their efforts.
This information insight gap between the have’s and the have-not’s will continue to accelerate in the coming years, and by virtue of network power, law rules information, and insight should necessarily become concentrated to the hands of a few. Whether we are aware of it or not, in this industry, we are all engaged in the great data land grab in the coming decade. For companies who want to lead, the question becomes: Will this position be determined by choice or by chance?
There is certainly time to establish a leadership position within this new paradigm that is upon us, but it will require some nimbleness, a fundamental philosophical reorientation towards the fundamental theory and the proper resources and significant structural investment put against it. This is where our focus remains at ZOG Media and why we continue to invest heavily in developing the industry’s leading optimization technology platform.
The continued hyper-acceleration of technology and media fragmentation is ushering in a new age right before our eyes where the ratio of known to unknown information will decrease at an ever increasing rate. Whatever privacy implications that might have, the agencies of the future, like ZOG Digital, that are able to creatively acquire, harness and drive insight from the data (and optimize their advertising accordingly) better than the competition by virtue of the fundamental theory should win. And those that don’t, or do it poorly, will be increasingly relegated to bluffing, occasionally winning big pots, of course, but over time becoming less fortunate, losing players by comparison.