Of cobra snakes and Thatcher

Neoliberalism is often associated with Margaret Thatcher in the UK. At its core, it believes that continued economic growth will lead to human progress, and the best way to do this is through free markets rather than government interference. 

But how to create this economic growth? Will Davies suggests in his book ‘The Limits of Neoliberalism’ that the creation of uncertainty is key. The more uncertain people are, the more they can be manipulated. Measurement and metrics are the means of doing this pushing and pulling us in all sorts of ways and encouraging us to be competitive. 

This context helps us understand why we have everything from school league tables and fitness apps to an obsession with competition during company away days. 

But back in the 1980s, there was a strong critic of Thatcher the economist Charles Goodhart. 

Goodhart’s Law 

Back at the time of British rule in India, so the story goes, the population of venomous cobra snakes in Delhi was a major cause for concern. The government decided to offer a bounty for every dead cobra a successful strategy that led to a notable reduction.  

But inevitably, enterprising individuals realised that if they started to breed cobras, they could return a good income. When this became known and the policy was scrapped, these cobras were released back into Delhi making the original problem even worse. 

This is Goodhart’s Law in practice. Charles Goodhart said that if you create a proxy as a target for what you really want to happen, either the proxy will stop connecting to the target or people will game the system. It’s often expressed more simply as: 

When a measure becomes a target, it ceases to be a good measure 

It’s the reason why A&E targets have led to some ambulances waiting outside hospitals. It’s why policies to tackle poverty bring families above the measured poverty level, but often miss the truly poor. And it’s why Charles Goodhart criticised Thatcher’s monetary policy in the 1980s for being a system based on targets. 

Measuring the effectiveness of advertising 

If we now think how this relates to advertising, the first question to ask is whether it’s right to measure advertising on financial return? The easy answer is yes because the whole purpose of advertising is to grow a business, without which there would be no business. 

But let’s take an extreme point of view. What if that business created a toxic environment that would lead to the extinction of life. Would a relentless pursuit of financial return then be wise? 

B

B

The recent Extinction Rebellion presence on the streets of London was a chance for us all to assess priorities. We need to be honest with ourselves and to think more in the long-term. The tide has turned away from tobacco companies, and who in their right mind would create a marketing strategy for a company embracing a slave trade? In just the same way, this is now a time to assess what is right for the environment. 

Let’s take billboards as an example. Should we be prioritising paper over screens? Aside from the additional energy that a brightly lit digital screen will take, we need to look at the impact on wildlife of light pollution, as well as the longevity of such a screen and how much will end up in landfill. 

Here in London, you can already see that some of the earlier digital screens on the Underground have been replaced with newer versions. Is this really a wise use of earth’s resources? How many decades had the infrastructure for the paper ads been there beforehand? 

What is the answer? We’d suggest an independent panel is set up to measure the lifetime environmental impact of each advertising channel – from print to radio, online display ads to PPC. With these facts, the emphasis should shift to a blended form of measurement. Yes, of course a business needs to understand the financial return of advertising, but it also needs to make that decision in full awareness of its longer-term environmental damage. We’d like to think that ROMI becomes an Environmental or E-ROMI. 

But this brings us full circle. Is having yet another form of measurement going to lead to people gaming the system and a number of unintended consequences? Oh dear… no one said this would be easy! 

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