David Brooks has a column today on the debacle created by the Rolling Stones report on General Stanley McChrystal. Ignoring the politics (why did the Rolling Stones reporter adopt that specific narrative, which he knew would result in political controversy?), there are a couple of points Mr. Brooks raises which I think are worth addressing.

The Psychology of Groups

First, he points out that it’s natural for people in small groups to complain about people on other groups as a way to relieve stress and build a sense of community. He is quite right about this; contemporary research in social psychology has demonstrated, time and again, that people (i) believe that their group is better, and (ii) have less awareness of people in other groups as people.

Possibly the best book on the subject, The Psychology of Stereotyping by David Schneider, goes into this in depth (I highly recommend the book). To summarize,

the “Tajfel effect” occurs when people have ingroup bias for no reason. The most obvious example in the real world is the attachment people develop to sports team from the cities they live in. Why do people associate so strongly with a certain team just because they live nearby? The most striking psychological example is the “minimal group” situation. If you take a set of people and divide them into two groups in a completely arbitrary fashion – say, flipping a coin – then even if you tell them ahead of time how the groups were divided, people show ingroup bias. That is, if you survey people they believe that their group is on average smarter, more attractive, etc. (This effect is robust, i.e. it holds true if you measure it in a different way – say, eliminating surveys).

The second effect is that people in the group will try to maximize ingroup differentiation (and minimize outgroup differentiation – e.g. “Those Muslims are all the same”). It’s a way, in essence, of “dehumanizing” people who are different from you. Why? Well, the easy answer is that everyone has limited cognitive power. You take shortcuts and, in general, while it’s very important to know how people in your own groups are different from each other, it’s essentially irrelevant to know the same information for people you don’t identify with. All you really need to know are attributes (or stereotypes) like “snakes tend to be dangerous” or “maggots are bad.” Applied to people, it can be “jocks tend to be dumb” or “politicians tend to lie.” Limited interactions mean you don’t need to know any more…. you just need to know enough to deal with them if you encounter them.

Thus, it’s not surprising that Genera McChrystal’s group exhibited (as Rolling Stones reported) “arrogance” about their own capabilities and denigrated people who (i) they didn’t deal with much, and (ii) whom they had nothing in common with. If you have something in common with someone, then you are by definition part of some group – and even if it’s a weak tie, the same ingroup/outgroup bias comes into play (just weaker, obviously).

In fact, it’s important to note that the fact that General McChrystal’s team exhibited such behavior. It demonstrates that he had a unified group. The Rolling Stones report really shows a healthy team. Why? Because the General was taking people from ostensibly different groups (computer geeks from MIT, special ops, soldiers, etc) and fusing them into a unified team. It’s very important to note that they complained about other people outside of the group. It would be very easy, in contrast, for the special ops guys to whinge about the computer geeks, or soldiers, etc. They didn’t: they complained about people outside the group.

That is, in fact, an indication of General McChrystal’s “greatness,” and is something – as Rolling Stones noted – which has given him such a reputation: the ability to pull people from multiple different backgrounds and construct a highly functional team.

The Cult of Personality

The second point David Brooks makes is encapsulated by this paragraph:

Then, after Vietnam, an ethos of exposure swept the culture. The assumption among many journalists was that the establishment may seem upstanding, but there is a secret corruption deep down. It became the task of journalism to expose the underbelly of public life, to hunt for impurity, assuming that the dark hidden lives of public officials were more important than the official performances.

I can’t really disagree with him: reading politics or watching the news is no longer about policies is about the personal lives of the politicians. “Would we like this guy if we met him in a bar?” or “Do we want to imitate this guy?” when, really, such concerns are patently irrelevant to the quality of the job they do.

Popular success is not determined on results; it is determined by personality.

Politicians have become celebrities. They establish a personal brand, and suck people into believe that they are a certain “type of person.”

It’s an interesting extension of the representative democracy model. We elect politicians who make political judgments for us – that is, they represent our collective interests, ideally. With the cult of personality, we elect people who seem like “our kind of people” and trust them to make the kind of decisions we’d like them to make. Thus, instead of judging a politician on how well they represented our interests, we judge them on whether or not we still feel like we have something in common with them.

Politicians as a proxy for people; personality as a proxy for ideology.

Of course, the sad thing is that personality is a terribly proxy for either ideology or effectiveness.

It’s also a classic lesson in Peter Drucker’s wisdom that “You can’t manage what you don’t measure” and “what’s measured improved.”

And as politicians learn how important their personality “brand” is, they become obsessed on maintaining that brand. But they found – particularly with the rise of TV – that managing their personality brand has very little to do with passing legislation. On the other hand, it has a great deal to do with (i) sound-bytes, and (ii) relationships with other politicians, and (iii) endorsements by famous people (and other politicians).

As such, the “personality brand” of politicians improves. But everything extraneous to that – e.g. actually reading the laws they’re voting on – deteriorates, because it has no impact on what’s being measured.

In fact, personality has become so important that people think the results (which personality is acting as a proxy for) is irrelevant.

Such is the fate of General McChrystal. He is – according to many on both sides of the political divide – highly capable, has proven success in multiple arenas, and is showing success in Afghanistan. Yet his personality has been judged lacking, due to the highly filtered view of it (and his team) provided by the Rolling Stones reporter.

Mr. Brooks is correct when he calls the “exposure ethos” damaging. But he misdiagnosis the problem – it’s not exposure, per say, it’s exposure of the wrong things. Actions are something we should care about – such as Nixon’s ethical abuses. Not “kvetching” as Mr. Brooks calls it; healthy team dynamics (that should be kept within the team).

This post is a continuation of my previous post How to Value Advertising.

Specifically, it’s a reply to Andrew Eifler who posted the blog post I responded to. He raised this point:

On the subject of variables and, as you point out, there can be quite a few – i think one of the biggest issues is how we quantify presence on each media channel. Universally the units that are used are “GRPs” or Gross Rating Points which are the product of “Reach” and “Frequency” against your target audience. For advertising measurement to really progress we really need a new unit of measurement. The system of GRPs worked great when the only media options were TV, Print, and Radio – but in today’s world, with such a fragmented media landscape, there really needs to be a more fitting measure. Maybe something like “Persuasion units?” Interested to hear what you think about this.

- Andrew Eifler

In general, I doubt I could come up with a decent replacement statistic, simply because the data is so poor. I agree, however, that the current statistics you use – GRPs, and also TRPs – are woefully bad.

Why GRPs Are Bad

The statistic Gross Rating Points (GRPs) is calculated by multiplying percentage reach by frequency (is that average frequency?). Now, this is all well and good if all you’re interested in is "impressions" as in "banner ad impressions." But the experience of NON-obnoxious (overlay) and NON-personalized banner ads should lead people to be VERY skeptical of the worth of impressions as something useful.

Click-through rates on banner ads are what, 0.2-0.3%? If "actions" (like clicking through is an action) on TV ads are similar – I wouldn’t be surprised – that’s very low. And what’s the conversion rate after that? 5%? 10%? Depressing, but I suppose it’s beside the point.

A more important observation is that (i) people will have variable marginal returns to seeing an ad repeatedly, and (ii) the distribution of view frequencies are highly unlikely to be normally distributed through the population or segment. In the case of (i), I think that the marginal returns are likely to resemble a S-curve as well; of course if your ad is particularly irritating, it may tend negative after some additional inflection point.

I hope the current methodology takes (ii) into the account; I would expect some members of the population to be more likely to see an ad more times. I suppose you can mitigate this by segmenting the population in the right way (e.g. segment by number of times they have seen/are likely to see and/or respond to the advertising). Otherwise, you’re asking to be mislead.

The Problem of Advertising Statistics

However, there’s a deeper problem with such “industry standard” statistics that do not measure the result they measure the deliverable. Or: they do not measure what the customer cares about (increased sales); they measure what the advertising did. “We showed most of the people you care about this ad 3 times – and surveys (?) indicate that consumers remember the ad!”

Sure, I get that’s the best you do. You’re not selling increased sales; you’re selling something very specific. If the company gets increased sales, good for them; if not, well they decided to do it in the first place. Hell, figuring out how to grow sales is (allegedly) why company executives are paid so much.

But, it would seem to me, part of empower companies to make their own choices about how much to spend is giving the information they care about – “How much did the advertising campaign increase my revenue and profit?” – not the deliverables (which are only really of interest internally to the advertising company). Making the process transparent – letting the company buying advertising know what advertising was delivering to their market – may (i) seem like a good thing to do, and (ii) help justify fees to the customer, but it’s really not a very bright idea.

An Unfounded Extrapolation

The reason is simple: it reduces the profit margins of marketing companies. Oh, not in the short term – but in the long term. The selection pressures for marketing shift from making the most effective marketing to making the… well, less effective marketing. If you can make the process less effective, you get paid more. At best, efficiency will stop increasing.

The approach should be reversed. Marketing companies shouldn’t sell different product lines – “Yes, you can spend $3m on TV, $1.5m on radio, $1m on billboards, and $2.5m on online advertising, we can do that for you” – they should be selling increases in sales. Hell, if you really wanted to motivate an advertising company you’d get them some percentage share of the increased revenue attributed to advertising (though with provisions to prevent gaming).

Sure, yes, I know I’m both reaching a bit and have no empirical evidence to make such an allegation and information about how (digital) advertising is changing things implies the opposite. The amount of innovation occurring in digital advertising (albeit, sometimes creepy innovation) is staggering. The allocation algorithms behind Google’s AdWords and AdSense programs are mathematically guaranteed to lead to the most optimal outcome for all involved; the personalization possible with customer tracking (e.g. DoubleClick) is getting there; the shift to Actions and not Impressions is coming fast, etc. I just don’t like statistics like the GRP (unless I’ve completely misunderstood it…).

Screw the Literature

Of course, it’s not like the (academic) literature is any better. I dipped into a couple of (mathematical) marketing journals earlier today when I was researching the (earlier) response; I lost most of my references, though, and as this is not an academic paper I’ll refrain from re-locating them. The upshot, though, is that modern mathematical and economic accounts of advertising assume that (i) you can segment your population well, and (ii) that all segments are homogenous (note that (ii) implies (i)). Is this accurate? – I would be terribly surprised if the segmenting was that accurate.

Given these constraints, most models assume that (i) you represent advertising as contributing to some sense of “goodwill” among people, and (ii) in the absence of advertising the amount of goodwill a customer feels towards you or your product declines (which is a great way to justify advertising! –> apparently it’s a well-established empirical pattern; I’d like to check that).

This is known as “inventing a variable which doesn’t really exist.” The scientific justification for it is that “goodwill hypothetically relates to several variables – known and “latent” (which means “unobservable”) – all of which are correlated, such as goodwill in an “index” for those other variables.” Actually, what they would probably tell you is that goodwill is a latent variable that can be distilled via structural equation modeling from some empirically observable variables – but it’s a distinction without a difference. Mostly.

Now, I suppose goodwill is a better thing to try and measure than GRP. However, it’s still (i) artificial, and (ii) has nothing to do with revenue or profit. Thus, the literature is little better.

However, one good point (which I had not considered) is that given these assumptions, then the approach you take is influenced by whether or not you are trying to maximize goodwill at some point t, or if you are trying to maximize the integral of goodwill over the advertising campaign. The obvious example of the former is in selling tickets to some event.

Closing Thoughts

Measuring advertising is hard. So the tools you have are limited.

However, I think the statistics cited should have more to do with what the company buying advertising needs. That may be revenue and profit, of course – but it may be something else. I mentioned aspirational advertising in the last post; I have no idea how to measure that (except really crudely, with surveys and interviews).

And I think the statistics used should have less to do with impressions, unless you’re trying to improve effectiveness (“Our GRP is 250, but sales only increase 0.4%! Something needs to change!”). It’s certainly never something you should show the customer.

Statistics related to inputs are useless. GRP, and similar statistics, look pretty much at what you put into the campaign – just like college rankings look at what goes into the colleges (SAT scores, money, etc). They don’t measure outputs, e.g. how successful each college student is, or how much advertising increased sales. Why? Because it’s hard to measure.

But abandoning something just because it’s hard is no way to live; and adopting an inputs-based measurement process will do nothing but increase cost (like it’s done for the college industry).

Unless, of course, that’s what you want.

Also, I have to confess that the reply to this I wrote earlier was lost when my computer crashed… teach me to use something lacking autosave.

Knowledge@Wharton has some very nice advice on the problem posed by exaggeration and embellishment of former accomplishments.

The core points the author makes are:

1. Everyone embellishes a little (and if you don’t, you’re at a disadvantage of those who do – the tyranny of asymmetric information!).
2. People don’t necessarily do it deliberately. Memory is unreliable, and there are different norms in different locations/industries/companies.
3. Employers really don’t like it.
4. It’s becoming a lot easier to both record and find (Google) transgressions.

The overall effect of the article is to discourage the embellishment of statements that are easy to check, and nudge people toward those which are “minor.” By minor, the author seems to mean “not binary;” that is, you either did or didn’t get a degree; you either did or didn’t hold such a position, etc.

The rest of the post is divided into two sections: they have nothing to do with each other. I just had two reactions to the piece.

Personal Reaction

My take is that asking people to accurately represent their experiences is like asking money to rain from the sky. Memory just doesn’t work that way, and cognitive errors (such as cognitive dissonance) ensure that people’s memories will always be self-serving.

Now, I don’t like to embellish, personally, because I fell like I’m lying. If anything, I tend to understate what I’ve done and expect the other person to know the unstated difficulties that needed to be overcome (an OK strategy when talking to experts in an area – I blame my years of academia, where people actually knew what I was leaving out).

But in general, and when looking for a job in particular, either understating one’s accomplishments or telling the absolute truth is more deceptive that embellishing a bit. If a hiring manager expects the interviewee to embellish, then they’ll discount all statements, since they have no idea which are embellished and which are not. (Also because a false negative is better than a false positive – better to drive away someone qualified than to hire someone incompetent).

As a result, considerate advice to the job-seeker must be to embellish a bit, but not too much… just around as much as everyone else is.

The Bigger Question

Now, there’s a bigger question the article raises. To what extent do these embellishments matter? Or, worse, qualifications at all?

Take Marilee Jones. The article says this:

…a former dean of admissions at the Massachusetts Institute of Technology and the author of a popular guide to the college admissions process. Although she encouraged college applicants not to overstate their accomplishments, Jones resigned from her position in 2007 after it was discovered that she had fabricated two academic degrees on her initial job application in 1979 and added a third later on.

Wikipedia reveals that (i) her book received terribly critical acclaim, being featured on the NYT, WSJ, etc, and (ii) in 2001 she received MIT’s Excellence Award for Leading Change.

In other words, Marilee Jones was a highly capable and highly effective employee.

Not having – and even lying about – her degrees did not detract from that.

Another example that springs to mind is former RadioShack CEO David Edmondson. Mr. Edmondson lied about his college degree, as well, but was also highly capable and added a tremendous amount of value to RadioShack (hired in 1994, won multiple industry awards, promoted internally to CEO). Apparently the trade rag Advertising Age recognized him as “one of 100 top marketers.”

These two examples have something in common:

They lied about their college degrees. Perhaps they lied about other things, but…

… that raises the question of whether or not college degrees made any different to one’s competence at work? Are those four years wasted?

It’s a scary question, as someone who’s just graduated (and currently unemployed!); and a serious issue for an industry whose pricetag has skyrocketed for decades.

(My answer deserves its own post, but: Sort-of. Employers use college as a way of filtering applications so they don’t have to determine the real qualifications… it’s a proxy for competence).