Where There's Mystery, There's Margin

Every once in a while, someone says something that sends me off into never-never land. It happened recently when someone in the advertising industry said, “Where there’s mystery, there’s margin.” 

It may have been one of those sorts of homilies meant to be entertaining. But for me, the comment inspired respect and revulsion in the same instant — kind of like watching Trump get votes from the people who will be further impoverished by his policies.

But I digress. Is that statement true?

Given that every business wants more margin, the claim warrants just a little scrutiny.

It seems true enough. Look at programmatic. One can only imagine how 2,000 companies with millions of lines of code hitting the Internet somehow conspire to make a market for a thing that carries no objective function for value. So how and why it works are both mysteries, and there must be margin.

Programmatic is technology, not romance. Ad tech would seem like one place where mystery need not exist — it’s all computers.



Advertising in general would seem like a place where mystery and margin hold hands.

In cases where rational measurement of value is more or less impossible, a bit of mystery somehow closes the value gap. Related, a prominent academic once told me that seduction has three elements: a promise, a secret, and a surprise.

Mystery is everywhere in advertising: in the algorithms that decide on search listings, in the calculation of effectiveness, in the creative that tells the story.

The human brain is drawn to mysteries. This accounts for the print creative best-practice of giving the user a problem to solve, or the creative director’s trick of a reveal, and so on. Mysteries get our attention — but left unsolved, may not work in the seller’s favor.  

So, mystery is everywhere, but if it’s absent, is there no margin? Of course not. Take bituminous coal, or shoe laces — any commodity. The rule there is: No mystery, small margin.

What about the reverse: Total mystery, huge margin. There’s perfume for $200 an ounce, or stereo speakers for half a million dollars. Yes, that happens, but not often.

How about the middle ground? Some mystery, some margin. This defines the bulk of the economy, but not all mystery increases margin. For example, the mystery of whether the exotic food in a “C”-rated restaurant will make you sick. Simple unknowns do not constitute mystery.

So, basically, it’s not true. Mystery might make for margin sometimes, but in business, mystery might not be sustainable. In advertising, it doesn’t have to be sustainable. If a campaign flopped, take another whack at it.

At this point, the reader might be thinking this whole thing is drunk-talk. Maybe, but after cursory examination, I assert the following: You, as advertising professionals, are in the seduction business. Without a promise, you have nothing to offer. Without a secret, there’s no mystery.  

So here’s the punch line: Mystery is in the mind of the beholder. Margin is in the spreadsheet of the accountant. They are unrelated, except maybe via the idea of seduction.

Sellers will seduce, and buyers will commoditize. A little bit of mystery might make the sale, but truth will out. Except, of course, where truth cannot be ascertained. Mystery and margin run together where truth is debatable. Welcome to the world of advertising.

1 comment about "Where There's Mystery, There's Margin".
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  1. Ed Papazian from Media Dynamics Inc, April 15, 2016 at 10:14 a.m.

    Very interesting, Ted, and, in my experience, mostly quite true. This is especially so when it comes to that much abused and misunderstood term "return on investment" or ROI. The plain fact is that there are so many intangibles and so many unique marketing situations, along with so little truly relevant---and so much redundant---data, that we, as an industry are kidding ourselves as we try to hunt down this golden fleece. "Mystery" will continue to rule no matter how much we try to define it in quantitative terms.

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