Climbing the pyramid: Advertising in a richer world

Apart from a few (looking at you, CO2-levels), all statistic show an insane progress in the world. Extreme poverty fell from 37% in 1990 and is well under 10% now; illiteracy fell from 65% in 1950 to just 15% now; and average life expectancy upon birth went up from 31 years in 1900 to 71.5 years today. The amount of violence and wars is at its lowest in two millennia. Humanity as a whole is moving forward; the poor are getting less poor, and the rich are getting richer, and the overwhelming majority of us lives more comfortable than kings a hundred years ago. While we don’t have an army of servants, we do have hot tapwater, central heating, airconditioning, cars, planes, TV, internet, smartphones, and vastly improved medicines.

As such, we’re collectively moving up on Maslow’s hierarchy of needs. Developing countries are finally satisfying the bottom two tiers with needs such as food, water, shelter and safety. Famines no longer happen because of natural causes, but mainly because of conflict and political reasons. In industrialised countries, memories of the wars are fading, and the Maslow’s fourth tier is filling, a process that has been going on in Western countries since the eighties, as well as in China since the start of this millennium. The effect is changing mindset, as wealthy countries are moving from ‘old values’ on family, belonging and status, to new ones, such as individuality, self-actualisation and creativity. Religion is being replaced by Amazon prime.

These new desires replace old desires, so it’s difficult to say if we’re any happier. Our bodies are hardwired to feel dissatisfied, as it makes sense for survival and evolution to always want more. Yuval Noah Harari makes the case that we’re more powerful than our ancestors, but not much happier. When conditions improve, our expectations balloon, leaving us equally satisfied as before. But advertising and consumerism make us believe fortune is always just around the corner: “If I have the iPhone X I’ll be truly satisfied!”, a thought strikingly similar to one in 2001: “If I have the Nokia 3310 I’ll be truly satisfied!” And so we keep inventing new flavours of icecream and releasing new models of smartphones, to provide the proverbial light at the end of the tunnel, as if saying: “This will make you happy, even if only for a short while!”

Tom Goodwin on The Drum: “Luxury stores and brands continue to thrive as the rich get richer and the middle get more keen to pretend they are. Off price retail will continue to thrive because most people have less disposable cash. It is mid-priced retailers in any sector that will continue (this isn’t new news) to struggle. The middle is dead.” Products are polarised with on one side commodities with low sales margins and thus no possibility for advertising, and the other half premium products with high margins. The dynamics in some market shifts from premium to commodity. Think about Harry’s and One Dollar Shave Club who took on Gillette, or Venmo who’s challenging American Express and Visa.

Traditionally, premium products positioned themselves as physical things you could buy and own, showing your status; a supercar, a gold-plated smartphone, a diamond ring, an overpriced coffee, sneakers, designer eyewear. Maslow’s fourth tier is about esteem needs. This is definitely still true today. In China, change is happening so fast that it’s effects are easier to see, and in a New York Times article about Unilever’s failed attempt to bring the Rexona deodorant to the Chinese market, Owen Guo writes: “Companies like Apple and Starbucks have prospered in part by selling aspirational products to Chinese consumers who want to show the world that they have made it. That task is tougher for products such as deodorant that nobody sees.”

But our collective ascent on Maslow’s pyramid is introducing new aspirations and desires, less rooted in consumerism. Maslow’s fifth tier is about self-actualisation, so we like to be creative, knowledgable, honest, open, ethical, connected, tasteful. More conscious consumers turn to yoga and vegetarianism. People take a year off from work to travel around the world, write a book, or start your own business. Advertising becomes less about functional claims, less direct and less ‘buy now’, but more aspirational. This is cherry picking, but the Apple Watch isn’t as much a result of technological change as it is of cultural change, with more people looking to focus on their health. Services like Airbnb ride the wave of increased interest in travel, and like citizenM it beats the dead old hotel cliché of lofty rooms with chandeliers. Air Asia’s campaign says ‘We’ll Take You There’, not ‘Sip champaign in our comfty seats’. Audi sells itself in China by appealing to who you wish to be: ‘There is no change without firsts’, not ‘At sixty miles an hour the loudest noise comes from the electric clock’. And Vero’s launch video is a great sign of the times, as it talks about ’truth’, ’simplicity’ and ’no algorithms’.

I welcome the change. Instead of what we own, it’s increasingly about who we are.

Now for the good news – The Economist
Greening of the Earth and its drivers –
Global Rise of Education – Our World in Data

The Better Angels of Our Nature – Wikipedia
Life Expectancy – Wikipedia
The Future of Luxury – Trendwatching
War and Peace – Our World in Data
Smartphone user penetration – Statista
The Cause of Ethiopia’s Recurrent Famine Is Not Drought, It Is Authoritarianism – Huffington Post
Happiness – Yuval Noah Harari
What Matters in Retail in 2018 – The Drum
Aiming at China’s Armpits: When Foreign Brands Misfire – The New York Times
The Future of Betterment – Trendwatching
Sixty-Four Percent Of U.S. Households Have Amazon Prime – Forbes