Sorting Hats and Politics

Anyone who has studied marketing will talk at length about the importance of market segmentation. Defining your target market, then your target group within that market, is a central part of any marketing strategy, since it drives decisions about product, location, price, promotion and everything else.

The people who love segmentation most of all are advertising experts. It is their creative enabler. Once they can picture a potential buyer, they can shape campaigns to appeal to him or her. That is how they win awards. Sometimes it even helps to sell products, though advertisers are notoriously vague about anything to do with financial results.

Segmentation is why many of us stare at the TV and fail to understand why anyone would ever buy anything on the basis of most commercials we see. WE are in the wrong segment, so the advertisers do not care. You notice the effect most when you are watching programs that you might not usually watch, because typically your segment for watching overlaps with your segment for choosing merchandise. So when I watch sports, I can at least understand all the many macho adverts for cars, even if I am not really attracted. But if I end up watching a gossipy movie for young people, I usually don’t even understand what is going on in the commercials.

I had mixed experience with segmentation in my Shell career. At some point I became in charge, temporarily, of all the marketing specialists in Europe for petrol stations, and they wasted no time in showing off their segmentation of European motorists. In a way it was impressive: they had five segments, and I could picture each one and see how driving and petrol buying might differ between them. They had beautiful videos as well – marketing types are very good at spending other people’s money.

But then I couldn’t make the next step. I thought of the types of locations for petrol stations, and felt most of them would need to attract people from all the segments, because petrol buying is so dominated by location. The marketers weren’t used to this sort of challenge, and nothing happened.

Now I look back, there probably was a middle ground. We might have been able to do things in locations with certain characteristics to target one group, without buyers in the other groups noticing or caring. We might have become a brand that one group associated positively, without any negative results for how the other groups felt about us. I wish I had not been so dismissive.

So segmentation is messy, but potentially valuable if you can find nuggets in the mess. Not all sports viewers want to rush out and buy a massive truck because of a film of one driving into the sunset driven by a cowboy accompanied by a deep bass voiceover. But maybe quite a few people who really would be attracted by that ad spend time watching sports.

I wish the marketing people spent longer understanding the mess. The way segmentation is taught fits the Harry Potter model, where everyone fits neatly into an ideal number of almost equal sized groups, and your group works for multiple situations. Real life is more complicated.

This applies also to political segmentation, trying to divine which types of people are inclined to vote for which party (if they vote at all). And there has been a boom in political segmentation, for at least three reasons. Politics has money behind it now, and targeting strategies can be more focused (partly thanks to social media). But the main reason is that traditional segmentations re breaking down, and political marketers are desperate to define new ones.

Growing up in England, the division was clear. The left were for working class people, those whose families had previously been exploited and who relied on unions, as well as newly inclusive welfare, health and education policies. The right was for those who valued the establishment, perhaps because that establishment offered their families continuing benefits.

I was told as a child that anyone not voting left in their youth had no heart, but anyone not voting right as a mature adult had no head. At the time there was some sense to this, as the left went through a phase of fighting against markets and growth, factors gradually pulling up global living standards.

I am not sure I would have drifted right even in this environment. But Thatcher put markets and selfishness on turbocharge, and that started a shift. After a time, my heart and my head both drifted leftwards, and that trend remains. The right replaced its natural voters like I might have become with others, often those who had won security and wanted to protect it against perceived threats like foreigners. Something similar happened in the US, with the civil rights movement a turning point.

Now these trends seem to have turned the world almost full circle, with less educated people tending to vote right and younger people in cities veering left. The polling and political establishment have been confused, and tried to define new segments.

Their problem has been that they have struggled to understand the new right, mainly because they struggle to respect them. It is true that many of the leaders of the new right have been shameless, and that their policies, such as they are, do nothing to benefit their voters. But those voters are angry – they are happy to continue losing, so long as the elites they despise start losing too.

This lack of respect shows through in the names given by pundits for new segments. They point to optimist versus pessimist, open versus closed, or tolerant versus resentful. Bagehot even tried exam failures versus exam passers, not his finest hour. All the segmentations are pejorative, and that inhibits understanding and responding. The best the elite can muster is condescension, re-education and charity, which only serve to grow the anger.

I have come up with an alternative, nimble versus rooted. The nimble look for opportunity in change and are ready to take risks. The rooted value and protect what they have, including tradition, and tend to see threats.

New York and Dubai are full of nimble people, while Scranton and Hartlepool have more rooted souls. The nimble move more, and select places of opportunity, which becomes self-fulfilling because nimble groups create things. The threats that the rooted fear often become reality, which serves to strengthen rooted beliefs.

The difference in my segmentation is that I don’t think is pejorative to the rooted. Many rooted values are generally positive, such as community, family, faith, or pride. Nimble cities can lack many of these virtues. And, most important, most of us don’t choose to become nimble or rooted, but are inclined to one or the other by our circumstances.

If your education has been limited by where you were born or your gender, you are likely to be rooted. If you have a handicapped child or sibling or a frail elderly relative to care for and no spare funds to pay for help, you are very likely to be rooted. If you live in subsidized housing in a town where your job has vanished and your skills have little value, you are likely to be rooted. And in each case it is less a failure than a product of circumstance. 

For progressives to win back the votes of the rooted, the starting point should be understanding why they are rooted and articulating policies to address the root causes. Needless to say, lectures about racism and LGBTQ rights from distant coasts are not the smartest place to start, still less wilfully casting aside tens of thousands of Amazon jobs. Even climate policies feel like an elite luxury to many rooted.

True, progressives are more likely to push for place-based policies, for healthcare and education and childcare support for all, or for retraining. But these are easily drowned out by nostalgic or nationalistic pleas, especially when these feel closer to home.

Segmentation is powerful. But, just like for my old experts at Shell, it needs to be made relevant and a bit messy before it can do more good than harm. Open versus closed only judges and feeds a lose-lose anti-elite mentality. Fascists and con men know how to exploit that situation.   

The Network Effect

One per month or so I have a tourist Wednesday, which includes going into Manhattan to watch a Broadway matinée. I usually buy at the box office, and rarely is there a queue, and often shows have so-called rush seats available for less than the prices in Times Square.

Last week I paid $40 to see Bryan Cranston in Network. Now, $40 is a lot to most people, but I find that a bargain to see one of the great actors of our time. We can certainly spend the same on a meal out.

Cranston did not disappoint. He has to work incredibly hard throughout the performance, and the energy he displayed and the character he portrayed were both utterly remarkable. I find the most wonderful thing about the best actors is how they can put on such mastery so many times per week. Live theatre is not TV or film, where you have the luxury of several takes and each scene is finished just once. This was a run-of-the-mill Wednesday matinée with a rather lifeless audience, yet Cranston gave of his brilliant best. I was mesmerised.

The play itself was also remarkable and I am still thinking about it nine days later. It is a wonderful vehicle for Cranston, with an utterly compelling central plot line about a newscaster becoming deranged.

The play was not flawless. The playwright includes some secondary plot lines and makes some efforts to develop secondary characters. Probably this is for the very practical reason that poor Cranston needs a break off stage every so often to recharge. But it almost seems as though the heart of the playwright is not in these secondary aspects, and, despite perfectly good acting, they failed completely to interest me. The overall effect became rather spotty, like an amateur show with too many long breaks while they changed the scenery.

I was also a bit frustrated by the technology. The play was written in the 1970’s and set there also. The modern interpretation is also set in the 1970’s, but included all sorts of technological gimmicks from more modern times, such as multiple screens and pixelated effects. Perhaps it was because my $40 seat was rather to the side of the auditorium, but for me these didn’t really work. And some aspects, such as having a sort of green room cum café on stage populated by audience members, seemed somehow inappropriate for the 1970’s but still dated for the 2010’s.

Still, the main plot line is riveting and it is that is still bouncing around my mind. It displayed real trends of the 1970’s and made an extreme projection from them. The brilliant thing is that these extreme projections are a very accurate reflection of exactly what has happened between the 1970’s and today. It is rare that something that tries to predict a dystopian future gets it so spot on.

The trends are manifold. Start with the ubiquity of television, which led to competition between networks and commercial pressures, as well as the power to influence people. The result was the breakdown of the original TV model in which news was somehow considered a public service and managed separately. From the 1970’s news came under the same pressure for ratings, and also pressure to promote the interest of corporate owners. Another result was that the homely, reliable figures like Walter Cronkite and Kenneth Kendall were pressured to be more entertainer than impartial journalist.

This all overlapped with other public trends. Attention spans became smaller at the same time as choice became larger and stress greater, so shallow sound bites and celebrity gossip became the news of choice for most.

Another trend is that the world became smaller, giving an impression of unmanageable complexity, just as people craved simplicity. There were always many wars, many intractable issues, many seeming contradictions, and few obvious solutions, few unalloyed heroes or villains and few happy endings. But somehow we could convince ourselves of the opposite, with the help of a bit of propaganda, censorship and genuine ignorance of things beyond our shores.

This last trend had a special impact in the US, since its self-assessed track record of being the good guy and always winning was being revealed as the lie that it always was, just as Hollywood was trying ever harder to perpetuate that lie, since that is what sells movie tickets.

Put all this together, and it still took a wonderfully prescient playwright to portray what could happen. Cranston has read straight news for 25 years, but has to read ever-more-simplified segments that still did not resolve pleasantly. Under ratings pressure, he is fired, but he has no other life so goes a bit wild and breaks from his script, saying “I’ve run out of bullshit”. A smart youngster in the commercial department, now merging with news, spots that the public would be entertained by more of this, and gets support from spineless executives to ride the Cranston horse further and further into deranged chaos. So long as he stays angry and mad, gains viewers, and does not veer from the message of the new Saudi money at the top of the channel, everything holds together - until it doesn’t.

Of course this more or less accurately predicted what happened to news since 1970. Fox News and its rivals rely on selectivity, anger and over-simplicity while promoting the political and commercial interests of owners. It garners ratings and eventually shapes politicians too, with the logical reduction ad absurdum being a Trump presidency. Social media has taken all the trends and amplified them further.

Perhaps most revealing to me was the tagline that the Cranston character descended to: “I’m mad as hell, and I’m not going to take it anymore”. Here, mad means angry, though the character is mad in the other sense too. The line brilliantly sums up how many people feel about the world. They are not ready for its complexity and look to people who offer comforting simplicity. It is not a bad way to sum up the mood of 60 million voters in November 2016. What a wonderful testament to a brilliant plot that is, and ample reason to revive it, despite the flaws.

Part of my thinking since watching Network has been to put myself in the position of a playwright now, imagining the world in 2040. I have not found this simple.

We have to start by adding in the new trends that had not developed by 1975. The first of these is social media, and its power to personalise. In the 1960’s we all watched the BBC (and its subtle propaganda). In the 2000’s we separated into three or four tribes with our own censored news from Fox or someone else. In the 2030’s we will have our own personal news – to an extent this has happened already, but it must accelerate.

Then, two other trends are more encouraging. I believe education has progressed, so that the next generation is more discerning and more able to judge fact from opinion and to embrace some complexity. At the same time that same generation is becoming more respectful of humanity in all its diversity and more at ease with themselves, and so less prone to anger and bigotry.

Put this together and you get a more nuanced picture. We will all get our own news, but the menu will cater to the curious as well as the angry, and more of us will be able to find content to help us develop and solve things rather than just rant, and more of us will be able to see through and reject corporate or other propaganda.

You already start to see this with Netflix. Hollywood’s stuff starts to look tired: it plays to the largest segment, but that segment gets smaller. Netflix can play to hundreds of subtly different segments, and content overall has improved as a result. The same will happen with news.

There will of course be missteps along the way. The excluded angry will find personalised material to make them yet more dangerous. And technology will make democracy and popularity move more quickly than most are ready for. Reputations will be made and lost in an instant, and instant plebiscites will lead to some horrible mistakes as majorities bully the oppressed.

But we will get through this and come out the other side better. I think my hypothetical play would be rather optimistic in tone. Of course, that means that my boss would probably toss it into the garbage as not being ratings-friendly enough.

However my play and other plays turn out, they will star no finer lead actor than Bryan Cranston.

Climate Tipping Points

There are a number of slow motion train wrecks happening around the world at the moment. Considering them could make us depressed, so it is just as well I still have the optimistic words of Steven Pinker ringing in my ears, lauding the wonderful march of human progress. That march will undoubtedly mean that many of the trains won’t crash in the end. But what if one that does is so great that humanity itself is threatened?

I like the expression of a slow motion train wreck. It describes a situation with some key characteristics. Above all there is uncertainty. There is a wide range of outcomes, some of which could be horrific, but the path towards the outcomes is unclear. While it is possible to define actions that would mitigate the risk, these are not obvious and some may have downsides, and sometimes it is not clear who can initiate such actions and which particular actions would be most beneficial. We are all on the train, and have a degree of agency, but our fellow passengers have as much responsibility as us and we are not in the driving seat.

One great example of a slow motion train wreck is Brexit. Years ago, when Cameron first mooted a referendum, disaster seemed highly unlikely, but somehow one event led to another and the train drivers missed chances to reset course. Even now, there is a sense that disaster will be averted, and it is not even obvious what any disaster would look like, or even if all the outcomes are all that bad. All UK citizens, even all EU ones, have some agency, but there is no single obvious path to avert the crash.

Look around and you find many other slow motion train crash situations. The possible failure of antibiotics is one. Untrammelled capitalism may be one. The Chinese political model may be one. The unravelling of the post cold war nuclear treaties is one. Others are not so sure, but could develop. Examples might be the gender imbalances in India and China, or abuse of a dominant social media channel.

But the biggest slow motion human train wreck is surely climate change. Pinker himself acknowledges it. He shows evidence of human progress, but argues that derailment is possible, and he dwells on nuclear war and climate change as possible culprits.

Climate change has all the classic elements of a slow motion train wreck. Uncertainty is the main one. Scientists simply do not know what might happen, because too many factors overlap and interact. Think about it. In November we had a storm that was supposed to give one inch of snow but sent down ten and caused chaos, but last weekend the opposite occurred, making the mayor look a fool when he closed schools. If something as simple has that has such uncertainty, then the whole climate for the whole planet has much more. If the outcomes are anywhere near the extreme end, it won’t just be the mayor looking dumb, it will be all of us.

Climate change has all the other required elements. It is happening in slow motion. It seems the solutions are within our grasp, but they are not all that easy to implement, and some actors have motives that complicate action. We are all agents, but our individual power is frustratingly small. Nobody knows when it might be too late, and even what being too late might imply.

The scientists do their best to help the discussion, but they are betrayed by their own disciplines. Everything is uncertain, so they talk in riddles and possibilities and in ways that are too easy to argue against. Many environmentalists are even less helpful, arguing for unlikely changes that voluntarily undue many of the gains humanity has made. This can be naïve and arrogant at the same time, and exposes them to ridicule and charges of hypocrisy whenever any of them get in a car or a plane.

Indeed, a recent book by David Wallace-Wells makes a very interesting point about individual action, arguing that it is a distraction. We feel good when we recycle, or bicycle, but the reality is that no individual action can have more than a trivial impact, and focusing on that gets in the way of identifying and lobbying for the actions that really could reroute the runaway train.

The concept of tipping points has long been part of the debate about climate change. They have become a way for scientists to try to describe secondary effects that could be unlocked and become serious.

But an article in the Economist this week set me thinking about climate tipping points in another way. As we are sitting in our train, what would make a step change in actions? What tipping point could change the climate of action?

Action happens because decision makers want it to happen. Scientists do a lot of good things away from the public eye, but for climate change they can do little more than sound the alarm. Then, action can come about because of politicians, businesses or communities, all of which can be influenced by lobbying groups. And tipping point triggers can come from knowledge, moral choices or market changes.

All of the factors have influenced all of the groups for several years, but the actions have lagged behind the needs. This is normal in slow motion train wrecks, because actions often have short-term costs and create losers, and because it is possible to be a free loader and rely on the actions of others.

Even in moderate scenarios, it is gradually becoming clear that this is not enough, and that humanity is taking reckless risks. So something is needed to change the game, to tip the scales towards more drastic action.

I have long thought that the most likely such tipping point would be a disaster or series of disasters of such magnitude as to shake decision makers out of their stupor. Suddenly, voters would demand action globally, and politicians would have to respond.

The problem has been that each disaster so far could be attributed only partly to climate change and has only impacted a part of humanity, usually not a very rich part. Perhaps this will change: Miami could flood irreparably, or California fires hit larger population centres.

But the article alerted me to a different kind of tipping point. Perhaps investors will demand that businesses will have to start taking real near-term risks seriously enough to quantify them, insure for them and try to mitigate them. This may be just starting to happen. The Californian power utility essentially became insolvent overnight, when it emerged that their legal liabilities for forest fires would be crippling.

So far these risks have been of the type that businesses have chosen not to investigate, since markets have not demanded it and any investigation would only unearth the need for costs. But as soon as markets will ask the question, a measurement industry will spring up and everyone will have to respond.

That will give more momentum to renewables, and, more important, business and its lobbyists will demand government action to reduce the worst risks. And business pays government, so government will respond. There will be laggards, like Mr. Trump’s friends in the coal industry, but they will become drowned out by the mainstream.

That is my new hope for a tipping point, and I think it might be what spurs the step change in action that we need. Whether it will be enough is another matter. I have faith in human ingenuity that it probably will be. But the sooner we reach the tipping point, the better the odds of averting the worst outcomes.