Play it safe, bet big: a new marketing paradigm

Antifragile is both the title and central notion of Taleb’s book. It’s a made-up term, coined by the author to be the true opposite of ‘fragile’. If fragility is the equivalent of an expensive wine glass breaking when you shake the box it comes in, antifragile is the equivalent of a glass getting stronger when you shake the box.

This is different from ‘resilient’ or ‘robust’, which would mean disruption or volatility would have no effect, rather than a positive one.

It may sound counter intuitive, but there are many examples of antifragility playing out in real life. For one, it’s been proven that a limited exposure to harmful substances or stressors can actually be good for your health – a phenomenon known as ‘hormesis’. And whenever a huge cataclysm hits our planet earth (say, a meteor), it will cause the demise of some species (say, dinosaurs), but also a huge surge in others (say, us). Nature is antifragile.

That begs the question: can marketing be antifragile? Can we find a way to not just be resilient to the volatility and change we see around us, but to gain from it?

Luckily for us, business isn’t nature. We don’t have to rely on completely random experiments to see what works and what doesn’t. We can apply some control, some directionality in our tinkering.

This is Taleb’s second lesson: to look for asymmetries in the world around us, and to exploit them (Taleb himself uses the somewhat inelegant verb ‘milking’).

These asymmetries are instances where the downside of a certain line of action is known and limited, but the upside potentially large – even astronomical – thanks to volatility.

Think about venture capitalists. They make their money investing here and there, until the big payoff. They don’t wait for the perfect pitch, they know success can’t be predicted. They simply invest a controllable portion of their funds, and wait for success to follow. Book publishers also snap up manuscripts in the hopes of one day getting the next Harry Potter. It’s not about preventing failure – failure is part of the game – it’s about the eventual win. You’re losing pennies to make dollars.

So are we really going to reduce marketing to a night at the casino? Should we just throw money at our campaigns, waiting for the next big hit?

Not quite.

One, because Taleb abhors not just academics and economists but also casino metaphors. The real world can’t be reduced to a game where all the parameters and odds are known (something Taleb calls the Ludic Fallacy). Odds in the real world can’t be computed.

Two – and this is the more significant part – is because Taleb proposes a more calculated strategy to deal with asymmetries and risk: the so-called barbell method.

Picture a barbell in your mind, and you see two big clumps of iron connected by a sturdy rod. Maybe you also see some cliché of a moustached weightlifter in spandex but ignore that for now. The thing about a barbell is that it focuses its mass in the two extremes, which is exactly the distribution Taleb wants us to follow when it comes to risk: one part extremely conservative and risk averse, and one part extremely aggressive and risk-seeking.

The link with financial investments is easiest to follow. Following the barbell strategy, you should put one part (the biggest) of your funds into a safe investment like government bonds, offering returns just above inflation, and one part (the smallest) into a high risk stock or option. There’s a chance you’re going to lose the little money you put into the high risk investment, but you keep open the option of a huge payoff. All while using the low risk part of your investment as a safety net.

Again, this is antifragility in action: volatility increases the scale of the potential profits through second-order and viral effects, but you’re protected from financial ruin by keeping a large part of your assets secure. Choosing the middle road however, exposes you to potentially unknown risks, which might still cause you to ‘blow up’.

The step to applying this into our third lesson for marketing is a small one. Here it’s about how to divide your marketing budget, choosing which initiatives to run in the coming year.

Say you’ve got 100 marketing bucks. The key is to allocate the biggest chunk of that (say 70 marketing bucks) to the stuff you’ve done before and that’s proven to work (SEA, hygiene content, awareness campaigns), and a smaller portion to new breakthrough experiments (a brand activation campaign, ABM, creative content). Here, you open up the opportunity for a massive unexpected success, but you’re also protected from ending up with zilch, thanks to the safer projects.

Note that ‘playing safe’ doesn’t mean dull and colourless communication. Even in the tried and true, you need a clear-cut message, distinctive design and solid copy. Quality is the baseline.

At face value, the ideas expressed in Antifragile are so simple they could be mistaken for trivial. Yet it’s these simple heuristics and rules of thumb that helped Taleb anticipate (and hugely profit from) the 2008 market collapse, where others met their financial demise. The seeming simplicity of Taleb’s ideas also hide a deeper layer of sound mathematics and probabilistic thinking.

The problem is that we humans look for credibility in the wrong places. We favour the baffling complexity of the consultant’s slide over the clear-cut logic of a simple diagram. Especially when it’s time to make a decision. And we favour the new over the old. Big time.

This is especially true for marketing. Just like we highly anticipate the next iPhone, only to replace it with a newer model one year later, we grab onto every new idea that comes along, briefly experiencing the feeling that we finally “got it”, until the next idea, and the cycle begins anew.

Taleb argues that only time can tell us what’s relevant and what’s not. There is a reason some ideas are still around: it’s because they work. In fact, you can predict that the longer something has endured, the longer it will live in the future (a heuristic known as the Lindy effect). Personally, I learned more about writing from William Zinsser’s On Writing WelI, a book written on a typewriter in the ‘70s, than I did from the countless blog articles populating the web.

As marketers we should always be aware of the significant changes in our environments, and the possibilities that new technologies bring. But we should not forget about the many timeless truths already uncovered by others before us, and we should never trust the things that we don’t quite understand.