1. Introduction
Picture this: a dingy booth on a busy Australian street, advertised as an ‘Ed Sheeran peep show’ for a mere two dollars. Inside waits the real Ed Sheeran, fully clothed and ready to perform. Yet, for over two hours, the shady promoter’s unconvincing calls draw zero takers. People dismiss it as a scam or worse, despite the authentic offering. This prank, pulled off by podcasters Hamish and Andy, starkly reveals a fundamental marketing flaw: superior products flop without credible, psychologically attuned presentation. Rory Sutherland, Ogilvy’s Vice Chairman and a behavioural science enthusiast, often cites such examples to expose how traditional marketing overlooks human quirks. He argues that decisions rarely follow strict logic; instead, they obey ‘psycho-logic’ – internal psychological rules that prioritise feelings, context, and intuition over rational calculation.
Drawing from Daniel Kahneman’s work, Sutherland reframes the marketing funnel as a behavioural ecosystem dominated by System 1 thinking – the fast, automatic, emotional mode that drives most actions through heuristics like social proof or loss aversion. System 2, the slower, analytical counterpart, typically steps in only to justify what System 1 has already decided. In Sutherland’s updated framework, the funnel’s layers interconnect to harness this dynamic for sustained influence. The top layer, awareness and brand building, generates fame and emotional resonance via creative narratives and contextual cues, embedding the brand intuitively in minds. The middle, consideration and preference building, refines this through targeted reframing – like presenting prices as relative feelings rather than absolute numbers – to foster deeper, differentiated attachments. At the bottom, conversion relies on performance tactics: universal nudges such as urgency timers or scarcity alerts that spark immediate impulses, though these masquerade as rational while rooting in System 1 shortcuts.
In today’s metric-obsessed world, where platforms like Meta and Google push short-term ROI through auction-based ads – a phenomenon Sutherland calls ‘technopplasmosis,’ akin to a parasite warping host behaviour for its gain – this framework offers a counterbalance, urging focus on customer-centric exploration over efficiency traps. As AI intelligence advances into the future, automating bottom-layer heuristics at scale, Sutherland’s model gains even greater urgency: it guides marketers to leverage AI for tactical precision while reserving human ingenuity for the creative, psycho-logical alchemy that builds irreplaceable brand personas, ensuring relevance in an era where machines commoditise the measurable but cannot replicate intuitive magic.
2. Explaining Sutherland’s Marketing Funnel Framework
At the heart of Sutherland’s approach lies a sharp recognition: human choices stem less from cold calculation and more from an internal ‘psycho-logic’ – the quirky, often irrational patterns that guide behaviour in ways that feel right, even if they defy standard economics. This psycho-logic explains why people might splurge on a branded coffee despite cheaper options nearby; it’s not about the caffeine alone, but the subtle sense of status or routine it provides. Sutherland builds on Daniel Kahneman’s dual systems of thinking to unpack this. System 1 operates swiftly and instinctively, relying on heuristics – mental shortcuts like following the crowd or fearing scarcity – to handle most daily decisions without effort. System 2, by contrast, engages only when needed for deliberate analysis, such as comparing specs on a major purchase, but it often merely endorses what System 1 has already leaned towards. In marketing, this means success hinges on tapping System 1’s dominance: create intuitive pulls that stick, rather than assuming buyers weigh every fact logically. Nudges, those subtle prompts to act, appear rational on the surface – like highlighting a discount’s value – yet they thrive by triggering automatic responses, not deep scrutiny. This dynamic runs through the entire funnel, where layers build on one another to turn fleeting impressions into lasting actions. The illusion that decisions are purely rational crumbles here; people act on gut feelings first, rationalising later.
2.1 Top of the funnel
This centres on awareness and brand building, where the goal is to embed the brand in people’s subconscious as something familiar and appealing. This layer generates mental availability – the ease with which a brand pops into mind when a need arises – through creative tactics like storytelling or well-placed ads that align with everyday contexts. Think of a supermarket rearranging shelves to put premium sugar cubes beside fancy teas; it’s not shouting for attention but subtly associating luxury with the brand, making it feel intuitively right for that moment. System 1 rules here, forging emotional associations through quick, affective hits: a clever ad evokes warmth or aspiration without demanding analysis. System 2 might later nod along, perhaps recalling the brand’s reliability, but the real work happens automatically, building fame that extends beyond direct exposure. Sutherland points out that true fame isn’t just recognition; it’s the assumption that everyone else knows the brand too, creating a self-reinforcing loop. For instance, when Apple’s sleek designs become shorthand for innovation, people gravitate to them instinctively, not after poring over reviews. This layer’s effects unfold indirectly and over time – a billboard glimpse today might spark a purchase months later – yet they deliver ‘easy mode capitalism,’ where opportunities flow to the brand unbidden. The hard truth: in a world fixated on immediate metrics, this unmeasurable foundation gets undervalued, leading brands to chase short wins while eroding long-term pull. Without it, lower layers struggle; awareness primes the mind, turning strangers into potential advocates.
2.2 Middle of the funnel
Moving to the middle, consideration and preference building refines that initial spark into a clearer choice among options. Here, tactics deepen connections through reframing – presenting information in ways that shift perceptions without altering facts. A classic example: showing airline ticket prices side by side, economy versus premium, transforms price from a stark number into a relative feeling of value, making the upgrade seem worth the small extra outlay. This exploits psycho-logic, where humans judge worth not absolutely but against anchors or contexts. System 1 drives the intuitive shift – the premium option feels like a smart indulgence – while System 2 might briefly calculate the difference, often just confirming the gut sense. Sutherland highlights ‘fat-tailed’ ideas in this space: low-cost tweaks with outsized impact, like adding names to Coke cans, which turned a simple drink into a personal shareable moment, boosting sales by billions through emotional ties. Or American Express’s ‘Member Since’ date on cards, a tiny detail that fosters loyalty by making cancellation feel like losing status. These build differentiation, setting the brand apart not through features alone but via unique emotional resonance – a hotel labelling rooms ‘pool-access’ for a premium fee reframes convenience into exclusivity. The layer flows from top awareness by nurturing preferences that endure; without it, brands blend into commodities. Yet, the unflinching insight: in metric-driven setups, these creative bets get sidelined for safer, quantifiable plays, starving the funnel of its potential for breakthrough growth.
2.3 Bottom of the funnel
Conversion through performance marketing zeroes in on prompting immediate actions, like clicks or buys, via tactics anyone can deploy. Universal heuristics take centre stage: scarcity alerts (‘only two left’) ignite fear of missing out, urgency timers push quick decisions, and social proof badges (‘bought by thousands’) herd behaviour toward the sale. These nudges masquerade as rational – offering clear reasons like ‘great deal now’ – but they succeed by hijacking System 1’s automatic responses, bypassing effortful thought in distraction-filled moments, such as a rushed online checkout. System 2 might glance over for a split-second validation, like checking the price drop, but the impulse comes first. Sutherland started in direct marketing and values this layer’s testability; it fixes bottlenecks efficiently, ensuring traffic converts rather than bounces. Imagine widening a road only to hit jammed traffic lights ahead – bottom optimisation clears those lights first. However, he calls it a ‘bastardised’ evolution: narrow and commoditised, where everyone copies the same tricks, inflating costs without building distinct edges. The core truth: overfocus here turns marketing into grinding for marginal gains, ignoring how upper layers amplify these heuristics’ power.
Together, these layers form a cohesive flow: top and middle cultivate System 1 intuitions that make bottom nudges land harder, creating a cycle where fame eases conversion and actions reinforce preference. This integration demands balance – prioritise bottom fixes, but fuel the top for resilience. With this foundation clear, we turn to why it matters in the current landscape.
3. Relevance in Today’s World
Modern marketing grapples with deep-seated challenges that Sutherland’s framework directly confronts, offering practical paths forward. Chief among these is the grip of short-term metrics, where platforms like Meta and Google steer brands toward auction-based ads that reward immediate clicks over lasting impact. This creates ‘technopplasmosis’ – a parasitic influence where marketers chase quantifiable gains, inflating costs as everyone bids on the same narrow targets. The result: red-ocean competition, where tactics homogenise and differentiation fades. Publicly listed companies exacerbate this, fixated on quarterly ROI to appease shareholders, often slashing creative budgets that fuel top and middle funnel layers. Family-owned businesses, by contrast, thrive by ignoring such pressures; they focus on customers, blending short and long horizons, as seen in Guinness’s 15-year strategy yielding sustained loyalty. Sutherland’s model counters this by demanding balance: optimise bottom heuristics first to clear conversion hurdles, but invest in upper layers for resilient fame. Without this, brands erode; the illusion of efficiency masks lost opportunities, like procurement favouring comparable bids over innovative ideas that could transform outcomes. Everyday evidence abounds – think of Dyson treating customer calls as privileges, not costs, building word-of-mouth that no ad auction can replicate. The framework exposes a core truth: pursuing profit directly through metrics often yields less than oblique customer focus, where exploration uncovers value metrics alone miss.
Behavioural insights, central to the framework, prove vital in this data-driven era, where digital overload demands smarter engagement. Consumers face endless choices, often deciding in moments via System 1 shortcuts, yet many campaigns still push rational appeals that System 2 rarely engages. Sutherland’s approach flips this: harness psycho-logic to make brands feel intuitive, not forced. For instance, contextual retail media – ads appearing when shoppers are already in buying mode – aligns with real behaviour, unlike intrusive pop-ups that interrupt unrelated tasks. This boosts relevance; a spirits ad near mixers nudges impulse buys without analysis. In a landscape of rising performance marketing, the bottom layer shines for fixing leaks, like streamlining checkouts to reduce drop-offs, but overreliance turns it into a grind. The framework’s strength lies in integration: upper layers prime System 1 emotions, making bottom nudges convert effortlessly. Data supports this – influencer endorsements add human trust, restoring context digital ads often lack. Yet, the unflinching clarity: ignoring behavioural roots leads to commoditised efforts, where algorithms optimise for engagement but miss the human quirks that drive true preference. Everyday scenarios illustrate: a wedding invite on embossed card feels special compared to an email, inferring care; similarly, brands must frame messages to evoke that intuitive pull amid data noise.
Early AI integration already reshapes marketing, and Sutherland’s framework provides a steady guide through it. Tools like machine learning personalise bottom nudges at scale – think recommendation engines using past behaviour to trigger scarcity alerts tailored to you – enhancing conversion without human input. This amplifies efficiency; AI spots patterns in vast data, automating A/B tests on urgency prompts to boost clicks. Yet, it risks deepening short-term traps, as algorithms favour measurable outcomes, sidelining creative reframing that defines upper layers. For example, AI-generated content can mimic ads, but it struggles with psycho-logic’s nuance, like the ‘Share a Coke’ campaign’s emotional spark. The framework adapts by assigning AI to bottom tasks – friction reduction, targeted heuristics – freeing humans for top and middle alchemy, where intuition crafts brand personas. Current applications show promise: AI analyses sentiment in reviews to inform middle-layer preferences, but without behavioural oversight, it amplifies biases, like over-targeting based on flawed data. The hard insight: AI commoditises universal tactics, making differentiation scarcer; brands clinging to metrics alone falter. As AI evolves, this sets the stage for a future where the framework’s emphasis on human-centric balance becomes indispensable.
4. Implications for a Future World of Increasing AI Intelligence
As AI intelligence advances, it stands to disrupt marketing profoundly by automating bottom-funnel heuristics on a massive scale, delivering real-time, hyper-personalised nudges that adapt to individual behaviours in the moment. Picture an AI detecting subtle hesitation during checkout and instantly tailoring a scarcity message to your past purchases, or shifting urgency based on your typical decision speed. This evolution further commoditises conversion tactics: everyday sellers access capabilities once limited to large players, flattening access but heightening competition where costs escalate for fleeting edges. Sutherland’s framework remains adaptable by safeguarding the irreplaceable role of upper layers; top and middle funnel efforts – forging fame via creative storytelling or reframing perceptions – prove harder for AI to replicate authentically, since machines excel at patterns but stumble on the unpredictable nuances of psycho-logic. The direct observation: without deliberate emphasis on these layers, brands risk becoming indistinguishable outputs of algorithms, forfeiting the intuitive emotional bonds that sustain preference. Current trends already show this tension: AI handles queries with impressive efficiency, and through fine-tuning on vast human data, modern LLMs craft responses that feel increasingly relatable and anthropomorphic, complete with warmth, wit, or empathy tailored to context. Yet, this simulation, however sophisticated, lacks the genuine reciprocity of human interaction, where shared vulnerability and unscripted presence create deeper ties.
Such progress creates opportunities for effective human-AI partnership, with the framework providing clear assignment of roles: deploy AI for bottom-layer precision, analysing data streams to refine heuristics, while humans focus on top and middle creativity. For example, AI might test endless variations of social proof, but humans infuse them with distinctive brand voice – a reframing that turns convenience into felt exclusivity. This collaboration leverages complementary strengths: AI’s relentless optimisation scales middle-layer insights, proposing anchors drawn from behavioural trends, allowing creators to pursue fat-tailed breakthroughs rooted in human quirks. In an era of escalating intelligence, System 1’s primacy endures; AI can anticipate heuristics with near-perfect accuracy, yet generating truly intuitive fame demands human grasp of subtleties that simulation alone cannot fully capture. The unflinching insight: leaning too heavily on AI across the board invites campaigns that prioritise flawless execution over resonant depth, mirroring present metric pitfalls but on a grander scale.
Ethically, amplified capabilities heighten stakes: AI might exploit biases in nudges, targeting susceptibilities with precision that outpaces oversight, necessitating robust safeguards. Over the long term, the framework advocates oblique approaches – prioritising discovery and customer insight over pure extraction – to chart ethical, enduring courses. With these prospects in view, a concluding synthesis ties the threads together.
5. Conclusion
Sutherland’s updated marketing funnel emerges as a cohesive behavioural blueprint, weaving System 1’s intuitive dominance through interconnected layers to drive lasting influence. At the top, awareness embeds emotional fame via creative cues; the middle refines preferences with psycho-logical reframing for differentiated bonds; the bottom converts through heuristic nudges that spark impulses, all flowing together to amplify each part’s strength. This integration dismantles the myth of isolated tactics: upper emotional groundwork makes lower actions effortless, turning fleeting decisions into enduring habits. The framework’s timeless core – prioritising psycho-logic over rigid metrics – exposes short-termism’s flaws, where efficiency chases illusions of control while missing fat-tailed breakthroughs.
Marketers must adopt this model now for resilience, blending bottom optimisation with creative upper investments to navigate data overload and AI’s rise. In tomorrow’s landscape, it stands as a safeguard against commoditisation, harnessing AI for tactical precision while centring human insight on intuitive magic that machines approximate but cannot originate. Embrace this balance: it equips brands to thrive amid change, rooted in the unyielding truths of human behaviour.
References
Sutherland, R. (2019). Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. HarperCollins. https://www.harpercollins.com/products/alchemy-rory-sutherland This book forms the primary source for Sutherland’s concepts of psycho-logic, creativity in marketing, and critiques of rational approaches, underpinning the entire framework discussed in the essay.
Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux. https://us.macmillan.com/books/9780374533557/thinkingfastandslow Seminal work introducing System 1 and System 2 thinking, central to the essay’s explanation of intuitive dominance in consumer decisions and nudge dynamics.
Thaler, R. H., & Sunstein, C. R. (2021). Nudge: The Final Edition. Penguin Random House. https://www.penguinrandomhouse.com/books/690485/nudge-by-richard-h-thaler-and-cass-r-sunstein/ Key text on behavioural nudges and choice architecture, referenced in discussions of bottom-funnel heuristics and performance marketing tactics.
Sharp, B. (2010). How Brands Grow: What Marketers Don’t Know. Oxford University Press. https://global.oup.com/academic/product/how-brands-grow-9780195573565 Provides evidence-based insights on mental availability and brand growth laws, supporting the top-funnel emphasis on fame and salience.
Hamish & Andy. (2015). Ed Sheeran $2 Peep Show. https://www.hamishandandy.com/2017/ed-sheeran-2-peep-show-2015/ (with video at https://www.youtube.com/watch?v=TaUlBYqGuiE) The prank experiment used in the introduction to illustrate failures in credible presentation despite a strong offering.
Borys, A. (2023). The Greatest Trick Big Tech Ever Pulled on Marketing. Referenced via Sutherland’s adoption; original concept inspiring ‘technopplasmosis’ discussed in relevance to modern metric-driven challenges. (Article available on various marketing sites, e.g., discussions in The Drum: https://www.thedrum.com/opinion/technoplasmosis-the-hidden-parasite-controlling-modern-marketing)
Institute of Practitioners in Advertising (IPA). (2024). Effectiveness Awards Winners. https://ipa.co.uk/awards-events/effectiveness-awardsv1/winners-2024 Data on family-owned businesses dominating awards, cited in critiques of short-termism in public companies.