Commercial Analysis

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Archive for October 2011

False Dilemma

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Insurance is, essentially, risk management. All of life’s aspects – active and static – are constantly at risk of failure and destruction. Insurance companies provide their customers with the ability to exist in spite of that risk because they are assured that should failure or destruction occur, there will be no financial cost. Of course, by buying insurance – also an aspect of life – the customer is risking the possibility that he will spend money on something he may end up not needing (ie: the aspects of his life which are insured may not fail or be destroyed within the term of the insurance contract, and thus he will not need to exercise his contractual right to be reimbursed by the insurance company). The reason why a person buys insurance for one or a number of his life’s aspects is because he judges the risk of failure or destruction of those aspects to be greater than the risk of “wasting” money on insurance he will end up not needing. The only way this works – the only way this is beneficial (read: profitable) to the customer is if he assesses the aspects of his life which he wishes to insure correctly. If he assesses them incorrectly he will either buy no – or too little – insurance, suffer failure or destruction of those aspects, and then suffer financially as well because he will be required to correct the damage; rather than the insurance company. Or, if he assesses his life’s aspects incorrectly by purchasing too much insurance, he may suffer no – or too little – failure to those aspects, and then suffer financially because he will be paying for a perogative which he does not need.

The insurance company doing business with the customer must also make these assessments of his life’s aspects. If they assess them correctly, the amount damage caused by failure or destruction will reflect the premiums they received from the customer, and they will be able to reimburse him while also profiting themselves from the agreement. If they do not assess them correctly – if they ask him to pay too small of a premium – when the failure or destruction occurs, the amount that they will be contractually-obligated to pay to their customer will be more than they needed to receive from him and they will lose money. Similarly, if they overassess the risk of failure or destruction – if they ask him to pay too large of a premium – when the failure or destruction occurs, this fact will be brought to the customer’s attention and he will demand to renegotiate or stop going business with the company entirely.

In other words: it is in an insurance company’s financial self-interest to “get to know” their customers. To “treat them like people”, not “policies.” There is no valid distinction between the two. If an insurance company writes policies which does not take into account the “humanity” of it’s potential clients, it will fail.

Why, then, does Aviva present this invalid distinction between “people” and “policies” as if it were valid? The reason is two-fold. First, the public is soaked in altruistic and egalitarian sentiment (the phrase “Aviva is putting people before policies” is clearly an allusion to the popular anti-business slogan “people before profits”). Because most people in the culture are altruists or egalitarians, when a customer incorrectly assesses the risk of failure or destruction to his life’s aspects which he wishes to insure, and (voluntarily) buys the incorrect amount of insurance, the negative consequences of this are automatically blamed on the insurance company. Because the insurance company is “big” or “wealthy”, the average member of the public assumes that the insurance company is solely responsible for “getting to know him” (ie: the customer is not, to any degree, responsible for evaluating his own life and bringing that to the negotiations). In other words: the “big” and “wealthy” insurance company – because it is big and wealthy – is, according to altruism and egalitarianism, morally responsible for doing all of the leg work that is involved in establishing proper terms for a given agreement. Thus, if improper terms are (again, voluntarily) agreed to, and negative consequences to the consumer occur (and occur to the insurance company also, as is much more often the case than altruists and egalitarians wish to acknowledge), it is necessarily because the insurance company was “greedy”, “heartless”, “inhuman.”

But wait, Aviva is an insurance company. Why would they wish to perpetuate the misconceptions surrounding the nature of insurance caused by altruism and egalitarianism? The answer is the second, interrelated cause of the existence of this commercial: pragmatism in a mixed-economy. What Aviva is attempting to do in this ad is to appeal to the public’s short-term, unthinking, emotional urges in order to gain for itself new business in the short-term. They are attempting to portray themselves as a unique insurance company – one that exists not for self-interested purposes, but purely for altruistic and egalitarian reasons. By appearing to be a servant of the customer – as opposed to a partner with the customer in the “business” of managing the risks inherent in the act of being alive (an arrangement which they smear as being predatory on the part of the “soulless” insurance companies) – they hope to gain a short-term edge over their competition. They are trying to win the business of that vast portion of the public which believes that the primary purpose of having a business is to serve others, not oneself.

Why would a company like Aviva risk inculcating even more altruistic, egalitarian, anti-business, and anti-self-interest sentiment in the general public when, given the general public’s ability to influence public policy, it is not in their long-term self-interest to do so? The answer is that, from the perspective of just one company in a large industry, or just one industry in a large economy, there is no “long-term.” In a mixed-economy such as the one that exists today – where there are some freedoms and some controls – there is no way for an individual company like Aviva to know what the business environment will look like years, or even months, from now. In the future, they could very well be the victims of some new regulation or tax that benefits a competing business or industry or social segment, and so with that in mind, they are going to do whatever they must – up to and including distorting the very nature of the industry they work in – in order to make sure that it’s someone else who suffers right now.

The irony of all of this, of course, is that while Aviva in this commercial presents the false dilemma between producers and consumers in a relationship that is actually mutually beneficial, they are doing so precisely because the real dilemma that exists between “us” and “everyone else” in a mixed-economy pressures them to do so.

Update: Here is another, newer ad from Aviva with essentially the same message:

Written by commercialanalysis

October 25, 2011 at 4:54 am

Posted in Finance

“To Serve. To Fly.”

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“I don’t intend to build in order to have clients; I intend to have clients in order to build.” – Howard Roark, The Fountainhead

This is an exceptionally beautiful commerical. It dramatizes a much-neglected, often denied, connection between the romanticized heroism of the past and the equally-heroic heroism of today (ie: it points out that our modern, technologically-advanced culture is not automatically going to remain simply because it exists). Perhaps it was British Airways’ intention to produce a commercial that was so abnormally romantic in nature – so “old-fashioned” – that it would grab greater attention by that fact alone, and thus it’s implicit message would be more widely disemmenated. In other words, the company was hoping to strengthen and regenerate pro-Western, pro-science, pro-business sentiment in the general public (and, in lifting up the public in this way, serve itself by making it that much more insulated from anti-business persecution). Wonderful. Given today’s culture, heroic, even.

Perhaps that was the intention, but if so, whatever proper thought it provoked was crushed by capping it off with the company’s motto. Even if “To Fly. To Serve” has always been British Airways’ motto, it never has been, is not, and never will be (if BA is to remain in existence) it’s real motto. It’s essence. Just look at this commercial and ask yourself what British Airways is really in love with: flying itself – or customers.

None of the men featured in this commercial – or in the longer version produced fifty years from now in some luminous future – fly in order to serve. They serve in order to fly – because they fly in order to live. “To live” does not merely mean to produce enough value to support one’s existence, it also means fully, completely embracing and loving the means by which one does so. Contrary to popular sentiment – the sentiment pandered to in the motto “To Fly. To Serve.” – there is no choice to be made between being materially competent and emotionally fulfilled*. To enjoy working is proof that one enjoys living. It is only those who do not enjoy working – those who work in order to, for example, serve – that do not enjoy living; and in fact the reason why they come to regard the primary purpose of their their work as service to others is because they seek an emotional fulfillment that they are unable to otherwise have. This commercial is not for such people. It’s a shame it attempts to be.

*To say that serving (ie: trading with) others is impossible to the person who works for no other reason than his own personal enjoyment of the experience is completely incorrect. In virtually all contexts, it is not only possible but preferable to do so. In many – such as aviation – it is even necessary. Obviously, without any customers, aviation of the sort featured here would be impossible no matter how much the men in the cockpits wanted to do it. This, however, is not a testament to the value of service to others as a moral ideal. Rather, it is a testament to the fact that self-interest – because in virtually every circumstance it is in harmony with, and serves, the self-interest of others – is what allows men to soar; both figuratively and literally.

Written by commercialanalysis

October 23, 2011 at 4:21 am

Posted in Transportation

Sell The Kids For Food

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“I’m not doing something like that to save money, so the economy cannot be that bad.” The appeal of these two commercials is that it allows viewers to escape for a moment from the fact that they might as well be doing such things.

Suppose for a moment that hamsters actually could be trained to row a tiny boat, and thereby generate electricity. Clearly, even if it could be done, it wouldn’t be worth spending the six months needed to do it. The amount of energy spent would be greater than the amount produced. That, after all, is the humor of the commercial. Similarly, imagine what would happen if a mother and father actually did kill their child’s pet fish for the sake of enjoying a sushi dinner. While they might very well enjoy the sushi, the displeasure they would get from seeing their daughter distraught at the disappearance of her fish (not to mention the anger she would have towards them if she figured out why the fish disappeared) wouldn’t be worth it. The humor lies in the “knowledge” that I, the viewer, would never do something like that – and thus it’s okay to laugh at the impossible.

But are such obviously stupid and inefficient (in the former’s case), or maliciously evil (in the latter’s) really impossible to the kinds of people who find these commercials appealing? Literally, yes. Virtually, no. The cause of intolerable electricity prices is not insufficient technology, or “corporate greed” – it’s politics. Things like appeasement in foreign policy which allows oil-rich dictatorships to extort Western businesses, environmentalism-inspired prohibitions on domestic energy production which artificially decreases supply, and general taxes and regulations upon business all drive up the price that the consumer pays for electricity. Similarly, the average middle-class family’s increased inability to enjoy “luxuries” such as sushi is not the result of some kind of new found powers of evasion on the part of fish the world over which is outsmarting fisherman, nor is it because of “corporate greed” – it’s because of rising prices on things like, well, electricity.

These economic conditions are the result of these things, but those causes have their own causes. The reason why politicians appease foreign brutes, treat polar bears as if they’re citizens with property rights equal to factory workers, and why they presume to know what the financial structure, quality standards, and general decision-making processes should be for every business under their jurisdiction is because every day people vote for the politicians who do these things. Every day people may not like the consequences, but they certainly support the intention behind them (ie: altruism).

Thus, the reason why these two commercials are expected to appeal to every day people is because every day people know, consciously or subconsciously, that it is they who are ultimately responsible for their decreasing standard of living (despite working just as much as ever before). Consciously or subconsciously, every day people know that if their children are unhappy, unfocused, unmotivated, and approach the thought of “the future” not with passion but with dread, it is because the conditions they created for their children dictate that that is how their children should feel.

These commercials allow such people, for the length of a few moments, to feel as if the connection between their philosophical (specifically, their moral) values and the practical, disastrous consequences of attempting to bring those values into existence doesn’t exist. The advertising agency which created these ads understands that in order to stand out from the vast array of experience the average post-modern person is exposed to – in order to be remembered – the ad must not simply be funny, or visually impressive, or informative. It must also touch a person deeply – on an emotional level. There isn’t anything necessarily wrong with that, of course (there is no inherent contradiction between one’s most personal emotions and the practical needs of one’s life; such as insurance), but in this case it is profoundly wrong. In this case, instead of the ad attempting to strike something good within people – and thereby have them associate the product being advertised with that emotion because it actually does compliment that emotion – what is being “struck” – what is being flattered and told that it’s good, is one of the most perverse and immoral emotions a person could have. An emotion which is, unfortunately, all too prevalent in today’s culture: the desire to escape moral culpability.

Written by commercialanalysis

October 9, 2011 at 3:23 am

Posted in Finance

Forgive Them For They Know Not What They Do

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GM realizes that, currently, the vast majority of people make the decision to drive a gas-only car or a gas-electric hybrid based upon philosophical principle. That may change in the future – when the economics of it changes (ie: when, aside from social engineering in the form of income tax breaks, it actually does make practical economic sense to drive a hybrid) – but for now it is ideology which is the reason a person chooses one or the other. These commercials, then, are targeted at a specific ideological demographic: environmentalists.

Environmentalists, typically, see anyone who disagrees with their claims (or who is even just skeptical about them) as intellectually dishonest and of flawed character. Thus, to them, any and all opposition to their position comes not from a conscious, honest rejection of it – or even just a sense of honest uncertainty about it – but from the threat it’s truth presents to their personal shortcomings. This commercial, of course, exploits that sentiment – by caricaturing the opposition.

It has everything an environmentalists could ever want: the low-brow humor environmentalist-types expect all of their opponents to enjoy (how else could they reject or be suspicious of environmentalist claims if not because of a mental deficiency that makes them unable to understand them, and at the same time able to enjoy “toilet humor”?), the “off-base” claims environmentalists frequently hear from their critics that they’re only environmentalists in order to be fashionable or feel superior in some way (the father’s straight-forward, over-the-top, unprovoked delivery of one of these – because it’s delivered in such a way – somehow automatically proves that all such claims about environmentalists are off-base, and wipes out mountains of evidence to support them). There’s even some glib anti-Americanism to boot (the clerk’s “typically-American” petty selfishness when he says – without conviction, no less – “customers only. No gas, no bathroom”). The commercials end with the father proving that opponents or skeptics of environmentalism could never be honest, when he reverts immediately back to his half-baked, dogmatic anti-environmentalism ways (ie: when he forgets everything the man just told him, and gives into his moronic urge to mindlessly criticize environmentalists as hypocrites).

Environmentalists – because their beliefs are first of all based upon flimsy sciences, and secondly – even if the science were rock solid – it wouldn’t justify the political and economic proscriptions they advocate for the sake of it – need commercials like this in order to feel good about themselves. They need to feel as if they are the level-headed ones, and the rest of American culture are just a bunch of brainwashed buffoons mindlessly parroting slogans related to subjects they don’t understand in order to feel like they belong.

Imagine if the situation were reversed. Imagine a man, in the parking lot of a home improvement store, loading energy-saving insulation into the back of his gas-guzzling SUV, when he is suddenly accosted by a snooty twenty-something in a Che Guevara t-shirt who claims, self-righteously, “whoa, what gives? By the looks of it, you couldn’t care less about energy.” When the man attempts to explain that in certain aspects of his life it’s in his self-interest be energy efficient and in other it’s not, he is interrupted by shrieking accusations of hypocrisy and insincerity, as well as threats to do more or face the consequences. What would this situation resemble? In a phrase: real life. This is the kind of thing average Americans are subjected to every day. Maybe not directly, face-to-face in many locales (although certainly in enough), but in virtually everything else. Their schools, the work places, their religious centers, the places they shop, the television they watch, the newspapers and magazines they read, etc, etc, etc. They fact that environmentalists – or leftists in general, for that matter – still believe that their ideas are not well into the main stream of cultural thought is one of the most perplexing phenomena of the post-modern era.

This commercial allows such people – those sanctimonious do-gooder environmentalists – an opportunity to absolve themselves of the secret guilt and embarrassment they feel for becoming the obnoxious moralizers they have become by allowing them to believe, momentarily at least, that they are the victims of such tactics, and not the other way around. Chevrolet, short-sightedly, is hoping that by providing environmentalists with that momentary release of psychological pressure they will endear themselves to such people, and end up selling some cars.

Written by commercialanalysis

October 7, 2011 at 1:55 am

Posted in Durable Goods