Ted Newcomb (tcn) Wed 15 Aug 12 03:44
We are extremely fortunate to have Doc Searls with us to discuss his new book The Intention Economy: When Customers Take Over. Our own Jon Lebkowsky will be leading what should prove to be a far-ranging discussion. Doc is an author and journalist, well known for The Cluetrain Manifesto (co-authored with Chris Locke, David Weinberger, and Rick Levine) as well as for his work as Senior Editor of Linux Journal, where he's been on the masthead since 1996. Since 1996 Doc has run ProjectVRM at Harvard's Berkman Center for Internet and Society, where he was also a Fellow from 2006-2010. In that capacity he has fostered pioneering development of VRM (Vendor Relationship Management) tools and services. Think of VRM as the customer-side counterpart of CRM (Customer Relationship Management), only broader than that. VRM provides individuals with both independence and means of engagement. The economic thesis they seek to prove is that free customers are more valuable than captive ones. Doc has high faith that this will prove out in the same marketplace that will be transformed by it. His next planned book is titled the Giant Zero, and will explore the Internet as infrastructure; work on that topic has been ongoing since 2006, under his fellowship at the Center for Information Technology and Society at UC Santa Barbara. Jon Lebkowsky is an author, activist, journalist, and blogger who writes about the future of the Internet, digital culture, media, and society. He's been associated with various projects and organizations, including Fringeware, WholeEarth, WorldChanging, Mondo 2000, bOING bOING, Factsheet Five, The WELL, the Austin Chronicle, EFF-Austin, Society of Participatory Medicine, Extreme Democracy, Digital Convergence Initiative, Plutopia Productions, Polycot Consulting, Social Web Strategies, Solar Austin, Well Aware, Project VRM, and currently Reality Augmented Blog. He is also a web strategist and developer via Polycot Associates.
Jon Lebkowsky (jonl) Wed 15 Aug 12 17:59
Thanks, Ted! And welcome, Doc! You've said that the "intention economy" focuses on buyers, not sellers. You've said "it leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don't need advertising to make them." How do you make buyers? What's the future you envision for the buyer/seller relationship?
Doc Searls (doc-searls) Thu 16 Aug 12 06:57
Thanks! Great to be here. The future I expect is one in which buyers have many more tools than they have now, that the tools will be theirs, and that these will enable buyers to work with many different sellers in the same way. One primitive tool now coming together is "Do Not Track" (or DNT): http://en.wikipedia.org/wiki/Do_Not_Track It's an HTTP header in a user's browser that signals intention to a website. Browser add-ons or extensions for blocking tracking, and blocking ads, are also tools, but neither constitute a social protocol, because they are user-side only. The website in most cases doesn't know ad or tracking blocking being used, or why. On the other hand, DNT is a social gesture. It also isn't hostile. It just expresses a reasonable intention (defaulted to "on" in the physical world) not to be followed around. But DNT opens the door to much more. Think of it as the opening to dialog: User: Don't track me. Site: Okay, what would you like us to do? User: Share the data I shed here back to me in a standard form, specified here (names a source). Site: Okay. Anything else? User: Here are my other preferences and policies, and means for matching them up with yours to see where we can agree. Site: Good. Here are ours. User: Good. Here is where they match up and we can move forward. Site: Here are the interfaces to our CRM (Customer Relationship Management) system, so your VRM (Vendor Relationship Management) system can interact with it. User: Good. From now on my browser will tell me we have a working relationship when I'm at your site, and I can look at what's happening on both sides of it. None of this can be contemplated in relationships defined entirely by the sellers, all of which are silo'd and different from each other, which is what we've had on the commercial Web since 1995. But it can be contemplated in the brick & mortar world, which we've had since Ur. What we're proposing with VRM is nothing more than bringing conversation-based relationships that are well understood in the brick-and-mortar world into the commercial Web world, and weaving better marketplaces in the process. A bit more about how the above might work: http://blogs.law.harvard.edu/vrm/2012/02/23/how-about-using-the-no-track-butto n-we-already-have/ And a bit more about what's wrong with the commercial Web (so far, and it's not hard to fix) here: http://blogs.law.harvard.edu/vrm/2012/02/21/stop-making-cows-stop-being-calves /
Jon Lebkowsky (jonl) Thu 16 Aug 12 09:01
Back in 1991 I cofounded a company called FringeWare, Inc., which we described as a "street market in cyberspace." FringeWare as many things, but the original idea was to make it a community market. Our insight was that the Internet could disintermediate the relationship between seller and buyer, removing the distance the mass marketing principles and operations had created. There was always a question of how this could scale. I think you're talking about is something similar - wondering what your thoughts are about the issue of scaling the conversation in big markets? Is VRM relevant to Coca Cola?
Rob Myers (robmyers) Fri 17 Aug 12 04:39
Given that we aren't the customers of sites like Facebook or Twitter (paying corporate and governmental organisations are), how does the idea of intention economy play out there? Are DNT-style dialogs a way of changing our relationship with such sites?
Doc Searls (doc-searls) Fri 17 Aug 12 06:07
Jon... If VRM becomes relevant to Coca-Cola, it will be way downstream, and probably to the company itself in developing new products, rather than for selling old ones. Coke (the drink) is almost purely a brand product, and mass-marketed. But the company is a big one that does many other things. VRM can help there. It's an old saw to say that listening to customers is a way to improve and gain new market advantages. But the difference with VRM will be adapting to standards and practices set on the customers' side -- ones that work the same for all companies. There will be less and less leverage in communicating only within a company's on communication silo. IMHO, "social" services like Twitter and Facebook are not going to provide those standard ways, because they too are privately owned silos. Scale will only happen when everybody uses the same stuff in the same way. The Internet and its core protocols scaled because they were essentially NEA: Nobody owned them, Everybody Used them and Anybody could improve them. (Yes, some were owned in a legal sense, but in a practical sense they were ownerless. This is why, for example, Ethernet beat Token Ring. Intel, Xerox and Digital essentially released Ethernet into the public domain while IBM wanted to keep Token Ring fully private and charge or it. This bitter lesson had leverage later when IBM embraced Linux.) Email as we know it won because it scaled in exactly that way. Rob... You hit on an important distinction. Facebook, Twitter and Google (with search and Gmail, for example) are like commercial broadcast in the sense that their customers and consumers are different populations. And that they sell the latter to the former. (Or at least data about the latter.) Since consumers aren't customers, there is remarkably little dialog and zero customer service. It will haunt them, just as it has haunted commercial broadcasting. I think DNT dialog can change our relationships with all sites willing to engage users in users' own ways, and on users' own terms. The problem we have at this early stage is that DNT is misunderstood all over the place. It sounds too much like "Do Not Call," and users tend to think it means the blocking of tracking. The ad business is freaking out for obvious reasons. And retailers are dependent increasingly on in-site tracking to customize "experiences" for users. Some of this customization can be quite helpful, while some of it is unwelcome and intrusive. In any case, the dialog can help.
Jon Lebkowsky (jonl) Fri 17 Aug 12 06:36
DNT seems like a dumbed-down version of P3P (http://www.w3.org/TR/P3P11/), which never seemed to go anywhere after years of discussion and documentation. The idea was to have a protocol for communication between websites re their privacy practices and users (or user agents) re their privacy preferences. Similarly there've been discussions about creating common standards for authentication and identity that have been ongoing via the twice-yearly Internet Identify Workshop, where you're one of the instigators, and those discussions have seemed difficult - hard to get everybody on the same page. Right now we have several popular authentication standards - Facebook Connect, Twitter, OpenID - but no single coherent approach. How does the difficulty in getting adoption of standards relate to your statement above, that "scale will only happen when everybody uses the same stuff in the same way"? Do you see convergence on a coherent set of standards? Is that an opportunity-space for VRM?
Doc Searls (doc-searls) Fri 17 Aug 12 15:32
DNT is different because it starts with the user, not the site. The P3P1.1 spec is for sites: "The Platform for Privacy Preferences Project (P3P) enables Web sites to express their privacy practices in a standard format that can be retrieved automatically and interpreted easily by user agents. P3P user agents will allow users to be informed of site practices ..." The W3C's DNT Tracking Preference Expression <http://www.w3.org/2011/tracking-protection/drafts/tracking-dnt.html> is about expression by the user. From the current draft abstract: "This specification defines the technical mechanisms for expressing a tracking preference via the DNT request header field in HTTP, via an HTML DOM property readable by embedded scripts, and via properties accessible to various user agent plug-in or extension APIs. It also defines mechanisms for sites to signal whether and how they honor this preference, both in the form of a machine-readable tracking status resource at a well-known location and via a Tk response header field, and a mechanism for allowing the user to approve site-specific exceptions to DNT as desired." What matters there (to me, at least) is that it starts with the user and frames potential dialog between parties and processes. Nearly all browsers already support it, or something like it, in some way. And Microsoft, by turning it on by default, is driving adoption of the standard in a proactive way. And, of course, adoption is everything. And yes, I do see coherence and convergence starting to happen here, and I see it as a huge opportunity space for VRM. (I'd say more, but have 5 and a 2 year old Grandkids crawling over me right now.)
Jon Lebkowsky (jonl) Fri 17 Aug 12 22:06
Could you give an example or two of the kinds of applications that would fall within the VRM category?
Anonymous (jonl) Sat 18 Aug 12 11:40
An anonymous reader submitted this question via email: Let's talk for a minute about the customer side. When we're in a store, I mean when we walk in, we don't assume that we'll be tracked in as much detail, or forced to sign abusive "Terms of Entry and Service" at the door. I suspect that most people would be ok with the many surveillance cameras all over IF we knew they were being used ONLY in case a crime was committed and the need to identify the perpetrator was relevant, instead of the the 10,000 Little Brothers with their "improved face recognition and identity matching" patterns and "data for sale" attitudes--essentially ganging up on us. Would you help me understand what a reasonable online "customer" person might look like? I'm guessing we'd have a virtual Contract of our own, easily accessible to all others (like a personal RFID?). Do we get to have a warning system when a store doesn't agree to our terms? (I imagine a red blinking light in the corner of my glasses/screen as I enter the door/site.) More to the point, there's a world of conflicts that we need to wrestle with, I think. For example: - we may not have just one set of terms. We might need to represent our different interests for family, self, work, etc. - we need to know ourselves a lot better. There's what we want, what we say, and what we really do. - there are a lot more of us than there are of marketers, so we also need group-forming functions to leverage our size and collective interests, no? How's that work? Thanks for your time and thoughts on this interesting topic. one of many of me
Michael C. Berch (mcb) Sat 18 Aug 12 12:29
> When we're in a store, I mean when we walk in, we don't assume that we'll > be tracked in as much detail, or forced to sign abusive "Terms of Entry > and Service" at the door. Before Doc responds, please allow me to introduce a somewhat contrarian point of view. I believe that most people -- Americans at least -- have no such assumption. Obviously there is no explicit consent to Terms of Entry or Service, but every large retailer *has* such terms, and there is no opportunity to negotiate them, and no one that I know of would have even the slightest expectation of doing so. Everything in a bricks-and-mortar store is subject to the retailer's policies on pricing, packaging, manner of purchase, methods of payments, and return policy (if any). That is understood by part of the socialization process starting when any child buys a candy bar at a store, and on to adulthood. When you walk into (say) a Walmart, you are being observed, both by video and by humans. Some of this is for loss prevention; some of it is to determine shopping patterns and in some cases to optimize store layout and shelf displays. When you pay with a credit card, debit card, or check, your purchases form a personal profile that is used for marketing, supply chain prediction, and may be sold as an asset to others for marketing purposes, and also become part of aggregate data. If the retailer uses a loyalty card, that adds additional personal and aggregate data. I don't believe that more than a tiny, marginalized number of people have any particular objection to, or even interest in, these practices, and they are considered unremarkable.`My key question, then, is: Why is there any reason to believe that it would, or should, be different on the Internet?
Doc Searls (doc-searls) Sat 18 Aug 12 14:39
Michael, One of my first jobs out of college was running a department at Bambergers, which has since been absorbed into Macy's. This was in 1969, but I doubt the protocols are much different today. At first I was amazed to find how much shopper surveillance actually went on. Some was through one-way mirrors or windows in the walls of the store, and some was by security people acting as ordinary shoppers. But I was also reassured quickly by the level of professionalism involved. The various parts of the store, including those involved in surveillance, were just trying to make the store function well as a store. There was none of the intrusive tracking or coercive and one-sided "agreements" of the sort that the anonymous contributor above talks about. Nobody took liberties like we see happening on the Web today. Few of the excesses the Wall Street Journal has been writing about for two years at http://wsj.com/wtk can be excused by precedents in the offline world. The manners of many (to be fair, far from all) online are simply terrible. They only good excuse is that they can get away with it. The "we're giving you a better experience" is 99% rationalization, because it fails close to that percentage of the time. But at the simplest level -- the beginning one -- it's okay, because e-commerce is just seventeen years old. It was defaulted from the start on a model called client-server, which some of us call calf-cow. Every site is a cow, and all of us are calves. And every cow wants to run the relationship with its calves in its own way. Thus there are as many e-commerce silos as there are e-commerce companies. Who you are to Amazon, and how you relate to it, are Amazon's business, not yours. Your history, your preferences -- all data by and about you -- are their's. Same goes for every site or service you encounter. True there are some forms of "federation" between them; but much of that is what we call "large companies having safe sex with customer data." And superficially helpful services such as Facebook Connect (by which Facebook's login button appears everywhere) carry huge exposure risks about which users typically know little. (For more on that see http://isharedwhat.com.) The system we have is by now deeply normative, so we're inclined to think it's at least sort-of okay. We are, to borrow another cliché, boiled frogs. Yet we won't stay boiled because we're dealing with a crappy system, and that means there is much opportunity there. That's what VRM is about, and it's why there are so many developers and developments already at http://cyber.law.harvard.edu/projectvrm/VRM_Development_Work . We can't fix the system unless we approach the problem from the customers' side rather than only from the seller's side -- which is what we're in the habit of doing. The Internet itself is an example of that approach. Its base design is end-to-end and peer-to-peer. Each of us has the power to do data processing and communications, world-wide, from our pockets. And to do that using the same protocols, everywhere. Before the PC and the Net came along, those powers were unthinkable. Now they are normative. So that's what we're working toward: new and better norms. Gotta stop and play with the grandkids again. More later. (And forgive errors above. No time to proofread, and I want to get this up.)
Michael C. Berch (mcb) Sun 19 Aug 12 00:19
> There was none of the intrusive tracking or coercive and one-sided > "agreements" of the sort that the anonymous contributor above talks > about. Nobody took liberties like we see happening on the Web today. Really? Bamberger's customers in 1969 had some sort of control over their interaction with the store? Hardly. Your only choice if you objected to anything from the price of goods to the methods of payment accepted to the presence of physical surveillance was not to shop at the store. Period. That is about as one-sided a customer relationship as I can imagine. And that same one-sided relationship carries over to today if you walk into Macy's - or Walmart. If you want to use the boiled-frog cliche, I think you have to make some sort of case that there's something terribly wrong with today's normative system, which I think is far from proven. The problems I have with the system are issues of user convenience, like having multiple incompatible e-commerce and social media silos that each require a learning curve, and different means of access. Facebook Connect (and Google's single login) are steps *forward* from that. Perhaps I was supposed to be impressed or horrified with the results of http://isharedwhat.com. They seemed completely unremarkable, and would undoutedly be seen as such by pretty much anyone under 30. It strikes me that a lot of the current "privacy" activism and its penumbra reflects Boomer values and expectations, which in 2012 are as archaic as the traditional corporate-brand values that the Cluetrain Manifesto railed against in 1999.
Doc Searls (doc-searls) Sun 19 Aug 12 03:26
I'm not idealizing the power asymmetry between seller and buyer at Macy's and Walmart. I'm saying that the problems we have online, such as the one of user convenience you mention, can be addressed by developing new and better tools on the customer side, rather than constantly upgrading the seller side. And that the same tools can help address the failings of brick-and-mortar retail as well. FWIW, little of that work is being done by boomers. In fact, I wouldn't be surprised if most of the work is being done by people under 30. But I'm also not much interested in checking. The work is what matters. Not demographic characterizations of those doing it.
David Wilson (dlwilson) Sun 19 Aug 12 06:21
<mcb>'s posts point up an interesting question concerning the costs of business and who bears them. Doc, could you talk about the costs of data mining and the whole infrastructure of e-commerce to the sellers and buyers? How much of the costs and cost savings shifted to the consumers?
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David Wilson (dlwilson) Sun 19 Aug 12 08:47
Found this in the NYTs today re: <14> <http://www.nytimes.com/2012/08/19/business/electronic-scores-rank-consumers-by -potential-value.html?pagewanted=1&nl=todaysheadlines&emc=edit_th_20120819 >
Doc Searls (doc-searls) Sun 19 Aug 12 12:13
Thanks, David. First, there are real costs to data mining and crunching, starting with the $billions companies will spend to understand from data what customers could tell them better with simple conversation. And that's just for starters. The best example I know for evidence of waste in marketing through data mining is Trader Joe's. They have little marketing to speak of, besides a Rose Bowl float and an opt-in flyer. They don't advertise. They have no coupons, no loyalty program, no shelves sold to Pepsico or other suppliers, no discounts, no buyback allowances, no contests, no co-op, no dealer premiums, no display deals, slotting fees, push money.... the list could go on, but why bother? These guys don't even go to most retailer trade shows because too much of the agenda is about manipulating customers. What Trader Joe's would rather do is talk to customers. Personally. In the store. What they save through what they learn is also passed on to customers. Who, for all the effort, love the store. )For more about that, see Chapter 25 of The Intention Economy.) Second, from the NYT piece (thanks for that), here are a pair of telling paragraphs: "These digital scores, known broadly as consumer valuation or buying-power scores, measure our potential value as customers. Whats your e-score? Youll probably never know. Thats because they are largely invisible to the public. But they are highly valuable to companies that want or in some cases, dont want to have you as their customer. "Online consumer scores are calculated by a handful of start-ups, as well as a few financial services stalwarts, that specialize in the flourishing field of predictive consumer analytics. It is a Google-esque business, one fueled by almost unimaginable amounts of data and powered by complex computer algorithms. The result is a private, digital ranking of American society unlike anything that has come before." The problem here is the assumption that all knowledge of the buyer should belong to the seller, and that "big data" can know the buyer better than the buyer knows herself. This is psychotic, because it is detached from the reality we call human nature, which is differentiated on an individual basis. The best guidance I know on this matter comes from Walt Whitman <http://searls.com/whitman.html>: I know that I have the best of time and space. And that I was never measured, and never will be measured. I know this orbit of mine cannot be swept by a carpenter's compass. I know that I am august. I do not trouble my spirit to vindicate itself or be understood. I see that the elementary laws never apologize. The spotted hawk swoops by and accuses me. He complains of my gab and my loitering. I too am not a bit tamed. I too am untranslatable. I sound my barbaric yawp over the roofs of the world. VRM development -- and the intention-based economy that results from it -- is for the spotted hawks in all of us.
Jon Lebkowsky (jonl) Mon 20 Aug 12 08:44
But is that really the assumption? (I.e. "that 'big data' can know the buyer better than the buyer knows herself"?) That feels like an overstatement. As a marketer measuring "potential value as customers," I wouldn't need to know everything about you. I'd have a very specific target: those behaviors and predilections that predict that you'll buy my widgets. I know one aspect of VRM thinking is about letting me control the uses of my data, and I'm totally down with that. But I think the argument for VRM vs the big data approach is that it's more efficient to let your customers come to you, and tell you what they want, than to do a lot of speculative tracking and data gathering to second-guess the customer's intention. That gets back to your point about Trader Joe's: they don't waste a lot of dollars trying to create or attract new customers - they focus their efforts on direct conversations with known customers, which, done right, is far more efficient than traditional mass marketing, but also more efficient than more contemporary data-driven target marketing. Am I off base here?
Doc Searls (doc-searls) Mon 20 Aug 12 10:42
Take a look at what IBM is pushing here: <http://www.ibm.com/smarterplanet/us/en/smarter_marketing/overview/> Look at the dollars involved. Look at the responsibility taken on the corporate side for controlling the customer experience, and how little direct input the customer actually has, despite verbiage suggesting that the CMO (chief marketing officer) actually knows the customer "as an individual." Check out the case studies <http://www.ibm.com/smarterplanet/us/en/smarter_marketing/examples/>, all of which are about improving old fashioned targeted marketing. Read Jeff Jonas, of IBM, on "space time travel": <http://jeffjonas.typepad.com/jeff_jonas/2009/08/your-movements-speak-for-thems elves-spacetime-travel-data-is-analytic-superfood.html> So maybe it's less about "knowing the buyer better than the buyer knows herself" than about "knowing the buyer well enough not to bother engaging the buyer as a human being." Hey, why bother to "connect millions of data points for a more detailed customer portrait" and to "understand customers as individual across millions of transactions," if not to paint a picture of an individual to a degree of detail that even the individual might not acknowledge, much less actually see? And that relieves you of the need to engage that individual directly? (BTW, I don't want to tar IBM here. They're making hay while the Sun shines, and Jeff himself is very big on privacy: <http://bit.ly/NXx9nK>.) The argument (or a main one) for VRM is the one you describe. Yet it's not necessarily against "big data" itself. There is nothing wrong with a company wanting to understand all it can about its markets, its customers, and what's going on in the world. But there is opportunity wasted by rationalizing away the need for customer contact, and for customer independence and empowerment. That's not an intentional effect of the argument for big data driven marketing, but it's still an effect.
Michael C. Berch (mcb) Mon 20 Aug 12 12:09
I definitely believe big data can "know a customer better than she knows herself". Whenever this is studied, from political polls to research on everything from sexual behaviour to shopping, there is a big difference between what people say and what they do. If a company wants to make the most rational choices about what products to develop and how to price them and market them, they're going to do better analyzing actual customer behaviour than relying on customers' self-programmed VRM profiles.
Doc Searls (doc-searls) Mon 20 Aug 12 14:18
Why not both?
Jon Lebkowsky (jonl) Mon 20 Aug 12 15:59
It was pretty clear in the book that you weren't presenting an either/or argument or claiming to have answers. In fact, you close with a set of questions. The first of those is relevant to this discussion: "Can advertising people ever finally cross the Chinese wall between their work and who they are as real people and customers?" Have you talked directly to advertisers about VRM thinking? How well do they get it? One other question is how well you can scale "engaging the customer"? In advocating that engagement, are you advocating a scaling down of marketing interactions? Do we get away from "mass marketing"?
Michael C. Berch (mcb) Mon 20 Aug 12 16:33
> Why not both? Because they are going to be in conflict. If a someone clicks a VRM box that says, "I'm not interested in ads about hair products", but their verifiable shopping behaviour is that they buy hair products, often in response to clockthrough ads, which are you going to believe and act accordingly on?
Doc Searls (doc-searls) Tue 21 Aug 12 04:23
Michael, First, VRM tools the customer's, not of the seller's. So the seller wouldn't provide a "VRM box" to click on. (Unless, perhaps, if the seller wants to know if the customer is using VRM tools or services.) Second, if the customer doesn't want ads for hair products and says so with a VRM tool, that's the customer's prerogative, and potentially useful information to the seller as well, regardless of whether or not the customer buys hair products or has clicked on an ad before. Chapter 25 of The Intention Economy is titled "The Dance." At its simplest, that's what VRM proposes: both sides engaging, each sometimes taking the lead, each sometimes following, both moving through steps that both come to understand, because those steps have become become common ways of interacting in the open marketplace.
Doc Searls (doc-searls) Tue 21 Aug 12 05:58
Jon, The short answer to your first question is that most of the people I've spoken to, at companies that advertise, get VRM to some degree. Or are at least interested in it. But then, that's why I'm talking to them. So I can't generalize from there. It's too early in any case. Meanwhile, it helps to remember that no company defines itself only as "an advertiser." They're a store or a manufacturer or a contractor, or whatever. For companies, advertising is a line item. It's overhead. The money spent on advertising can be spent many other ways as well, or not at all (as in the case I cite of Trader Joe's). It also helps to recognize that online advertising is less a breed of old-school advertising (that ran in media other than the Net) than of direct response marketing, which began with direct mail. It's more about sales than about branding. The top advertisers overall -- car makers, phone and cable companies, retailers, manufacturers, insurance companies -- still spend most of their money on major media (TV, radio, magazines, newspapers), and branding, rather than online looking for direct responses. But some of them are big online as well. Here is a picture of Google's 2011 revenue breakdown by advertiser: http://www.techi.com/2012/03/a-breakdown-of-googles-top-advertisers/ . Google is the biggest player in online advertising, but their total is still a fraction of what's spent on advertising overall. (Which is around half a trillion dollars per year.) Note that most of Google's search-based advertising (AdWords) is intention-based. That is, it appears in your browser in response to a search, which is an intentional act. I think there is a good chance that, as Google and Microsoft evolve toward embracing VRM, AdWords and the Bing equivalent will morph toward the "Dance" I mentioned in the response to Michael above. How, I don't know, but I expect that Google and Microsoft will wish to stay in a mediating role between the intentions of customers and companies in position to respond. Most of the conversations I've had with companies since the book came out has been around these larger systematic changes, and the upcoming tools and services that will make the changes happen, rather than around advertising itself. I think that's because the advertising game right now is a very noisy one that is caught up in its own dramas. Somewhat less noisy is the CRM business, which matches up more directly with VRM development. CRM is separate from advertising, on the whole. As for people in the advertising business itself, some of those had an influence on the book while I was writing it, especially John Battelle and Randall Rothenberg. Both had me speak at an IAB conference last year (through a conversation with John on stage): http://www.youtube.com/watch?v=X07JCMlASnE . Those are guys for whom the "Chinese wall" doesn't exist: they can see, and operate, on both sides. As for the rest of the business, I've not focused on it, because I expect advertising will change as a second- or third-order effect of VRM development and deployment in the marketplace. In your second question... "How well you can scale 'engaging the customer'? ... the "you" is the company. The scale we want with VRM is to be able to relate to many different companies in common and well-understood ways, rather than in as many ways as there are companies. For example, loyalty cards don't scale for customers. Having lots of them is mostly a pain in the ass. There are approaches, of course. I have a friend who scales his loyalty cards by punching a hole in the corner of each (careful not to hurt the barcode or the mag-stripe) and putting them on a janitor's key ring. He organizes them alphabetically and keeps the whole thing in his car. At the drug or grocery store he whips out this big round messy thing and presents it to the self-check-out machine or the baffled person behind the counter. I know a woman who has a fat wallet in her purse devoted to all the loyalty cards she carries. Real scale for both of these people would be eliminating the whole separate-card system (in which each loyalty program is a separate silo) and replacing it with one way of defining a genuine relationship with each company. That way, for example, companies with genuine relationship would get favored treatment when the customer signals an intention to buy. Also, the customer should be able to change their contact information for every company in one move, rather than dozen, fifty or a hundred different moves, each on a separate website. I don't see this as a scaling down of marketing interactions, but rather of eliminating waste, increasing efficiency and increasing genuine loyalty, by removing gimmickry and costly self-delusional bullshit. Last year I noticed that Panera Bread, one of the few chains where I like to shop, started pushing loyalty cards. It pissed me off, because I was already loyal and didn't want this fashionable friction inserted into an otherwise functional relationship. When I said so to the woman behind the counter, she said, "I know, I know. We hate them too." Later they stopped putting a stack of cards for customers to take on the counter, and stopped asking if customers carried cards. So I just looked up Panera and loyalty cards in a search, and found this article by Dale Furtwengler: http://www.retailcustomerexperience.com/blog/6219/When-is-a-reward-NOT-a-rewar d-A-lesson-from-Panera-Bread . Read the post and the comments. It's a different angle on the same issue for a retailer like Panera. What is says is that this loyalty program has failed to scale for both Panera and its customers. For customers like me, who don't carry a Panera card, business is the same, and the company knows whatever it knows already by less gimmicky means. Customers who like and carry loyalty cards are now buying for the gimmicky reasons (e.g. discounts, points and the rest) rather than just because they like the store and the products sold there. Panera itself gets a skewed view of their customers, bassed on what they learn only from the subset using loyalty cards. The whole mess makes Trader Joe's approach -- to avoid the whole mess and make the shopping experience as simple, pleasant, inexpensive and good as the products sold there -- look a lot more appealing. So, to your third question, "In advocating that engagement, are you advocating a scaling down of marketing interactions? Do we get away from 'mass marketing'?" the answers are yes. But mass marketing won't go away. As I say in the book about advertising, it will do what only it can do. Coca-Cola will always need mass marketing. But the rest of the business world won't need to be just like Coca-Cola.
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