Vendor relationship management is on the rise. Though for the last ten years a powerful trend has driven marketers to trap consumers and collect their personal data in order to anticipate their wishes to the point the very idea of choice was questioned, disruptive ways of managing this relationship are emerging. Will consumers recover their freedom?
Paris Innovation Review – Your starting point seems to be an assumption: people’s tolerance to intrusive marketing practices is getting lower. Is it a question of privacy?
Doc Searls – Yes, privacy issues are involved, but it’s only one side of the question — the protection side. People feel exposed, and that unwelcome liberties are being taken. The other side is freedom, of action and of expression. One should have the ability to make choices, and not just between what’s being offered by sellers in the marketplace.
Let’s face it: the so-called “attention economy”, which is the basis of online trade nowadays, has made such progress that marketers have gained a huge power. A number of tools have been developed to track and trap people. “Big data” has added more tricks to this toolbox. And as a consequence the customer’s freedom of choice tends to become a mere fiction. A “free market” today is “your choice of captor.”
How did it happen? To make a long story short, in order to get our attention content producers and advertisers have developed techniques and strategies that transformed most of the pages you watch on your screen. These pages used to be designed for anybody; they are now “personalized.” That is, full of contents and suggestions focused on you. In a near future even the prices of the suggested items will be defined according to a consumer profile over which you have little if any control. This is quite far from the principles of free economy.
Should we see this as a plot?
Of course not. The basic idea behind the attention economy is a practical one. With the Internet allowing almost unlimited access to a huge variety of content, your attention becomes the limiting factor in the consumption of information. So the challenge for content producers and intermediaries is to better manage the flow of information. They do it by creating filters to make sure the first content a viewer sees is relevant – i. e. consistent with all the information they managed to get about this viewer.
The problem is that advertising and trade are the first beneficiaries of these techniques that radically transformed online shopping. By focusing on you, and by getting personal with you, the content managers (these managers are actually algorithms) narrow your view to what they think you should see. Much context is lost in the process. You may not know what the seller has to offer beside what they’re showing you — or what they think you are. When all sellers are busy personalizing, the commercial world around each person literally shrinks. So does the celebrated freedom of choice. And so does the quality of information each seller gets from its consumers and customers, because the system forces both sides to wear blinders.
This phenomenon is part of a larger trend that sees the most powerful players create silos, and their clients have little options besides paying their fare to the Giant. But several signs suggest a reversal. Lower tolerance to what is seen as excessively intrusive practices, increasing suspicion towards sellers, growing irritation against targeted ads… it looks that “we, the consumers” may be tired of this grip.
Are we talking about a revolution?
Except among hactivist minorities, I don’t see any revolution or radical refusal coming. It’s one thing to make bittersweet jokes about the AppleStore or Amazon, and another to stop using these platforms. What I see is a subtler, though more efficient way to regain some of the power we have given up over the years. I call it the “intention economy”. It’s a reversal of initiative, with active customers driving markets, instead of passive consumers being driven by sellers.
Note that I make a distinction between “consumers” and “customers.” A consumer (or, online, a user) may not be paying for anything, while a customer pays. In some cases there is no overlap between the two. For example, Google’s consumers — the users of its search engine and other free services — are the product being sold to the company’s customers, which are advertisers. Commercial broadcasting has worked the same way for many dozens of years as well, with a complete split between consumers and customers. In the intention economy, the actors that matter most are the consumers who are also customers, because they have money ready to spend, and are not just consumers whose attention is being sold to marketers.
In the shift from an attention economy to an intention economy, we move from one based on a push to one based on pull — in which the demand side takes the lead. In a nutshell, you could put it this way: it starts with the customer’s ability to declare and discuss his or her intentions. Each of us should be able to express our needs, our wishes, our preferences and policies regarding use of our data. It also requires intelligent sellers, able to respond to clear signals of intent.
In a way, it is a revolution, with technologies building on these emerging dynamics and shaping different relationships between vendors and customers. One could see this revolution not only as a reversal, but also as a development of the ever more personal relationship between vendors, customers, and ordinary consumers as well. It’s also about rebalancing relationships.
Can you tell us more precisely what customers might be able to do in order to rebalance and better manage their relationships with the vendors?
The most urgent issue for individuals — consumers and customers alike — is to control the flow and use of personal data. Right now we are shedding data in huge amounts as we go about our business both on the Net and off. We need better control of that flow than we have now, when nearly all the controls are on the side of the data collectors.
First, you will need your own space to store your own transactional data (for example, receipts from purchases), your own preferences and policies regarding use of your data, your relationships with sellers and with other entities, such as government agencies, and the data you are willing to share in order to do business in the marketplace. This space in the past has been called the personal data “store,” “locker” or “vault”; but the term that has the most traction now is “personal cloud.” Big business has been talking about its own “clouds” for years, and now individuals will have their clouds as well.
Second, tools are already emerging that will allow you to tell whole markets what you want, how you want it, where and when you should be able to get it, and how much it should cost. We call this “intentcasting.” There is a limited degree of this within social platforms; but true intentcasting should not be limited to any existing commercial entity. You should be able to securely “advertise” your purchase intentions to sellers willing to listen and respond, without giving up any more data about yourself than you like. This can’t be done in today’s biggest social systems (Facebook and Twitter), because you are just a consumer with them, and not a customer — and (in Facebook’s case) because they are busy selling data about you to advertisers.
Third, you should be able to have your own terms of service and privacy policies; and these should be ones that can be matched up between you and sellers or site operators. Customer Commons (http://customercommons.org) is working on this right now with the Cyberlaw Clinic at Harvard University’s Berkman Center. It’s early in that process, but at the end of that work Customer Commons will have a list of terms anybody can use, much as artists can choose licenses from Creative Commons (which also began, in some ways, at Berkman).
Fourth, you should be able to build your own loyalty programs. This is the exact opposite of the silo model that is trapping consumers nowadays.
It’s all about the individual being in control, and building up his or her own power in the marketplace, not about shifting power from sellers to buyers. Greater freedom and power for customers will mean better market efficiencies and more opportunities for sellers to make money and earn the true loyalty of customers.
The intention economy will be built around truly open markets, not a collection of silos. As I say in The Intention Economy: When Customers take Charge, “Customers don’t have to fly from silo to silo, like bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In the intention economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer's purchase. Simple as that.”
Simple… and not so simple. We could understand your model as a jump from implicit intentions, deduced from our online behavior by algorithms, to explicit intentions, declared by individuals. But don’t you forget our laziness?
This is obviously an issue, and we, promoters of the intention economy, should always remember that there is a world of difference between web activists and the everyman. Actually putting the customer in charge is a cultural shift and quite a challenge. So let me be clear that I’m not counting on everybody’s sudden decision to spend one hour per day managing his or her data. But I’m observing an emerging trend, led by both pioneer individuals and firms. Activists have started to shake the structures of attention economy, and among firms some outsiders already come up with easy, practical solutions. Even governments are now embarking on VRM, be it with private data in the UK, public data in the US or in France with a Fing initiative, Mes Infos. The whole thing started as a niche, but it may become mainstream in a couple of years.
Why should it become mainstream?
Because of relationships. Relationships are at the very heart of Web 2.0. We – I, you, everybody – have undergone a dramatic change in less than a decade: in any relationship, we literally crave to have our say. We don’t accept any longer to be passive. The only way we feel at ease with an institution, an authority, a teacher — and also a vendor, is to have the possibility to be respected as an active part of a relationship. A wallet is not part of a relationship; a person is. The intention economy is built around more than transactions. It acknowledges the fact that relationships and conversations matter. This is why we talk about vendor relationship management (VRM).
I see the attention economy, with its tools designed to track you and guess what you want, as a first step towards recognition of the personal dimension of online relationships. Algorithms help vendors to get personal with you. But it is also a way of crushing the very heart of a person: his or her freedom. And I sincerely don’t think it can last for long. As soon as true relationship tools are available on the individual’s side, and as soon as some of them get viral and spread, people will catch up through VRM — not for the pleasure of managing things, but because they can get more done though an actual relationship than through a system that’s more like “one hand slapping” than two hands shaking.
You once wrote that “the intention economy grows around buyers, not sellers,” adding that it leverages “the simple fact that buyers are the first source of money.” What could motivate some vendors to join this movement?
Their own interest, of course. By equipping buyers, you give markets a voice — and better ways to spend money. Isn’t it a vendor’s dream? Marketing was invented because markets were mute. Marketing spoke for markets because individuals couldn’t speak for themselves — not effectively. Today, markets — that is, individuals — are gaining fresh means to express their needs, their preferences, their policies. It won’t take long for smart firms to see what kind of advantage they can take from this new ability on the customer’s side. In the long run, the winners will be those who managed to recognize that the customer is the partner in a genuine relationship, rather than just an “asset” or a “target” to be “captured.”
I will give you the example of an event platform. Eventful.com enables users to find and post local events anywhere in the world, but also lets them demand events and performances in their town and spread the word to make them happen. At last count, there were more than 126,000 demanded events on Eventful.
Another very interesting example is Chinese. It is the tuangou ('team purchase') phenomenon, which involves strangers organizing themselves around a specific product or service. Think electronics, home furnishings, cars and so on. These likeminded then meet up in real-world shops and showrooms on a coordinated date and time, literally mobbing the seller, negotiating a group discount on the spot. Popular Chinese sites that are enabling the crowds to first group online, then plan for actual real world shopmobbing, are TeamBuy, Taobao and Liba, Combined, these sites now boast hundreds of thousands of registered members, making money from ads or commissions from suppliers who are actually happy to have the mobs choose their store over a competitor's.
There are many startups in what we call the “intentcasting” space: where the customer does the advertising — of his or her own wants and needs — and the vendors do the listening.
Talking of how to manage the relationship, are the tools already in place?
There are a number of technical things that are needed: a robust way for customers to manage their own online identities without getting trapped in any vendor's silo, a way for customers to only share the aspects of identity that they want to share with a particular vendor (perhaps anonymously), and a robust way for vendors to interact with those customers. All this suggests an infrastructure, and one is now taking shape. It’s called the personal cloud. Think of this as a personal platform in virtual space. It might be on a device in your home, or your hand, or out on various servers in the world. What matters is that this cloud is yours alone.
Personal clouds have emerged as a hot topic, with lots of development going on, just in the last six months. There is a very active mailing list, lots of gatherings, and a wiki.
As for the big commercial platforms, VRM presupposes a number of customer rights that are quite far from their practices. For instance, individuals should have control over their own data, and how it flows. That data might include transaction histories, health records, membership details, etc. – and each of us should have our own ways to to share that data selectively, without disclosing more personal information than we wish. We should have the ability to control how our data is used by organizations, and for how long. This ability should necessarily include the option to delete data. It might also include an opt-out or even an opt-in for advertising.
Actually, the entire advertising industry may have to change its practices – for an excellent reason: efficiency. Advertising is a form of economic signaling. Old fashioned brand advertising actually worked well because it wasn’t personal. It simply made clear the name of the brand and what it stood for, or what its advantages were. The size of a media buy was also an economic signal of seriousness. It said “this company can afford to advertise.” But today’s “adtech” advertising online is often highly personalized, and what it signals is often very wrong, because it’s based on some machine’s algorithmic guesswork rather than truly knowing and respecting you. Also, it doesn’t do a good job of the old brand type of signaling, where the consumer sensed why the ad was there, and how big and serious the company was.
In fact both brand advertising and personalized adtech are inefficient, because most of the money spent on it is wasted. But 0% of a customer’s intentcast to a marketplace is wasted if results come of it. And, since an intentcast in most cases is money ready to be spent, sellers should flock toward the economic signal the intentcast produces.
Meanwhile, advertising is in need of reform. We may require a new language, with universal signs showing, at a glance, the provenance of an ad. It should be as clear as possible when an ad is personal or not, when it is tracking-based or not, and whether it’s welcomed by the individual. Approaches to all of this are in the works among VRM developers as well, and I expect lots of cooperation, in the long run, between VRM developers and advertising companies.