Month: October 2013

Come to VRM & Personal Cloud Day

Tomorrow, Monday 21 October, is VRM and Personal Cloud Day at the Computer History Museum. Register at that link. It’s free. Or just show up. (Registering gives us a better idea of head count.)

It’s the time and place to brainstorm about both topics, plus what we’ll be discussing and moving forward the following three days at IIW, also at the CHM.

More details here.

It’s all about leverage on the future. So be there.

Cracks in the walls of the online advertising castle

On the advice of @SteveLohr and @michikokakutani ‘s review in The New York Times, I just ordered Dave Eggers‘ The Circle — a tale of the dystopian present taken to its future extreme: a world where we are all fully devolved into data, and one big company serves us exactly the poop it knows — and helps — us want.

Provided, of course, that there is still money in it.

But there won’t be. The most vulnerable big money game in the commercial Web today is advertising — and it’s headed for a dive, if not a crash. That’s the case @TimHwang and @AdiKamdar make in The Theory of Peak Advertising and the Future of the Web. It’s also the one @DonMarti makes in Targeted Advertising Considered Harmful, and that I make too, in both The Intention Economy: When Customers Take Charge and Beyond the Advertising Bubble, a post I put up earlier today at Customer Commons.

In addition to the evidence compiled in those sources, there’s Flash Ad Takeovers Drive 55% of Consumers Away (by Tyler Loechner in MediaPost). The headline actually understates the case. Here’s the opener:

Adblade, a content-style ad network, commissioned a study carried out by research company Toluna which found that 82% of consumers feel that online ads are “detrimental” to their online experience at least some of the time. The report focused on questions revolving around the obtrusiveness of ads…

The emphasis is mine, not that it’s required. More stats:

When it comes to ads causing one to navigate away from content, an overwhelming majority (55%) of respondents said flash ad takeovers are most likely to do the trick. The ad type that is second-most likely to drive consumers away from a page are right-side banner ads (10.4%). Pre-roll (9%), top banner (8.5%), and middle-of-the-page ads (7.1%) round out the top five.

The source might be a bit self-serving, though. See here:

Over 66% of respondents believe middle-of-the-page ads to be the most obtrusive, compared to just 4% for end-of-article ads.

Adblade specializes in end-of-article ad placements, so those particular results play into their hands.

Still, we’re talking about least-aversive stuff here.

That’s always been an imperative of sub-optimal advertising, though not of advertising that actually appeals. And indeed, appealing advertising does exist. Every fat magazine testifies to the fact of advertising that appeals in some settings at least as much as does the editorial. Note that those ads are not personal, and depend not at all on surveillance of privacy invasions of any kind. They simply do a good job of sending strong signals — economic and otherwise — to populations that are interested in them.

The other breed of in-demand advertising, I would ad, are classifieds. The success of Craigslist and Google’s (search-results) Adwords  attest to that as well. Note that those don’t creep us out. At their best, they just work.

And that’s what always wins in the long run.

Why Google and Facebook need to go direct

In Google sets plans to sell users’ endorsements, and describe new ways that Google and Facebook are taking liberties with users who have had nice things to say about companies’ products and services in the past, in contexts where they didn’t expect their words to turn into personal endorsements (especially ones for which they are not paid). Specifically,

Google on Friday announced that it would soon be able to show users’ names, photos, ratings and comments in ads across the Web, endorsing marketers’ products. Facebook already runs similar endorsement ads. But on Thursday it, too, took a step to show personal information more broadly by changing its search settings to make it harder for users to hide from other people trying to find them on the social network.

(on the left) An example of a Google shared endorsement…

The problem, privacy advocates say, is when Web companies use or display the personal information of users in ways the authors did not expect when they originally posted it.

“People expect when they give information, it’s for a single use, the obvious one,” said Dr. Deborah C. Peel, a psychoanalyst and founder of Patient Privacy Rights, an advocacy group. “That’s why the widening of something you place online makes people unhappy. It feels to them like a breach, a boundary violation.”

“We set our own boundaries,” she added. “We don’t want them set by the government or Google or Facebook.”

There is a simple reason why Google and Facebook feel free to take these kinds of liberties: we pay them nothing, so they feel free to make us the product they sell, rather than the customers they serve.

This kind of abuse (and it is exactly that) will cost more value than it adds, for example with the Times story and this post. Even if the costs aren’t obvious on bottom lines, the negative externalities are large, and growing.

So here’s a simple suggestion for both companies: go freemium. Charge for value-added services, such as genuine, accountable privacy, within circles that customers (no longer just “users” or “consumers”) help define. We are legion, and you are increasing our numbers every day.

Online advertising is already post-peak and possibly headed toward oblivion, at least for ads that aren’t whitelisted by the likes of Adblock Plus. Ad and tracking blockers and enlightened browser makers, all working for the demand side of the marketplace, have their fingers on a pulse that Google, Facebook and the other ad-supported Web companies ignore. Enlightened as they are about their algorithms, analytics and infrastructures, they are literally senseless toward the consumers they sell to their customers — and the far greater return on investment they would get if lots of those consumers were customers as well.

A couple years ago I heard a Google executive say the company would never “go direct” because it was an “engineering company” and that didn’t want to make less than $1 million per employee. The implication was that going direct would require lower-wage and lower-skill workers in call centers — and other forms of non-engineering-type overhead. Yet there are plenty of highly profitable companies that do high quality service (call centers and all) with plenty of margin. For example: Apple and Amazon.

The writing is on the wall, big guys. Time to wake up and smell the demand for respect, privacy and genuine service. It’s huge.

And, if you’re ready to talk about it (or anything), come to IIW the week after next, at the Computer History Museum in Mountain View. It’s cheap. (Heck, Google is already a sponsor — and we do thank them for that.) It’s an unconference, so we can easily make “going direct” a topic there. (Hey, if you don’t, one of us will.)

Speaking of negative externalities, here’s the bonus linkage recommended by Zemanta:

Link-o-rama

VRM

  • There is an interesting correlation happening right now between online advertisers and adblocking technology: they’re both growing. By Till Faida, co-founder of Adblock Plus, in RealBusiness. Pull-quotage…”Our ultimate consideration, however, should lie in keeping these decisions in the users’ hands. So, adblockers should not rid the Internet of all advertising, they should give users the choice to rid their version of the Internet of annoying advertising. Giving the public control is the crux on which the entire issue pivots.”On this front we are not alone. We’ve found common ground with user-rights groups like the Electronic Frontier Foundation and researchers like Doc Searls and his Harvard-based VRM-Project. In addition, groups like Mozilla and news outlets like CNET have recommended this approach.”We believe in an Acceptable Ads initiative to provide a middle ground for a sustainable advertising landscape. Websites that wish to do so apply to be whitelisted and if their ads conform to the established guidelines, users see the ads they serve under default settings.”
  • Till also wrote this piece, in French for Rue89. I believe it’s the same one, but not sure.
  • Mobile Is Huge — But Two Key Elements Could Slow Its Growth. By Terry Heaton in StreetFight. Sez Terry…”We’re weary of running a relentless gauntlet of jumping, screaming, frantic warnings, hands grabbing, voices shouting, noise-making, disjointed movements, and the almost demonic reaching for our wallets coming from advertising. This is Madison Avenue’s idea of perfection, and the only way you can get there is to completely ignore the effect of advertising on the very people you’re trying to influence. The Web is, at core, a pull mechanism, not one that pushes. It’s why all those big projections of advertising “potential” have turned into a commodified “pennies for dollars” reality.”Doc Searls is onto something with his “Vendor Relationship Management (Project VRM)” concept at Harvard, for it fits the postmodern cultural shift like a glove. VRM is all about empowered consumers who send advertising messages back to the market, where they are bid on by service and goods providers, and you can bet that it will be primarily a local experience (although let’s not underestimate companies like Amazon). In the VRM model, there are ‘fourth parties’ who work on behalf of consumers to send the messages to third parties representing the manufacturers, retailers, or whatever.”
  • Fundamental Features of Persistent Compute Objects by Phil Windley.
  • My Dryer: A SquareTag Case Study By Phil Windley.
  • CRM Meets VRM: How a Personal Cloud Network Will Enable Real Vendor Relationship Management. A Respect Network event. Watch that space for a recording of the webinar.
  • Bill Wendel, Real Estate VRooMer, on the above. In answer to “How can homeowners who are watching the housing market to decide when to sell,” “How would they issue that IntentCast?” and “Right now, there is a shortage of inventory, so seems the opportunity for intentcasting (in real estate) is at hand,” Bill writes,  Eager to pursue answers to that question at IIW, and glad to Hangout on Google before that event with others interested in real estate use cases, or what we call reVRM.  For 22 idea starters, see reVRM-Minifesto on slides 13-15: http://bit.ly/reVRMgameChanger
  • #datatuesday, a #VRM event in Paris.
  • Personal Clouds Are Rolling In, by Elizabeth Glagowski of Peppers & Rogers Group. A flattering short piece. (Small correction: I am no longer a fellow at the Berkman Center — which I was from 2006-2010 — but remain involved while continuing to run ProjectVRM.)

Intention Economy

  • The Art and Science of Creating a Psychic Brand, by BusinessWire, for Peppers & Rogers. It begins, “Many companies today are still trying to scale relationships with their customers – by minimizing actual human contact, scripting human interactions and treating customers according to antiquated stereotypes and profiles. In reality, brands should be ‘treating customers like the gods by whose grace every company exists.’ Those words, chosen by Doc Searls, author of The Intention Economy: When Customers Take Charge, may seem a bit excessive, but they are as true as they are shocking to hear. Customers are the gods of any brand, they can give it life or banish it into obscurity – in order to thrive, it is important for a brand to be psychic, so it can anticipate the will of the gods and avoid their wrath.”
  • Everything you think about big data is wrong! By Tracey Parsons in Social Media Explorer. Pull-quotage: “We must change the way we think about customers“When we remember that our customers are people and not “consumers” or “targets” we can better treat them like people. Brands desperately want relationships with their customers. Customers just want their toothpaste. They don’t want big data, but they might want a coupon for toothpaste. They are not thinking about us in the same way we are thinking about them. In fact, customers are getting wise to our trickery and it is having quite the opposite effect. Instead of thinking about our products, they are thinking about ways to block our product messages. They are looking for ways to hide from us. They are feeling stalked.”Trust me when I say that I understand that tracking and building shopper profiles allow us to measure our work. Measuring our work is one of the most critical challenges marketing leaders face today. Showing a return on investment keeps many awake at night. But if the data is bad and turning off our customers, it is time we look for new ways to reach customers. We need to be thinking about small data, personal data, one person’s data, not big data. We should be thinking about intentions and how we can allow our customers to share their intention with us in a way that is not creepy. People are not ones and zeroes. They are more than that, and we need to start treating them that way.”Project VRM inspired this post. If you have some time this fall, do read The Intention Economy.”
  • If ad-blockers threaten revenue, then what’s the solution? By Colin Strong in Newsline. Pull-quotage: “Just as robotics expert Masahiro Mori first suggested in the early 1970s, perhaps there is an ‘Uncanney Valley’ where automated systems get too human like and leave us feeling ‘creeped out’. If we accept this premise then there comes a point at which targeted advertising ceases to improve in effectiveness and consumers get turned off. And this is perhaps an indication that a new era of Vendor Relationship Management (VRM) may start to replace the current authority of Customer Relationship Management (CRM). This is a world in which consumers are actively managing their relationship with brands rather than being the passive recipient of advertising. The term for this shift, created by academic and commentator Doc Searls, is the Intention Economy. In the Intention Economy consumers take responsibility for holding their own data about themselves in personal clouds, collecting it from a variety of government agencies and brands – which forms a fundamentally new value exchange between brands and consumers. So consumers are placed firmly at the centre of their own personal data, being able to collect and integrate it from a multitude of different sources. Consumers may choose to provide brands with selected parts of this data when they wish to engage with them on a purchase decision.”
  • The Cost of Identity in the Personal Data Economy. By John C. Havens in Huffington Post. Writes John,’We have to rethink our institutional structures.’ John Henry Clippinger is a research scientist at the MIT Media Lab Human Dynamics Group and the cofounder and Executive Director of ID3, (the Institute for Institutional Innovation & Data Driven Design). He and his ID3 cofounder, Alex “Sandy” Pentland have created The Open Mustard Seed Project (OMS) to combat the existing model of data exchange for the Internet economy. ‘There’s a logic among companies that collect data which is, If I can get away with something, I can do it,’ notes Clippinger. ‘But they don’t understand the ecosystem they’re creating.'”OMS is building a data banking methodology through a technical architecture they call the, ‘Trustworthy Compute Framework’ (TCF). This allows users to create their own personal data cloud that reverses the current transactional nature of the ‘freemium’ Internet economy. Instead of individuals sacrificing their data in exchange for services, they create general preferences around which companies they’d like to engage with and how. Here’s how the Open Mustard Seed wiki describes the need for this new paradigm:

    Users have not had an easy or reliable means to express their preferences for how their personal data may be accessed and used, especially when one context (a bank) differs so much from another (a health care provider) and still others (family and friends). A user may not know with whom they are really transacting, nor can they readily verify that their privacy preferences are actually respected and enforced.

    “OMS lets users curate their digital personas and manage the data they collect, produce and distribute. They can also pre-determine privacy and other settings for social networks or transactions with brands. This is a critical idea regarding personal data banks — they don’t hinder transactions with companies looking to communicate with consumers. Relationships are actually enhanced via increased trust since people know what organizations will do with their data, and will be more likely to volunteer specifics about their lives in this new transparent framework. (This is an idea known as Vendor Relationship Management, or VRM, eloquently elaborated in the book, The Intention Economy: When Customers Take Charge, by Doc Searls.)

    “Clippinger is evangelistic about the timing for a solution like OMS, noting what will happen if we don’t change the tide of how our data is managed in the current Internet economy — ‘If you don’t have an open platform, you don’t have an open society.’

    BTW, John was for a long time a Senior Fellow at the Berkman Center, and brought me in as a fellow there, back in 2006.

Trends

Advertising and Marketing

VRM at IIW

We’re coming up on the 17th Internet Identity Workshop, better known as IIW. It takes place on 22-24 October at the Computer History Museum in Mountain View, California.

While IIW’s title suggests a focus on identity, there are as many different foci as there are subjects to discuss, and the participants choose those. That’s because IIW is an un-conference. It has no speakers, no keynotes, no corporate agenda. There are sponsors, but they just cover the meals and the free espresso bar. Topics are suggested by participants at the beginning of each day, and then everybody heads to breakout rooms to talk about those topics and move them forward. Sometimes code gets written too.

VRM as a topic grew to a large degree out of conversations at IIW — and many VRM topics have moved forward at IIW breakout sessions. If you want to move your own topic(s) forward, there is not a better instrument for doing that than IIW. Last time we talked about these, among many other topics:

  • Identity
  • VRM
  • Personal clouds
  • Better “social” login
  • Authentication (e.g. Oauth2)
  • Data portability
  • Mobility
  • Surveillance
  • Security
  • Legal issues
  • Business issues
  • Cultural and social issues
  • Cool new and old devices
  • Trust frameworks

You can register here.

In addition we will have VRM and Personal Cloud Day, also at the Computer History Museum, just before IIW. Register at that link. It’s free.

While this day has usually been free-form, this time we are structuring it to get maximum leverage for VRM topics and projects heading into IIW. Kaliya (Identity Woman), who also organizes IIW (with Phil Windley and myself), will facilitate the day’s proceedings. She explains on the registration site,

Our overall goal is to support all those working in the VRM and Personal Cloud space knowing who else is there, what they are working on, find key synergies and opportunities for collaboration, and coordinate and brainstorm about ideas for sessions during IIW.

Opening and Context Setting
We are inviting T.Rob to give us a presentation about the industry landscape as he sees it along with future challenges and opportunities.

Community Landscape Mapping
We will spend an hour or two figuring out who is doing what in the emerging ecosystem.
The goal will be to have a comprehensive map that clusters key projects and efforts to collaborate and prevent folks from re-inventing wheels.

Please bring an 8.5×11 print out to the Day with the
* Logo of your Company or Project
* Name of your Company or Project
* Description of your product
* Description of other ecosystem components that your product needs to work

Both this day’s activities and IIW are designed to maximize leverage on the future. So be there.

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