The shift in control over personal data is underway. Consumers are getting switched on to the value of their information in the personal data economy and so they want greater say over who holds it and what it is used for. So it follows that consumers need also to take control over the relationships they have with businesses in a reciprocal version of the CRM model — not least because the number of those relationships is growing so rapidly.
In this second part of our interview, writer, academic and Internet visionary Doc Searls talks about VRM — Vendor Relationship Management — as that reciprocal solution and how it fulfills a key premise of The Cluetrain Manifesto, a viral 1999 rant on the Web that became a bestselling business book in 2000, and which Doc co-authored. Doc runs ProjectVRM at Harvard University’s Berkman Center for Internet and Society, fostering development of tools that allow customers to control their business relationships.
Here, Doc also tells Internet of Me how he sees the battle between ad tech and ad blockers playing out, and shares his thoughts on the Internet of the future.
IoM: In November last year, Marketing Week in the UK said that customer relationship management is central to the goal of focusing resources on customer retention rather than acquisition, so does that mean it is it set to become ‘the new advertising’, with one-to-one customer communications displacing media spend as the dominant element of the marketing mix?
Doc: The shift to retention is good, for three reasons. First, we only buy things a tiny percentage of the time, and it’s mostly (though not entirely) a waste of money to push sales pitches at people all the time. Second, we own things 100% of the time, and it makes sense to keep the customers you already have. And third, we’re most likely to defect from a product or a brand when something goes wrong. So service is hugely important.
But I’m not sure if working to retain customers has to mean you don’t advertise your goods and services. We’re talking about marketing functions here with little Venn overlap.
Still, we’re talking about retention, so go back to something we talked about earlier: scale, for the customer.
Iain Henderson of The Customer’s Voice says we have ten times more relationships to manage today than we had at the turn of the millennium. For evidence of that, look at all the login/password combinations each of your browsers remembers for you. In my case it’s many hundreds. Every one of those companies has its own way of relating to you, and all the rest of their customers. That’s scale for them.
On your side you need one way to relate to all those hundreds of companies you interact with. For example, one way to change your address, phone number, credit card or last name. One way to get product recall notices or permitted promotions. One way to signal a need for service to a company.
This would bring what Phil Windley calls “the API of me” to what Jon Udellcalls “the Internet of my things.” Both those graces presume market intelligence that flows both ways, by standard methods. CRM has had decades to provide this; but it can’t, and therefore it won’t. Still, to its credit, there are people in the business who would love to see standard VRM-based ways for customers to shake hands with CRM systems of all kinds.
Here is an example of missed opportunity in the current CRM-dominated non-system. At that last link I give the example of two products I own from companies I like, and to which I am loyal (whether they know it or not): Lamo moccasins and Rockport shoes. I also describe ways I have problems with pairs 0f both, and how it would be great if I had VRM relationship conduits between me and those companies: conduits for which open source code exists today.
Presumably both companies do “SCRM”, or “social” CRM, meaning they look for mentions of their brands on Facebook and Twitter. Yet, even though I tweeted “Market intelligence that flows both ways: http://t.co/hUIY4qmzprYo @LAMOFootwear @rockport @windley @judell … #vrm” — a tweet that appears to have scrolled off the Web but I still found in my digi.me personal cloud (disclosure: I consult the company) — I heard nothing from either company (though @LamoFootwear did start following me).
I should add that, for Lamo and Rockport, the opportunity here isn’t just better retention. It’s maintaining and increasing genuine loyalty, with the bonus of debugging feedback from loyal customers.
At the base of the new marketplace here — let’s call it True Loyalty — will be data control on the customers’ side — and standard methods for sharing that data on a need-to-know basis with other parties. Marketing will have a whole new channel once this connection is made. Until then, the best it can make is the sound of one hand clapping.
If CRM comes down to the individual consumer level, is it not better for brands and companies to engage their audiences through something that looks more like your VRM model — i.e. driven and controlled by the individual rather than the other way round?
Sure. Just remember that VRM is what the customer has while CRM is what vendors have. It is also important to remember that CRM is a many-dozen-billion-dollar business category in which big B2B businesses sell client companies sales and service systems — all of which are different, even if they have the same back ends in the clouds of Salesforce, Oracle, IBM and the rest. That means customers have no common across-the-board way of dealing with every company, beyond what they have already with their laptops, browsers, email clients and mobile devices. All those things give customers some measure of scale, but not enough.
The simple belief central to the Internet of Me is that when people control how their personal data is used it allows better and more meaningful relationships to develop between consumers and businesses. Does this begin to then resemble the idea of ‘markets as conversations’ from The Cluetrain Manifesto?
Yes, but it more closely resembles what Cluetrain called “the one clue to get this year: we are not seats or eyeballs or end users or consumers. we are human beings and our reach exceeds your grasp. deal with it.” Having control of one’s personal data gives one a reach that exceeds the grasp of others, and a good position from which to start dealing.
In a recent blog post you were optimistic that, at last, that idea of ‘markets are conversations’ is close to becoming a reality. Certainly, the idea that in good business ‘both sides win’ is key to the Internet of Me. People having greater control over their data is good for them and the businesses or organisations they deal with. So, is individual ownership and control of personal data the key to ‘markets are conversations’?
Yes, but again it’s less about the data than about the means to control what we do with the data, and especially how we relate. I fear that focusing on the data alone puts us in the “Big Data” world where we are dependent rather than independent.
It is significant that the term “big data” only began to come into popular usein 2011–12, when IBM, McKinsey and others began to promote it as a meme and a product offering to business — especially to marketing. In How will the big data craze play out?, in Linux Journal, I visit how closely the growth of Big Data, as a meme and a business, is coincidental with the rise in surveillance of individuals by marketing. This in turn has caused a counter-movement against surveillance, most dramatically in the rise of ad blocking.
Is it too much to expect that the ultimate utopian outcome would be a world where defensive tactics such as ad blocking and dodging tracking become redundant? Or will there always be baddies?
It is important to realize that the Internet is a utopia already. From The Intention Economy:
Imagine you’re back in 1982. Somebody tells you the world in twelve years will adopt a new communications system that nobody owns, everybody can use, and anybody can improve. The system will be all-digital, and will provide ways for anybody to communicate with anybody, anywhere in the world, and to copy and share anything that can be digitized — including mail, print publications, music, radio streams, TV programs and movies — at costs that veer toward zero. Would you believe it? Or would it sound as far-fetched as anti-gravity cars?
How about if you were also told that the same system would end the livelihoods of many journalists and recording artists, undermine media businesses of all kinds, expose millions of diplomatic communications to the world, provide new ways for bad people as well as good to collaborate in secret, and undermine civilization as we know it?
Both forecasts would be true.
My point: the Net is more than a new development, more than a game-changer. It is a new environment for business, culture and human interactions of all kinds. It is also a perfect example of how the miraculous becomes mundane. The Internet is now so common, so ordinary, that we hardly pause to get perspective on how radically it has changed nearly everything it connects. Nor do we pause to contemplate its progress toward (and away from) end states good and bad — or how we may be slowing progress in either or both directions.
Clay Shirky says one sure sign of a good technology is that it’s easy to imagine bad uses of it. And there will always be bad actors, along with bad ideas and bad decisions by companies and other actors large and small.
I see ad and tracking blocking as early expressions of a kind of personal agency, and that the bargaining power they provide is far more important than whatever they do to publishing and advertising. But I also don’t know how it’s going to play out. I just know there’s a huge opportunity that can’t be seen if all you’re doing is looking at ad blocking vs publishing and advertising.
Should companies see respecting people’s data and privacy as an opportunity rather than an onerous regulatory, legal and practical burden?
On a less optimistic note, do you think there is a danger that these opportunities are not seized and that the full potential of the Internet of Me won’t happen?
Sure. But we’ve been facing that as a fact of life since before the Net showed up. Progress is gradual, and often not as fast as we would like. But the fact remains that the Internet is a Giant Zero in our midst — a network that puts us all at a distance apart of nothing — and it is designed to fully empower everybody and everything on it. Countless new inventions and conventions will appear and grow, simply because that Zero is there. With that in mind, I think the Internet of Me is inevitable.
But could there be a fragmentation of the Internet or some other disastrous outcome?
Every company and government with an interest in limiting personal freedom will try to fragment out areas of control on the Internet. Being networked (and digital) is part of nature now, like sunlight and gravity. Even if the protocols themselves change (and they probably will), we already have the experience of zero distance at zero cost. This is a genie that will not go back in the bottle. It will also grant an infinite variety of wishes for those willing to put in the work.
If common sense prevails and this potential is fulfilled, how do you see the Internet of the future looking in 5, 10, 20 years?
First, I wish it were common sense. Right now it’s still uncommon. Still, I see more personal agency and business arising from the fact that the Internet is here in our midst. I see the collapse and rebuilding of institutions. I see minimum viable centralization as a design imperative. I see hyperlinks continuing to subvert hierarchy. (That’s Thesis #7 in Cluetrain.) And I am optimistic about all of those.
I also see people continuing to fight over ideas, religions, territories, old grievances, and political BS of all kinds, and rationalizing killing each other over all of it. As they always have. I also see our species as a persistent and growing pestilence on the planet, and expect coastlines to submerge, resources to run out, and populations and economies to collapse before the wake-up occurs. For all those reasons I also see the Giant Zero in our midst as the best hope we have of waking up to the fact that we are fucking up the only planet we have — and to start doing something about it, together.
And hey, I could be wrong about all of it.
You’ve written extensively about ad blocking and the ad tech war, pointing out the manifold problems and dangers associated with targeting and tracking — bandwidth abuse, malware/security, debasing of marketing in general and so forth. The fact is, it must work to some degree otherwise companies would have given up on it. Is it just a numbers game?
Yes. The CEO of one company I know in the ad tech business calls it a ‘walking zombie’ even as the company makes many millions doing what it does. They plan to do VRM, by the way.
Do otherwise decent companies keep doing it knowing that there are a lot of people in the world they haven’t yet annoyed?
Publishers and ad agencies keep doing it, but the advertisers are starting to bolt. I know one advertiser that yanked $100 million of ad tech spending because it didn’t work. Simply put, they stopped buying the BS.
Is it the ad tech industry driving this — holding up evidence of success metrics and ROI that is sufficient to get their clients to keep spending?
Does the key lie with companies weaning themselves off the ad tech hucksters and finding better ways to engage their customers?
Yes, and they are. Not all at once, but it is starting to happen.
In a VRM blog you liken ad tech to direct — or junk — mail. We still have junk mail even though everyone tells you they hate having it stuffed through their letterbox. There are direct marketing companies that are proud of what they do and the place direct mail has in the marketing firmament.
They may be proud of it, but ask the recipients how much they like it. Or just look here: http://www.bing.com/images/search?q=no+junk+mail. By the way, none of those signs has any effect. But they do speak of well-earned antipathy on the receiving end.
But some percentage of that junk mail hits the spot and gets a response to the Call To Action.
Yes, some percentage does. But the cost in negative externalities is rarely taken into consideration. By the way, there are also positive internalities. We would not still have postal services without junk mail. It’s a huge source of income for La Poste, the Royal Mail and the US Postal Service.
Will malign ad tech only cease if and when the rate of ad blocking has made it non-viable?
Probably. But malware and fraud have costs as well. It’s important to watch what the advertisers do. About those, I just put up another post on the topic.
I also wonder if advertising itself may prove in the long run to be an obsolete relic of an age before supply and demand were both digital and zero distance apart. If the main challenge is for supply and demand to interact more efficiently and productively, so anybody can inform anybody else, and relate to them in productive ways for both parties, is advertising something we need in the middle at all? I’m not sure it is.
That last post Doc highlighted is a comprehensive and learned account of modern advertising as well as an authoritative dispatch from the ad tech battlefield and worth five minutes of anybody’s time. Typically of Doc, it highlights what lies at the heart of the debate over ads, data, privacy and control, but which is so often missing from the conversations about those things — individual human beings with minds of their own. That’s you and me.