After Facebook fails

Making the rounds is , a killer essay by in MIT Technology Review. The gist:

At the heart of the Internet business is one of the great business fallacies of our time: that the Web, with all its targeting abilities, can be a more efficient, and hence more profitable, advertising medium than traditional media. Facebook, with its 900 million users, valuation of around $100 billion, and the bulk of its business in traditional display advertising, is now at the heart of the heart of the fallacy.

The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency. The nature of people’s behavior on the Web and of how they interact with advertising, as well as the character of those ads themselves and their inability to command real attention, has meant a marked decline in advertising’s impact.

This is the first time I have read anything from a major media writer (and Michael is very much that — in fact I believe he is the best in the biz) that is in full agreement with The Advertising Bubble, my chapter on this very subject in The Intention Economy: When Customers Take Charge. A sample:

One might think all this personalized advertising must be pretty good, or it wouldn’t be such a hot new business category. But that’s only if one ignores the bubbly nature of the craze, or the negative demand on the receiving end for most of advertising’s goods.  In fact, the results of personalized advertising, so far, have been lousy for actual persons…

Tracking and “personalizing”—the current frontier of online advertising—probe the limits of tolerance. While harvesting mountains of data about individuals and signaling nothing obvious about their methods, tracking and personalizing together ditch one of the few noble virtues to which advertising at its best aspires: respect for the prospect’s privacy and integrity, which has long included a default assumption of anonymity.

Ask any celebrity about the price of fame and they’ll tell you: it’s anonymity. This wouldn’t be a Faustian bargain (or a bargain at all) if anonymity did not have real worth. Tracking, filtering and personalizing advertising all compromise our anonymity, even if no PII (Personally Identifiable Information) is collected.  Even if these systems don’t know us by name, their hands are still in our pants…

The distance between what tracking does and what users want, expect and intend is so extreme that backlash is inevitable. The only question is how much it will damage a business that is vulnerable in the first place.

The first section of the book opens with a retrospective view of the present from a some point in the near future — say, five or ten years out. A relevant sample:

After the social network crash of 2013, when it became clear that neither friendship nor sociability were adequately defined or managed through proprietary and contained systems (no matter how large they might be), individuals began to assert their independence, and to zero-base their social networking using their own tools, and asserting their own policies regarding engagement.

Customers now manage relationships in their own ways, using standardized tools that embrace the complexities of relationship—including needs for privacy (and, in some cases, anonymity). Thus loyalty to vendors now has genuine meaning, and goes as deep as either party cares to go. In some (perhaps most) cases this isn’t very deep, while in others it can get quite involved.

When I first wrote that, I said 2012. But I decided that was too aggressive, and went with the following year. Maybe I was right in the first place. Time will tell.

Meanwhile, here’s what Michael says about the utopian exhaust Facebook and its “ecosystem” are smoking:

Well, it does have all this data. The company knows so much about so many people that its executives are sure that the knowledge must have value (see “You Are the Ad,” by Robert D. Hof, May/June 2011).

If you’re inside the Facebook galaxy (a constellation that includes an ever-expanding cloud of associated ventures) there is endless chatter about a near-utopian (but often quasi-legal or demi-ethical) new medium of marketing. “If we just … if only … when we will …” goes the conversation. If, for instance, frequent-flyer programs and travel destinations actually knew when you were thinking about planning a trip. Really we know what people are thinking about—sometimes before they know! If a marketer could identify the person who has the most influence on you … If a marketer could introduce you to someone who would relay the marketer’s message … get it? No ads, just friends! My God!

But so far, the sweeping, basic, transformative, and simple way to connect buyer to seller and then get out of the way eludes Facebook.

The buyer is a person. That person does not require either a social network or absolutely-informed guesswork to know who she is or what she wants to buy. Obviously advertising can help. It always has. But totally personalized advertising is icky and oxymoronic. And, after half a decade or more at the business of making maximally-personalized ads, the main result is what Michael calls “the desultory ticky-tacky kind that litters the right side of people’s Facebook profiles.”

That’s one of mine on the right. It couldn’t be more wasted and wrong. Let’s take it from the top.

First, Robert Scoble is an old friend and a good guy. But I couldn’t disagree with him more on the subject of Facebook and the alleged virtues of the fully followed life. (Go to this Gillmor Gang, starting about an hour in, to see Robert and I go at it about this.) Clearly Facebook doesn’t know about that. Nor does any advertiser, I would bet. In any case, Robert likes so many things that his up-thumb has no value to me.

I have no interest in Social Referrals, and if Facebook followed what I’ve written on the subject of “social” (as defined by Facebook and its marketing cohorts), it wouldn’t imagine I would be interested in

I’m 64, but married. “Boyfriend wanted” is a low-rent fail as well as an insult.

I get the old yearbook pitch every time I go on Facebook, which is as infrequently as I possibly can. (There are people I can only reach that way, which is why I bother.) I don’t even need to click on the the ad to discover that, as I suspected, is a front for the scammy

I’ve never been fly flishing, and haven’t fished since I was a kid, many decades ago.

And I don’t want more credit cards, of any kind, regardless of Scoble’s position on Capital One.

In a subchapter of  titled “A Bad Theory of You,”  calls both Facebook’s and Google’s data-based assumptions about us “pretty poor representations of who we are, in part because there is no one set of data that describes who we are.” He also says that at best they put us into the  — a “place where something is lifelike but not convincingly alive, and it gives people the creeps.” But what you see on the right isn’t the best, and it’s not uncanny. It’s typical, and it sucks, even if it does bring Facebook a few $billion per year in click-through-based revenues.

The amazing thing here is that business keeps trying to improve advertising — and always by making it more personal — as if that’s the only way we can get to Michael’s “sweeping, basic, transformative, and simple way to connect buyer to seller and then get out of the way.” Three problems here:

  1. By its nature advertising — especially “brand” advertising — is not personal.
  2. Making advertising personal changes it into something else that is often less welcome.
  3. There are better ways to get to achieve Michael’s objective — ways that start on the buyer’s side, rather than the seller’s.

Don Marti, former Editor-in-Chief of Linux Journal and a collaborator on the advertising chapters in my book, nails the first two problems in a pair of posts. In the first, Ad targeting – better is worse? he says,

Now, as targeting for online advertising gets more and more accurate, the signal is getting lost. On the web, how do you tell a massive campaign from a well-targeted campaign? And if you can’t spot the “waste,” how do you pick out the signal?

I’m thinking about this problem especially from an IT point of view. Much of the value of an IT product is network value, and economics of scale mean that a product with massive adoption can have much higher ROI than a niche product…. So, better targeting means that online advertising carries less signal. You could be part of the niche on which your vendor is dumping its last batch of a “boat anchor” product. This is kind of a paradox: the better online advertising is, the less valuable it is. Companies that want to send a signal are going to have to find a less fake-out-able medium.

In the second, Perfectly targeted advertising would be perfectly worthless, which he wrote in response to Michael’s essay, he adds this:

The more targeted that advertising is, the less effective that it is. Internet technology can be more efficient at targeting, but the closer it gets to perfectly tracking users, the less profitable it has to become.

The profits are in advertising that informs, entertains, or creates a spectacle—because that’s what sends a signal. Targeting is a dead end. Maybe “Do Not Track” will save online advertising from itself.

John Battelle, who is both a first-rate journalist and a leader in the online advertising industry, says this in Facebook’s real question: What’s the native model?:

Facebook makes 82% of its money by selling targeted display advertising – boxes on the top and right side of the site (it’s recently added ads at logout, and in newsfeeds). Not a particularly unique model on its face, but certainly unique underneath: Because Facebook knows so much about each person on its service, it can target in ways Google and others can only dream about. Over the years, Facebook has added new advertising products based on the unique identity, interest, and relationship data it owns: Advertisers can incorporate the fact that a friend of a friend “likes” a product, for example. Or they can incorporate their own marketing content into their ads, a practice known as “conversational marketing” that I’ve been on about for seven or so years (for more on that, see my post Conversational Marketing Is Hot – Again. Thanks Facebook!).

But as many have pointed out, Facebook’s approach to advertising has a problem: People don’t (yet) come to Facebook with the intention of consuming quality content (as they do with media sites), or finding an answer to a question (as they do at Google search). Yet Facebook’s ad system combines both those models – it employs a display ad unit (the foundation of brand-driven media sites) as well as a sophisticated ad-buying platform that’d be familiar to anyone who’s ever used Google AdWords.

I’m not sure how many advertisers use Facebook, but it’s probably a fair guess to say the number approaches or crosses the hundreds of thousands. That’s about how many used Overture and Google a decade ago. The big question is simply this: Do those Facebook ads work as well or better than other approaches? If the answer is yes, the question of valuation is rather moot. If the answer is no…Facebook’s got some work to do.

But Facebook isn’t the real issue here. Working only the sell side of the marketplace is the issue. It’s now time to work the buy side.

The simple fact is that we need to start equipping buyers with their own tools for connecting with sellers, and for engaging in respectful and productive ways. That is, to improve the ability of demand to drive supply, and not to constantly goose up supply to drive demand, and failing 99.x% of the time.

This is an old imperative.

In , which Chris Locke, David Weinberger, Rick Levine and I wrote in 1999, we laid into business — and marketing in particular — for failing to grok the fact that in networked markets, which the Internet gave us, individuals should lead, rather than just follow. So, since business failed to get Cluetrain’s message, I started in mid-2006 at Harvard’s Berkman Center. The idea was to foster development of tools that make customers both independent of vendors, and better able to engage with vendors. That is, for demand to drive supply, personally. (VRM stands for .)

Imagine being able to:

  • name your own terms of service
  • define for yourself what loyalty is, what stores you are loyal to, and how
  • be able to gather and examine your own data
  • advertise (or “intentcast”) your own needs in an anonymous and secure way
  • manage your own relationships with all the vendors and other organizations you deal with
  • … and to do all that either on your own or with the help of that work for you rather than for sellers (as most third parties do)

Today there are dozens of VRM developers working at all that stuff and more — to open floodgates of economic possibility when demand drives supply personally, rather than “socially” as part of some ad-funded Web giant’s wet dream. (And socially in the genuine sense, in which each of us knows who our friends, relatives and other associates really are, and in what contexts our actual social connections apply.) I report on those, and the huge implications of their work, in The Intention Economy.

Here’s the thing, and why now is the time to point this out: most of those developers have a hell of a time getting laid by VCs, which on the whole have their heads stuck in a of the Web, and can’t imagine a way to improve the marketplace that does not require breeding yet another cow, or creating yet another ranch for dependent customers. Maybe now that the bloom is off Facebook’s rose, and the Filter Bubble is ready to burst, they can start looking at possibilities over here on the demand side.

So this post is an appeal to investors. Start thinking outside the cow, and outside the ranch. If you truly believe in free markets, then start believing in free customers, and in the development projects that make them not only free, but able to drive sales at a 100% rate, and to form relationships that are worthy of the word.

Bonus links:

HT to John Salvador, for pointing to Life in the Vast Lane, where I kinda predicted some of the above in 2008.

This entry was posted in Berkman, Books, Business, Cluetrain, Friends, Harvard, history, Ideas, Life, Live Web, MIT, Personal, problems, Technology, VRM. Bookmark the permalink.

107 Responses to After Facebook fails

  1. Matt Platte says:

    If we let Facebook popularity determine a party’s presidential candidate, then instead of a statesman with known, stable policy positions we might end up with someone “…lifelike but not convincingly alive, someone who gives people the creeps.”

    And a big thanks and congratulations to Garry Wills for coining the phrase “comic rictus” in describing Mitt Romney’s laughter.

  2. Guy Higgins says:

    Could not possibly agree more strongly. I am certainly not a power user of social, but I can tell you with absolute certainty that the next time I actually pay attention to an ad on the web will be the FIRST time. I suspect I am not the only person who blithely ignores all that “targeted advertising.”

    Human beings are much more complex than the simple summation of their online behavior.

  3. Visionary marketeers would give all the data to the customer and offer content just to look at that data and think of ways to use it without pestering for an autograph all the time. Great post.

  4. Rossmann says:

    Too long/didn’t read

  5. Shmerl says:

    Well, if it’s failing – don’t use it 🙂 There are other social networks like Diaspora who aren’t aimed to profit by selling off your privacy. They simply have no ads at all. Such kind of networks are doing what they are supposed to do – helping social interactions. No point to blame the symptoms (broken ads), when the cause is all wrong (the purpose of the network is to sell off your profile to third parties).

  6. Nilesh says:

    Interesting piece. I am just beginning to be convinced that this is the way to go. I have not read the Cluetrain Manifesto but I did pen a few thoughts on – why search is the only relevant adertising – on my blog:

    Your analysis obviously seems to be much deeper. Would like to read more.

  7. Facebook is just a place for all the stalkers to gather.

  8. The concept of flipping the model of “the person to advertise to” to “the companies a person receives advertising from” is brilliant. A paradigm shift to say the least. The question is, will this be an evolution or a revolution?

    Conversely, I find it interesting that people allow so much advertising around them…right down to keeping a license plate frame in place from a car dealership. Makes no sense. I pay $20K+ for a vehicle, then turn around and advertise for free (whether I “endorse” my purchase or not).

  9. For years, Doc has been one of the clearest voices out there. His wisdom and insight have repeatedly proven themselves to be exceptionally valuable. This post is no exception. Thank you Doc!

  10. Mike Perlman says:

    You are right but wrong.
    Right that what they are doing now is not the best.
    But wrong to assume they will just keep doing more of the same.
    They will evolve and like the person on CNBC said yesterday, if you want to short FB and get in front of the speeding train, good luck!

    Sometimes it’s the simple ideas that work. For example – Yahoo. What should they do going forward? Simple answer – why not just compete directly with Google instead of differentiating into unproven markets?

  11. Kat says:

    Fantastic article- I’m a recent graduate and trying to build a career in the digital world whilst also trying to think of new, innovative web solutions myself. If things were reversed, and customers were proactively enabled to build their own vendor relationships (through some kind of open platform) then not only would customers be happier, feel more in control (etc), but vendors would save time and only have to manage interactions that actually converted to a sell. Thanks Doc- I will be checking out this blog frequently!

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  13. I would add that the transition to mobile platforms, with their limited display capability, might only worsen this trend.
    Great post!

  14. PJ Brunet says:

    I disagree “digital ads” are losing value. The data shows just the opposite–every year ads are worth more. Where before ads cost 5 cents per click, the same ad now costs $50 per click, because the targeting is better, the landing page is better, the payment gateway is better, the buyer more comfortable, etc. More data means better targeting. If you don’t like fly fishing, no big deal. a) wins here because we’re talking about them and b) they *do* know their market–they can afford to plant the “fishing trip” idea in your mind–to be successful they don’t need to convert even half of the people they show the ad. Better to convert 10% of 1000 people than 90% of 10 people who exactly match some too-specific criteria. 1% or 2% of 5000 impressions might be even more affordable, so the 99% need not be offended.

    Don’t get me wrong, I hate Facebook. I see Facebook as the training wheels for the bulk of people who still don’t get the Internet. Eventually they’ll break free from Facebook–yeah I really hope it’s 2013. Zuckerberg hoodwinked millions of families and now he’s a billion dollars richer. The users need to realize they did most of the work that made Zukerberg so rich. If families built their own websites, the families would get paid–not Zuckerberg. Registering a dot-com is not the easiest thing in the world but it’s only $10/year, it’s affordable.

    As far as “tools” for interaction with businesses, that’s on my to-do list. And I have been engaging “prospects” on Twitter more recently. But with word-of-mouth working well, I’m reaching the point where advertising and prospecting may be unnecessary.

  15. As a minotaur, all these cow analogies offend my sensibilities. 🙁

  16. Becky Isaacs says:

    I know you have a relationship with Robert Scoble and thus must refrain from wanton criticism of him.

    I, however, have none. Thus I can readily conclude that this man is one of the biggest tools on the Internet. He ‘likes’ Orchard Supply Hardware and Capital One. My, how discriminating of him.

    And that’s just what he’s done today.

    If I ever used Facebook, I no doubt would see that he also ‘liked’ Sears for their Kenmore refrigerators, John Deere for their riding mowers, McDonald’s for their quarter-pounders with cheese, Ryobi for their cordless drills, Foster Farms for their chicken broilers, Casual Male for their big and tall clothing, Depends for their absorbent underwear, and this inane list goes ever on.

    What an unbelievable waste of space and an unparalleled example of pure sycophancy.

  17. Константин says:

    Simpler said: “I am content with my life and never buy anything that is being advertised to me, only that I learn about by other means. So, don’t bother with the ads.”

  18. Doc, 

    Good luck changing the Venture investor mind about the free/ad supported business model.  

    I’ve been in the meetings with VCs, presenting business models with member fees, event tickets, merchandise, and sponsorable apps, with double digit EBITDAS.   They asked me where the ad revenues were.  

    I told them I left the big agency business because advertising-as-we-know-it doesn’t work anymore.  The Internet, by being more accountable, has proved it. 

    None of them have any experience in advertising or marketing.  Unfortunately even people with experience starting in the late 1980’s have no idea how it did work when it worked.

    You’d think that someone would want to at least hedge their bet with one alternative. 

    But there is something Psychological going on here that is described in the book “mistakes were made, but not by me”.  Their point is that once people make a bad decision they will often continue to make the same bad choice to rationalize the first one.  I guess the premise is that admitting your wrong is the most difficult thing a human being can do.

    By the way, many Venture Funds were counting on the Facebook shares they bought in the private market to liquidate at IPO and replenish their coffers.  So you may be talking to a “big hat with no cattle” (just keeping with the whole cow-calf thing)

  19. Doc Searls says:

    Good points, Katherine.

    I should point out that some VRM companies have received generous VC funding. Singly, Personal and Getabl are three that come to mind. We need more.

  20. jerhewet says:

    So where’s the MP3 audio download of the Gilmor Gang episode? No audio download == not interested.

  21. According to the WSJ, in an urgent letter to its suppliers last week Target “suggested that suppliers create special products that would set it apart from competitors and shield it from the price comparisons that have become so easy for shoppers to perform on their computers and smartphones.”

    In other words, they are enlisting vendors to help them deceive customers.

    Yesterday I saw a pitch to a VC from a social media company that is luring consumers by offering to connect them with other people they trust. But the company is telling VCs they plan to help vendors prevent showrooming by -essentially – also deceiving individuals (or at least distracting them from the fact they are about to make a bad purchase.)

    Old business models die hard.

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  23. Damian says:

    Interesting piece – I agree with almost everything you’ve said about Facebook. The one part I disagree with is this simplistic notion that advertising is all about signalling to the potential buyer that the firm is a stand-up company and not a junkie company. While it’s a nice combination of economic theory and advertising it is, in my opinion, a left-over idea from a time where only big firms could afford to advertise.

    This model also got blown away during the last bubble, when we clearly had fly-by-night companies that advertised in big ways on traditional channels – the best example being (which ironically would probably be a good business now). They bought up space during the Superbowl – thus, they supposedly signaled to the audience that they were a strong company – when in fact they were not. And for many of us, that ad was a signal of weakness rather than strength – as in “oh my god they’re wasting $XX millions on a Superbowl ad.”

    I think the average consumer is completely unaware of this signal that you guys are talking about. The consumer is interested in relevant product information in relationship to their place in the buying cycle. That’s why search advertising is so effective because it signals the consumer’s intent. And it’s the last part about the consideration process that most people miss. Advertising to someone about a TV on a TV website isn’t very useful. Advertising to someone who has shown that they are in the process of buying a TV is.

    So this idea that targeting an ad makes it less worth just doesn’t wash imho. And moreover, it isn’t proven out by data as others have mentioned here in the comments. CPMs go up for targeted audiences that are valuable to advertisers – moms as an example. Now, if you want to target moms that have shown intent in buying a new baby stroller, that ad will likely cost you more and it should because you’re getting to the right person at the right point in the consideration process.

    Great article though – and like you, I’m not convinced that Facebook can ever really deliver the value that the IPO price delivered.

  24. jeremiah256 says:

    Great article. I think it all comes down to trust and I’m not even talking about the company of Facebook but my ‘Friends’ on Facebook. The people I follow on Facebook are not necessarily people I trust or even, in some cases, like. Most are people I haven’t seen in years, decades even, including past co-workers and school mates who I’d be much happier not knowing their political beliefs or opinions. These people don’t know me, I don’t know them and if Facebook gathers information based on how I interact with them, it’ll never know me either. The data they have is flawed so I don’t trust it.

    Ads work on me when I’m either shopping (I’ve bought items I wasn’t necessarily searching for while on Amazon) or when I’m in a ‘place’ where I’m relaxed and trust the community. I’ve ran out and bought items based on reviews from my RSS feed via Pulse or while watching, say a TWiT Network show and being introduced to a new app or product. I trust my sub-communities, be they the few relatives and friends that I trust but are drowned out by the mass of others that I follow on Facebook or the specific communities online that I belong to that are not part of Facebook or Google.

  25. There was a time not too long when I worried about what companies were doing with all the data they collected. I worried less as I saw them apply it, because it didn’t really tell them anything about me.

    My continued worry, though, is that law enforcement might start to believe data is all-knowing and use it in place of professional police work. I’m sure Big Data advocates are hard at work trying to sell the virtues of data to governments.

    It’s not a problem for someone skilled enough to manipulate the data in their favor, but what about the average person?

  26. Shared this as a “Must Read”

    I adopted Facebook very late in the game and quite reluctantly.

    Early on, I could somewhat see the value for small item B2C, and it does have other useful purposes; we’re releasing an updated white-paper tomorrow (“Using Social Media for Disaster Recovery”) from the Joplin Tornado Info folks. They created a tremendous resource for the Joplin community via Facebook during the tornado last year.

    That said, aggressive app integrations – SocialCam, Yahoo Reads, etc. – are annoying and dangerously invasive; they have the potential to create mountains of issues for unsophisticated users. Accidentally click in to a “questionable” video via SocialCam and it gets announced on your Facebook page. Read a racy article on Yahoo News and the world knows it. Blech.

    That said, a fundamental issue with those annoying Facebook ads is that, to me, they are redundant to the nth degree; If you click a GM ad once, it constantly appears. I don’t even notice them any longer from a consumer perspective.

    As we are the product of Facebook, it seems like a risky supply chain plan to me.

    The paradox outlined in the article is fascinating to me: “… the better online advertising is, the less valuable it is.”

    Start “Thinking outside the cow” indeed.

  27. When are companies going to get the following REALLY important point about the Internet (and other platforms as well):

    The more you try to “personalize” advertising, the more perceived “deception” you’re creating.

    I equate “personalized” advertising in any form to a strange man on the street walking up to me and saying…

    “Hey, no, really… your Mom said I needed to pick you up. No, really!”

    To the investors, and to entrepreneurs… advertising isn’t something people WANT to see, it doesn’t matter how you dress it up, even if you try to “personalize.”

  28. Doc Searls says:

    Damien, I’m not arguing against advertising that works (including search advertising), or against what can be done with “big data” on the sell side, even by Facebook. I am agreeing with Michael Wolff that there is little little evidence from Facebook, so far, that it can evolve past “the desultory ticky-tacky” advertising stage it seems stuck in now. And I am saying that there are limits to personalization — limits that are less worth probing once we see what can be done with fresh and effective new approaches from the demand side.

    While the kind of brand signaling Don talks about does not apply in all cases, it was hardly “blown away” by dot-com failures. The example might be an affirmative one here, because it was so clearly a bogus outfit. “Nothing will kill a bad product better than good advertising,” an old saying goes.

    What’s required, and very hard to do, is to think outside the advertising box. So, while “advertising to someone who has shown that they are in the process of buying a TV” is a good thing to do, maybe a better one is to give the customer their own ways of “intentcast” that fact to the marketplace before “showing” that interest to the behavioral targeting mills — and to do that selectively, in ways that respect existing relationships and that protect their anonymity in other cases.

  29. Damian says:

    “While the kind of brand signaling Don talks about does not apply in all cases, it was hardly “blown away” by dot-com failures. The example might be an affirmative one here, because it was so clearly a bogus outfit. “Nothing will kill a bad product better than good advertising,” an old saying goes.”

    Agreed my statement was over the top – too much coffee. But I still think the idea that consumer gets that signal no longer true with the fragmentation/long tail media development.

    “So, while “advertising to someone who has shown that they are in the process of buying a TV” is a good thing to do, maybe a better one is to give the customer their own ways of “intentcast” that fact to the marketplace before “showing” that interest to the behavioral targeting mills”

    I get thinking outside the box, but isn’t that exactly what searching is? (albeit going to the behavioral targeting mills).

  30. I’d be interested in hearing more about the intentcast ideas in a full blog post (if not in your book).

    Getting your book and the other you mentioned on kindle [so some kind of targeted advertising works ;-)].

  31. Emil Sotirov says:


    I have a huge respect for the intellectual and ethical integrity of your VRM concept.

    However, I see a problem with the “management” element in it. Management is too much work… too much complexity… with little ROI most of the time – CRM being a classical example.

    I have an almost philosophical problem with idea that we can “manage” anything – but that’s a longer conversation.

  32. David says:

    I loved reading your article and couldn’t agree more with your position on Facebook but I do have to say that being that you’re 64, Facebook does not consider you part of its target audience. Facebook thrives because of 14-20 year old girls who vomit their entire lives onto the site with complete disregard for privacy and/or how it will affect them in the future.

  33. Doc Searls says:

    David, I get your points, but don’t consider either of those statements true. And, for what it’s worth, my age doesn’t buy anything. I do. Big difference.

  34. Doc Searls says:

    Emil, “management” doesn’t mean the individual does it all. That’s why we have fourth parties. Lawyers and brokers are fourth parties already. As individuals get more control over their lives online, new professional classes will arise to help out.

  35. Doc Searls says:

    Steven, intentcasting has lately emerged as a better name than personal RFP. Look that up and you’ll find more. And I’ll be glad to post more on the subject as well (as will others).

  36. Doc Searls says:

    Joseph, good points. I should add that there are plenty of kinds of advertising people do like to see, and use. I once sat next to a woman on a plane who, from one coast to the other, read an entire fat issue of Lucky Magazine, cover to cover. The magazine even came with a sheet of page flags bound in, and she used some of those to flag the editorial and advertising pages she was interested in.

    Trade publications too are places where the ads function as a kind of editorial.

    When I lived in Chapel Hill in the ’70s, a weekly paper with nothing but ads, and abundant classifieds, was snatched up the instant it came out, mostly by people like me, looking for an apartment or some used furniture. At its best, the commercial Web satisfies the same needs.

    What we don’t want, as customers, is to be stalked.

  37. Marcus Robbıns says:

    Really love this article, thumbs up. On my wavelength, yet clearly extendng and deepening my understandıng, thankyou.

  38. Nick says:

    Doesn’t matter that the ads cost $50/click – that actually shows you how little value the ad really has, because the clicks are so rare they’re worth that to companies desperate to increase some number in a database.

    And also, that tells you how much the products you are consuming really cost – that $50 to get you on the hook is $50 you’re expected to pay back for the ‘privilege’ of being their customer. Deals are offered to get the new customers in, but the loyal get it stuck to them (see, for instance, any contract services like cell phones, internet lines, etc.).

  39. Doc, You are correct that both Facebook & Google have birthed appalling formats for selling advertising based on their data. In some way they both appear to disdain advertising in fact. I don’t think though that personalization is what makes the work appalling.

    The idea that Advertising was once a great art that has now been reduced to drivel is absurd. Advertising has always been 99% appalling drivel and always will be. It’s just that no one has made a hit TV drama about how awful it is. Stick around for “The Pitch” after watching MadMen and you can see first hand “how the sausage is made” and why maybe you shouldn’t really eat sausage.

    There are incredibly brilliant campaigns still being created that only exist in this socially networked environment “Old Spice Guy” for instance. Unfortunately for Facebook, YouTube & Twitter the majority of engagement in those campaigns takes place on the free properties as opposed to paid. Currently they all seem to charge for the crap, and let advertisers have the prime real estate for free.

  40. Richard Grant says:

    Great post.

    I never click an ad offered by Facebook\Google\etc. The last time I did, every site I visited that was part of their respective “galaxies” offered me the same targeted information for weeks. It was a thoroughly humbling experience to see my momentary weakness for swallowing real-time spam paraded in front of me for weeks. When the informational noise of targeted ads finally stopped, I found myself looking for them for another few weeks to verify they were gone.

    I’ve been conditioned to avoid clicking any ad – no matter what it is. If I want information about something interesting in an ad, I open a new page and search for it on my own.

    A similar phenomenon occurs with online transaction groups like eBay\Amazon. What one buys becomes a template for targeted suggestions that actually limit *what* one might buy by hiding future things of interest behind past things of interest, It’s a form of social engineering by suggestion really. For example, I purchased one pair of shoes on behalf of my daughter on eBay, and now I get constant offers for women’s shoes whenever I enter the eBay “constellation”. I don’t wear women’s shoes. Should I be insulted that the suggestion engine at eBay has decided that I’m a man that likes his lady-girl pumps? If I was a woman, would I find it limiting that I bought my daughter an outrageous pair of boots, and now all the ads are for similar products?

    Mr. Searls, you’re spot on: targeted everything makes people feel uncomfortable in their own homes, interacting with their own computers. Not everyone is in tune with the same ideas of privacy, individuality and right to be anonymous; but ultimately this is all less about 30 somethings and above’s ability to adapt\thrive in the Generation next world, and more about the survival of Facebook\Google\eBay. I’m not worried about my kids though, the subtle limiting of choices foisted on Generation next aside, Generation next knows how to deal with informational noise – they turn the volume of their PlayStations higher while simultaneously texting three friends, IMing with class mates, doing their homework, and..

  41. Doug Reffue says:

    We’ve been working on this for the past seven months and we have the answer. Ten Quick Questions is a new company that will flip the script and finally help you monetize your personal data. We need consumers to sign up. Just like during the Industrial Revolution, we can only change the system of data exploitation if we band together.

  42. Don Marti says:

    @Joseph Ratliff — +1 Insightful. (“Your mom said to let this man pick you up” would be a great display ad.)

    Closely matching the ad to the _content_ can increase its value. Closely matching it to the _user_ can only reduce its value.

  43. roscoe p. coltrane says:

    if there is anything that illustrates Doc’s point perfectly it’s re-targeters.
    its borderline offensive to visit a site once and then be followed around by their ad begging you to come back again and again and again…

  44. Jon Garfunkel says:

    Hey Doc. Long time, no comment. I took a long break from this stuff since net/crit was bad for my mojo. I saw this via the Berk’s Facebook so I figured to reply as a brain exercise.

    One proposition on the table is:
    1. Targeted advertising doesn’t work for most people because they find it too invasive.

    Maybe it is for a lot of high-IQ net/critters, the ones who never click on any Internet ads. But consider the rest of the population, whose online clicking+conversions — what proof is there to this proposition?

    Another proposition on the table is:
    2. Facebook is uniquely evil/annoying because (a) they are exclusively wed to that practice, and (b) nobody else is doing that (what about targetted newspaper circulars?)

    Again, maybe that’s reading too much into it.

    Now let’s say I want to get in the business of cleaning out home gutters. If I could target people who live in single-family homes (by zip code, age), really, is that such a bad thing? What if they helped underwrite an online “game” that would encourage to check-off all of the home maintenance stuff that they should be doing… would you suggest that that’s not in Facebook’s realm to provide an audience for?

    3. Facebook’s targeted advertising sucks — it is, still, providing, woefully untargeted ads.

    Indeed it does. Again, is this due to inherent qualities of Facebook, of social graphs, or consumer targeting in general?

    What is it that you want of targeted advertising? Do you want the whole enterprise to be abandoned — or do you want it to work better?


  45. Jon, Doc and sundry have writing for years about their perspective, which from my view here is basically trying to portray business as personal empowerment for the buyer – i.e. “we need to start equipping buyers with their own tools for connecting with sellers, and for engaging in respectful and productive ways”.

    This makes for great conference fodder for businesses, but tends to fail rather badly when one gets out of the talk-bubble. It’s a living, but one of the negatives is constantly having to write that businesses would do so much better if they followed the guru’s theory, and lamenting that they don’t.

    If the guru actually believes the theory, that makes it even worse.

  46. Doc Searls says:

    Jon, I’d like targeted advertising to work better, but without the compromises to personal privacy that too much of it tends to involve.

    But my appeal here isn’t for better advertising. Mostly I don’t care about that. Billions are being spent on making advertising better. That will do whatever it does.

    I think that now, as attention turns to Facebook’s shortcomings, we could use at least some consideration, especially from investors, of what can be done to improve markets by working from the customer’s side.

    As for Seth, he and I have gone back and forth on this for years. He calls empty the glass I’m working to see filled. Take away the characterizing and that’s his argument. Hey, maybe he’s right. If the work VRM developers have been doing fails, so be it. If it succeeds, we won’t have to settle just for improving what we’ve already got.

  47. Cannon H. says:

    Couple comments,
    I’m not a huge fan of targeted advertising for myself. As others have pointed out, the engines are rather ineffective and we tend to get stuck in strange silos that are hardly appropriate. Often, the idea of basing future purchase possibilities off of our online behavior or past purchases can be ridiculous. If all content delivery mechanisms were based off of this premise, we would all be effectively sucking on our own tailpipes.
    However, the very fact that there are billions of dollars being spent on this method of advertising seems to suggest that the ROI isn’t as bad as some comments are making it out to be. Businesses spend a lot of time, effort, and energy into making sure that their ad monies are being spent effectively. While even the best of these measuring tools are somewhat questionable, the fact is that there are a lot of very smart people looking at the return on this and continuing to invest. Maybe because they are just hoping it will pan out, but you can only send those kind of numbers back to your CFO for so long before you lose your job.
    Also, I’ll submit that this discussion is rather broad. Interest based advertising might be terrible for one company, but brilliant for another. Broad appeal products might lose their shirts on this sort of advertising, while niche products may really shine here.
    Eventually, the market will probably prove this out. If targeted advertising is crap, we’ll soon know it. Like sheep, we’ll abandon in droves and FB will be left to the late adopters and continue to cling to hopes of its former glory.

  48. Doc Searls says:

    Cannon H,

    There is plenty of ROI in online advertising.

    The investments of smart people have also gassed up every bubble in history.

    FWIW, Facebook’s users are not its customers. Advertisers are. They are the ones whose abandonment will make a difference to Facebook’s bottom line. I doubt that will happen soon, though I do think Facebook and “social” everything have both peaked. And, of course, I could be wrong.

    Michael Wolff’s argument is that Facebook’s current model is inadequate to satisfy its investors and growth imperatives. I agree. But, as I’ve said above, I also don’t much care about that. I do care about the liberties Facebook takes with users’ data, but others are doing a great job of hammering on that issue.

    Instead this post is about what Michael calls “the sweeping, basic, transformative, and simple way to connect buyer to seller and get out of the way that eludes Facebook.” VRM developers have been working on that, in an investment-starved environment, for years. I’d like to see that changed, and that’s why I wrote this post.

  49. Computer Repairs By IT Master Services says:

    Great article, I have felt that facebook and social media in general is over rated and specifically in the case of Faceblok OVER VALUED!

  50. Brett Glass says:

    Funny that Doc lambastes Facebook, but doesn’t go after Berkman Center donor Google.

  51. Biztag says:

    I hope their hands are at least warm! Great post, now we know the problem, what’s the solution?

  52. Brett, c’mon, be fair – note the sentence in the post “Eli Pariser calls both Facebook’s and Google’s data-based assumptions about us …”. With all the hype about the Facebook IPO, basing a post around Facebook isn’t unreasonable.

    Doc, regarding – “He calls empty the glass I’m working to see filled. “, I’d say it’s more along the lines of “He calls untreatable the disease I’m trying to cure with my innovative methods”. There’s people who think cancer can be cured by coffee enemas (I am not making this up!).
    I hope the problems with getting caught up in something like that are obvious (i.e. even if well-intentioned, even if the proponent really does believe in the coffee enema cancer cure, there’s all sorts of downsides).

  53. Pingback: Who cares if FB fails? « Truth of the Lesser Men

  54. Mike says:

    I’ve been saying this for a decade. I simply don’t see how anyone in online advertising is making real money or getting real results. I’ve been on the web for 13 years and never once clicked, opened or watched an ad on purpose.

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  56. Doc Searls says:


    The Google Exposure. A sense of bewronging. What happens when Google buys Sprint, too? (In which I also put in a kind word for WISPs, fwiw.) On advertising and search. I could go on, but would it make a difference? A yes or no answer will do.

  57. Thanks for this great analisys. Would you say that the case is different for B2B companies? It seems to me that they successfully implement content marketing strategies instead of aggressive advertising given the nature and complexity of their products and services. They can name their terms of services and “intentcast” needs, manage their own relationships with vendors etc.

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  59. gregorylent says:

    the disease of quantification … only one problem, it misses reality

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  61. Jon Garfunkel says:


    So, in short, the VRM imperative is this: what marketplaces would benefit most from empowered buyers specifiying their needs up front?
    Well, Facebook & Google should have a strong suspicion I’m planning a wedding, and, indeed, neither have any value-added service to offer us in terms of connecting us with the small businesses who can meet our specific needs.

    So any point about Facebook being incompetent or unseemly generally seems immaterial to the above. I still am having trouble grokking Don Marti’s point about the size of the ad campaign being interpreted as a proxy for the quality of the product — I could not track down his sources on that to anything substantive.


  62. Don Marti says:


    The economics literature on advertising and signaling is AFAIK behind journal paywalls. It does look as if Google is starting to get the idea, though:

    As far as I can tell, the signaling problem is the best explanation for why the most trackable media are pulling in the lowest ad spending per unit time.


  63. Doc Searls says:


    You could see VRM as a qualified leads business, in which the leads themselves do their own qualifying. What marketplace wouldn’t welcome that?

    Either Facebook or Google could get into the VRM business, if they liked. I’d welcome them. But there’s still plenty of money helping advertisers guess at what prospects might want, so they’re not inclined.

    The journals Don and I researched for The Intention Economy were Harvard’s, and they’re unavailable to both of us at this point. But the results are in the book, which cites them, so I recommend you pick up a copy. It should answer other questions as well. (And raise some too, by intent.)

  64. Professional says:

    When Facebook dies about half of the 10 year old girls on earth will to

  65. Jon Garfunkel says:


    Your endnotes point me to Kihlstorm & Riordan, “Advertising as a Signal” from the Journal of Political Economy (1994). That sounds a bit old in cluetrain years…

    I found this article on JStor

    The article is from 1984, not 1994. The article is a lot of math; the objective of the investigators, as far as I could tell, was to validate the price-signaling theory put forth by Philip Nelson, in the 1970’s.

    I wouldn’t dismiss an academic theory from the 1970’s out of hand; I just suspect that there’s been a lot of research which expanded, or otherwise contested, parts of Nelson, not to mention changes in consumer behavior.

    What the heck, JStor gives us a free preview of the first page of Nelson’s “Information and Consumer Behavior” (1970), so let’s figure out why Nelson postulated that advertising signals price to begin with. 1970, here we come:

    “Consumers are continually making choices among products, the consequences of which they are but dimly aware. Not only do consumers lack full information about the prices of goods, but their information is probably even poorer about the quality variation of products simply because the latter information is more difficult to obtain.”

    Forty years later, we are in a world where the full information about the prices of goods, and information about the quality of them, is at our fingertips.

    (Except, of course, in the wedding industry, necessitating a meeting with each an every vendor… 😉

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  68. Doc Searls says:


    You touch on a lot of things here, so I’ll try to sort them out…

    First, thanks for catching the typo. Should there be a second edition (and I trust there will be), I’ll take the correction.

    Second, the book was informed by more sources than were cited, though I tried to be as generous as I could with endnotes. That one source was old does not mean they all were. Nor, as you agree, does the antiquity of a cited source make it irrelevant.

    Third, I don’t believe we are yet in a world where the full information about anything is yet at our fingertips. There is certainly an abundance of it out there, but finding it all, and making sense of it, is not a given for everything.

    True, times have changed, and are changing still. One of my many cautions in the book is toward assuming that today’s big-data-driven hyper-personalized online advertising, much of it based on degrees of surveillance that are unknown to the user, and mostly out of his or her control (that is, if he or she wishes to participate in the commercialized Web), is normative only at this moment in time, and not fully understood, even by its practitioners, even if it is fully rationalized. It doesn’t hurt to bring in some proven principles of advertising (such as branding of the old-fashioned sort), to help figure out why some things work and others don’t.

    Fourth, I’m not playing the guru here. I’m just a guy who thinks the development of business in the networked world is still at an early stage, and that equipping customers with tools for both independence and engagement is an opportunity worth exploring. I do believe that the Intention Economy is the likely result of that, but hey: I could be wrong. I wrote the book to think out loud about the possibilities, and to both stimulate more development while supporting the develpment work already taking place. This work isn’t happening because I’m playing the guru (which I try not to do), or talking about stuff at conferences. Most of it started without my involvement at all. But there is in the community a sense of common purpose.

    As groundswells go, the elevation isn’t high yet. But a lot of good, smart and hard-working people are shaking it, and I think that deserves some respect.

    Fifth, since you’re a local, I hope you can make it to my talk at Harvard Law School on June 11, and participate as well. And pass the word around. The students are gone then, along with most faculty as well, so the gathering will probably have a different mix than the usual events there.

    And finally, look up “buying a wedding dress online.” The results suggest that many brides doing all their dress shopping without visiting a dress shop. I read an article about that, but I’m afraid that it’s a needle in the dress vendor haystack, and I don’t want to be followed by bridal ads for the next three months, so I won’t dig for it. Meaning you might want to spare yourself that research effort as well. (BTW, I’ve found that doing searches in “private” or “incognito” mode fails to keep the trackers from following me later, throwing up ads for stuff I searched for once, presumably invisibly and anonymously.)

  69. Doc Searls says:


    What’s the disease? Serious question.

  70. Don Marti says:

    Doc, we should get into the Harvard library again. I might have a couple more citations to track down.

    Jon, here’s another good one:

    It seems like the results from user-targeted ads are supporting some of the 1970s-1980s models.

  71. Ian E. Gorman says:

    A number of sellers have the same problem with ads that they have with their own web sites. They know what they want to tell the buyer, and what they want the buyer to see. This can make it very difficult for a potential buyer to find information that will lead them to the product they actually want.

  72. Doc Searls says:

    Don, getting into the Harvard library non-physically requires an affiliation both of us lack at this point. (Mine ended when the fellowship ran out. Even though ProjectVRM is still at the Berkman Center, the library privileges don’t go with that.) But I’ll see what I can do.

  73. Peter says:

    I read this yesterday and it has been bubbling away in my head since. I haven’t read your ProjectVRM site yet so I am not sure what your direction is but…
    I recently touched upon some work involving Australia’s major directory service (Sensis). They are having some major trouble with their business model because simply building a list of phone numbers is not sufficient where Google can provide full details about a company.
    However, it occurs to me that HAVING a complete set of contact information about every company in the country puts the Yellow Pages in an enviable position in terms of setting up a VRM type web-site.
    All that would be required to in the first draft would be some social media type functions such a favouriting, sharing, providing feedback etc. so potential consumers can rate potential providers for themselves. Eventually some deeper relationship building tools would be needed – but not a lot. More like singles introduction sites rather than sales.
    The trouble is that it would cause a 180 shift in perspective from the company providing the VRM service – from vendor advocate to customer advocate.
    That and understanding how the monetisation works. Probably why investors are not involved is that they don’t see how the idea makes money – it is easier to collect a lot from a few than a little from very many.
    Apologies for the brain dump in your comments section 🙂

  74. Brett Glass says:

    Doc, in those articles you don’t level the same serious criticism at Google that you do at Facebook above.

  75. Curtis says:

    The model that can enable the “imagine you could” list is that of Diaspora, whereby you own and control your data but can still disclose and share it with others as you want.

    This model is the way forward for medical and health, financial sharing etc.

    I imagine the buyer seller transaction as it has existed for time eternal .. buyer meets seller and a negotiation begins .. but with the Diaspora model you can open your “imagine you could” list to seller at that time and go from there.

    Caveats here are that both parties are ready to be flexible enough to respond and deliver negotiations.

    I am not completely certain though that the Facebook model will fail .. with better AI for lack of better term, better algorithms, data mining, whatever… its representation of life is going to get better. At some point it will be indistinguishable .. right? Isn’t that the trajectory?

    But personally, I want my data, I want to share it when and how I want. I want reward for it .. if advertisor is paying, then i wnat that affiliate payment or a cut, or a discount when i buy.

    Great article though .. really got me thinking.

  76. Regarding “What’s the disease? Serious question.”

    Doc, you (collectively), not me, wrote this, in Cluetrain:

    “We are not seats or eyeballs or end users or consumers. We are human beings …”

    The problem is that when to business we *are* in fact seats or eyeballs, etc, not human beings, that (social relationship) pathology can’t be changed by the equivalent of the coffee enema cancer treatment. And the exchanges follow a predictable path, something like:

    1: Cancer is a disease, an uncontrolled growth of cells. Therefore, to cure it, I’ve come up with CoffeeEnemaDiseaseManagement.

    2: What? That’s quackery.

    1: Hey, I’m trying to *do* something here! I’m trying to *cure cancer*.

    2: But coffee enemas won’t cure cancer.

    1: How do you know that? If it works, it’ll be great!

    2: Well, it’s been tried and tried and tried, and never worked before.

    1: But has this particular blend ever been tried? And that brewing system? Why not stop carping and being negative, and join our team of coffee roasters?

    2: What reason could any of that make a difference?

    1: I’m glad you asked. Cancer is a disease of uncontrolled growth, right? So by stimulating other cells with the coffee, it makes the bad cells relatively weaker, see my article for “Enema 2.0 Conference”

    2: How many tries before it can be said to be useless?

    1: I’m an optimist!

    [Apologies to anyone suffering from/knowing someone with cancer, no insensitivity intended]

  77. Doc Searls says:


    So the disease a social relationship pathology within business in which both consumers and customers are regarded as non-human. Do I have that right? If so, we agree on that.

    Then how would you treat that pathology, if not by anything I’m prescribing, or anything on the list of VRM developments and related projects?

  78. Doc Searls says:


    I doubt I will ever criticize Google to your satisfaction.

  79. Rotkapchen says:

    When recalling how some of these criticisms were lodged against Amazon in the past, and thinking about how at least Amazon was using the information to sell their own products, I started to see all of this more in the vein of a huge multi-level marketing scheme, but one in which there are no middle men.

    The point being, if no one is actually buying any product, but just adding new people, the model will implode.

  80. Regarding “So the disease is a social relationship pathology within business in
    which both consumers and customers are regarded as non-human. Do I have that right? If so, we agree on that.”

    Close enough. We could refine, e.g. “dehumanizing” might be a better word than “non-human”. But I think we actually are broadly in agreement on initial statements. The difficulty is what comes after.

    “Then how would you treat that pathology, if not by anything I’m prescribing, …”

    Ah, this is the problem. I recognize that you and many Berkman people work in an environment where much of what you can say is *immensely* constrained by what’s acceptable to corporate executives. That’s why so much of what comes out of it is roughly “Here’s a techno-gimmick that’ll solve this tough social problem, and look, big business types, there’s opportunities to make money off it, or at worst, it’ll solve some negative social effects of your business without bothering you at all!”. I grasp that approach is considered far-left radicalism in a relative sense, for not being as slaveringly plutocratic as those who wallow in corporatism and think the function of intellectuals is to justify big business (as opposed to putting a human face on it and abstractly sympathizing with some negatives).

    So if I start saying even the mildest things – gee, what does work, in terms of favoring more human(istic) business arrangments? – I have a sad feeling even the mildest aspects will be off the table in terms of utility to you.

  81. anonym says:

    Are you advertizing your book on Facebook to ????

  82. Joe Raimondo says:

    Q) Who is the most important person at The New York Times?
    A) Their best ad salesperson.
    Having been first a writer then a content creator, I understand this paradox–even at the top of the content food chain, the commercial interest predominates. Is this wrong? Not at all–it provided us with a transactional model of information generation and dissemination that has served well for over 150 years.
    But to Doc’s point, we are witnessing, finally, the birth of a new model that represents a substantive break with the past. It’s obvious that Facebook represents the last hurrah of the old order–the last “mass medium” that served impressions of commercially-oriented information that subsidized the production of the high-value information the reader initially sought. The new order–the discontinuous model that alters the matrix of financial exchange for information, falls within what Doc describes as the VRM. The notion has been inchoate since Toffler’s pro-sumers from the early 80’s; now people will have the ability to exercise agency in the commercial domain for information in ways never before seen. And Facebook is most assuredly not a platform for that.
    The question is how to get enough people up to speed in the skills needed to accomplish makes the transition to self-aware info pro-sumers. I think Howard Rheingold has done a nice job in his new book “Net Smart” of laying out a kind of curriculum for people to start building these kinds of personal toolkits, as well as exploring the critical thinking skills necessary to proactively and sustainably develop this new kind of agency.

  83. Doc Searls says:

    anonym, I’m not advertising my book anywhere. I don’t believe the publisher is, either. We’re both working to promote it, however.

    I’ve been advised to create a Facebook page for it, but I haven’t.

  84. Doc Searls says:

    Thanks, Joe. Agree completely.

    In Chapter 16 of the book I run down a list of sources, starting ahead of Toffler (but including him, to whom I owe much) all pointing in the direction you describe.

    I’m kicking myself for not including Howard Rheingold, who worked this beat long before I showed up. His work will also go in the second edition. (I’m compiling a list.)

    Wish I’d known Net Smart was in the works. (See it came out on March 12.) Just ordered it.

  85. Doc Searls says:

    Try me, Seth.

    And don’t assume I’m in lock-step with the Berkman Center. That’s never been the case. To my knowledge, ProjectVRM is the only project in Berkman history that set out from the start to encourage development projects, including commercial ones, to address a market issue, rather than a social or a policy one.

    FWIW, I am also not constrained at all by “what’s acceptable to corporate executives.” That I do try to talk with them (or at least some of them), and make sense to them, does not mean I am constrained by them. Nor does it mean they’re the only people I talk to.

    So if you can lay off the personal (and associative) characterizations, and tell me what your prescriptive solutions are, I’m all ears. (I am anyway, but the characterizations — especially when they ring so false to me — are digressive at best.)

    I’m wondering… Would what Don Marti suggests here be something you’d find agreeably prescriptive? Or, pivoting off VRM as it does, is it more coffee enema?

  86. Don Marti says:


    That link also mentions what I see as the biggest obstacle to VRM — many vendors rely on confuseopoly and other non-transparent price discrimination. Making the company more transparent to VRM tools (whether controlled by the user or 4th parties) makes those two tactics harder.


  87. Doc Searls says:


    VRM obviously won’t work, at least in the short run, where confusopoly and other gimmicks are the norm. But the world is bigger than that. In the book I give the example of Trader Joe’s and other retailers that essentially have no marketing and go out of their way not to play the gimmick game at all.

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  89. wine barrel says:

    When recalling how some of these criticisms were lodged against Amazon in the past, and thinking about how at least Amazon was using the information to sell their own products, I started to see all of this more in the vein of a huge multi-level marketing scheme, but one in which there are no middle men.

  90. Regarding – ” … but the characterizations — especially when they ring so false to me — are digressive at best” – no offense intended. I had a longer reply, but I decided to dump it as I’ll probably get myself in trouble. We are talking somewhat at, not exactly cross-purposes, but a very different view of the meaning of certain phrases (i.e. like to some people “Socialism” means the Soviet Union, while to others it’s Barack Obama’s economic policies). I’m worried that I’m getting myself into a hole here, and I’d better stop digging. I always resolve not to do this stuff due to the horrible risk/reward ratio, but so far I always break that resolution.

  91. Doc Searls says:

    Appreciate that, Seth. I’m also cool with taking it offline if you like.

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  94. Thought-provoking piece that punctuates the Facebook Fantasy – but I am not entirely convinced that salvation lies in VRM. Perhaps VRM just looks at the same problem from the other direction when we should be re-defining the problem entirely (shifting from channel identification to behaviour identification).

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  97. Jon Garfunkel says:


    You’ve responded to my critique of your book chapter (and blog post) by asking me to spread the word about your talk? What I want is for somebody with access to your sources to put it in a much more clear analysis. I continually find you still leaning on these broad statements with the flimsiest of backing.

    Two years ago, on this blog, you wrote a post titled “Brands are Boring.” You undermined it by summarily recalling fifty year-old beer jingles. And your actual point on that blog post was not that brands are boring, but they’re antiquated — ideas that worked in an age of limited channels. On another post (“Brands are Bull”), you remind readers about the genesis of branding from the cattle industry. And the Project VRM wiki follows along, in defining itself as a system which rejects “the language and thinking of slave-owners when dealing with customers.”

    Today you are telling us not only that brands are important, but that they are the most important thing, because of this signalling theory. You had no idea what the actual source of this was, trusting that readers would be content that it was an academic journal article that they would probably never read.

    What is it? Are brands antiquated, evil, or… essential?
    Likewise, are consumers better served by economies of scale (which can underwrite larger advertising campaigns), or by smaller vendors which can engage in more direct conversations?

    Easy answer: it depends on the industry and type of good.
    Follow-up question: in which industries & goods, how do these different drivers apply?

    That research would be worth buying, and promoting.



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  99. tony fish says:


    great article

    The point for me is… I believe that the efficiency of advertising is not the right question, nor is the targeting, not segmentation, nor value for money, nor ROI. Advertising cannot simply be boiled down to such a one dimensional ratio as there is more than one reason that Brands do something.

    The observation is that the internet can be both more effective and less efficient at the same time, this does not make it a winner or a loser.

    My insight would be that digital services bring what other non-digital services cannot bring – Digital delivers a closed loop feedback system and that is where the value is…..

  100. Justin says:

    Doc, Isn’t that marketplace to demand things of vendors sort of like kickstarter? I know I’ve put my money where my mouth is to demand something that isn’t on the market yet in kickstarter. Still waiting for it too…

  101. Doc Searls says:


    As usual, a lot to respond to here.

    You’ve responded to my critique of your book chapter (and blog post) by asking me to spread the word about your talk?

    I responded in more ways than that. Why would disagreement disqualify you from attending? Since you seem to like talking here, why not do it in person?

    What I want is for somebody with access to your sources to put it in a much more clear analysis. I continually find you still leaning on these broad statements with the flimsiest of backing.


    Two years ago, on this blog, you wrote a post titled “Brands are Boring.” You undermined it by summarily recalling fifty year-old beer jingles. And your actual point on that blog post was not that brands are boring, but they’re antiquated — ideas that worked in an age of limited channels. On another post (“Brands are Bull”), you remind readers about the genesis of branding from the cattle industry. And the Project VRM wiki follows along, in defining itself as a system which rejects “the language and thinking of slave-owners when dealing with customers.”

    Hope you don’t mind me adding the links.

    Today you are telling us not only that brands are important, but that they are the most important thing, because of this signalling theory. You had no idea what the actual source of this was, trusting that readers would be content that it was an academic journal article that they would probably never read.

    I’m not saying they’re the most important thing. I am saying they matter.

    What is it? Are brands antiquated, evil, or… essential?

    In some ways antiquated, in some cases essential, in others important, in others not.

    My case in the book is against excesses and assumption errors behind much of what we see with online advertising. And for new approaches that come from the demand rather than the supply side. I think there are many things that advertising is good for, and that advertising does best. I also think it’s very early in the evolution of online advertising, and much discovery is happening along the way. I just listened to this Planet Money program on Facebook’s future, including what works and doesn’t with its marketing engine (advertising, plus fan pages, plus “likes” and the rest of it). Good stuff. I recommend it.

    What I tried to do with this post is get people to think more about the current (though fast-changing) default assumptions about online advertising, Facebook’s in particular, and to look at the work being done already by VRM developers. I also wanted to help those developers by pitching any investors who happened to show up. As usual, I cited others as best I could. Citations matter to me. My book is thicker with footnotes than most other business books you’ll find. If you have problems with those, and with the case I build on them, fine.

    Likewise, are consumers better served by economies of scale (which can underwrite larger advertising campaigns), or by smaller vendors which can engage in more direct conversations?

    Easy answer: it depends on the industry and type of good.
    Follow-up question: in which industries & goods, how do these different drivers apply?

    FWIW, I visit some in the book.

  102. Jon Garfunkel says:


    Thanks. I think we’re getting to agreement. The core issue you wanted to raise — “does targetted advertising really work” — should be examined thoroughly.

    (I likely won’t make your talk in June– I’m in NYC much of my time now.)

    I will listen to the PlanetMoney piece — their reporting team is razor sharp.


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