Utah Open Source Planet

Dave Winer

Dave Winer wrote yesterday about the death of online advertising. He says:

I've been saying it for as long as people have been building businesses on advertising on the web, it's not a longterm thing. Now we're at the end of the road.

Assuming the economy comes back from the recession-depression thing that it's in now, when it does, we will have completely moved on from advertising.

The web will still be used for commercial purposes, people will still buy things from Amazon and Amazon-like sites, but they will find information for products as they do now, by searching for it, and finding out what other people think, not by clicking on ads and buying things on the pages they link to.

No one needs advertising, and there are much better ways to sell products.

From Online advertising is now dead (Scripting News)
Referenced Fri Nov 14 2008 08:02:18 GMT-0700 (MST)

I don't know that I'd go as far as saying it will not come back at all, but merchants will find new, innovative ways to reach customers without advertising when their budgets get tight.

Of course, we might call these new things "advertising." I get that frequently when I explain what Kynetx does. People call any message from a merchant an advertisement even though, in many cases, it's not widely broadcast.

There were plenty of discussions relevant to Dave's post at IIW this week. The VRM crowd was there in force with grounded discussions about how the implicit contract between merchant and shopper can be rewritten in ways that are better for both.

Most exciting to me, the discussions about r-buttons were getting down to the level where you could see real protocols and standards developing behind the talk.

I was troubled by some VRM discussions that still see to border on being hostile to merchants and even commercial efforts in general. I think that only hurts the opportunity to have to redefine what commerce is and how it takes place. I also think that some of the discussion gets lost in relationships in general, not just those that exist between the merchant and shopper. Nothing wrong with figuring out infrastructure for relationships, but it's nice to keep things focused on the task at hand.

The next steps we take can be as important as the final end state. Dave's insight that the economic downturn opens up opportunity is a good one. At Kynetx we're working on new ways for shoppers and merchants to relate. We're creating new channels for relevant messages--both from shopper to merchant and from merchant to shopper. Not advertising--just plain old communication.

Tags: ads google ecommerce iiw vrm kynetx

Doc Searls has taken the stage for todays keynote. He started with a brief review of the history of DIDW and the identity space and how we got where we're at leading up to a discussion of VRM. VRM is all about relationships between people and the entities they want to interact with.

One thing he said that stuck with me is that big companies should embrace the networked individual and small companies should enable them. Free customers are more valuable than captive one. Businesses still thing that the opposite is true. That's what we think the free market as "your choice of captor." Markets won't be free until customers are free. For individuals VRM is a way to relate.

Doc starts talking about the Rel button. The Rel button looks like two horseshoe magnets lying on their side facing each other. The Rel button can indicate (depending on how it's colored) an intention to buy, an intention to sell, or a relationship between the two.

In Doc's vision, underneath the Rel button is a protocol for exchanging information between parties based on the relationship including preferences, transaction histories, payment histories, and so on.

The first, pilot project is radio. Network-based radio streamed to devices over the data network is the future of broadcast. You could imagine that as advertising supported or subscription supported, but Doc sees it as finer grained than that. A Rel button in an iPhone streaming radio app could give people the ability to pay for the programs they enjoy piecemeal using the phone's built in payment system. This is in the early stages and will launch with public radio.

Doc ends by saying there's no limit to the amount of business that can be done with free customers in free markets. We have to stop thinking of ourselves as consumers because we're producers as well. VRM removes the guesswork because in a relationship you know what people want now (and at what price), what they want later, and what they never want.

Tags: vrm relationships identity didw08

Ross Mayfield notes that in an Apple retails store "50% of the space is for retail sales and 50% for service and support." He goes on to contrast that with places like Fry's or Best Buy. I'm always amazed when I go into an Apple store: they're happening places. If you're in retail, visit an Apple store and then go back to your place. Seem kinda quiet and dead. Yeah, I thought so.

Ross goes on:

What Best Buy is missing is the fact that they provide no after market value add with their retail -- in comparison to buying and servicing with an e-commerce vendor. If I buy something in person I expect a person to be able to help me when things go wrong. At least during the manufactures warranty, and I might pay to extend that period with the retailer.

But I think Apple gets something more than the value of customer experience. According to the Consortium of Service Innovation, there is an iceberg effect for product knowledge. 90% of conversations about supporting products never touch the company. Only 10% touch the call center. And 1% of this service and product quality knowledge are assimilated.

In other words, Apple's trying to capture more of the product knowledge conversations. That goes beyond mere "customer experience" and gets to building relationship.

Finally Ross gets to the key question for online retailers:

For your business online, what porportion is dedicated to retail vs. support? When not constricted by the boundaries of physical space, and can be empowered through community, where do you draw that line? What crosses that line is a process not unlike osmosis, where energy is released with the right balance.

When I was at Internet Retailer it was clear that one of the hot features for ecommerce Web sites was customer reviews. More and more places are following Amazon's lead and adding places for customers to talk to other customers (and inform the retailer in the process). This is a great way to capture more of the customer product conversation and capitalize on it in order to keep shoppers coming back for more.

Tags: ecommerce kynetx customer vrm

Bob Blakely is speaking about building a relationship layer for the Internet. A relationship is the context within which we observe one another. Past history and even attitudes are not directly observable. This is imperfect--distant relationships are the basis for inaccuracies. More observations at a closer distance make for a more useful and feature rich relationship.

Bob puts forward the emergence of the credit card industry as an example. Rather than requiring shoppers to create intimate relationships with every merchant, you create a single intimate relationship with your bank and the merchant has an intimate relationship with their bank and then the banks form a relationship (contract) that connects those.

Generalizing this thought to identity, in situations where you don't have one good relationships can two relationships provide the answer? Intermediaries need to have a trust relationship with the user. Phone companies, utilities, even shipping companies have a great advantage here. They can out compete banks.

Relationships are the type information about edges in the social graph. Bob presents a schema for relationships. Relationships have a creator. Relationships have a type (FacebookFriend). Creators establish rules and roles. Rules might be "can't copy." Roles are descriptions of individuals who can participate in the relationship.

There are other elements in the schema. Consents are what you agree to (i.e. enter into a relationship, you can send email, etc.). Promises are things you're held to (i.e. abide by terms of service). You also have claims (i.e. this is my name, this is my email address, etc.) There might be blocks to list other participants. The schema is a contract sorts. In privacy, for example, this shifts the discussion from one of rights to one of contract law.

Employees present an expensive relationship. Contractors are a less expensive way of having an employee relationship. This is relationship federation. The contracting company provides context about the relationship and there are rules, etc. that govern the relationship.

Identity providers present a similar scenario. The IdP can, in theory, create the expensive relationship with the user and with the RP. The difference is that IdPs can't make money from the expensive user relationship. You're not selling identity. If you sell identity, like Equifax, people hate you. You're selling relationships. They should compete on the basis of cost and quality.

"X-centric" is dysfunctional nomenclature no matter what the value of "X." Functional relationships happen when both parties gain value and agree to treat each other with respect.

Tags: iiw2008a iiw identity vrm

I'm starting a new business called Kynetx. As I go through some of the things I do, I'm planning to blog them. The whole series will be here. This is the twelfth installment. You may find my efforts instructive. Or you may know a better way--if so, please let me know!

Every business makes a choice, often implicitly or by default, about what kind of relationship they want to have with their customers: will their customers be active participants or passively resentful? We all know business in the latter category. Cell phone companies spring to mind with almost no effort. You never hear someone say "Wow! I just love how my cell provider treats me!" Most of us are resentful of them.

On there other hand, there are businesses that have made their mark through the participation of their customers and users. Amazon and Google are both great examples. Neither would exist in their current form without the active participation of people--often without their even being aware--in providing the business with better information. Google relies on links. We don't link for Google's benefit, but whenever you do, you're helping Google make sense of the world. Amazon also relies on implicit participation, but also uses explicit requests of the customers to help make their service better: reviews, list, and wish lists are all examples.

With a nod to Doc Searls who taught me this, some of this has to do with language. At Kynetx, for example, we don't "target consumers." Rather we "serve customers." Even if the action you take is largely the same in either case, the words make it different. The former is impersonal, intrusive, and demeaning. The latter is uplifting and makes us think about our customers as people.

The word "consumer" brings to mind a stupid cow, carelessly ingesting whatever happens to be put in front of it. And who wants to be "targeted?" Not me. People are happy to be served, they want to be understood, they crave relationships.

This focus on nomenclature may seem silly and soft headed, but I think it's vital to developing the right culture in our business. Ultimately, I believe that culture can be a bigger differentiator than anything else you do.

I'm putting a jar at the office. Anyone who uses the word "consumer" or "target" when talking about our clients or their customers is putting a quarter in it. Maybe a buck. Along with a share of stock. Just kidding about the stock--but only because it's too hard to implement.

Tags: startup kynetx vrm

One of the great things about blogging is that it gives you and outlet to vent when you get crappy customer service--heck, I think that drives blogging more than anything. Dave Winer got ripped off in an Apple store yesterday and told the tale on his blog.

I've owned, if you count the machines I buy for my students in my research lab, dozens of Apple machines in the last five years. Overall, I find them to be moderately reliable--but I have to admit most of the problems I've had have been on new-release machines.

I've never taken my machine in to get a hard drive replaced and I've done that more times than I'd care to count. Dave didn't do it himself--not because he can't, but because he already had it at the store and they'd diagnosed the problem--I'd probably do the same thing.

Apple doesn't make machines particularly easy to work on. My recent experience taking an iMac apart is a case in point. Over the normal life of any laptop, chances are you'll want to replace the harddrive. That's especially true with the number of large media files that I find myself accumulating. External drives just don't cut it.

Frankly, it would be nice if Apple would make drives as easy to replace as RAM. I'll gladly trade some case esthetic for easier upgrades.

If you do upgrade the harddrive in your Mac, the best resource I've found is iFixIt. They have instructions for cracking the case on just about every Mac model around. Very handy.

Back to Dave, he clearly go ripped off. If this had been a warranty repair, then the Apple would have claim on the drive unless he paid a "own the drive" fee like Dell offers. But this wasn't. He paid to get the machine repaired and the drive should belong to him.

Dave's concerns over the data on his drive are valid. I'd have them too. When I replace a drive on my machine, I always do a security erase on it before giving it to someone else. With a broken drive, I'd like to destroy them, but so far just accumulate them on a shelf. You can buy a service. Anyone have any experience destroying old drives?

Tags: apple gear repair vrm customer+service

One of the great things about blogging is that it gives you and outlet to vent when you get crappy customer service--heck, I think that drives blogging more than anything. Dave Winer got ripped off in an Apple store yesterday and told the tale on his blog.

I've owned, if you count the machines I buy for my students in my research lab, dozens of Apple machines in the last five years. Overall, I find them to be moderately reliable--but I have to admit most of the problems I've had have been on new-release machines.

I've never taken my machine in to get a hard drive replaced and I've done that more times than I'd care to count. Dave didn't do it himself--not because he can't, but because he already had it at the store and they'd diagnosed the problem--I'd probably do the same thing.

Apple doesn't make machines particularly easy to work on. My recent experience taking an iMac apart is a case in point. Over the normal life of any laptop, chances are you'll want to replace the harddrive. That's especially true with the number of large media files that I find myself accumulating. External drives just don't cut it.

Frankly, it would be nice if Apple would make drives as easy to replace as RAM. I'll gladly trade some case esthetic for easier upgrades.

If you do upgrade the harddrive in your Mac, the best resource I've found is iFixIt. They have instructions for cracking the case on just about every Mac model around. Very handy.

Back to Dave, he clearly go ripped off. If this had been a warranty repair, then the Apple would have claim on the drive unless he paid a "own the drive" fee like Dell offers. But this wasn't. He paid to get the machine repaired and the drive should belong to him.

Dave's concerns over the data on his drive are valid. I'd have them too. When I replace a drive on my machine, I always do a security erase on it before giving it to someone else. With a broken drive, I'd like to destroy them, but so far just accumulate them on a shelf. You can buy a service. Anyone have any experience destroying old drives?

Tags: apple gear repair vrm customer+service

Doc is giving his riff on VRM. It's new and different every time. No one does this sort of thing as well as Doc. With respect to VRM, he quotes Whitman:

It seems relevant. He said a lot more than this, but his gestalt is so hard to capture in a blog post.

Tags: defrag vrm