Zipfluence

No Conflict, No Interest

One from the archives: Circa 2013

If there is a lesson to be learnt from spending any time around financiers, of all types and persuasions, it is the golden rule... No Conflict, No Interest.

No Conflict, No Interest. It is the first law of journalism. The first law of the novelist. The first law of the sports commentator. The first law of the storyteller. The narrator. The gossip. Columnist or backyard.

Let's face it. It is the first law of all media. Be it search, lists, newspaper editorials or the SuperBowl

No Conflict, No Interest.

It is the insight that fuels the words and actions of lawyers, politicians, judges and courtesans alike.

Men and women of state, diplomacy and war. No Conflict, No Interest. Can be heard in the whispers that spread virulently through the corridors of power.

Arguably it is the first law of life. From the cradle to the grave. No Conflict, No Interest.

And business and investors are not immune to its attraction. No Conflict, No Interest.

It sparks their imagination. Piques their passion. Stokes the flames of their desire. Like a teenager playing with a PlayStation. Or a child with a toy. A entrepreneur with an opportunity. No Conflict, No Interest.

For there is money to be made where there is conflict. And interest too.

Both a bankable commodity. The stuff of empires are made of it. No Conflict, No Interest.

And so it is only natural, if you are a VC seeking to be a winner in the investment game, that you too would be actively seeking an investment that offers both conflict and interest in the one game-changing package.

It is after all the question, and the answer. No Conflict, No Interest.



Now imagine if Big Data was labelled Stupid Data or BitCoin, StupidCoin. Social Media, Stupid Media. The Internet of Things, the Internet of Stupid Things. Facebook, Stupidbook. Pinterest, Stupinterest, Or even Google, Stupid.

Just think I'll Stupid that.

And why shouldn't we? After all these technologies have all emerged and thrive on the Stupid Network (Think: Rise of the Stupid Network: The seminal essay published by AT&T’s David Isenberg in 1997.)

The reason being of course words shape perceptions. In this case our perceptions of value. Stupid doesn't sell. But it is a good market to sell into. And words have the ability to cast spells. To make the irrational appear rational and, of course, the rational to appear entirely irrational.

In the hands of the most creative minds they have the ability to entice us to do stupid things. Irrational things.

They have the ability to shape our behaviour. To forge habits. To shape our experiences.

And the key to understanding how and why they can do this is to learn one simple lesson.

That lesson?

Success, be it in marketing, branding or gamification, is about becoming, not the answer, but the question.

Not the conditioned response but the stimuli that shapes the conditioned response.

Think about that, the next time you consider "Finding us" on Google or "Follow us" on Facebook to be the answer to your marketing woes.



You see, if you think about it, there is an inherent conflict of interest in monetizing any list engine. Be it search or social or eCommerce or otherwise.

It is inherent in the functionality of creating the list.

A list, is a list, is a list. But what counts is being at the top of this list.

Top of the list is where all the action is. Top of the list is where the focus is. The trust. The value of the list.

We are talking about long tail economics here.

When you monetize the list you are not interested in monetizing the tail. You are interested in maximising the head.

The top is where the money is made. Simply because the top is where the list is trusted.

If old media was about monetizing prestige by association then new media, list media, database media, is about monetizing trust by association.

What the market now describes as Freemium essentially boils down to establishing trust in the list and then pivoting that trust into cash.

Eventually every entrepreneur with a popular list faces the question: The audience trusts my list. How do I monetize that trust?

The simple answer being I auction off that trust. I put trust up for sale, to the highest bidder of course.

The problem being of course this pivot gamifies the list. It creates a feedback loop that distorts the value of the data displayed in the list. Why? because by changing the rules it modifies the behaviours that originally created the list.

The original "implicit" rules of trust become the new "explicit" rules of trust.

Put very simply it becomes yet another example of how Gamification = Garbage.

But it is better understood, at least in the context of monetizing a list, as the gamification of trust.

The list is built on a model where the rules of the game are very simply "Trust is Free".

The monetization pivot means the new rules of the game are very simply "Trust is Currency".

At the core of the new business model is the management of a proprietary trust based currency.

Advertisers exchange "paper" dollars for the new "digital" currency.

They lease trust, for a fleeting virtual moment, in exchange for dollars.

So, for all the talk about trust being earned in the new reputation economy, the truth is the currency of the reputation economy is trust, and, like any currency, it can be bought and sold at a price.

The exchange rate of course being determined by the position it purchases on the list.

In this context the list engine is both central banker and list vendor. They issue both the currency and define what the currency can buy.

The problem with the model being, somewhat ironically, a question of transparency.

Those of you who worked with traditional mass media will recall that if you put an advertisement in a magazine, newspaper or on radio or TV. The advertisement was independently logged and the reach independently measured. Put very simply you were not reliant on the publisher or broadcaster to validate the distribution of your advertisement. There was transparency and accountability. As an advertiser you could verify that you received what you paid for.

List media is personalised media. It's between the user and the list provider. Privacy doesn't allow for transparency. The user could be a bot, a dog, a cat or a real life prospect. But that is between the user and the list provider. The advertiser just receives a bill for the expended units of leased trust.

The model cannot be independently audited. It lacks the transparency of traditional media. So as to the question is it money well spent? Well let's just say who wastes time trying to calculate the ROI of social media?

But if we mash all these fragments of interest together we discover the conflict inherent in the monetizing of the list.

The user comes to the list expecting a result set they can trust to be accurate and current.

The advertiser comes to the list seeking a target audience they can trust to be accurate and current.

The list owner monetizes the list by shaping the results to maximise the revenues generated by each result set created by the user.

Three parties playing a game of lists each in their own way seeking to capitalise on their investment in the currency of trust.

Think of it as a game of Snap. The card game that kids play. When the two cards at the top of the pile are the same. It's Snap you win! So the user gets a card for free . The advertiser also gets a card for free but they can purchase extra cards, at a price set by the competition. This allows the advertiser to skew the odds in their favour and keep the competition out of the game. The list vendor, the dealer of the pack, gets to keep the fee and turns the cards.

Snap you win. Most of the time you lose.

Now I want you to think about this carefully.

Within the construct of the game the most "accurate and current" result for both user and advertiser means the cards held by the user and the advertiser are Free.

That's right. The most trusted and accurate fit, if the list engine is to be trusted, is when the advertiser gets to sit on top of the pack for free. They receive top billing, not because they have distorted the odds of success, but because the list engine has found them to be the perfect match to the user request.

The problem for the list vendor being of course they make no money when the advertiser and user hook up for free.

You see now the seeds to the conflict of interest inherent in the monetization of any list?

You cannot monetize accuracy. But you can monetize inaccuracy.

Think about that, and get back to me if you think my logic is wrong.

Because, in retrospect, this is the missing piece of the puzzle I uncovered when I discovered back in late 2009 that a Top 10 organic page rank for hot topics like making money from eBooks, Mobile Apps and Games translated into daily click through traffic that could be counted on your fingers.

How could it be that Google has built a $48 Billion advertising business based on the publishing of lists with an average reach that would concern the editors of most school newsletters?

The answer being of course, in retrospect, there is no correct answer to the question. Only the opportunity to connect with the question, if the price is right.

Think about that, until next time...

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