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The business of life tracking
One from the archives: Circa 2011
This is a mashup of a string of threads on privacy vs efficiency in relation to monetizing a social network
The key to understanding the efficiency of any social network is that, as with any relationship, once you have rapport value can be exchanged.
This idea is of course central to the find me, find you and let's exchange MobCon media model.
What is interesting about TV however is that there is a total absence of any formal social relationship between the broadcaster and the audience and yet it is significantly more efficient than Social Media.
This is because, unlike Social Media, TV works as a pure message stream. The reality is social media is relationship first. Message a distant second. Plus, with TV you no only get to an efficient broadcasting network, you also get to keep your privacy.
And privacy is important when trying to comprehend and evaluate the potential of Social Media as a commercial advertising messaging platform.
You see privacy and efficiency are the oil and water of social media economics. You can either have privacy or you can have network efficiency but you can't have both.
Why? Because the network is inherently inefficient as a messaging platform and therefore the only way to extract an ounce of value from the network is to utilise privacy as a substitute for efficiency.
i.e. If the message won't travel organically across the network then at least we can target the recipients on a 1:1 basis. But to do that we need to know exactly who they are.
This is why the policy of "act and then ask for forgiveness if you are caught" is rampant across the start-ups of the industry and why the market leaders are driving for a zero privacy eco-system. They simply cannot imagine a network that can deliver economic value while retaining traditional privacy safe guards.
You see if the network was efficient you could inject a message anywhere into the network and it would have a high probability of going viral. The probability of a message going viral on social media independent of support by traditional media is extremely small.
This then is the major difference between the murmuration of starlings and the Social Networks. The starlings is a complex adaptive system that can be easily manipulated by internal and external stimuli. Social Networks are little more than data in a box - direct marketing on steroids -masquerading as communities of self interest.
The privacy data has to be mined for nuggets of insight for advertisers simply because advertisers cannot manipulate the network by exposing it to internal and external stimuli.
The wholesale assault on online privacy is a substitute for network efficiency.
Solve the network efficiency problem and you solve the privacy problem.
This then raises the question of how is it a Mexican cement company solved this problem nearly 20 years ago but the finest minds in Silicon Valley seemingly still don't have a clue?
The answer of course is the limitations of network thinking and the dominance of the FAUX Design Movement. Plus the fact solving the problem is not as easy as it would first appear.
You see, working on the assumption there is a correlation between working memory and social network efficiency, the social network at its most efficient when it is crystalline. You monitor, measure and manage six contacts in real time and they do the same. Insert a message at any point and watch it infect the matrix.
The problems occur when we try adding movement to the model. Relationships ebb and flow. New connections are made as other fade. But it would be interesting all the same to conduct a series of experiments with a social network that limits the number of connections to no more than 6 or 7 at any one time. Just to see how much more viral this type of social network may be. After all 7 is far more efficient than 7000 when it comes cutting through the noise, amplifying the signal and placing constraints around the fragmentation of the message.
This new model may not solve the perennial problem of monetising a social network without the assistance of advertising but it would be interesting all the same to see if the "Quality Over Quantity"network model proved more efficient as an advertising communications platform than the inefficient "Quantity Over Quality" network models that dominate the social today.
The simple answer to why I think Silicon Valley missed the opportunity to build a more efficient network is the misplaced focus by American Innovators on what is now described as Digital Darwinism. i.e. Survival of the fittest. Which translates into Biggest is best. or Influence is about counting connections rather than outcomes.
This of course, like much of what passes for Darwinism Thinking, is a bastardisation of the Stoic idea of Logos. Logos is of course the root of our world Logic. The basis of our ideas about order and patterns. For the Stoics the Logos pervaded everything and the objective of life was to share your Logos with others. For the Stoics nature was unselfish.
Darwin's theory of evolution and the survival of the fittest turned that idea on its head. And that's why if we expressed Silicon Valley network thinking as a cartoon it would look something like this. An ants nest where the biggest ant wins. So the objective of the game is to become the biggest ant by collecting the biggest number of followers.
This creates what I call Networked Intelligence. A One to Many Relationship where by many seek to be connected to the chosen One. It is what those familiar with Business Intelligence would call the Single Version of the Truth complex. Meaning is passed down by the primary influencer. The central repository of knowledge (i.e. Google for the web and Facebook for the all things social).
Put very simply the Silicon Valley networking concepts look a lot like TV and/or other Mass Media simply because that's what they are. Media fragmented. Not media optimised for consumption by the network.
However if you look at how collaborative networks (i.e. Complex Adaptive Systems) work in nature you find the model is very different. The objective of the game is to hunt for food so everybody can eat. Here the network consists of Many to Many Relationships and meaning is both created and shared across the network. Or, what I call, in stark contrast to the Silicon Valley model, the Intelligent Network. Here there is no centralised repository. Just the constant social buzz of (among other things) Food?!
The key difference of course between the two models is in the Silicon Valley Network Model the focus is on gaming the relationships and harvesting the activity. The Intelligent Network model the focus is on all of the members of the network discovering the objective and sharing the harvest. Which in the case of a media network would be the story or the message or the advertising message or, more accurately, the Nest Bling.
Silicon Valley's approach is an industrial age solution (i.e. Optimise and Harvest) to a post industrial age problem.
In contrast Collaborative Intelligence embraces the compelling idea that the community of nodes scattered across the network hold very little information at the individual level but can rapidly aggregate and share large volumes of data across the network. Plus they have the collective ability to change the shape of the network in ‘real time’ as the community evolves to meet each new challenge.
Put simply the future of the network is about stimuli and movement. Not data farming.
The "massive" data breach at the Atlanta based credit card processing company Global Payments brings up a number of discussion points. The most obvious one being the ongoing concerns over data privacy and security in the Financial Services industry and of course the risks for any economy that choose to adopt a purely digital currency. As I have said before the biggest risk with Mobile Money isn't the device it is the network. If the network is interrupted or hacked then it puts the whole ecosystem at risk of cascading network failure and ultimately collapse.
So the biggest challenge isn't building a wallet. It is designing and implementing the contingency plans and downstream technologies that would allow the digital economy to recover quickly from the inevitable network failure.
It also brings into spot light the announcement that Facebook is now valued at $104 Billion on the second market.
You see if you take a quick look at Global Payments Inc's NYSE financials you will see that here is a company that mirrors Facebook circa 2010. $2.09 Billion in revenues, $1.09 Billion in profit, 3,734 in staff plus the kind of raw personal and financial data that would make Facebook's social graph pale into insignificance. And yet it's market cap prior to the data breach was just over $4 Billion. That's right a mere fraction of the Facebook IPO valuation.
We see the same result when we look at all the major credit card companies (e.g. Visa) . More customers, More Revenue, More Profit, More Sensitive Customer Data and yet they all have a lower market cap than Facebook.
And yes we have looked at this issue before. But I think it is worth exploring it one last time before the IPO. This time with the ant cartoons just to make it easy for everyone to digest.
We'll begin our journey with what made (and still makes) TV so special.
TV is a broadcast medium that allows brands to efficiently sow the seeds of desire which evolve into social conversations. This in turn generates demand which the brands harvest at a significant premium. This is why the very best Brands dominate the social conversation without investing in Social Media. They sow seeds of desire and then simply let their customers do the talking.
Social Media (e.g. Facebook), as with all other forms of Data Base Marketing (e.g. Direct Mail, Telemarketing and eMail), changes this paradigm by offering Brands the opportunity to turn customers into targets. This of course takes us back to old debate about how whether or not Brands are in the business of seducing or stalking customers.
It also raises the obvious question is the next generation of database marketing, the future of target marketing, admittedly repackaged as a Social Network, really worth in excess of $100 Billion?
Target marketing can be a fun game. Lots of patterns to explore in the big data. A myriad of experiments to be tried and tested in search of the most effective approach. But it does raise the obvious question: Does social media solve a problem for Brand Managers. Or, Does it simply create more problems? More noise that simply clouds the Brand's identity and meaning.
After all advertising and marketing is about cutting through the noise. Not adding to it.
And isn't it time for Brand Managers to get back to framing the conversations that customers and prospects have with one another rather than hunting them like exotic and endangered species in custom built game reserves?
The reality today is everybody is a potential media portal on the look out for ideas and experiences that are worth sharing. The real challenge isn't to target your audience it is to deliver something into the marketplace that is exciting enough to get people talking about it. Do this and social media easily pays for itself simply because it's free.
The shooting gallery may be fun place to play but the commercial objective is to be in the conversation. And, despite all the hype around Social Media, Prime Time TV continues to be the most cost effective medium to allow you to achieve this goal and that's why its revenues and its audience engagement is growing so much quicker than Facebook and YouTube.
Or, put another way, if your latest TVC hasn't gone viral on YouTube or Facebook then you know your campaign has failed.
You see social doesn't feed the conversation. It's the conversation that fuels our social activity.
Of course Cemex didn't solve the privacy vs. efficiency problem of the social network. They just leveraged an algorithm that simulated how ants forage for food to improve the logistical capabilities of their supply chain.
They put trucks full of fresh concrete on the road and left them to traverse the highways and the byways waiting for customers to ring and say they wanted concrete urgently. Having trucks on the road just meant they could mobilise their resources to meet the opportunity quicker than the competition. But just like every body else they still used mobile communications to send a signal from a centralised command and control centre to point the cement trucks at the target.
The efficiency of the network was still based on a One:Many rather than a Many:Many network communications model. Simply because the customer phoned the sales office for the product. The trucks didn't roam the city looking for business. They roamed the city to fulfil the order faster than the competition.
Cemex, like FedEx and all the other game changers that emerged from the eBusiness revolution of the 1990's still relied on the efficiency of the hub and spoke network model. They just used information technology and mobile communications to improve delivery flexibility and optimise their supply chain.
They didn't need to resolve the privacy vs. efficiency problem of the social network because they were fixing up the supply side of the equation.
Today however the challenge is very much focused on the customer side of the equation and that's why the privacy vs. efficiency problem is central to the challenge of profiting from the opportunity of So.Biz.
If their is a synergy between supply side and the customer side of the equation is it is simply this: Mobile communications allowed organisation to design "eBusiness" systems that improved the capability of the organisation to mobilise its resources and focus them on hitting the target once the opportunity was identified.
So too I suspect the rationalisation for So.Biz will be to use the same technology to improve the organisation's capability in identifying and focusing on the target before the competition is a aware of the opportunity.
The easiest way to understand where the Brand Manager fits into all this is to use the increasingly popular euphemism of "business is war". So if were to take the idea of "military action being diplomacy by other means" then what we are increasing starting to call So.Biz is of course "Branding by other means". Branding, be it traditional or social, is about seduction. About letting your customers do the walking and the talking on your behalf. So.Biz is about identifying, locating and targeting the prospect followed by the deployment of logistical resources to meet the challenge of hitting the customer with an offer too good to refuse.
Yesterday we had direct marketing. Today we have target marketing. Tomorrow we'll have precision marketing... and the corporate advertising and marketing departments will look more like military operations centres than the "swinging 60's" offices of the creative mad men.
Marketing as a military science. As opposed to marketing a fantasy.
And while we are on the subject of marketing fantasies, as the world discovered over the weekend, it won't be just the biggest players in town who will have access to this type of quasi-military surveillance and targeting technology. It will also be in the hands of young, smart and savvy urban 'social terrorists'.
If you can use this mobile social technology to locate, identify and target girls in the market for deoderant and shampoo then why not relationships or even free sex?
This then is what lies at the heart of the mainstream media and wider social response to the Girls Around Me mobile app. (e.g. CultofMac, Forbes, TechCrunch, Wall St Journal, ZNet, PCMag, Daily Mail, The Next Web...)
It raise the question what happens when this mobile precision marketing technology goes beyond mainstream and becomes feral? What happens when everybody is not only the target but also a hunter?
The answer is of course we move from the carnival side show of the target marketing shooting gallery into urban social warfare. A new urban landscape where this new mobile social technology not only puts the microscope on our new mobile social morality. It also magnify the experience beyond out wildest dreams and ultimately our fears.
As I said almost 2 years ago to the day.
What happens when we no longer have to point, click and discover who our next friend will be but simply have to scan the crowd with our phone to discover the “high value nodes”?
Imagine being able to program your mobile phone with a list of names and then being able to search the conference room or exhibition hall in search of people who can negotiate a meeting with one or more of these names. Imagine a future where you can use your mobile phone to send these “high value nodes” gifts and invitations to arrange these meetings or join you at your table.
Now imagine sitting at a table in a crowded piazza in Rome, Milan or Venice, drinking you coffee and using your “Hi-Tech” networking, designer sunglasses to scan the passers-by for “high value nodes”. All the time receiving real-time audio-visual information feeds on their individual digital identities and network connections being displayed on the 3-D display and the sound system embedded in the sunglasses.
This I think puts a whole new perspective on the future of people watching and the value of mapping and visualising the social graph. Particularly if the glasses provide a real-time audio-visual feed back to your digital identity recorder.
Again I wonder: This is a future not too far away from today but do we really want to go there?
Clearly we're here now. It is to late to put the genie back in the bottle. And, like it or not, mobile apps like this have the potential to significantly disrupt our social fabric in both good and bad ways.
The only real question we need to ask ourselves is should this technology be left simply in the hands of Product Marketeers and Business People to harvest this freely available data or should everybody have access to do what ever they want with it?
I would suggest it remains a 'free for all' simply because the only reason there is so much personal data out there is because most people have been foolish enough to believe that nobody has been watching. At least this way everyone will become acutely aware of the social risks involved in playing around with this free media. Plus why should Governments, corporations and businesses the world over have exclusive access to such an overwhelming competitive edge in the age of the social network? The role of government here shouldn't be to regulate (i.e make exculsive) the technology but to publicise the risks associated with the technology. (e.g. Satirizing Surveillance: The Camerahead Project.)
Besides leaving the app in the market place would provide the incentive for developers to create a counter intelligence app that could discover who's looking and allow you to decide if you want to block access or feed them counter intelligence. Simply putting the social surveillance app in the naughty corner or the too hard basket isn't going to solve the wider problem. It's up to the free market to respond to the challenge.
In closing let me just say that it is self evident that Social Counter Intelligence and Privacy Protection will emerge as a must have product of the social era in much the same way that virus protection emerged as the must have protection of the personal computing era. Anyone who thinks otherwise simply doesn't understand how free markets and innovation works.
Of course Brands don't stalk their customers. They are in the business of life tracking.
You could say that back in the 1960's the creative mind in the advertising world aspired to be like Richard Attenborough. Today it's his brother David.
After all why bother creating flights of fantasy. Stories to fuel the imagine. Lifestyles to aspire to. When you can simply track the customer like exotic wild life on a purpose built wild life park (Think: Facebook)?
Bait, Tag, Release and Track.
This then is the new science of advertising and marketing. Brands as bait.
This then poses the question. What does it say about the business of advertising today? And what does it say about us? The customer.
For it would appear that the Brand Manager aspires to live life watching a dashboard. While we the customers aspire to live life as an experiment in branding. The act of creativity is now the play thing of the crowd. Filling the void left behind by a generation of creatives who now aspire to be merely the managers, the keepers, the attendants of brands rather than the architects, the builders, the forgers, the sculptors of brands.
Welcome ladies and gentlemen to the significantly less than brave new world of dashboard man and business of life tracking.
Let's hope for all of us that it is in the end a life worth tracking.
Till next time...
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