May 8th, 2006

The Death of the Intermediary

by Scott Karp

Query: If marketers can get their own consumers to create marketing messages for them, and then get those same consumers to propagate those messages through online social networks — all for free — why should they give a dime to media and advertising companies to serve as intermediaries?

If your best counterargument is “We’re not there yet,” consider this from MediaPost:

THE RAPID RISE IN USER-GENERATED content has created a new way for marketers to reach consumers, ironically via media created by consumers themselves. Now it is spawning a new way for advertisers to generate the kind of content they use to communicate with consumers: advertising. In an announcement scheduled to be made later today, a new player will unveil an ambitious plan to tap consumers to create ads for both online and traditional media outlets, displacing the role of traditional advertising agencies. While a grass roots movement toward consumer-generated ads has emerged over the past couple of years via individual consumers and marketers, the effort seeks to provide some structure for the process, giving marketers a place to interact with consumers, provide them with specs for creating their own ads, and sophisticated tools for reviewing, editing, approving and activating consumer-generated ad campaigns.

The company referenced in the article is ViTrue — one can image a not-too-distant future when a service like this — combined with mature online social networks — obviates the need for any intermediaries, i.e. marketing services and media channels (including Google, Yahoo, Microsoft, etc.).

In fact, once marketers master the tools of Marketing 2.0, even a service like ViTrue will become an unnecessary intermediary.

Topics: Media Economics

  • The history of marketing is littered with failed campaigns dreamed up by professionals — Yo Quiero Taco Bell, Pets.com Sock Puppet, the list goes on forever.

    Yes, but there is also a massive list of ideas cooked up by marketers which launched brands into the stratosphere. Of course the approach will have to be different given the new mediums, but I would argue that marketers can be even more successful given the distribution networks they have access to. Sure, expert practicioners of the 30 second spot are probably in their final years, but similarly talented people at manipulating public perception will rise to take advantage of the new situation and medium.

    I am skeptical that any technological advancement can fundamentally change the fact that some people are better at coming up with ideas then others, and in a capitalist society those people will be compensated for their work and applied to the business of selling things to people. A buggy driver's skills do not translate to the jet airplane, but another person with different skills can be a pilot.

  • Sally,

    Social networks that function through live interactions are to the horse and buggy what online social networks are to the jet airplane. Technology has turbo-charged this phenomenon, so things have changed just a bit since the dawn of capitalism.

    I think your giving a bit too much credit to "professional" marketers in understanding what resonates with consumers -- you would think the consumers themselves know best.

    The history of marketing is littered with failed campaigns dreamed up by professionals -- Yo Quiero Taco Bell, Pets.com Sock Puppet, the list goes on forever.

    You're seeing business as usual, but I see the potential for a total sea change.

  • Since the dawn of capitalism, there has always been major user-generated advertisement. It's called "Word of Mouth". But it doesn't happen on its own, and it doesn't happen just because you ask for it.

    Marketing is an inexact science, but people at or near the top are very smart and creative, and they create memes because they are good at it. Call it manipulation or whatever you want, but the simple fact is that some people are smarter and more creative then other people. Regardless of the empowerment tools the net offers us, the fact that some people will be able to come up with interesting/funny/cool/revelatory ideas better then others means that those people will be in demand, and they will sell those services.

    Word of Mouth is sure to grow and grow and become much more sophisticated, but brand definition and manufactured memes will always be at the top of the pyramid.

  • If ViTrue is the cutting edge of this effort, consumer-generated advertising is going nowhere fast: could their flashy Flash web site be any slower?

    On a more serious note, ask yourself this: if you owned a multi-billion dollar brand like Nike, how much control of your brand image would you be willing to give up? Getting people involved with a brand is the ultimate goal of branding, and consumer-generated media gets people involved, but believing that advertisers will fire their ad agencies and cede control of their brand assets to anyone with a video camera and editing software is naive. The marketing people behind the recent Chevy Tahoe debacle were that kind of naive. The smarter strategy is transparency, and there is a world of difference between being transparent and being stupid.

  • Lovely post Scott. It was really thought provoking.

    Here's my take which I have posted on my blog.

    Intermediaries1.0 was all about them working for marketers, Intermediaries2.0 will be about they working for customers!

    They need to disrupt their thinking and change their business model

    What do you think?

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