May 8th, 2006
The Death of the Intermediary
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.
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I don’t believe this will happen, because the amount of product looking for a market out there most likely far outweighs the number of enthusiastic users willing to “generate content” about it. People are fickle, and when one car company has run a make-our-ad! contest, the next one in line will have a more difficult time convincing budding directors to bother paying attention.
I agree that that marketing as we know it will fundamentally change, exactly how will be interesting to see.
We are now in a far more transparent environment than ever before. If I’m about to buy something I can search the web for comments on the product. The most likely results will be those from blogs. Of course, some will be biased however with many contributions/blogs the reader will be able to make an informed decision. What affects companies the most here is how swiftly information that is not too complimentary can be disseminated across the globe with the potential of axing years of reputation in a heartbeat.
The counter to this are customer advocates - consumers of your products who will be proactively complimentary about them. Think about it, if you’ve got a network of advocates what do you need a marketing department for? Exactly.
So, if you’re a brand, if you’ve got products, create an online community for your consumers. Listen to them. Give them the attention they deserve. If you don’t they’ll move on.
If you don’t believe this, do nothing. Keep sending flyers through my door for products I don’t want. Keep shooting for a 2% conversion rate on pay-per-click advertising. Keep paying outsourced call centres to cold call people in the middle of their dinner. Good luck and best wishes, the train to the future has just departed from track one - sorry you missed it!
You are right - the death of the intermediary is coming, marketing is dead.
Stuart
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?
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.
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.
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.
[…] Now that Chevy has demonstrated how an advertising campaign can work with some online tools and lots of user participation, the era of the high-priced ad agency account could be viewing a blood-red sunset. Publishing 2.0 blogger Scott Karp asked the salient question about the role of the intermediary when it comes to marketing: 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? Karp references a report on the debut of ViTrue, a company that claims it can enable “Brands and Consumers to engage in meaningful interactions” through its technology solutions. ViTrue said on its site that it wants to reinvent how marketing for a brand can be created. Tools and brand partnerships it can deliver would be the key to accomplishing that reinvention. While the ad-creation contest run by Chevy had some negative points, like a number of anti-SUV ads created and circulated, it still proved that the richness of available tools coupled with some creative approaches could yield useful marketing content for GM. If that is the future, Karp thinks a ViTrue combined with “mature online social networks” could brush aside the need for intermediaries. That would bode poorly for Google and other companies who would see some of their online advertising revenue fall off the screen. “Once marketers master the tools of Marketing 2.0,” wrote Karp, “even a service like ViTrue will become an unnecessary intermediary.” — Tags: Social Media, Marketing, ViTrue Add to document.write(”Del.icio.us”) | DiggThis | Yahoo! My Web | Furl It Bookmark WebProNews - View All Articles by David A. Utter Receive Our Daily Email of Breaking eBusiness News About the Author: David Utter is a staff writer for WebProNews covering technology and business. More top_news_top_news Articles Contact WebProNews […]
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.
Scott Karp has this nice post on the role of intermediaries if this trend gains traction: 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
[…] In The death of the intermediary, Scott Karp reports that the rapid rise in user-generated web content is opening up new ways for companies to connect with customers, by cutting out some of those traditionally involved in the advertising value chain. He asks: 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? […]
sind Marketing-Botschaften zu verbreiten. ABER: Markenwerte (genetischer Code etc) werden die User wohl nicht in die Videos integrieren… to be continued…. technorati tags: Marketing, 2.0, User, generated, Content, Unternehmenskommunikationvia Publishing 2.0
[…] Publishing 2.0 The Business of Publishing in the Digital Age « The Death of the Intermediary | Home | […]
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”?Publishing 2.0 May 12, 2006 | Permalink | Comments (0)
there. The market is much closer to negative than people think.†Scott has made many predictions foretelling radical change to media and advertising economics (here - “Consumers Are The New Medium”, here - “TV Industry Will be Downsized Online”,here - “The Death Of The Intermediary” and here - “What If Media 2.0 Is less Profitable Than Media 1.0 ?”, for example). Social Media Sites Start Snagging Big-Name Marketers Adage is reporting that social media sites start signing up big marketing names.
there. The market is much closer to negative than people think.†Scott has made many predictions foretelling radical change to media and advertising economics (here - “Consumers Are The New Medium”, here - “TV Industry Will be Downsized Online”,here - “The Death Of The Intermediary” and here - “What If Media 2.0 Is less Profitable Than Media 1.0 ?”, for example). Social Media Sites Start Snagging Big-Name Marketers Adage is reporting that social media sites start signing up big marketing names.
[…] It’s all about “consumers” and “advertisers.” No need for content. No need for an intermediary. […]
[…] Vitrue is a more formal way for brands to leverage CGM and interact with consumers, and get them to make their own ads. Or:ViTrue connects Brands with Consumers through our Video Infrastructure Tools and User Generated Content.ViTrue enables Brands and Consumers to engage in meaningful interactions through our world-class technology solutions.ViTrue defines the next generation of Brand and Consumer interaction from over 20 years of combined industry experience from our management team.Hmm, another nail in the coffin of traditional advertising? […]