Re: [projectvrm] Theory of peak advertising

[Don Marti < >]

begin Nathan Schor quotation of Sun, Dec 15, 2013 at 07:39:12PM -0800:

Comments inline.

> The 'Theory of Peak Advertising' thread, initiated back in October 11 by Doc
> pointing to an interesting paper  <http://peakads.org/images/Peak_Ads.pdf>
> http://peakads.org/images/Peak_Ads.pdf, has contained many thought-provoking
> comments, especially lately when it was resurrected by Dan Marti last
> Wednesday (12/11). However those recent responses, although interesting,
> didn't directly address the points Don asked in that post. In particular
> these two:
> 
> 1)     I'm still not seeing how users selling their information to
> advertisers is supposed to work. If a vendor is willing to pay me some price
> for my information, then in order for me to accept it, that price has to be
> greater than the intent information plus the transaction costs to me of
> selling the information.
> 
> 2)     Actually, I have an incentive to spoof my intentions. If I can
> convince a vendor that I'm not interested, or can't afford the product at a
> given price, I might get a better deal.
> 
> Both are legitimate issues we should be able to address explicitly if we're
> going to commercialize VRM. 
> 
> As I read Don's first issues, he's asking what's the incentive for buyers to
> participate in a dollars-for-data exchange as opposed to the way it's done
> now via broadcasting and ensuing 'negotiating' for deals and discounts
> (whether outright price deductions or by proxies such as coupons). 
> 
> As many of us have pointed out, the obvious key to motivating such an
> exchange is for both transaction parties to receive enough value to trouble
> themselves to participate in the cash for information trade. 
> 
> What would it take to deliver this incentive? 
> 
> One way to answer that question is to re-define purchasing intent from the
> prevalent non-structured (and thus, ambiguous) keyword definition prevalent
> now to one that is aligned with VRM's principals. Instead of the
> seller-centric keyword definition, we replace it with one that is not only
> equally commercially viable, but also sufficiently valuable to stimulate
> both transaction parties to engage in an exchange that is patently fair to
> each side. Such mutual incentive would exist if we explicitly define
> purchasing intent as consisting of four components - what, which (brands),
> when, and where - consumers aspire to acquire. 

Are these "consumers" anything like "people"?

> Since that comprehensive quartet delivers all the information a seller would
> want from the most coveted of consumer groups - those self-declared to be
> in-market - merchants will pay more for such detailed data, thus encouraging
> buyer's to offer it; hence, instigating a positive mutually-beneficial loop.
> In other words, because this four component definition is itemized, detailed
> and complete it packs enough value to inspire both sides to engage since
> each obtains immediate and noticeable amounts of the benefit they
> respectively value the most - cash for customers and transaction efficiency
> for vendors. 

If I want to buy a $350 DeWalt DC927, I want it before
Saturday, and Nathan's Tool Emporium is willing to pay
$25 for that information, doesn't that mean that the
cash on the barrelhead price they'll accept is $325,
or actually a little less because of the transaction
costs?  If not, why not?

> Don second issue raises another crucial problem: 'Actually, I have an
> incentive to spoof my intentions.' That inducement to game the system is
> readily solved if the buyer is only paid for their data after the sale takes
> place. This simple resolution also strongly motivates sellers, since with no
> out-of-pocket expense they take no risk in bidding for the data. In fact,
> they can use the revenue from the sale to pay for the data that initiated
> the transaction. With no risk for either party, it's reasonable that both
> sides would engage since they each gain a substantial reward.

What if no vendor offers me a deal that I choose
to accept? Who still has my information at the end
of the process?  Am I taking the risk of giving up
my intent information for nothing if I don't get an
acceptable deal?

> The four factor definition may not work for all goods, but for those that
> represent substantial purchases - say over $100 - it carries more than
> enough value to inspire both transaction parties.  

If I want to buy a midrange device, I'll try putting
in that I intend to purchase the low end unit.
I bet that a vendor will offer me some kind of deal
to upsell me to the product I really wanted in the
first place, and I'll get a better deal than if I
revealed my true intentions.  At least I'll get free
shipping out of it.

> Besides the economic incentive, there is another important but reason that a
> dollar-for-data exchange provides a compelling alternative to
> seller-dictated transactions. There is discernable movement among sellers
> toward forming a more honest and open relationship with their customers. An
> increasing number of books, articles and web sites point out how the
> inherently inauthentic way sales transactions presently are conducted
> damages the meaningful and long-term customer relationship necessary for a
> sustainable business. (* References below) 
> 
> Sellers paying buyers a fair value for what is inarguably useful information
> is clearly much more authentic and trustworthy than the alternative of
> discounting which is deceptive and disingenuous, signaling that a seller is
> dripping with desperation. Because an intentcasting initiated data exchange
> bypasses the innate inauthenticity of discounting, it delivers considerable
> non-monetary value. And all that in a transaction that entails no risk for
> either party. 

Discounting has valid uses. Most manufacturers can't
build everything to order or perfectly predict demand.
Some winter coats always end up on the discount rack
in the spring, for people who are willing to store
them until needed in exchange for a lower price.

> Given the ongoing negative publicity commercial surveillance is receiving
> and the rampant click fraud within ad tech, the timing is perfect for an
> online dollars-for-data facility. Acting as a 4th party, it permits buyers
> to exchange a valuable cognitive asset they own - the comprehensive (and
> thus, more valuable) version of their purchasing intent data - for cash from
> vendors eager to benefit from the huge increase in efficiency such detailed
> information would deliver. 
> 
> * (For our purposes, this trend is best expounded in
> <http://www.amazon.com/Extreme-Trust-Honesty-Competitive-Advantage/dp/159184
> 4673/ref=sr_1_4?ie=UTF8&qid=1386864697&sr=8-4&keywords=rogers+pepper>
> Extreme Trust: Honesty as a Competitive Advantage by
> <http://www.amazon.com/Don-Peppers/e/B000AQ8U5Q/ref=sr_ntt_srch_lnk_4?qid=13
> 86864697&sr=8-4> Don Peppers and Martha Rogers. What makes this book
> especially notable are its authors, whose previous works were instrumental
> in establishing CRM as the preferred approach to conducting business.
> Although they don't mention VRM explicitly, their thesis surely points
> toward demand-side commerce. (For more on this movement that hasn't received
> much attention here see also the Edelman Trust Barometer
> <http://www.edelman.com/trust> www.edelman.com/trust and 'Rethinking Trust'
> Harvard Business Review June 2009 which describe a neural basis for trust
> embodied in the transmitter oxytocin.)
> 
> Nathan Schor 305.632.1368 
> 
 
>  
> <mailto:
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> 
> 
>  
> 

-- 
Don Marti                      +1-510-332-1587 (mobile)
http://zgp.org/~dmarti/        Alameda, California, USA