Re: [projectvrm] Is MeCommerce Economically Viable for Marketers?

[Doc Searls < >]

On Jun 9, 2014, at 2:22 AM, Graham Reginald Hill 
<
 >
 wrote:

> Hi Doc
>  
> Another day and another vote by a mega-Co for more use of contextual 
> marketing. This time it is American Express that has decided to move 100% 
> of its digital marketing to a programatic, real-time bidding model; where 
> algorithms in effect use data about customers to bid for the right to serve 
> a single ad, to a single customer, looking at a single website, at a single 
> moment in time.
> <http://wallblog.co.uk/2014/06/06/the-implications-of-american-express-going-100-programmatic/#ixzz347NkMSmh>

That's a very buzzy article that sounds like a business talking to itself:

"From a quality perspective, much time and investment been made – and 
subsequent innovation achieved – in creating an incredibly diverse (if 
fragmented) digital ecosystem.

"Sexy ad formats, sponsorships, native executions and so many other 
imaginative applications of digital can’t and frankly won’t always fit into 
the RTB ecosystem. I think that’s ok, after all, the constant innovation 
that’s achieved relies on agencies and brands’ willingness to explore new 
exciting offerings. If RTB is to become the sole source of digital media 
across the board then there’s a very real prospect of stunting that 
innovation in the industry.

"However, does our inability to actually execute certain kinds of media 
in-house mean we can’t reduce the friction that exists in the buying and 
reporting process for 3rd party solutions? Absolutely not, and that’s why 
programmatic direct is an equally important area of innovation that we’re 
only beginning to scratch the surface of now. Programmatic direct aims to 
connect publishers direct system with buyer’s tools to improve the process of 
buying reserved or packaged inventory."

I know what programmatic is, and that RTB is Real Time Bidding.  Beyond that 
it's all jive.

It ends,

"Efficiency should benefit everyone. Buyers spend less time consolidating, 
sellers spend less time administrating. Thus, the industry can continue to 
focus on building innovative products that allows brands to better engage and 
connect with their audiences. The key here is allowing programmatic 
innovation to run its course and resist trying to push square pegs into round 
holes. There’s really no need to push all media through the existing 
technology that we have, give it time and before too long we’ll see the right 
type of programmatic solution emerge."

I'm lost, but I'm not sure I want to be found.

> As mega-Cos evolve from traditional advertising through direct marketing 
> and digital display towards contextual marketing, their insights about 
> customer behaviour and their ability to serve marketing micro-interactions 
> to them increases hugely. The more contextual information a mega-Co has 
> about its customers the more they can accurately imply what the customer is 
> trying to do at that moment in time. If they can more accurately predict 
> the customer's behaviour over the next few seconds or minutes they can 
> target just those customers with micro-interactions that make sense for the 
> customers as well as for marketers.

Do you want this, Graham? I mean, as a human being. Are you that know-able? 
And do you want to be micro-targeted in real time, by machines that think 
they know you, selling you stuff? 

Does any customer want it? And does it actually work?

Hell, I'm an American Express customer (meaning I have one of their cards), 
and I can't think of a damn thing I want to hear from them. If one day on my 
phone they tell me I'm about to pass a store that has some bit of merchandise 
I might want, and it's clear that their guess about that is based on 
micro-knowing me, I'm more likely to be creeped out and pissed off than 
appreciative — especially since I'm not buying stuff all the time.

FWIW (and I think it's a lot), I know successful people in the RTB business 
who have told me, point blank, that it mostly doesn't. They don't want to 
talk about this publicly because they're making too much money at it, and 
they don't want to show their hand as they plan to move beyond it toward 
innovations that don't waste time and money on constant guesswork that 
customers mostly don't want.

> Contrary to popular opinion, no marketer wants to market to customers who 
> are not interested in their wares.

Then how do you explain the Niagara of marketing messages under which we are 
all drenched, pretty much constantly? Or why that opinion is popular?

> As contextual marketing's accuracy improves and its cost decreases, the 
> incentive for mega-Cos to think about MeCommerce with all its built-in 
> inefficiencies quickly falls to zero.

It's pretty much at zero anyway. What's the loss?

> Why would a marketer plump for a MeCommerce model

Who's asking them to?

> where they mighht give-up the right to interact with any customer they 
> thought might be a good fit for their wares,

And who's asking them to do that?

> where the number of potential customers would likely be much smaller and 
> where there is no guarantee the customers would even be profitable. It 
> would be commercial suicide! 

I'm lost with that one.

VRM, by whatever name, is also not aimed only at marketers.

> I have yet to see a general, viable, economic model for MeCommerce that a 
> marketer couldn't pick apart in a few minutes.

Let them pick. It's not for them anyway.

> Isn't it time that one was laid out in this forum?

Tell us what you think a "viable economic model" is. Meanwhile, I encourage 
others engaging in VRM businesses to explain, if they like, how they'll help 
customers and make money. 

> Best regards fron Edinburgh, Graham

Likewise from New York at 3:35am.

Doc

>  
> -- 
> Dr. Graham Hill
> 
 
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> 
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> http://www.optimapartners.co.uk
> 
> Senior Associate
> Nyras Capital
> http://www.nyras.co.uk