As a newbie to the group, I am wondering if there is a role for the big ID providers (google, etc.), branded ID companies, and/or the OpenID community as allies (if that isn't already happening)?
On Apr 15, 2011 7:05 AM, "Judi Clark" <
">
> wrote:
> A couple of points:
>
> Katherine, I don't think credit cards are "saving" anyone money as much
> as they've found an additional revenue channel which is to sell the
> data. They get their 2-5% transaction fee AND more.
>
> Doc and others have long been working on the language. We tried to get
> Craig Burton involved a couple of years ago. The fact is that this is a
> chaotic and fractal space, and the CRM side knows this. They try to
> simplify using existing concepts. That's not (yet) wrong, but the real
> picture has yet to be painted. Many of us understand this intuitively,
> but until we have a working set of colors, we'll all continue struggling
> with our black lead pencils.
>
> judi
>
>
> On Fri, 2011-04-15 at 08:46 -0400, Katherine Warman Kern wrote:
>> Doc,
>>
>> There are many different issues raised in your responses below. But I think
>> the most important is: If 4th party is the term then clearly establish what
>> the criteria for using that term is so you can call out those who attempt to
>> co-opt it for being a fraud and be willing to endorse anyone who meets the
>> standard.
>>
>> A company which shares individual's data with businesses on their behalf and
>> one which has a conflict of interest will look the same, superficially. How
>> will we know the difference?
>>
>> The assumption behind Cluetrain is that when people are free to communicate,
>> the truth will rise to the top.
>>
>> But the internet has proven that eventually, by necessity or by greed, money
>> enters the market and without any rules or framework (i.e., a purely free
>> market), the natural balance between buyer or consumer of information and
>> seller or publisher of information is corrupted.
>>
>> For example, one of the biggest businesses on the internet is the selling of
>> words. Which means they can be co-opted and corrupted. Especially words
>> that the general public doesn't really understands the meaning behind.
>>
>> The only alternative is government regulation, but the risk is that the deep
>> pockets will influence policy to protect current conflicts of interest - not
>> incent companies with integrity to serve the buyer who pays them. For
>> example, I'm not sure the Kerry bill isn't heavily influenced by businesses
>> who wish to protect conflicting revenue streams.
>>
>> I respond to your comments below.
>>
>> K-
>>
>> -----Original Message-----
>> From: Doc Searls [mailto:
">
]
>> Sent: Thursday, April 14, 2011 10:20 AM
>> To: Katherine Warman Kern
>> Cc: Project VRM
>> Subject: Re: [projectvrm] 3rd party vs. 4th party
>>
>> On Apr 14, 2011, at 7:53 AM, Katherine Warman Kern wrote:
>>
>> > Credit cards are paid a fee by individuals. And the credit card companies
>> profit by selling their data.
>>
>> They also get a piece of the sale. That's a cut out of the seller's side in
>> most cases. A seller makes less on a credit card sale than on a cash sale.
>> One could say for that reason that credit card companies are fourth parties,
>> in the sense that they help the buyer. I have been told this by people in
>> the business, by the way.
>>
>> They also protect both the buyer and seller from fraud, and offer other
>> benefits (e.g. insurance) to both sides.
>>
>> >> They charge the seller a transaction cost and the seller builds that into
>> their pricing which is paid by the buyer. So the buyer pays for it all.
>>
>> >> If they didn't guarantee payment, credit cards would not exist. It is a
>> cost of doing business for them to guarantee payment. In my opinion, saying
>> that they protect the buyer and seller from fraud is marketing puffery.
>>
>> I don't know enough about card companies selling data. Fill us in on the
>> particulars here.
>>
>> >> Hypothetical based on the observation that credit cards have been in the
>> direct marketing business from the start. Do you remember when you used to
>> get all that stuff in the envelope with your bill? Man was that annoying.
>> But at least it was transparent. Now, it is my understanding that they sell
>> your name on a mailing list characterized by how they predict you will
>> behave in the future based on historic purchasing patterns. Since this is
>> not transparent I have no concrete evidence. But with some digging, I
>> suspect there is.
>>
>> > They rationalize this conflict of interest by saying they can keep
>> consumer fees down by selling personal data.
>>
>> Evidence? Not saying there isn't any. I'd just like some. I'm writing a book
>> right now, and this kind of information would be very helpful.
>>
>> >> Hypothetical, based on how business, in general, rationalizes (read:
>> talks to themselves about) monetizing personal data by arguing that it is in
>> the customer's best interest. The reality is it is a lot easier to monetize
>> the data to sell it to a few businesses than use the data to offer a service
>> that one must convince millions of people to pay more for. But it would be
>> great to get some actual quotes in the press or from lobbyists.
>>
>> > And they spend a lot of money on lobbyists to tell government regulators
>> this.
>>
>> Sure.
>>
>> > A fourth party doesn't improve this.
>>
>> How not? If a credit card company doesn't sell data (or, only sells data
>> with the customer's permission), and otherwise distinguishes itself by
>> working for customers in particular, rather than for other parties, why not
>> distinguish their position with a label? That's all the fourth party label
>> does.
>>
>> >> So a credit card company can be a 3rd party and a 4th party? Or are you
>> saying, as in states where real estate agents have to disclose if they are a
>> buyer's agent or a seller's agent, that they choose between one or the
>> other? How does the credit card company set up a wall between their
>> traditional business, serving two masters, and this buyer's agent product?
>> How does such a company maintain accountability to the buyer or how does a
>> government agency enforce living up to this promise?
>>
>> > I want a better third party that serves one master and has no conflict of
>> interest, making more regulation less urgent, and shifting corporate dollars
>> from paying lobbyists to serving me better.
>>
>> I suggest that would be a fourth party.
>>
>> > I would pay more for a credit card that pledges to serve one master. I
>> would pay more again if they made it simple and even kind of fun to make
>> sense of my own data. I'd pay more again if they used all the consumer
>> research expertise they have to help me connect with peers and empower us to
>> leverage our information as a group in the marketplace. I would rather have
>> a relationship with my peers and relate with business as part of a group,
>> anonymously.
>> >
>> > And I would cancel my other credit cards.
>> >
>> > Net: I want a better 3rd party that serves one master, has zero potential
>> for conflict of interest.
>>
>> Is "better third party" a good-enough label for that different kind of
>> credit card company? Maybe it is.
>>
>> >> I think what's more important than the word are the specifics: the
>> operating principles, the method for accountability, and the business model
>> to assure zero potential for conflict of interest. I don't care if it is an
>> existing company or a new one. But if they are willing to live up to these
>> standards, I would trust them more than all the folks make empty promises or
>> offering free services with no transparent way to pay the bills.
>>
>> > The marketing campaign would be very simple. "No Hidden Agendas" and an
>> image of a one sentence terms of use and privacy policy statement.
>>
>> Sure. But marketing by companies and categorizing them for the purposes of
>> understanding them are different things. My interest here is making VRM
>> easier to understand, in part by bringing a customer-based understanding of
>> business to the fore. New words and phrases help for that. "Web 2.0."
>> "Tipping point." "Open source." "Really Simple Syndication." None of those
>> were in common use, or meant much, before 1998. Now they're unavoidable.
>>
>> >> As discussed above, as long as these words can be bought they will be
>> co-opted for marketing purposes - especially new words which are popular but
>> the general population really doesn't understand.
>>
>> The hardest problem we've had to face as a community, so far, is the
>> assumption that improving business as usual is the best that can be done, or
>> good enough. We've seen that with CRM, and now with Social CRM.
>>
>> I've attended two conferences recently wher smart and hip gurus and startup
>> CEOs sang the praises of Cluetrain, and saluted me personally, then took
>> some of what we've been saying in the VRM community about the rise in
>> personal empowerment in the marketplace -- and went on to say that "social
>> media" alone was behind this power change, and that what's needed next is
>> "better personalization" by the vendor side, and by third parties mostly
>> helping the vendor side.
>>
>> So we have work to do here. It's the same work we were left with when
>> Cluetrain failed its full mission.
>>
>> We thought, when we wrote The Cluetrain Manifesto, that "markets are
>> conversations" and "we are human beings and our reach exceeds your grasp"
>> both made clear that free customers were more valuable -- to themselves and
>> to vendors -- than captive ones. Instead understood Cluetrain came to to
>> mean three things:
>>
>> 1) Marketing (and not just sales) now has to talk directly with customers;
>> 2) Social media, because it's conversational, will improve the way
>> companies deal with customers; and
>> 3) Social CRM is what CRM needs to make "relationships" with customers
>> real.
>>
>> In other words, what we got was better business-as-usual. Half a loaf.
>>
>> >> I agree these ideas are half-baked attempts to co-opt the vision of
>> Cluetrain. I do not think they are transparent and all have a conflict of
>> interest problem. What is needed is a manual for how business and customer
>> can contribute to and benefit from the vision of Cluetrain.
>>
>> Our challenge is to prove that free customers are more valuable than captive
>> ones, that freedom is native to individuals and not conferred by the grace
>> of companies, and that dependency is fine only when it goes both ways in the
>> form of agreements between parties of equal power.
>>
>> That means we need whatever it takes to become independent on our own, to
>> break out of captivity, and to become better customers in the process.
>>
>> As that happens, and as business changes, we will see new categories emerge,
>> along with new code, new means of engagement, new norms, and new names and
>> labels for this new stuff. "Fourth party" is an early move in that
>> direction. The fact that some companies already want to make that
>> distinction, and either look for fourth parties to emerge, or to become a
>> fourth party themselves, is meaningful. Could be we won't end up using that
>> term, and a better one will come along, or -- as you suggest -- we won't
>> need it. But as long as "fourth party" is current in conversations today, it
>> helps to get the best possible understanding of it.
>>
>> >> there are individuals motivated to take the time and deal with the
>> frustration of figuring out how to do it on their own. But most people want
>> a service which is transparently dedicated to serving their interests.
>>
>> >>This is what I have described here.
>>
>> >>Perhaps one way to realize the vision of Cluetrain is for those who want
>> to figure it out commit to what it looks like by outlining the operating
>> principles, business model, and method for accountability and then build a
>> community of people willing to pay for this service. Then you have something
>> predictable, scalable, and worth changing business models or investing in
>> from scratch.
>>
>> Doc
>>
>> > Katherine Warman Kern
>> > 203.918.2617
>>
>>
>
> --
> Judi Clark, Digital ID Coach
> Helping you pull yourself together
http://digitalIDcoach.com
>