Picking up on a post by Chris Messina on
Social Media "Attention Brokers" whose business model is then to push commercial messages to the aggregated audience:
Attention brokers, like Brightkite, therefore, need to remember their place in this ecosystem: they need to first be the friend to and advocate of the individual (their customer), and second, to the advertiser or brand. Companies that don’t get this prioritization right will fail (and is why, in some respects, Facebook continues to change its platform rules while drawing the ire of developers, because, in order to keep their users, they must ultimately continue to make their environment a safer and more trustworthy space).
And therein is the ultimate contradiction of Social Media Commerce - any commercial enterprise is ultimately the creature of its cash channel. Chris is sort of onto this when he writes:
Doc Searls calls this consumer-driven leverage VRM or “vender relationship management”. I’ve been a fan of the idea, but I think it falls down on the last word: management. Big companies are willing to devote thousands and millions of dollars “managing” their customers; individuals are not. But services like Brightkite and Facebook are beginning to change that by enabling us to leverage our real-time, real-world behavior as a gating apparatus, removing the “management” requirement of VRM, and allowing us to “flow with the go”.
Chris is on the button with the user not being prepared to put the time into "management", so it either has to be automated via algorithms, social filters, or massively simplified. But the main "contradiction inherent in the system" remains my top note though - Facebook and Brightkite are ultimately the creature of their cash channels, not the customer. Thus, for them to hand us the levers to their gates will be an (ultimately) impossible thing for them to do, because that chokes their revenue models off. You see, when Chris notes that:
As we invite these attention brokers into our list of recipients to whom we release increasingly contextualized and precise information about ourselves, we stand to benefit a great deal.
He is in theory correct, but in the real world such existing instruments benefit us very little - in that most loyalty cards etc give us very little benefit (as a % off) compared to the value they create. And it is hard to see what changes this dynamic today, as the relative market power of the individual (represented as the consumer NPV) has not changed. Thus when he notes that:
privacy, then, becomes a rational, economic instrument that determines whether a company gets to serve us well (based on knowing us better) or clumsily (as they make presumptions about us through circumstance rather than intentional disclosure).
He is again right, but again only in theory. The reality, as I note above, is that no one individual yet has the market power to extract anything like sufficient surplus back to themselves to make this a rational economic instrument. In order for this approach to work it needs an aggregation system which is on the user's side, and big enough to aggregate large numbers of users - and that means the aggregator ultimately must derive its funding from the user, not the commercial entity. (This, in VRMspeak is a Type 4 entity - a user agent - rather than what Brightkite and Facebook are structured as, which are Type 3 (vendor agent) systems albeit attempting to mediate a Type 4 experience).
Now, solving this problem would be extremely interesting, but it is not what Brightkite, Foursquare or Facebook are about. So who is? Well, right now there are three approached that can be used:
- Offset funded entities - something that makes its money from elsewhere, that chooses to take the user's side as an Attention Broker. Google makes money from millions of tiny Ads, an extension into Attention Broking in this scenario is not hard to imagine.
- Parallel funded entities - something that, by taking the user's side as an Attention Broker, makes its money directly. An obvious example here is something that makes money from carrying the transactions, the obvious ones being transport layer players such as Telcos or ISPs. The eBay model is another example, where the vendor "pays to play" on the platform, but here getting the balance right is a lot harder. Also credit cards could take this role, making money from a small % of financial transactions.
- Venture funded entities - use money from backers to make a market, to capitalise sustainably via one of the above methods in the longer terms. You could imagine using the asymmetric connection nature of Twitter, for example, to nail up the inbound commercial communications based on user data and permission given to the API. In simple terms I suscribe to a list called "good cheap pizza" and Twitter knows my location, so when I twt @feedmeseymour #pizza (for example) I get a bunch of twts of special offers from nearby (knows my location) good (rating 4+ from my twitterfriends), cheap (my setting), pizza (not #fried chicken).
(Update for clarity - The Twitter example serves to illustrate the probable Open endgame in my view - you don't need to be a social network, or a location based service or any "application layer" entity. All you really need is highly automated mediation at the infrastructure layer, and a flexible transport layer. )
All to play for then, as you can see - but my hypotheses tell me that its not the Brightkite's or Facebooks that are
necessarily going to win this game if - assuming its game on, of course - good Type 4 systems can be built. But, as Chris notes, the vendors will spend millions and millions of dollars on "Type 3" systems, so its no slam-dunk and we could sell see a continuation of today's world.
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