Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.


 
Friday, November 09, 2007

Research Note: On Selling Out (The So-Called Fansumer)


It's funny how incentives shape outcomes.

Consider Forrester's note about "fansumers", launched hot on the heels of the Facebook/AdSocial/etc announcement.

Did anyone stop to think about the most important economic actors involved in all of this - consumers?

I guess not. Because here's a great comment (from here) that sums up their mood:

"there's no way I want to become a 'fansumer' of advertisers on facebook and people just don't need to know what I've searched unless I email them the link or choose to post it on my profile.

blocking program 1
facebook 0

it's a social networking site, not a social advertising site."


The word consumer is nasty enough - with all the implications of helplessness and the assumption of stupidity it carries.

Fansumer, I think, is even worse - as this commenter points out.

It utterly - and completely - misses the point of connected consumption.

Consumers connect with each other - not with brands.

Which brings us to a set of deeper issues. There are foundational problems with the concepts execs are using to make sense of the next mediaconomy.

Here's what happens when we think about "engagement": we think consumers want to be fansumers, on the assumption that they wanna connect with brands. Here's what happens when we think about "relevance": we bombard consumers with ads on the assumption that it will be good for them.

Neither is true. There is, as I've pointed out before, an existence proof confirming this: if consumers loved brands, no one would have to advertise. If consumers loved ads, firms wouldn't have to pay for them. If consumers trusted firms, brands wouldn't exist.

What do those simple economic truths tell us?

There are no fansumers. There are people who love products. But very rarely will they want to be pimped out and put to work on Facebook's (or anyone else's) digital streetcorner.

And those who want to - well, those are exactly the guys you don't want talking about you and your brands: classic adverse selection.

So why do we keep getting it wrong?

For my money - it's because everyone, from Forrester, to VCs, to journalists, to developers, has a huge incentive to keep buying into (and producing) the hype. And that inures all of us to a deeper understanding; we accept concepts like "engagement" and "relevance" - though they're largely meaningless and strategically vacuous.

What we really need are better foundations, concepts which reflect economic reality. And building those takes much more critical thinking - not hype.

-- umair // 11:12 AM // 10 comments


Comments:

Thanks for your honest and balanced viewpoint.

Let's look behind any hyper or buzzwords and look at the real opportunity.

If you read carefully in my (I know, too long) post, I indicate some real upsides for people.

If people were able to recommend products to their trusted peers, advertising as we know it could change, be more accurate, and less invasive.

It comes down to how it's deployed, and how people react to it.

Again, good thoughts, let's continue the conversation.

For a more radical approach, take a look at what Doc Searls is doing with the Intention Economy and VRM. I'm chatting with him about what it could mean.
// Anonymous Jeremiah Owyang // 12:09 PM
 

@ Jeremiah...thing is, I can already recommend products to my trusted peers - I just tell them.

I don't need / want anybody else horning in on that transaction.
// Anonymous alanp // 3:00 PM
 

Your criticism of this play has the advantage of being subject to a metric:

Will FB users "friend" brands?
// Blogger Marcus // 5:33 PM
 

Hey kids! Make Pepsi your friend and win free ringtones!!!!!
// Blogger phil jones // 8:38 PM
 

Users are willing to give up privacy and accept advertising if they get commensurate value. I do not think the value is there yet for users, but let's see.

Remember the reaction to the News Feed. Users hated the loss of privacy at first, Facebook backed off a bit, and now the News Feed is one of the stickiest features driving usage.

Watch for the same thing here. There are components of Facebook's ad announcements that make sense and can be valuable for users, some that are less so as currently implemented.

As Jeremiah has always pointed out, it's always about how its deployed...
// Blogger taylor // 9:12 PM
 

I completely agree with your comments on the "fansumer," but I think you may be a bit too harsh on brands per se. Brands have the power to "create customers" (in the Peter Drucker sense) when they are developed as value-based programs and platforms for customers. This is a post-product brand chain that completes and extends the original value chain, using innovation and customer collaboration to create new streams of value.

Granted, most current brands exist as empty symbols and stylized sales stimulants, and fall far short of this productive level. On the plus side, digital technologies make new brand innovations very accessible, and potentially disruptive, as brands are built from the customer up.

Customers can connect with brands--when brands deliver value that customers can use, and when brands are tools for getting things done.
// Anonymous Brian Phipps // 11:48 PM
 

hey jeremiah,

thanks for the comment. let's keep the discussion going.

marcus,

that's the wrong metric - i have no doubt facebook users will friend brands. but will they accept viral spam from friends about *their* friendbrands?

ie, exactly what phil's saying.

taylor,

i couldn't agree more. in fact, i was one of the first people to point out the relationship between privacy and value (a long time ago).

be careful thinking about the feed though - there's a (big) difference between passive and active media consumption.

brian,

that is a killer comment.

you are talking about how consumers *should* connect with brands, and i agree with you mightily. but those activities require a very different kind of connection than what marketing droids typically mean by "engagement" and "relevance" - see the point?

thx for the comments guys.
// Blogger umair // 5:09 PM
 

Where Forrester is wrong is in forgetting that consumers trust their friends' recommendations because they believe their friends have no hidden agenda. When they do have one Facebook becomes MLM 2.0, and friends' opinions (on Facebook at least) aren't trusted anymore.
// Anonymous Elad Kehat // 3:22 PM
 

"What we really need are better foundations, concepts which reflect economic reality. And building those takes much more critical thinking - not hype"

Frankly, this is the bit that really resonates with me. We need to focus on innovating against the status quo and to re-engineer value chains to deliver more value to the "(Whatever)sumers".

Think bottom-up and not top-down. Build more "Bazaars" not "Cathedrals".

The "(Whatever)sumer" has clawed back their rightful powers. The Docs VRM concept is very relevant here and definitely timely.

Take the "(News)sumer" as an example. They did not bring down the news industry by intent. They just realized (and progressively have gathered unstoppable momentum) that they did not need to be done unto and found, demanded or created alternatives to remedy their condition.

They are now evolved and empowered "(Smart)sumers". They will revolt or simply ignore attempts to shoehorn them into "Fansumers", "Friendsumers" or "(Whatever)sumers" ... that is, unless they see and receive clear and quantified value form any advert, offering, system, network or other mechanic.

@AAinslie
// Blogger Alexander Ainslie // 2:12 PM
 

"Neither is true. There is, as I've pointed out before, an existence proof confirming this: if consumers loved brands, no one would have to advertise. If consumers loved ads, firms wouldn't have to pay for them. If consumers trusted firms, brands wouldn't exist."

No, I think you're quite off. If consumers despised brands, then why such loyalty? Why are certain women willing to spend $1000 on a LV handbag and not a Coach? Why do 2streetwear kids spend all their available income on limited edition Nike dunks? Brand fetishism exists, and it's a very powerful force.
// Anonymous Douglas Haddow // 6:19 PM
 
 

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