This is an unpublished piece I just found. It was last modified on September 25, 1999, less than a month after Chris Locke, David Weinberger, Rick Levine and I finished writing The Cluetrain Manifesto (which came out in January 2000), and a month before @DaveWiner got me started blogging. I think it was an early draft of a Cluetrain chapter that I never got around to repurposing. Regardless, it’s still a good time capsule of what I thought about the present and future of tech at that time, and still right in many (perhaps most) respects. Sections† Convergence Market conversations Dividing Labors Goodbye consumers, hello customers Funding illusions Marketing returns The killer service A choice, not an addiction Biography Notes Convergence “A key difference between a dialogue and an ordinary discussion is that, within the latter people usually hold relatively fixed positions and argue in favor of their views as they try to convince others to change. At best this may produce agreement or compromise, but it does not give rise to anything creative…What is essential here is the presence of the spirit of dialogue, which is in short, the ability to hold many points of view in suspension, along with a primary interest in the creation of common meaning.” — David Bohm & David Peat The resemblance between TV and the Web is only screen deep, yet convergence between the two is inevitable. Television has been the most pervasive and powerful social influence through the whole second half of the 20th Century, and an enormous economic influence as well: a $45+ billion industry in the U.S. alone , directed on purpose to the attention of everybody. The Web is the most personal and interactive medium since the telephone, as well as the first in a position to facilitate direct commercial relationships between every vendor and every customer, plus every link in every value chain, from first source to final customer. 1 Both technologies lend themselves to projection, so it’s easy for us to project the assets of one across the liabilities of the other. Coming from TV, it’s easy to see a huge advertising market on the Web, just from TV’s spillover. Coming from the Web, it’s easy to see TV’s channels and program sources as links suitable for browsing, and content ready for downloading on an as-wanted basis, preferably for free. But fixed positions have two problems here. First, the Web is growing and changing to fast for easy characterization, and changing the world along with it. Second, the terms by which we understand familiar media — especially television — limit our understanding of the Web’s potential, especially as it converges with those media. way These problems argue for the kind of dialogue Bohm and Peat suggest: one that holds open any number of viewpoints, looking for a common meaning that isn’t here yet. So if you’re open to real dialogue, this is your chapter. You’ll read things here that you won’t find anywhere else, and your views will be challenged by them. I know, because I’ve held many — perhaps all — of the same views. My own career path has wandered from writing to publishing to radio to advertising to marketing, while staying involved in all those professions. What I’m looking for, and want to share, are not self-evident truths for all of us to hold, but rather truths that will become evident as convergence proceeds. This chapter suggests a few candidates. It will succeed if it gets us thinking and talking about them. Market conversations “Conversation is the socializing instrument par excellence.” — Ortega y Gasset Business is social. We can’t do it without other people. Markets are the societies of business. Every market, from the streets of Tashkent to the Web pages of Amazon.com, is a bustle of social activity. It may not be live talk, but if the market is alive, people are talking. And if it’s growing, people are talking a lot. That’s what “buzz” is all about. Hot markets are abuzz with both talk and business. The buzz around Amazon.com is huge right now, even though almost nobody says a word when they buy a book from the company’s Web site. The buzz happens inside Amazon, and inside the book-selling market that Amazon radically changes. Amazon isn’t changing that market just by adding a new channel, but by adding a new and interesting subject to the bookselling conversation — and by facilitating much of that conversation on the Web, which is the most conversational medium since the telephone. Today Amazon sells $400 million worth of books per year on the Web, and Barnes & Noble sells $100 million. That’s a $500 million business where four years ago there was nothing. And all of it is to the bookselling business we knew before 1995. 2 additional So the bookselling market grows along with the bookselling conversation. The growth is positive sum, and accellerates in pace with growth in both old and new sales channels. A similar thing happened to the bookselling conversation a few years earlier, when Barnes & Noble rolled out its superstores. The business changed radically, almost overnight. Independent book stores were hurt in some cases, but on the whole the market not only grew but became much more active and interesting, and far less hidebound. Yet the press treats the bookselling busines as a battlefield. Which it is. Between Barnes & Noble, Borders, the warehouse stores, and the countless independent bookstores, competition is fierce. Tempers boil over into lawsuits. Right now the American Booksellers Association, representing independent book stores, is suing Barnes & Noble for allegedly predatory business practices. It all makes great copy. So what we have here are two metaphors for a marketplace: 1) a conversation; and 2) a battlefield. One is positive-sum and the other is zero-sum. One is virutal and the other is physical. One uses AND logic, and the other uses OR logic. Which does more justice by the Web? It’s no contest. The conversation metaphor describes a world exploding with positive new sums. The battlefield metaphor insults that world by denying those sums. It works fine when we’re talking about battles for shelf space in grocery stores; but when we’re talking about the Web, battlefield metaphors ignore the most important developments. There are two other advantages to the conversation metaphor. First, it works as a synonym. Substitute the word “conversation” for “market” and this fact becomes clear. The bookselling conversation and the bookselling market are the same. Second, conversations are the fundamental connections human beings make with each other. We may love or hate one another, but unless we’re in conversation, not much happens between us. Societies grow around conversations. That includes the business societies we call markets. Reese Jones, the brain researcher who founded Farallon Computing (now Netopia), said “conversation is the fundamental basis of all social interaction. People are built to talk one-to-one, not many-to-many. The human brain can only pay close attention to what only one person says at a time. Even when one person speaks to a large group, the relationship is always one-to-one, speaker to listener. For that speaker and each listener, it’s half of a personal conversation.” That’s why Jones wanted to make “software for telephones.” He thought the telephone was a much better platform than the computer for the social activity we call business. Saying this in 1989, he was way ahead of his time. Because now we do have software for telephones. It’s called the Web. The Web is growing at an explosive rate: from zero to fifty million domestic users in just four years. It took television thirteen years to reach the same number of viewers. And it took radio forty years to reach that many listeners. Business growth projections are even more wild. The U.S. Commerce Department expects business on the Internet to grow from $8 billion this year to $327 billion by 2002 . It was approximately zero in 1994. 3 4 The Web is not a market. It is a new technological development that expands the conversations in existing markets, and in some cases adds a new sales and distribution channel. So the Web is not one conversation, but a place that invites conversations, each with its own vocabularies, interests, prejudices and standards. many Let’s look at standards for a moment. In every business that relies on technologies, there are endless arguments about standards. The Web is no different. But the standards that matter most are the ones we talk least about, because we don’t even know they are there. Network guru Craig Burton says, “There are three kinds of standards: , and . But the third is the one that really matters, because it’s the hardest to change — and therefore the most standard. standards are the habits of societies and industries. They are so ingrained that almost nobody can even imagine any other way.” de facto de jure de rigeur De rigeur 5 What makes standards “so ingrained that we can’t imagine any other way” is that they are common sense to those societies. “Common sense has a conceptual structure that is usually unconcious,” says George Lakoff, who is Professor of Linguistics and Cognitive Science at UC-Berkeley and the leading thinker in both fields. “We are even less conscious of the components of thoughts — concepts,” he says. And all our concepts are metaphorical. Thanks to metaphor, we understand everything in terms of something else. de rigeur 6 7 Take life. We talk about life all the time; but do we bother to see we talk about it? Almost never. Life is a matter of common sense. Yet our most common conceptual metaphor for life is . This is why we speak about life — unconsciously, of course — with travel metaphors. Birth is “arrival.” Death is “departure.” Choices are “crossroads.” Purposes are “destinations.” We get “sidetracked” or “lose our way” if we don’t “know where we’re going.” Our counselors give us “guidance.” We say “he has a long way to go,” or “she’s come quite a ways.” We could fill this whole book with examples of travel metaphors, just for the subject of life. how a journey So the standard conceptual metaphor for life is a journey. Without even thinking about it, we all agree. de rigeur We don’t all agree about the Web. Right now we understand the Web in terms of at least five different concdptual metaphors. Each of these constitutes a different market conversation. Let’s look at each of those conversations and their underlying conceptual metaphors. None yet are “common sense,” yet all of them would like to be. As convergence progresses, one or two will emerge as the connon sense (and therefore _de rigeur_standard) understanding of the Web. The conversations it supports should define and limit the markets that emerge there as well. 1) The publishing conversation Publishing is the original Web metaphor — the one used more than any other by the thinkers and developers who created the Web. Here we “write” or “author” “hypertext” “documents,” “content,” “pages” and “files” for “visitors” to “browse,” occasionally marking locations with “bookmarks.” The publishing business is quick to adopt this vocabulary, of course, and to publish its own work extensively on the Web. Newspapers and magazines are published whole on the Web, complete with “sections,” “stories,” “features,” letters to editors and the rest of it. There is also an within this conversation. Here we “design” pages “creatively,” with “graphical elements” and “high production values.” Still, we’re publishing pages. So, by this conceptual metaphor, . art topic 8 the Web is a publication . 2) The real estate conversation The creators of the Web also borrowed heavily from the real estate vocabulary. Thus everything on the Web is a “site,” a “home” or a “location” with an “address,” which we “build,” perhaps with the help of a “developer.” By this conceptual metaphor, the Web is real estate (or a real estate development). Ironically the real estate trade has been slow to adopt the Web. Unlike publishing, retailing, advertising and entertainment, it contributes little to the overall Web conversation, in spite of the Web’s adoption of real estate metaphors. . 3) The retail conversation Unlike the real estate, lots of existing retail businesses have embraced the Web and contributed to its vocabulary. Amazon.com, for example, presents itself as a “store” where you can “browse” through “subjects” organized to resemble “aisles.” You can also visit the “gift center” while loading up your “shopping cart” before “proceeding to check-out.” Onsale, though an “auction supersite,” calls itself “the smarter way to shop,” posts sale “specials,” and features a “bazaar” section. By this conceptual metaphor, . the Web is a marketplace 9 4) The advertising conversation The Web is a communications medium that will potentially reach billions of people. This immediately invited occupation by the advertising conversation, which largely employs freight transport metaphors. We “put out,” “send” or “push” an “inventory” of “products” or “messages” that we “target” over “signals,” through “portals” and “channels,” or on “vehicles” directed toward “eyeballs.”We hope to “capture” some percentage of those eyeballs through “branding,” “exposure” and other advertising practices, nearly all of which move goods in a one-way fashion, from advertisers to consumers. By this conceptual metaphor, the Web is a delivery service. 10 . 5) The entertainment conversation The entertainment business is interested in the Web for the same reasons as its broadcasting and publishing companions, the advertising business: the prospect of reaching and serving billions of people. But as an entertainment medium the Web has been “a costly and vexing flop,” says . “It’s a mistake to treat the Internet as an entertainment medium,” says Ed Bennett in the same article. Bennett was president of VH-1 for five years, and was hired by Prodigy in 1995 to bring TV savvy to that on-line service. It failed. The Wall Street Journal 11 With the exception of erotica and multiplayer games (which have simply expanded what happens behind the screen to include players and programs elsewhere on the Net), entertainment-related sites on the Web are accessories to other media. Most of the listings under Yahoo’s entertainment heading lead to publishing or retail conversations by entertainment companies or individuals with entertainment interests. Even the TV networks now use the Web mostly as a publishing medium where they can promote their shows, or add value to those shows by providing, say, live traffic and weather reports. And while many radio stations now broadcast on the Web, nothing in their use of the Web contributes to a new Web market conversation. It’s just another topic in the existing radio conversation. So we don’t find conceptual metaphors such as or . Not yet, anyway. the Web is a theater the Web is a TV set So far, the only entertainment conversation that works with the Web is the one concerned with the fashion and cosmetics end of Web site design. Here we find talk about “exciting,” “cool,” “killer,” “attractive” and “stimulating” designs that “enhance the image” of a site by “developing a story,” “framing a narrative” or “creating a sense” of something-or-other. By this conceptual metaphor, the Web is a stimulant. Now let’s look at how well these conceptual metaphors map to the Web, and how well the Web these conversations . facilitates as markets The metaphor describes the Web well; but it does not follow that publishing is a good way to make money on the Web. As John Perry Barlow puts it, “Protecting physical expression had the force of convenience on its side. Copyright worked well because, Gutenberg notwithstanding, it was hard to make a book.” So, while the physical nature of ink on paper made publishing hard to do and easy to protect, the virtual nature of the Web makes publishing easy to do and hard to protect. The result is a billion free publications, some with ads, few if any of which make the kind of money publishers like to see. publishing 12 Publishing, however, is the Web’s original metaphor, and the one we still use more than any other. So there is a market for it. But that market is like the one for telephony: a necessary convenience and a welcome cost. Not a way to make money. Bottom line: publishing is a great way to make money the Web, not it. with on The metaphor is another matter. As Amazon.com, CDNow and many others demonstrate, the Web is a effective new sales channel, and one that works both ways, allowing vendors and customers to engage in all kinds of new (and far more direct) conversations than were possible in the past. “E-commerce is already huge, and will surely account for a large percentage of all commerce in the next few years. retail The metaphor is extremely popular, and equally misleading. That’s because the real estate trade’s most important cliché — “Only three things matter: location, location and location” — has only transitory relevance on the Web. Short URLs may be preferable to long ones, and “.com” domain names may have “brand” qualities; but any location is still just one click away from any other location. And the time will come (as we’ll see later) when we won’t need search engines to find exactly what we want. That will reduce the brand value of Yahoo and other “portals.” You can put together your own damn portals, right on your desktop. real estate The metaphor works, but only so far as advertising remains acceptable in the Web environment. As with the real estate metaphor, advertising will be undermined — in this case by the opportunities the Web provides for direct conversations between vendors and customers, producers and consumers. We’ll go more deeply into this in the next section. advertising The metaphor is the weakest of all. Mostly the entertainment conversation is about just two things: entertainment Web site design, which is just landscaping and interior decorating for the real estate metaphor What will happen when the Internet’s capacity grows to accommodate the entire entertainment industry, including everything on TV and radio, in movies and on audio recordings (which won’t happen soon because those industries won’t let regulators allow it to happen). So it seems entertainment is not a great way to make money on the Web, even though the Web is a great way for entertainment companies to enlarge their existing market conversations. So at this early stage, a few things are clear: Publishing, retailing and real estate are proven conceptual metaphors that support working market conversations Advertising is a success to the degree that it works on the Web like it worked on other media. Entertainment awaits proof that won’t come until the bandwidth is here. So as we approach convergence of Web and TV, let’s look for ways we can learn from the history of the Web, so far. Publishing came first. The thinkers and inventors who developed hypertext theory , including Vannenar Bush , Ted Nelson , Marshall McLuhan and Doug Englebart all used publishing concepts and terms. The metaphor was later expanded by the people who put hypertext theory to work, including Tim Berners-Lee , Marc Andreessen and the original Internet community of scientists, hackers and academics. Today the Web remains an extraordinarily useful way to publish, archive, research and connect all kinds of information. No medium better serves curious or inventive minds. 13 14 15 15 16 17 18 While commerce may not have been the first priority of the Web’s prime movers, their medium has quickly proven to be the most commercial medium ever created. It invites every business in the Yellow Pages either to sell on the Web or to support their existing business by using the Web to publish useful information and invite dialog with customers and other involved parties. In fact, by serving as both an ultimate yellow page directory an endless spread of real estate for stores and businesses, the Web demonstrates extreme synergy between the publishing and retailing metaphors, along with their underlying conceptual systems. and So, in simple terms, the Web efficiently serves two fundamental economic needs: The need to ; and know The need to . buy While the Web also serves as a fine way to ship messages to eyeballs, we should pause to observe that the message market is a conversation that takes place entirely on the side of TV’s shipping system. In the advertising market, media sell space or time to companies that advertise. Not to consumers. The consumers get messages for free, whether they want them or not. supply What happens when consumers can speak back — not just to the media, but to the companies who pay for the media? In the past we never faced that question. Now we do. And the Web will answer with a new division of labor between advertising and the rest of commerce. That division will further expose the limits of both the advertising and entertainment metaphors. Dividing labors “Advertising is what you do when you can’t go see somebody. That’s all it is.” — Fairfax Cone Fairfax “Fax” Cone founded one of the world’s top advertising agencies, Foote, Cone & Belding, and ran it for forty years. A no-nonsense guy from Chicago, Cone knew exactly what advertising was and wasn’t about. With this simple definition — — he drew a clear line between advertising and sales. Today, thirty years after he retired, we can draw the same line between TV and the Web, and divide the labors accordingly. what you do when you can’t go see somebody On one side we have television, the best medium ever created for advertising. On the other side we have the Web, the best medium ever created for sales. The Web, like the telephone, is a much better tool for sales than for promotion. It’s what you do when you go see somebody: a way to inform customers and for them to inform you. The range of benefits is incalculable. You can learn from each other, confer in groups, have visually informed phone conversations, or sell directly with no sales people at all. can In other words, you can do business. All kinds of business. As with the phone, it’s hard to imagine any business you can’t do, or can’t help do, with the Web. So we have a choice. See or be seen: see with the Web, or be seen on TV. Talk people or talk them. Converse with them, or send them messages. with at Once we divide these labors, advertising on the Web will make no more sense than advertising on the phone does today. It will be just as unwelcome, just as intrusive, just as rude and just as useless. The Web will call forth — from both vendors and customers — a new kind of marketing: one that seeks to enlarge the conversations we call business, not to assault potential customers with messages they don’t want. This will expose Web advertising — and most other advertising — as the spam it is, and invite the development of something that serves supply without insulting demand, and establishes market conversations equally needed by both. This new marketing conversation will embrace what Rob McDaniel calls a “divine awful truth” — a truth whose veracity is exceeded only by its deniability. When that truth becomes clear, we will recognize most advertising as an ugly art form that only dumb funding can justify, and damn it for the sin of unwelcome supply in the absence of demand. 19 20 21 That truth is this: And there never was. There is no demand for messages. 22 In fact, most advertising has demand, especially on TV. It actually value. To get an idea just how negative TV advertising is, imagine what would happen if the mute buttons on remote controls delivered we-don’t-want-to-hear-this messages back to advertisers. When that feedback finally gets through, the $180+ billion/year advertising market will fall like a bad soufflé. negative subtracts It will fall because the Web will bring two developments advertising has never seen before, and has always feared : 1) direct feedback; and 2) accountability. These will expose another divine awful truth: . 23 most advertising doesn’t work In the safety of absent alternatives, advertising people have always admitted as much. There’s an old expression in the business that goes, “I know half my advertising is wasted. I just don’t know which half.” (And let’s face it, “half” is exceedingly generous.) With the Web, you know. Add the Web to TV, and you can measure waste on the tube too. can Use the Web wisely, and you don’t have to settle for any waste at all. Goodbye consumers, hello customers “Consumption is the sole end and purpose of production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.” — Adam Smith It’s easy to confuse consumers with customers, and producers with vendors. Adam Smith didn’t make those distinctions when he wrote . In 1776 there was no need to. Now there is. The customers of TV’s entertainment product are not its consumers. Nor are the customers of its advertising product. These splits between customers and consumers create both communication gaps and market misperceptions that become costly errors when TV’s business model is applied to the Web. Wealth of Nations To make sense of the differences between TV and the Web, let’s explore market relationships between these five roles in different market conversations, both within the TV business and on the Web: Producers Consumers Vendors Customers Distributors Television is two businesses: 1) an entertainment delivery service; and 2) an advertising delivery service. They involve two very different conversations. The first is huge and includes everybody. The second is narrow and only includes advertisers, broadcasters and agents for both. TV’s entertainment producers are program sources such as production companies, network entertainment divisions, and the programming sides of TV stations. These are also the vendors of the programs they produce. Their customers and distributors are the networks and TV stations, who give away the product for free to their consumers, the viewers. In TV’s advertising business, the advertising is produced by the advertisers themselves, or by their agencies. But in this market conversation, advertisers play the customer role. They buy time from the networks and the stations, which serve as both vendors and distributors. Again, viewers consume the product for free. In the past, the difference between these conversations didn’t matter much, because consumers were not part of TV’s money-for-goods market conversation. Instead, consumers were part of the conversation around the product TV gives away: programming. 24 ? In the economics of television, however, programming is just bait. It’s very attractive bait, of course; but it’s on the cost side of the balance sheet, not the revenue side. TV’s $45+ billion revenues come from advertising, not programming. And the sources of programming make most of their money from customers: networks, syndicators and stations. Not from viewers. their Broadcasters, however, are accustomed to believing that their audience is deeply involved in their business, and often speak of demographics (e.g. men 25–54) as “markets.” But there is no market conversation here, because the relationship — such as it is — is restricted to terms set by what the supply side requires, which are ratings numbers and impersonal information such as demographic breakouts and lifestyle characterizations. This may be useful information, but it lacks the authenticity of real market demand, expressed in hard cash. In fact, very few viewers are engaged in conversations with the stations and networks they watch. It’s a one-way, one-to-many distribution system. TV’s consumers are important only in aggregate, not as individuals. They are many, not one. And, as Reese Jones told us earlier, there is no such thing as a many-to-one conversation. At best there is only a perception of one. Big difference. So, without a cash voice, audience members can only consume. Their role is to take the bait. If the advertisements work, of course, they’ll take the hook as well. But the advertising business is still a conversation that does not include its consumers.. So we get supply without demand, which isn’t a bad characterization of advertising. Now let’s look at the Web. Here, the customer and consumer are the same. He or she can buy the advertisers’ goods directly from the advertiser, and enjoy two-way one-to-one market conversations that don’t involve the intervention either of TV as a medium or of one-way messages intended as bait. He or she can also buy entertainment directly from program sources, which in this relationship vend as well as produce. The distribution role of TV stations and networks is unnecessary, or at least peripheral. In other words, the Web disintermediates TV, plus other media. So the real threat to TV isn’t just that the Web makes advertising accountable. It’s that it makes business more efficient. In fact the Web serves as both a medium for business and as a necessary accessory to it, much like the telephone. No medium since the telephone does a better job of getting vendors and customers together, and of fostering the word-of-mouth that even advertisers admit is the best advertising. The Web is an unprecedented clue-exchange system. And when companies get enough clues about how poorly their advertising actually works, they’ll drop it like a bad transmission, or change it so much we can’t call it advertising any more. It will be a blood bath for the advertising business. Killing ad budgets is a snap. Advertising is protected by no government agencies, and encouraged by no tax incentives. It’s just an expense, a line item, overhead. You can waste it with a phone call and almost nobody will get fired, aside from a few marketing communications (“marcom”) types and their expensive ad agencies. What about other kinds of advertising? Well, print ads are tolerable and often welcome, because the reader has some choice about them. They actually compete with editorial for the reader’s attention. Junk mail is 98% waste, by its own admission. Banner ads on the Web are in the same range. Most surfers consider them low-impact spam: rarely useful and never welcome. Yahoo and some other Web services already charge only for click-throughs (and this has actually contributed to Yahoo’s modest profitability). But add a little more accountability (what happens the click-through) and advertisers might not even pay for that. after Of course, there will still be demand for television programs. Just expect consumers be more involved in the market conversation — in other words, to pay for some of it, to become customers. Broadcasters have a substantial inventory of programs and movies. Customers can buy them outright, or perhaps negotiate a reduced fee based on percentage of advertising content. Since they will probably have the ability to skip the ads, however, it’s unlikely that unwanted messages will have to be part of the bargain. The TV (or WebTV) will turn into a video store, just as the computer turned into a book store. Anything supplied off tape, disk or film will be subject to the simple laws of supply and demand. Live TV will be a bit safer for traditional TV advertising. Real time will always be scarce, and so will the kind of content that’s best served by live TV: news, weather and sports. The question of who will pay for it will still be open, however, because today’s advertisers may still find more efficient ways to spend their marketing money in a Web-mediated business world. Funding Illusions “Words Are Nutrition. Images Are Drugs.” — Rob McDaniel I recently asked an executive with one of the Web’s most popular sites if his enterprise was making money yet. “No,” he said. “But that’s okay. We just got $27 million in our latest round of funding.” Form follows funding, Stewart Brand says. And nowhere is this demonstrated more abundantly than on the Web today. 25 Entertainment and media empires look at the Web the way Bugsy Siegel looked at the desert: as a perfect place to build attractions where people will spend money, or where their eyeballs will pause long enough for ads to capture them. This is what makes much of the Web a Virtual Vegas. Some venture capitalists share the same ambitions as the entertainment industry, and will lavishly fund just about anything with a plan to replicate TV’s product, market model, or both, on the Web — in spite of the Web’s obvious deficiencies as a big-time advertising medium.. Why? Are they on drugs? Well… yes. All of us are. Because all of us are in the entertainment conversation, with an endless supply of topics from television.. We’re in Oz. It doesn’t matter that it’s not real. We’re all on the yellow brick road together. And hey, those bricks are gold. Why else would the VCs and entertainment moguls pay so much for them? This Oz is another Field of Dreams. They’re building it, and most of us are coming right along. So what if we’re not paying for it? Hell, they are. Entertainment is a form that also follows fashion. This year, the most fashionable sites are dressed as “portals:” are advertising-gilded openings to a space that was never closed. They’re as absurd as a dancing scarecrow and as necessary as a door to the sky. But, surreal as they are, the concept sells. Excite, an ordinary portal company with 1997 sales of $53 million and losses a third that large, today has a market value of more than $2 billion. Yahoo, a company with similar sales and a marginally positive balance sheet, is valued at more than $9 billion. 26 Not bad for a total illusion. Last year’s Oz fashion was “push.” For a while “push” was so hot that , the computer industry’s utopian fashion monthly, declared the death of browsing and its replacement by TV-like “immersive” media that offered “a zillion nonpage items of information and entertainment.” At PC Forum in March, 1997, I asked the gathering — about 500 industry figures, including many of the most fashionable push designers — to raise their hands if they really wanted content pushed at them over the Web. None did. Many laughed. It made no difference. It was a fashion, so it ran its course, as fashions do. Wired 27 Why are these fashions so compelling? Because this conversation is about entertainment, not truth. As Howard Beale put it in the movie , “Television is not the truth. Television is a goddamn amusement park. Television is a circus, a carnival, a traveling troupe of acrobats, story tellers, dancers, singers, jugglers, sideshow freaks, lion tamers and football players. We’re in the boredom-killing business.” Network 28 And a damn successful one it is, too. Consider the statistics: 29 Most Americans divide their time between three kinds of activities: work, sleep, and watching TV. The average American watches more than 4 hours of TV every day. That’s 28 hours per week, 2 months per year, 10 years per life. Advertisers spent more than $45 billion on TV advertising in 1997 in the U.S. That’s more than one quarter of all advertising expenditures. Over a year, kids spend 1600 hours watching TV. That’s nearly twice the 900 hours they spend in school. Ninety-nine percent of American households have at least one TV. On the average, those TVs are on nearly 7 hours a day. Two thirds of us watch TV while we eat dinner. One in four of us often fall asleep while watching TV, too. Children spend 1,680 minutes per week watching TV. They also spend 38.5 minutes per week in meaningful conversation with their families. That’s a ratio of 436-to-1. The average kid sees 20,000 thirty-second TV commercials per year. By the time he or she reaches 65, the number will reach two million. Few would argue that TV is a good thing. Hand-wringing over TV’s awfulness is a huge nonbusiness. TV Free America counts four thousand studies of TV’s effects on children. The TVFA also says 49% of Americans think they watch too much TV, and 73% of American parents think they should limit their kid’s TV watching. And, as the tobacco industry will tell you, smoking is an “adult custom” and “a simple matter of personal choice.” Then let’s admit it: TV is a drug. So why do we take it when we clearly know it’s bad for our brains? Six reasons: 1) because it’s free; 2) because it’s everywhere; 3) because it’s narcotic; 4) because we enjoy it; 5) because it’s the one thing we can all talk about without getting too personal; and 6) because it’s been with us for half a century. Television isn’t just part of our culture; it our culture. As Howard Beale tells his audience, “You dress like the tube, you eat like the tube, you raise your children like the tube.” And we do business like the tube, too. It’s standard. is Howard Beale had it right: . Let’s look at it one more time, from point of view. television is a tube our What we see is a one-way freight forwarding system, from producers to consumers. Networks and stations “put out,” “send out” and “deliver” programs through “channels” on “signals” that an “audience” of “viewers” “receive,” or “get” through this “tube.” We “consume” those products by “watching” them, often intending to “vege out” in the process. Note that this activity is bovine at best, vegetative at worst and narcotic in any case. To put it mildly, . And let’s face it, when most people watch TV, the only thing they want to interact with is the refrigerator. there is no room in this metaphor for interactivity 30 Metaphorically speaking, it doesn’t matter that TV contains plenty of engaging and stimulating content, any more than it matters that life in many ways isn’t a journey. TV is a tube. It goes from them to us. We just sit here and consume it like fish in a tank, staring at glass. Of course not really like that. conscious when watch TV. we’re We’re we Well, of course we are. So are lots of people. But that’s not how the concept works, and its not what the system values. TV’s delivery-system metaphors reduce viewing to an effect — a noise at the end of the trough. And they reduce programming to container cargo. “Content,” for example, is a tubular noun that comes straight out of the TV conversation. What retailers would demean their goods with such a value-subtracting label? Does Macy’s sell “content?” With TV, the label is accurate. The product is value-free, since consumers don’t pay a damn thing for it. 31 32 There is a positive side to the entertainment conversation, of course. Writers, producers, directors and stars all put out “shows” to entertain an “audience.” Here the underlying metaphor is theater. By this conceptual metaphor, . But the negotiable market value of this conversation is provided entirely by its customers: the TV stations and networks. The audience, however, pays nothing for the product. Its customers use it as advertising bait. This isolates the show-biz conversation and its value. You might say that TV actually value from its own product, by giving it away. TV is a stage subtracts Another conceptual problem appears when we look at the conceptual metaphor for advertising messages. This is it: . Advertising talk is full of military metaphors, and not just in the TV business. Ads everywhere are “deployed” in “flights” that are “positioned” or “aimed” to “deliver impact” against “targets.” Thick ad schedules get nicknames such as “carpet bombing” and “roadblocks.” Would we talk about this way? Of course not. Customers are involved. They pay us for our goods. We have relationships with them. We’re in a conversation together. messages are weapons customers In the long run (which may not be very long), the Web conversation will win for the simple reason that it supports and nurtures direct conversations, and therefore grows business at a much faster rate. It also has conceptual metaphors that do a better job of supporting commerce. Drugs have their uses. But it’s better to bet on the nurtured market than on the drugged one. Trees don’t grow to the sky. TV’s $45 billion business may be the biggest redwood in the advertising forest, but in a few more years we’ll be counting its rings. “Propaganda ends where dialog begins,” Jacques Ellul says. 33 The Web is about dialog. The fact that it supports entertainment, and does a great job of it, does nothing to change that fact. What the Web brings to the entertainment business (and every business), for the first time, is dialog like nobody has ever seen before. Now everybody can get into the entertainment conversation. Or the conversations that comprise any other market you can name. Embracing is the safest bet in the world. Betting on the old illusion machine, however popular it may be at the moment, is risky to say the least. that The truth is, we never left Kansas. And that’s not such a bad thing. Because thanks to the Web, Kansas will be a much better place to do business. Marketing returns “There can be no effective corporate strategy that is not marketing oriented, that does not in the end follow this unyielding prescript: The purpose of a business is to create and keep a customer. To do that, you have to do those things that will make people want to do business with you. All other truths on this subject are merely derivative.” — Theodore Levitt More than thirty-five years have passed since Theodore Levitt gave substance to the word “marketing.” In his 1960 manifesto, , Levitt defined marketing’s job as “satisfying the customer, no matter what.” Unfortunately, marketing was much more successful as a buzzword than as a discipline; but this kept Levitt busy, serving with thought what too many others served only with words. Marketing Myopia 34 In , Levitt heaped coals on companies “whose policies are geared totally and obsessively to their own convenience at the total expense of the customer.” Finally, in Levitt summarized his thinking with the quote above. The Marketing Mode 35 The Marketing Imagination 36 When those words were published, marketing was still understood in what we might call “broadcast” terms. Even for companies that meet face-to-face with large numbers of customers, such as McDonald’s and Sears, marketing was a top-down, one-way effort aimed at large numbers of people from whom little direct feedback (in forms other than cash) was expected. Or wanted. The Web changes all that. The Web does not work like an 800 number, a mailback card, or any other “direct response” medium. It can’t be controlled and managed by customer service or an order fulfillment office, because it’s too open and too interactive. Anybody outside the company can contact anybody inside the company whose email address can be found. And with so many employees participating in newsgroups and other Internet activities, finding and contacting those people is not hard to do. For companies with fortress mentalities, the Web is a scary development. It lets the rabble in the gates and turns them loose in the ivory towers. In fact, fortress-minded companies are often so Web-blind that they hardly see the rabble penetration that does occur. Webmasters at these companies find themselves in the interesting position of knowing far more about what’s going on than the guys upstairs. But for companies with frontier mentalities, the Web is a wide open galaxy of Star Trek-grade opportunities (with new places “to boldly go” exploring new worlds and splitting new infinitives). These companies see the Web as a rich new medium through which customers — and everybody else — can participate in the marketing process. To them, the Web is nothing less than the best medium ever developed for marketing as Levitt defined it: something that will make people want to do business with you. In , Regis McKenna insists that marketing is entirely about relationships: “dialogue, not monologue.” But by 1984 Levitt already saw the growing importance of relationships in marketing, and used relationships to differentiate between “old” and “new” styles of selling. In the old style, “the seller, living at a distance from the buyer, reaches out with his sales department to unload onto the buyer what the seller has decided to make.” With the new style, “the seller, living closer to the buyer, penetrates the buyer’s domain to learn about his needs, desires, fears and the like, and then designs and supplies the product in all its forms.” Relationship Marketing 37 “The future,” Levitt summarized, “will be one of more and more intensified relationships.” The Web takes “more and more” and pushes that slope straight up at the sky. Already it threatens to make relationships more numerous and intense than most companies can stand. Even Microsoft strips its gears trying to manage countless customer relationships over both the Web and the phone. This makes relationship-management perhaps the most important work a webmaster faces. And the ever-prescient Levitt provides us with a few very helpful suggestions: Recognize relationships as the most precious assets a company has, and invest in them Foster actual or felt dependencies between buyers and sellers Establish direct links between buyers and sellers, and use them Recognize that it is the seller’s responsibility to create and nurture these relationships Help the buyer understand the long-term costs and benefits of these relationships Prefer to humanize, rather than institutionalize, relationships Use your imagination, and start by getting down the “the simple essence in things” — in other words, don’t BS ?The Web does all those things. It’s as if it were made to fill Levitt’s order. Television doesn’t do any of them. The Killer Service “Our ineptitude in getting at the record is largely caused by the artificiality of systems of indexing.” — Vannenar Bush, 1945. “We’re still at the end of the middle ages, and the renaissance won’t get here until we solve the directory problem. And we won’t solve that problem without metadirectory.” — Craig Burton, 1998 The Web is a wonderful thing, but it isn’t organized. Nor, for that matter, is television. Worse, our only concepts for organizing either are the index or catalog (Yahoo!) and the search engine (Excite, Infoseek and the rest of them). Despite their high regard by Wall Street, these services are woefully inadequate, given their failure to address reliably the simple . Mostly these services only . Few customers go to any directory only to have choices narrowed down. need to find narrow down In computers and networks, the organizing work belongs to a of one kind or another. There are many kinds of directories, each designed to serve the arcane needs of an operating system or an application. In purpose these are little different than the directories we take for granted in our daily lives, which include maps, channel listings, book indexes and floor numbers in elevators. The difference is that directories tend to get along in the real world. In the networked world, they don’t. directory Craig Burton defines a directory as “ .” We can do that in our daily lives, with calendars, address books, and the other directories that fill the social spaces around us: white and yellow pages, maps, restaurant menus… The presence of one does not exclude another. They get along. a way to manage identities, locations and relationships that change over time The directory chaos in computing produces both schizophrenia and Alzheimer’s disease. Look at search engine findings. How often a search produces different versions of the same document, plus links to pages that have moved? Too often. A real directory would comprehend all the constantly changing contents of the Web — or at least of the parts of the Web we want to know about. We wouldn’t need search engines that merely narrow down. We could go straight to what we want. The Web does have a minimal directory called the Domain Name Service, or DNS. But DNS only defines is the domain level, or top level, of the Web: what comes between the // and the first / (for example, To the right of the first /, however, the Web is all haystack. It has never been organized in any way, nor has anybody attempted to organize it. www.microsoft.com). Search engines may find needles in that haystack, or at least reduce the big haystack to a smaller one that include the needle you’re looking for. But no improvement to any search engine will deny the haystack nature of the Web. It isn’t organized. And it won’t be organized until two fundamental network services are applied to it. Those services are and . might directory security Every serious private network has both. That goes for Microsoft Exchange, Lotus Notes, Novell NetWare, IBM SNA networks and so on. But every directory that organizes a network also excludes it from other networks, including different kinds of networks from the same vendor. Large companies such as Microsoft, Novell and IBM all have many directories, and few of them get along well with others. Differences between directories are political as well as technological, for vendors as well as users. Directories tend to be exclusive. They lock in customers and lock out competitors. Complicating things is the matter of security. Our security metaphors favor locks and vaults, but in fact security is mostly a matter of record-keeping (think of it as a very private form of publishing). When you authorize a purchase with a credit card, for example, the record of your account number is compared against a list of revoked numbers. Right now security on the Web doesn’t extend far beyond what you get just from your own credit card. And without first-class security, it’ll be a long time before we’ll see the promise of electronic commerce truly fulfilled. The final complication is the matter of distributed or object-oriented computing. Everybody agrees that the whole computing world will evolve into a vast collection of “objects:” building-blocks of data and code that can be assembled on an as-needed basis into applications, files, and everything else. This world, however, requires a complete and coherent directory and security infrastructure. But we don’t have it, and we won’t have it as long as the world is also filled with exclusive directories. This is why, when the Web was built as a wide-open space, directory and security services were left out. It’s also why progress has been slow. There have been positive steps. One is LDAP (Lightweight Directory Access Protocol), which allows directories to exchange information. But LDAP doesn’t organize the Web, or (more appropriately to the Web’s design) allow it to organize itself. Analysts who have studied this issue agree that the only technology that will solve this issue in the long run is . A metadirectory joins the contents of multiple directories in a way that maintains each directory’s autonomy, but allows them all to work together as a functional whole. It also provides a kind of social space where both political and technological issues can be resolved. metadirectory Think of metadirectory as the computing equivalent of the real-world space where countless different directories, few with any awareness of the rest, coexist in your own life. We have nothing like that today in computing — even on our own computers, where our list of fax numbers doesn’t know about our lists of email, snail mail and phone numbers. Products like Microsoft’s Outlook Express do a good job of embracing and extending many of those directories, but often at the expense of displacing other systems the customer might want to keep. Multiple directories won’t go away, because directories tend only to proliferate. Netscape’s new browser (4.05), for example, introduced features that require two or three entirely new directory “name spaces” in a server, each or which act as alternatives to DNS. The only way to truly embrace and extend them is with metadirectory. Now let’s look at where metadirectory plays with the Web, and with Web/TV convergence. Right now we can a lot easier than we can . With a functional directory infrastructure, will be far more easy and efficient. For example, imagine how easy life would be if you didn’t have to keep track of every User ID and password different Web sites require, or if you could log just one time into multiple email systems. is what metadirectory does. And “single log-in” is just one of its obvious benefits. There are manyothers. buy find both That The biggest benefit for TV/Web convergence is closure. When metadirectory comes along and provides a coherent directory and security infrastructure, the difference between the Web and TV becomes largely a matter of display. Whether you want to research a paper, download a movie or book a flight, directory and security marshal the resources you require, given your available technologies. Exactly one company offers a metadirectory product today: a small Canadian company called . The product is VIA. Watch for it. _Somebody_is going to make this thing happen. Zoomit A choice, not an addiction TV is just chewing gum for the eyes. — Fred Allen This may look like a long shot, but I’m going to bet that the first fifty years of TV will be the fifty years. We’ll look back on it the way we now look back on radio’s golden age. It was something communal and friendly that brought the family together. It was a way we could be silent together. Something of complete unimportance we could all talk about. only And, to be fair, TV has always had a very high quantity of Good Stuff. But it also had a much higher quantity of drugs. Fred Allen was being kind when he called it “chewing gum for the eyes.” It was much worse. It made us stupid. It started us on real drugs like cannabis and cocaine. It taught us that guns solve problems and that violence is ordinary. It disconnected us from our families and communities and plugged us into a system that treated us as a product to be fattened and led around blind, like cattle. Convergence between the Web and TV is inevitable. But it will happen on the terms of the metaphors that make sense of it, such as publishing and retailing. There is plenty of room in these metaphors — especially retailing — for ordering and shipping entertainment freight. The Web is a perfect way to enable the direct-demand market for video goods that the television industry was never equipped to provide, because it could never embrace the concept. They were in the eyeballs-for-advertisers business. Their job was to give away entertainment, not to charge for it. So what will we get? Gum on the computer screen, or choice on the tube? It’ll be no contest, especially when the form starts funding itself. † Note: I copied and pasted the original HTML. With @medium’s CMS, the anchor links under Sections don’t work; but as a Table of Contents the list still functions, and you can scroll down. Notes 1. McCann-Erikson. . Here 2. See “The Baron of Books,” , June 29, 1998. Business Week 3. Source: , July 27, 1998. P 19. Time 4. Source: , U.S. Department of Commerce, 1998. The Emerging Digital Economy 5. Craig Burton and his wife Judith Clarke Burton changed network thinking back in the eighties, when they developed and implemented NovellÕs strategy for changing the networking business from a hardware to a software conversation: from one about “pipes and protocols,” to one about Network Operating Systems and the software that worked with those operating systems. After leaving Novell, they founded The Burton Group, which got the industry to talk about networks as sets of services, rather than as platforms. de rigeur 6. , The University of Chicago Press, 1995. P.4. Moral Politics: What Conservatives Know That Liberals Don’t, by George Lakoff 7. The most accessible book on this subject is , by George Lakoff and Mark Johnson. The University of Chicago Press, 1980. Metaphors We Live By 8. See David Siegel’s (Second Edition), Hayden Books, pp. 12–15. Creating Killer Web Sites: The Art of Third-Generation Site Design 9. We might also say the Web is a mall or a main street. But the original and most well-conceived understanding of a place where many vendors sell many things is a market, of which malls and streets are types. 10. Or we might say the Web is a vehicle. “Conveyance,” however, suggests singular and one-way movement or conduction, while “vehicle” does not. 11. “It Isn’t Entertianment That Makes the Web Shine; It’s Dull Data — Sex Aside, Sites That Offer Consumers Convenience Prove to Be the Big Hits” By Jared Sandberg. The Wall Street Journal, July 20, 1998. 12. by John Perry Barlow, Wired, Issue 2.03. See “The Economy of Ideas,” http://www.wired.com/wired/2.03/features/economy.ideas.html. 13. The whole Web is a hypertext construction. You can see it at the front of every address. “http” stands for “HyperText Transmission Protocol. 14. Vannenar Bush foresaw countless developments in his landmark essay published in 1945. Chief among these was the explosion of knowledge enabled by developments in technology He foresaw compression of computer processing to cheap and tiny forms, ubiquitous communication, and the critical need to share and navigate the explosion of knowledge that would result. His notions on navigating that knowledge were the first Hypertext theories. See . “As We May Think,” 14.Ted Nelson coined the term “hypertext” in 1965. While he is credited as the foremost thinker on the subject, Nelson also holds the world record for development time on an unreleased product — — which is still in the works after decades of effort by Nelson and others. Xanadu 15. Marshall McLuhan is famous for his radical thinking on media, plus a raft of other subjects. His ideas about the relationship of individuals and society to their media was merely quotable when McLuhan was alive (he died on the last day of 1980); but with the arrival of the Internet those ideas are increasingly germane and useful. See the for more. University of Toronto McLuhan site 16. Doug Englebart is the Edison of the Web. Most famous for inventing the mouse (and with it the whole notion of pointing and clicking), Englebart has countless other inventions to his credit, including the “NLS” system, which decades ago provided hypertext email. 17. Tim Berners-Lee created the Web. His paper describing that work is . here 18. Marc Andreessen led the team that developed the first browser, Mosaic, at the University of Illinois, then did the same at Netscape. 19. Rob McDaniel is a screenwriter currently working on a new book “The M!nd of the Species,” which he hopes to have out before the end of this year. He is a partner in , a retailer of t-shirts and other goods on the Web. Both the site and its goods contain McDanielÕs provocative and quotable “trance codes.” Technorganic 20. The notion of a “divine awful truth” is one of McDanielÕs “trance codes.” 21. Ever the contrarian, Marshall McLuhan said, “Advertising is the greatest art form of the twentieth century.” (Advertising Age, 3 Sept 1976) 22. I will admit to a little hyperbole here. Many people watch the Superbowl game to see the ads; and there is clearly demand for the kinds of messages Nike and other powerful “branding” companies put out. But I maintain that advertising in these cases works like television at its metaphorical best: as a source of stimulation, not information. In other words, it succeeds as programming. But if you ask people if they demand messages, the answer is usually no. 23. With the notable exception of David Ogilvy, the greatest ad man of all time. Ogilvy inveighed constantly against advertising that failed to respect its consumers, and was a tireless advocate of research. In this mission, Ogilvy considered himself a voice in the desert. “Most people,” he said, “use research the way a drunk uses a lamppost: more for support than illumination.” Ogilvy has written a number of books; but the best is Ogilvy on Advertising, Random House, 1987. It does for Advertising what Strunk & White’s The Elements of Style does for writing. It vividly clarifies a very foggy subject. 24. “Product placement,” while promotional in nature, is not a form of advertising. It is a promotional sales or barter arrangement worked out between the TV showÕs creators and the companies placing the products. 25. Stewart Brand. How Buildings Learn. Viking Books, 1995. P.?. 26. July 7, 1998 27. Kevin Kelly and Gary Wolf, . Wired, issue 5.03, March, 1997. “PUSH! Kiss your browser goodbye: The radical future of media beyond the Web,” 28. http://www.filmsite.org/netw.html 29. TV Free America (TVFA) has abundant statistics at , mostly on its , which cites the A.C. Nielsen Co. (1996), plus other sources, footnoted on that page. its site statistics page 30. IÕd like to credit somebody with this, because itÕs a great line. But I donÕt remember where I got it. 31. “Content” also comes from the publishing conversation, where it serves as a synonym for meaning. In all of today’s Web conversations, however — including the publishing conversation — “content” is a synonym for cargo. 32. There are four exceptions: 1) noncommercial TV, which customers buy directly from stations; 2) pay TV, including premium and pay-per-view channels; 3) home shopping channels, which are retailers and distributors; and 4) Cable, which is a passive signal distribution system. 33. Regis McKenna credits this quote to Marshall McLuhan, as do some others but Nelson Thall, McLuhan Archivist of at the University of Toronto, and former president of the Marshall McLuhan Center for Global Communications, . The McLuhan Program for Culture & Technology credits Jacque Ellul 34. Theodore Levitt, “Marketing Myopia,” Harvard Business Review, July/August 1960. 35. Levitt, ,1969. The Marketing Mode 36. Levitt, . Free Press, 1984. P. 19 The Marketing Imagination 37. Regis McKenna, . Addison Wesley, 1991 pp. 14, 18, 119–31. Relationship Marketing: Successful Strategies for the Age of the Customer 32. Bill Gates, , pp. The Road Ahead
