April 09, 2012

The Consumer Is In Charge. Really?

In my family's history, there were a pair of people who I find fascinating.

They were an aunt and uncle who were born in the 1920s. They grew up in deep poverty during the great depression. According to legend, their families were often to be found out on the streets of NYC with their meager belongings, having been thrown out of their tenement apartments. Then they would rent other apartments and be out on the street again in 60 days, having, once again, not been able to pay the rent.

One set of parents tried to scrape out some kind of living with petty crime, like bookmaking and running card games.

Despite their hardships, the two people in question were brilliant and went on to impressive accomplishments. She became the head of the mathematics department at an East Coast college. He went on to become an author respected enough to have his work featured in The New York Times Book Review.

They were gentle, kind, compassionate people. During their college days, in the 1940s, they became communists. Their experience of poverty lead them to believe that communism offered the world the first truly realistic shot at equality.

When the horrors of Stalin's Soviet system started to become common knowledge during the 50s and 60s, they were devastated. For years they lived in a kind of denial state, refusing to change their political beliefs in the face of reality.

Although they were brilliant, they were the kind of people who Lenin is reported to have referred to as "useful idiots." There were thousands of well-meaning people in the West who completely misunderstood the nature of communism. They were "useful" to the Soviets in that they created an idealistic, sympathetic lobby for a brutal, murderous regime. They were "idiots" in that their ideology blinded them to reality. They couldn't see that communism was built on bullets and repression, not bake sales and sing-alongs.

Today, the marketing industry is espousing a conviction that may turn out to be very misguided. It is the belief that "the consumer is in charge." This assertion is inescapable in marketing circles.

The hypothesis behind this meme is that traditionally, in the relationship between marketers and consumers, the power has been in the hands of marketers. But today, because of the Internet, the consumer has the power.

Underlying this thinking is the viewpoint that the Internet has had a democratizing effect that is good for consumers and good for society. The thinking is that it has given the individual more power and more control. I am not so sure. In fact, I am highly skeptical.

If the Internet has produced any change in the power relationship between consumers and marketers, it may very well be in favor of the marketers. The amount of information they are collecting, warehousing, and selling about us is outrageous and alarming.

From an article last week in The Wall Street Journal...
"Some of the most widely used apps on Facebook—the games, quizzes and sharing services that define the social-networking site and give it such appeal—are gathering volumes of personal information.

A Wall Street Journal examination of 100 of the most popular Facebook apps found that some seek the email addresses, current location and sexual preference, among other details, not only of app users but also of their Facebook friends. One Yahoo service powered by Facebook requests access to a person's religious and political leanings as a condition for using it. The popular Skype service for making online phone calls seeks the Facebook photos and birthdays of its users and their friends...
...a user's friends aren't notified if information about them is used by a friend's app. An examination of the apps' activities also suggests that Facebook occasionally isn't enforcing its own rules on data privacy. "
In an article I wrote for Adweek over a year ago entitled Big Brother Has Arrived And He's Us, I said...
It (the Internet) pretends the information is secure, but only a blind fool believes this. It tells us that privacy is an old-fashioned, out-of-date concept. It is reassuring in its pervasiveness.

Then it sells the information to the highest bidder. And sometimes to any bidder at all...

There’s no reasonable way that this is a good development for a free society. There is no realistic vision of the future in which this will not lead to appalling mischief.
Like my aunt and uncle, the people who trust in the democratizing effect of the Internet are not evil or stupid. They sincerely believe that the web has given us more control. They sincerely believe the consumer is in charge.

Also like my aunt and uncle, they may be letting ideology get in the way of reality. They may be blind to the hidden, subtle structure.

Today, the Internet is essentially three things: Google, Facebook, and a zillion little rats and mice. An unprecedented amount of information and power is being concentrated in the hands of a few entities and their allies. I can't help but notice that in the world of marketing the big keep getting bigger and small keep getting vaporized. Does this sound to you like the consumer is in charge?

We are used to thinking about tyranny as a function of governmental excess. Never before in history has this kind of information monopoly been in the hands of non-governmental institutions. This is completely new and we have no idea where it leads.

It's getting harder and harder for me to believe that they have all the information, but we are in charge.

Right on cue, Facebook announced that they were buying Instagram today. This set off a firestorm among the social media crowd who apparently just discovered that Facebook knows where they live.

Also, someone sent me a pdf of the intro to Doc Searl's new book called "The Intention Economy" which has yet to be published. Doc is one of the authors of "The Cluetrain Manifesto." He is a very cool guy and from what I can tell from the intro to the book, he is in 100% disagreement with today's post. He thinks consumer power is about to explode. I would post his intro but I don't need a lawsuit for copyright infringement. If you can find it, it's worth reading to get another viewpoint.

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