We all know the ordinary business models on-line. You buy something, and then you pay. We all know about Amazon, and that we tend to buy a book with high rankings. Suggestions from friends have the same effect; we tend to buy a suggested book, before looking for something else ourselves. We know of “freemium”/ premium services, like Spotify.
Of course we know that corporations pay for advertisements. (That’s when you and I are “sold” to someone). Google, Facebook, YouTube and also Twitter are cleverer than just selling banner ads based upon amount of clicks on pages or clicks on ads.
The value of algorithms.
We know that Google made some algorithms, to sort out what search results show up and not. It’s complicated and it’s secret. New lines of work came due to this Search Engine Optimizing (SEO) and also Search Engine Marketing (SEM)..
The other day, we got some insight about Facebooks way of sorting out the flow of our newsfeed (you can read an interesting article HERE ). In short it claims that if you are popular, interactive and have a lot of followers, shares videos and images – you rank higher than others. Where is the value? Well you get less “noise” and facebook can sell you at a higher rate, based on the segment (“high social profile” assuming you have higher influence on people around you)
Beyond old fashioned segmentation there is behavioral and contextual marketing.
The segmentation (Nation, gender, age, education, income, etc.) governs what ads you are likely to be exposed to and this is as old as marketing itself. Online the possibilities to get far better data because people might be willing to provide a lot more information about them. Facebook take this a step further and cooperation with third parties, such as Google, has become common. This makes it possible to share information so that the segment information from Facebook includes knowledge about your actions on Google and your search pattern. The sum of this knowledge is assumed to provide advertisers with “better” audiences, and you with “targeted” ads. All of this has lead to yet new professions: “Behavioral and contextual” advertisers.
If I know where you are, I know what to sell you! “Geo- tagging”
Location based knowledge is great. And it has become “trendy” to talk about. “Everyone” want to jump on this train. And it’s amazing. One thing is to add a commercial message at the map – you know the map on your cell phone, web site, iPad or the GPS in your car. It gets more sophisticated with the “chip” in in your training shoes, together with a GPS and a USB. Your training sessions will never be the same. Your running patterns is transferred to your community, your cell phone tells you when other training friends are out in the same park as you. My guess is that location based marketing is going to be huge, and then commodity, something just being there as a new marketing / sales technique.
Internet in all things.
Not only geo- tagging is out there. As syndicating system, services are offered via different business partners that never used to be combined is on its way. Devices; like the cell phone goes into the banking, credit card and insurance business. The car computer syndicates with gas stations, car repair work shops and mapping services. The result is on your GPS in your car – and/ or cell phone. If I know where you are, how much gas is on your tank, for how long you have been driving? I can offer you a solution to problems you have, before you thought of them – before they even happened!
Now, combine this with semantic technologies. In the article I linked to, it’s only used to monitor, and moderate comments in an online newspaper. That’s still a very primitive usage of a very powerful business concept. Semantics and semiotics are language disciplines where meaning of communication is decoded See the Wikipedia article about semantics and about the semantic web HERE. This enable the option to provide relevant content to anyone. It enable to port relevant content based upon my interaction with “Internet” and others on Internet that I interact with. E.g. Twitter may run my flow of feed via their semantic engine, and deliver me relevant content, dependent on the meanings of my flow of statement. Twitters business model is starting to take form; look HERE. Provide me with relevant topic, and relevant followers. Provide knowledge about brand, topics and monitoring services(that let them know I have a need, an opinion worth while interacting with towards a business market. Using semantic technologies will surely help Twitter, streamlining their business models.
None of the above is future or science fiction, its existing services. Still the concepts aren’t advanced, but they will, and in a speed we have hardly seen. You see, all the technology is in place. All business models are already tested and working. We, the market, have started embracing the new possibilities and have purchased the devices already.
Is privacy corrupted?
Yes, but not by governments, police or military. Not by nosy journalists, but by you and I. And I’ve seen the reactions (amongst others) against facebook. But to be sincere I don’t think that regulations will help. The phenomena are spreading, and the business cases are too great to back off. The benefits for us as users are too big as well. Not long ago, communities were criticized for interrupting privacy merely because people shared information about themselves, in manners we hadn’t seen up till then. Photos of their loved ones, information on which restaurant they were dining, all kind of “silly” information, that could, if misused interrupt our privacy and be misused ( just think of dating services where people put images of themselves – no newspaper would ever print) People still do this, and continue to want to share, to interact in every possible way.
Will the governments stop this, and is it all bad?
If one government wants to regulate what is legal, the servers are moved to another country, where no such rules apply. It’s these companies that will win the race, grab the market shares. Internet is not a ‘ cosy café ‘. It’s a hard core business environment that is changing the way we live our lives. Another reason I believe that protests won’t help this time, is that in the western world unions have been a driving force, to regulate what the finance world may do or not. Unions have lost a lot of their power in western societies. After the financial crisis in 2008, politicians are scared of a new breakdown and will not be motivated to stop initiatives for finding business models, creating new types of jobs – keeping the wheels running.
I’m not sure if this is all bad. It’s a dramatic change, and it can surely be misused for a whole range of reasons. On the other hand, it simplify our lives, we get better services and offerings we want, not a mass media cacophony of commercial messages thrown at us at all times. The standard TV commercials, interrupting our film experiences will vanish. “Shouting” primitive messages, attempting to have us remembering a hair shampoo brand will be a lousy business. “Offer me what I want, when I need it and leave me alone if you don’t know me, and my preferences!” - This just might be the next decades slogan for the marketing business – online.