The Bankwatch

Tracking the consumer evolution of financial services

Posts Tagged ‘ReadWriteWeb

Thoughts on the real-time web, and the fallacy of the wisdom of crowds


The big meme at the moment is the real-time web. I have a couple of points to make here, that might help understand the current state of internet. If like me you are fed up of hearing CNN reporters say "and over here on Twitter mightymouse says ….. " then read on, and hopefully this helps define your own perspective.

The broad notion of real time is that the internet is series of information snippets that can be pulled together from disparate sources across the web. By immersing yourself in this pool of information through tools such as twitter, Facebook, Posterous, Tumblr etc, you will elevate yourself to new levels of awareness and no doubt approach a zen like status! For more read the experts; Chris Messina, ReadWriteWeb | the definitive primer

This is all wrong. One thing the ‘leaders’ from silicon valley miss is that the next big thing does not replace all things that went before. How often did we read that social networks will replace blogging. To suggest that the real-time web will replace all else that went before is to suggest that conversations in coffee shops will replace universities. Perhaps my metaphor is not ideal, but you get the idea. Society requires all kinds of people and many types of approaches and interactions to move ahead.. And all those approiaches do not impact each person – each has their own approach. The proponents of real time suggest that 140 characters will replace document search online. The web will somehow gravitate from a web of documents and pages to a web of snippets.

This conversation cannot move forward without referring to the Semantic Web where the internet is a series of data that can searched, aggregated, disseminated as each person sees fit. When we think about the Semantic Web then the real time concept makes more sense as part of the larger whole.

So thats my take on real time – yes it is coming, but its not an end in and of itself, and it does not replace what went before. Actually it might replace what went before for those with attention deficit but I won’t go there 🙂

A related point is how the masses are smarter than the individual. The fallacy of the Wisdom of Crowds is pointed out here in new research addressed by Sarah Perez at ReadWriteWeb. Where is the Wisdom of crowds

This is something we all know intuitively. She refers to Wikipedia, Amazon, IMdb, Digg and BookCrossing. The conclusion is simple and frankly intuitive. The majority of people are lurkers and browsers. The contributors are a very small group, 1% in the case of Wikipedia. Jimmy Wales refers to them as the Wikipedia community. This is not necessarily a bad thing. The notion of authors and readers is as old as books. This is what makes the world work.

Back to real time web. The reason it is a misnomer, is that the real time web has two components. One is simple immediacy. Information is transmitted to all users immediately, versus the 20 minute +/- index delay with Google search or few minutes delay with RSS. The second component of real time is the simultaneous sharing. Everyone can see the same update at the same time because everyone is in twitter all the time :-/

Scoble himself creates a list of reasons that Twitter is now part of eveyones life, and he actually argues against his own point here:

8. If you don’t read tweets for eight hours, don’t worry, all the big stuff you missed will be on TechMeme. When I was the first to talk about Yelp’s augmented reality feature on Twitter and on FriendFeed it was quickly blogged by EVERYONE and was on TechMeme within a few minutes and stayed there for about a day. The same is true of ALL news. I have not found an example yet where something important is discussed on Twitter about a tech company or tech news and doesn’t show up on TechMeme within a few hours. What doesn’t show up? Small stuff like birthdays or launches of obscure technology that only a very small audience will use.

Something to think about at a personal level – do you feel smarter because of your twitter feed? Do you every wonder what you are missing? Can we be just as smart by following a simple aggregation tool, and save ourselves a bunch of time in the meantime?

Then from a bank strategy and marketing strategy perspective, if we think through the above, the inputs to Twitter that are read by the lurkers will be represented by two components.

  1. the 1%
  2. marketers

Relevance to Bankwatch:
Banks should definitely not ignore the trends, and should participate in these platforms – the above does not mean anything here will disappear, merely that further evolution is inevitable, and it is essential to be part of that evolution. We are a long way from end of job in terms of defining how markets and marketing will play out here. The 1% thing is worrisome though, and is something that brings into question the validity of the social platforms for marketing purposes; the lack of widespread input will lead to consumer disaffection and lack of trust very quickly if people can see platforms being gamed by marketers.

Written by Colin Henderson

September 18, 2009 at 09:36

On VRM, Facebook, and being misunderstood for long periods of time


I simply love this post at RWW.  The post is about how FaceBook could turn on the power of their userbase to the benefit of consumer power.  I have long been a fan of VRM and at the same time at something of a loss to see how it could be initiated.  Then I read this post, and new lights went on.

The post is about FaceBook, but it is less about them, than it is about business models for dot.com companies with large userbases who insist on following tradigital advertising models. The whole ‘We have lots of eyeballs so lets monetise’ thing.

[disclaimer]  I have long believed that adwords, adsense, and any such interruptive advertising model has only a limited online lifespan, and represent a termproary interlude that keeps SEO types busy in these formative internet times, until we get to the next level whereby the consumer is truly in charge.  Only then will I accept a Web X.0 increment.

I look at myself and my online behaviours, and maybe I am in the minority, but maybe thats because the tools I use are not well understood.  My online experience sees almost no ads except when I choose to do so, and I do so choose.  I see them in emails I deliberately subscribe to, I see them when I seek them out, but my standard web experience is protected by pop up blockers and AdBlock Plus.  If in doubt how many have PVR’s at home, and skip tv ads?

Its not that I don’t want to lknow about products and services.  I just don’t want to know when I am reading, listening and watching things on the web.  This is the power and the promise of the internet medium;  it has the power to be better.  I listen to Sirius Radio for similar reasons; I want to hear music not ads.

Enter Vendor Relationship Marketing (VRM).  Terrible title, but in essence VRM says you will decide when a merchant (vendor) may contact you, ie advertise to you.  Until then stay away. Here is one of the more provocative catchphrases from “The ClueTrain Manifesto” which forsaw this problem and solution 10 years ago.

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The challenge is how to move from an interruptive model in radio, television, phone, mail, and now internet to VRM which would require a seismic and complete shift.

“be prepared to be misunderstood for long periods of time.” – Jeff Besos

Back to the RWW post.  Bernard does a nice job of pointing out that FaceBook is taking too long to develop a business model, and is taking longer than Google did.  He notes that it will take a radical shift in order to do that, and that shift will be misunderstood, but give it time.

I agree with Bernard.  The reason FaceBook and traditional advertising doesn’t work is because no-one wants to hear an ad in the middle of a conversation.  However FaceBook has the other benefit (some say weakness) of being a walled garden and Google cannot see inside.  He notes this is the perfect oportunity to turn that walled garden into a powerful tool on behalf of the consumer.  When they feel the need for a product, service or information on them, FB users could, through an RFP (Request for Purchase) process make it known to vendors, even to the point of naming their price or price range.  Vendors could respond.

This turns the ad model on its head.  The playing field is levelled between the merchant and the consumer.  If the merchant comes on stronger than the consumer wishes, or tries to return to old ways, the consumer can ignore them.

Relevance to Bankwatch:

Consider banking – every day thousands of RFI’s emanating from VRM services, and the banks can compete on them, all electronically.  Clearly this requires formats, standards, and defined processes but it makes an interesting future world view, and one that FaceBook could kick off.

Written by Colin Henderson

June 26, 2009 at 12:47

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