Philosophical Musings

November 13, 2007

MLM 2.0

Filed under: business,Digital Culture — Elad Kehat @ 3:15 pm

“Consumers trust their friends and acquaintances far more than any other source.”

So says a Forrester “strategist”. Makes sense. But the corollary is wrong:

“Facebook, which brings a unique solution evolves advertisements to endorsements and encourages members to subscribe to a brand in what we are calling “Fan-Sumers” (an evolution of the consumer). As consumers share their affinities, brands can advertise using trusted social relationships.”

Apparently, in order to be a strategist at Forrester you need to be good at coining new terms (fan-sumers), that are rip-offs from your betters (Toffler’s prosumers – Update: Jeremiah says it wasn’t a rip-off, and I apologize. Nevertheless, Toffler is basic reading if you’re any kind of strategist). However, Mr. Strategist doesn’t have to ask “why?” – why do consumers trust their friends and acquaintances more than other source?

Here’s why I sometimes trust a friend’s opinion more than an expert, and always more than an ad – because it’s honest. It’s because I believe that my friends have my own interests in mind when they recommend a product, and not any commercial interest. More than that – if a friend was ever to try to promote some product to me in order to receive a benefit from a third party without disclosing that, I’d never trust their opinion again, and would seriously question whether they’re actually my friend.

Facebook’s “amazing” strategy that Forrester is touting seems more like MLM 2.0. Make money working from home, touting products to your social network friends, only you don’t even make money…

Fortunately some clear thinkers realize that. Nick Carr’s “The medium is the message from our sponsor” had me rolling on the floor…

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7 Comments »

  1. Thanks for the feedback, I wasn’t familiar with Toffler’s work but this is a good indicator to check it out. I didn’t ‘rip it off’.

    I understand your points, but there’s an upside that many are missing. I have a few friends, who I read their blogs on a daily basis, when they recommend products, I’m very likely to take a closer look. If the same concept is applied to Facebook pages and fans, how is this different?

    Look beyond the buzzword, and let’s focus on the the opportunities. In the end, we’ll know what really works when brands start adopting this lateral marketing play.

    To quote Dave Winer (roughly) “when advertising becomes so targeted, it’s no longer advertising, it’s information”

    Comment by Jeremiah Owyang — November 13, 2007 @ 6:34 pm | Reply

  2. Interesting post. Not that Jeremiah needs any defending (he obviously did a nice job representing himself in his comment above) but I can vouch for the fact that neither he, nor Forrester needs to “rip anyone off.” I’ve been reading Jeremiah’s posts for a while now and I can vouch for the fact that he is not only a leader in this space but also a true “thinker” and “innovator.” In fact, he just joined Forrester a few weeks ago – the first blogger/social media strategist turned analyst that anyone can think of.

    Regarding Forrester, I’ve worked with them off and on for the last 10 years and I’ve found them to be a firm of integrity and innovation. They have been known to popularize certain buzzwords in the industry, mainly because they hire smart people and those people get quoted a lot in the media.

    Comment by Aaron Strout — November 13, 2007 @ 6:46 pm | Reply

  3. I am no Jeremiah flunky (as my disagreements with him in the past will testify). And like Aaron, I’ve also been a Forrester customer in the past, and found their insights useful.

    I agree that “fan-sumers” isn’t a great word, and for me the words “fans”, “advocates”, and “evangelists” all would have worked for me…

    … but snide remarks about “rip-offs from your betters” strike me as unhelpful.

    If, as you believe, Jeremiah’s analysis is self-evidently wrong, why do you feel that ad hominem attacks are the way to go here?

    For what it’s worth, I think that Jeremiah has an optimistic view of Facebook’s commercial chances, but that the general premise that 1: social networking sites will allow ludicrous micro-targetting for advertisers, 2: many of these advertisers will get it badly wrong, and 3: the good ones will concentrate on how SN sites can be used by having conversations WITH, rather than broadcasts TO their customers seems spot-on.

    Regards,

    Mark

    Comment by markharrison — November 13, 2007 @ 8:14 pm | Reply

  4. Facebook is still stuck in 2.0 — it’s an “old fashioned” community based on demographics and/or “1st life” community.

    A good (online) friend of mine who is a strong advocate of the “prosumer” concept totally blew me away a couple years ago:

    “One paradox of the emerging Small Is Good World is that David Suzuki’s words — It’s time to think local, act local — are made true, not because it’s time to turn away from global concerns and participation, but because local is no longer a term geographically place-bound.”

    And this applies 200% to social networking: localization is TOPICAL, and not limited by TIME and/or SPACE.

    What is the “topos” of facebook? It HAS none — or maybe it’s “Harvard” (if that is a “theme” or whatever).

    Future social networks will thrive insofar as they are able to thematically focus, to localize the topic — maybe you could say in this context that “always on” would refer to “always on topic”, rather than “always online”….

    Such topically oriented networks (in contrast to amorphous and/or “one size fits all” universal 2.0 kitsch) are still rather virgin territory — so there are indeed vast opportunities for growth here. Perhaps this growth will mean “stagnation” or perhaps even “decline” in the “old-fashioned” approach to community — time will tell.

    🙂 nmw

    Comment by nmw — November 13, 2007 @ 8:54 pm | Reply

  5. Personally, I trust people who are experts in their field more than my friends when making buying decisions. I’m not sure how that’s going to be leveraged in Facebook style ads. For example, just because a friend of mine bought a new HDTV doesn’t mean he made a smart purchasing decision.

    Comment by Ed Kohler — November 13, 2007 @ 9:42 pm | Reply

  6. Philo (not sure of your real name)

    Thanks for entertaining the open and fair discussions here, I hope to continue to see your points of view in my comments on your blog and on the web in general –all helpful and welcome.

    Will get Toffler’s book (I was less than 3 feet tall when it was published in 1980s) and thanks for updating the text.

    Comment by Jeremiah Owyang — November 14, 2007 @ 2:28 am | Reply

  7. Thanks for the commentary people. A couple of points if I may

    Speech of ideas – faster, more exciting
    Speed of thought – slower, more difficult

    Facebook may need to think this through a bit more, I’ll still experiment with the system. I think they sold out when they abandoned their college roots and opened it up to old folks like me. On to a larger subject.

    Situation:
    increasingly cynical society
    technology to share our thoughts and eliminate packaged messages of companies
    companies need to sell stuff
    consumers would rather listen to trusted friend of a friend than a company
    break the chain of trust when incentives are introduced

    Problem:

    Financial, legal, and political, institutions are structured for predictability, blame, and division.
    Socialness does not fit into these structures
    Quarterly earnings reports as currently perceived will not allow for an intent driven economy
    Control reigns supreme in boardrooms and advertising agencies
    Facebooks of the world trying to bridge the gap between casual social conversations with controlled buying programs

    Questions

    If demand creation via advertising model is declining, and endorsement programs undermine trust, what can business turn to for predictable financial returns that will be accepted by Wall Street? Somebody is going to have to pay for all this stuff and it ain’t gonna be me.

    Comment by Albert Maruggi — November 14, 2007 @ 4:14 am | Reply


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