In my recent conversation with Michael Ferguson, he brought up the book Net Worth and the concept of infomediaries. I hadn’t read the book (an oversight I’m correcting) but I did a little quick online research. First, here was Michael’s comments:
There’s a book that came out in early 1999 called Net Worth, which you might want to read. I almost want to revisit it myself now. It’s a Harvard Business School book that Marc Singer and John Hagel came out with. It talked about infomediaries and it imagined this future where there’d be these trusted brands and companies. They were thinking along the lines of American Express or some other concurrent banking entity at the time, but these infomediaries would have outside vendors come to them and they would entrust all their information, as much as they wanted to, they could control that, both online and offline. You were talking in your latest blog post about understanding in the consideration phase where somebody is and presenting, potentially, websites that they hadn’t seen yet or ones that they might like at that point in the car purchase behavior. But the way that they were imagining it was that there would be a credit card that might show that someone had been taking trips from the San Francisco Bay area to the Tahoe region at a certain time of year and had maybe met with real estate agents up there and things like that. But these infomediaries, on top of not just web history but even offline stuff, would be a broker for all that information and there would be this nice marketplace where someone could come and say, “I want to pay $250 to talk to this person right now with this specific message”. So it seems that Google is doing a lot of that, especially with the DoubleClick acquisition. But I’m just wondering about the other side of it, keeping the end user aware of and empowered over that information and where it’s at. So Net Worth is a neat book to check out because the way they were describing it, the end user, even to the broker, would seep out exactly what they wanted to seep out at any given time. It wouldn’t be this passive recording device thing that’s silently taping. My experience so far of using the Google Toolbar that’s allowing the collection of history, is that it’s ambiguous to me about how much of my behavior is getting taken up by that system and used.
So, as Michael says, Google seems to be positioning themselves to be this infomediary. Think about the nexus that’s forming between personalization and Google’s acquisition of every available marketing channel. Google is creating the perfect customer acquisition marketplace. And what’s their typical pricing model? Yes, auction based pricing.
So let’s walk down this path a little. Let’s assume that Google is successful in pushing a high degree of personalization on a significant portion of the population. If you capture all the search history and web history, you have a great data set to predict, with a high degree of accuracy, a consumer’s needs at any given time. The math behind this is not that intimidating for the brain trust that Google has assembled.
Then, let’s factor in Semantic Web functionality. Now, through a series of useful apps, Google takes that personalization data and further adds user value by letting them interact with information. It’s Google’s recent announcement of Universal Search, taken to a new and much more functional level. They’ve already warned us that Universal Search is just the beginning. Google powers the web as our personal assistant, so that for any given life or consumer event, Google is determining our intent, either implicitly or explicitly, and providing us with commercial recommendations. In this case, it’s not really advertising, it’s a helpful recommendation.
Finally, through the Google web of properties, both online and offline, you have the opportunity to present these “commercial recommendations” through a number of reinforced touchpoints. The odds of connecting with an engagement consumer and eliciting the desired conversion are almost 100%.
It’s a perfect marketplace, the ideal match between a prospect and a solution.
So now you have the perfect marketplace, complete with a Google console that lets you target the consumer you want in the way you want. Let’s add one more piece of the puzzle, the pricing model. Auction based pricing has worked pretty well for Google in the past. Why should this be any different. There will of course be a quality scoring component to this. Google is way too obsessive about user experience to just open the bidding to anyone. But let’s say that the Google quality scoring mechanism goes deeper than it does right now, determining exactly the best vendor fits with the determined need and intent of the consumer. Let’s say that Google narrows the list down to the top 10, and then from their database of potential advertisers, who have all indicated what they’re willing to pay for an almost guaranteed customer with an already predetermined ROI (remember, we know with a high degree of accuracy what it is that the prospect is likely to buy), they present the advertiser (or perhaps a few options, as we all like to see options) with the combination of the highest bid price and the highest degree of consumer intent relevancy. Once the bid is accepted, a packaged and personalized message goes out to the prospect through the appropriate channels.
Think for a moment what this does to the entire world of advertising. Hmm…some pretty hefty food for thought.