Wednesday, November 18, 2009

Death of Advertising, round 2: personal RFP

I've blogged on this topic once before, but I didn't have as much to say.

Advertising is annoying, isn't it? It sometimes feels like an overenthusiastic robot salesman that always follows you around, interjecting every few minutes about so-and-so product that people who fit your profile might enjoy. Not only is it annoying, it's remarkably inefficient - I don't care about 99.5% of the ads I see on a daily basis. This really sucks!

So, why not kill the ad industry?

I've wanted to say that for a long time, but until recently I couldn't back it up. If we want to get rid of advertising, we need to replace it with something better, otherwise nobody is going to listen. This is setting a remarkably low bar, actually: "we need to improve on a universally-reviled system." It's actually pretty surprising that nobody's managed to do this so far.

Enter Project VRM. You may have heard of CRM; VRM is basically that in reverse. They've floated the idea of a "personal RFP", the idea being that instead of being advertised to, you put something up on a website when you need something, detailing your requirements, and vendors come to you. Think of it as a reverse eBay.

This is a pretty disruptive (and therefore awesome?) idea. It could completely change the dynamic between buyers and sellers, for the better on both sides. If I'm a buyer, I don't have to spend as much time on comparison shopping - options are brought to me, instead. If I'm a seller, I don't have to waste time and money on broadcast advertising - I can just search for people who want what I'm selling, and contact them directly. I can also customize my offer to each individual, something which companies would love to do right now, but can't because broadcast advertising is such a limiting medium.

One problem on the way to adoption could be the chicken-and-egg problem. There's not really any reason for buyers to use something like this until there are sellers, and vice versa. We could get out of this by crowdsourcing comparison shopping, at least initially - having people look at requests, and finding the best deal online that matches, in exchange for a cut of the sale. This would probably even happen spontaneously, as long as the service doesn't explicitly discourage it.

Would this actually kill advertising? Maybe not, but it would certainly change the nature of it. Right now, advertising has two major functions: convincing you that you need a product, and directing you to someplace you can get it. The former goal wouldn't really be affected at all; only the latter would change. All isn't lost, though. In a perfect world, people would see the advertisements, consider them, decide they want the product... and instead of clicking on them, go to a personal RFP site, and get it that way. If this takes off in any meaningful way, we could see advertising take a huge hit.


Æther said...

Problem: advertising also serves to inform or remind you of the existence of a product. It's why there are fast food commercials on at specific times of the day. Your solution requires that people go to the effort of researching a fix for something they may not even think is a problem until they know about the fix.

I suppose from the view of many products, this isn't much of an issue, but what about all the cool kitchen gadgets and cleaning supplies no one really needs but buys because they see the ads!

P. Static said...

Yeah, people wouldn't buy all kinds of useless stuff that they regret a few days later! (As a member of a family with plenty of late-night TV gadgets in the kitchen, I know this feeling well XD)

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