Digital Thoughts: Relationship Driven Universe, The Cyclical Nature of the Beast
by Sam Harrelson
Online
direct response marketing exists in a relational bubble
universe that is constantly contracting and expanding.
Rather than being created
ex nihilo (out of nothing) and existing up until some
finite point where the industry will collapse upon itself or
tear apart due to loss of centralization, it seems
that the online marketing universe is here to stay, even in
its perpetual morphing state. In a microcosm of this, we as
members of the industry are doomed to the same fate (if we
don’t cash out and leave for a lucrative off-line career).
The
relationships we share with each other as members of the
online marketing universe are continually expanding,
contracting and ever changing. However, the relationships
are always present and determining the shape of our
respective businesses and campaigns. Relevant for our
industry in all of this is the way that some companies are
able to continually evolve. They make small waves in the
market and continually gain share until they are able to
move from a small publisher or broker to a company that
takes on more and more direct clients until finally the
company sets up a network or agency and begins to broker
their offers to smaller publishers and brokers. This cycle
happens over and over again each year as more companies make
it to the next tier in the market and new companies are
spawned from either pre-existing ones or from individuals in
the industry with a past-history.
Incredibly
enough, physics and cosmology offers a few pointers on this
phenomenon. One of my great interests and the topic of my
senior paper in high school so many years ago was
String Theory. It’s an incredibly complex theory full
of crazy calculus formulas and strange diagrams. However,
the basic point is that the universe as we know it is
actually built upon super tiny strings, or thin one
dimensional objects. Imagine a tiny guitar string. The
strings group together, resonate (like tuning a guitar) and
eventually form larger building blocks such as quarks,
protons, neutrons and electrons that eventually form atoms
that become the foundation for everything else.
An
interesting part of string theory is its predictions about
the universe and space/time. Rather than being created out
of nothing and eventually blowing up or shrinking to nothing
(the tiny strings in string theory aren’t able to collapse
into one point), string theory predicts a universe that is
constantly re-emerging in a cyclical nature. If you read
the article from Scientific American hyperlinked above (and
written by the creator of string theory), particularly near
the end, you will encounter some of the very complex yet
wildly creative theories that have been put forth by those
who study string theory. But the basic point is that string
theory predicts a universe and cosmos that has always been
and will always be.
Our
universe of online marketing is very similar to the universe
predicted by string theory. During numerous trade shows and
phone conversations, I’ve pondered the idea of a centralized
way for publishers to access all the deals available online,
thereby flattening the online marketing universe and
creating a Google like automation to the process. However,
it would and could never work for many reasons. The
position of super-brokers and agencies is too ingrained into
the fabric of online marketing for one. Greed also keeps
such a system from being created. The manpower needed by
advertisers to create such a system and the selflessness
that would be required by all publishers and advertisers
involved would be too intense. There is always the
temptation to game the system or “go around” the network for
a better deal.
Is the
industry doomed to stay in this more inefficient model?
Yes. There will be attempts by agencies to create
Google-like automated systems that allow optimization and
real time management without human involvement and there
will be continued consolidation of the major players (seen
this past year in the Doubleclick and Valueclick
acquisitions), but the beast of inefficiency is too large
and powerful, and the relationship fabric is too thick to
allow any sort of centralization that moves towards
automation and away from relational.
Is this a
bad thing for the industry? I don’t think so.
Relationships have market values that automation doesn’t. I
use Google’s platform quite a bit and make money from
Google, yet I have never sent a Holiday card to a Google rep
or a picture of my house via email. They have never taken
me out to dinner or gone to a NASCAR event with me. However,
I’ve done those things with my human clients, partners,
affiliates, and advertising partners. I’ve never been able
to barter for an extra quarter from an automated set-up, but
I’ve been able to do that within the relational structures
of the agencies I work with. Intangibles still have value
too.
As
interesting as the industry may be in 5, 10, or 15 years, I
imagine that it will be remarkably the same.
Sam Harrelson
is the Co-Editor of the Digital Moses Confidential. Send comments and questions
to sam@digitalmoses.com
