Is VRM radical?

In this post at ReadWriteWeb, Bernard Lumm interviews Richard de Silva of Highland Capital Partners (a neighbor of ours here in the Boston metro’s northwest quarter). It’s about advertising, primarily. Richard and Bernard both agree that advertising is moving more toward “performance-based” models. “Closer to the sale.”

It’s a sell-side conversation, framed by the need to sell goods, move inventory, do branding, and all that. Which is good. Advertising needs all the help it can get, and both Bernard and Richard are clearly ahead of the curve on the topic.

I’m less comfortable with these remarks in Bernard’s post:

Some recent blog chatter says that online advertising is doomed. The best reasoned case for this is made by Doc Searls (of ClueTrain Manifesto fame), who is touting his radical Vendor Relationship Management (VRM) as an alternative. Searls is an academic (Harvard Berkman Center). Another academic, Eric Clemons, Professor of Operations and Information Management at the Wharton School of the University of Pennsylvania, kicked up a storm with his guest post on TechCrunch titled “Why Advertising Is Failing on the Internet.”

Academics are often right, if you don’t mind waiting an eon or two for their pronouncements to be realized. In business, you need a more pragmatic view.

First, I didn’t say that advertising is doomed. I said it was a bubble, and has been for a long time. I explained that in After the Advertising Bubble Bursts, and among the comments below it. (As well as in many prior posts, to which I linked in that one.)

Second, while I’m flattered to be called an academic, technically speaking I’m a fellow at two university centers. What got me those fellowships was my work as a writer and a tech activist, not as an academic (by any definition). For most of my adult life I’ve worked in the private sector, including many years in the advertising business. From the mid-80s to the late 90s, Hodskins Simone & Searls was one of the top tech advertising agencies in Silicon Valley, much of that time occupying a whole building in downtown Palo Alto. So I know a few things about the topic.

Third, and most importantly, if VRM is radical, it’s not in an oppositional way. It’s not against advertising, or CRM. It’s merely an effort to equip customers with better tools for expressing their wants and needs, and for engaging with sellers. I think VRM can eliminate the need for much guesswork in the marketplace, and — as I said in my post — most advertising is guesswork. But that doesn’t mean guesswork, or advertising, goes away. But it does change. If you don’t believe me, listen to Bob Garfield of Advertising Age:

There is no longer a need to warn of a gathering Chaos Scenario, in which the yin of media and yang of marketing fly apart, symbiotic no more. There is no need to seed doubt about the internet’s prospects as an advertising medium, nor otherwise be a prophet of doom.

Chicken Little, don your hardhat. Nudged by recession, doom has arrived.

The toll will be so vast — and the institutions of media and marketing are so central to our economy, our culture, our democracy and our very selves — that it’s easy to fantasize about some miraculous preserver of “reach” dangling just out of reach. We need “mass,” so mass, therefore, must survive. Alas, economies are unsentimental and denial unproductive. The post-advertising age is under way.

This isn’t about the end of commerce or the end of marketing or news or entertainment. All of the above are finding new expressions online, and in time will flourish thanks to the very digital revolution that is now ravaging them. The future is bright. But the present is apocalyptic. Any hope for a seamless transition — or any transition at all — from mass media and marketing to micro media and marketing are absurd.

The sky is falling, the frog in the pot has come to a boil and, oh yeah, we are, most of us, exquisitely, irretrievably fucked.

ReadWriteWeb is a micro medium. So is Digg, in which Highland is an investor. They may be big on the Web, but they’re micro next to the giants of mass marketing that have kept Madison Avenue in business.

What keeps ReadWriteWeb and Digg in business isn’t Madison Avenue. It’s Highway 101.

My point: VRM is also about Highway 101. It’s one more stage in the not-very-seamless transition to whatever succeeds mass marketing.

What Bernard misses here is that VRM is also pragmatic. This is why I’m very insistent that VRM be built on strong open source foundations. Open source work is always pragmatic. That’s its nature.

But VRM is also unproven. People can knock it all they want and not be wrong. Yet.

Our job is to make the pudding that proves our ideas. I beg the patience of Bernard and others while we do that. I promise it won’t take eons.

2 Comments

  1. Alexander Ainslie

    March 27, 2009 at 10:59 am

    Been thinking deeply about VRM and the (viral) Engagement Loop recently for one of our projects.

    I agree with you that advertising is not doomed. It seems to me that the fundamental constructs of advertising are evolving towards an engagement & results oriented model. Thinking about delivering value & ROI to advertisers through using VRM as a filter sounds like a good way to get there.

    @AAinslie

  2. Doc, the problem you have is that VRM is not so much ‘radical’ as ‘rhetorical’ i.e. “expressed in terms intended to persuade or impress”

    Yes, ReadWriteWeb and Digg are being driven by “Highway 101″ (if by ‘Highway 101′ you refer to a mass of users themselves) however, the major problem for VRM is that it is patently NOT being driven by Highway 101… It is ideologically concerned with “Highway 101″ without a broad validation by this claimed constituency… Therefore, its weakness is that it comes across as being a ‘top-down’ prescription for a ‘bottom-up’ solution.

    Making pronouncements like: “VRM is also about Highway 101. It’s is one more stage in the not-very-seamless transition to whatever succeeds mass marketing.” actually succeeds only as a rhetorical statement, it is not even being supported by an evident argument.

    Further, to say: “Our job is to make the pudding that proves our ideas.” is very much like the statement you made last year in your post Clues vs. Trains, cont’d’ (http://tinyurl.com/c2rld3) that: “We need the invention that mothers the necessity” – As I pointed out that the time:

    “We need the invention that mothers the necessity ~ That is an inversion of a parable, the same way that VRM is an inversion of CRM. I get it, and its clever, but… the inverted meaning really kind of messes with the logic of the original parable. The original, points to what drives human invention: ‘need’. To say that we need the invention to mother the necessity (i.e. the need) is to almost admit that ‘need’ has failed to be the driver.” – June 2, 2008

    Where’s the bottom-up push from Highway 101? Many of us see the ‘need’ (me included)… but you can’t pronounce the solution into being, and you can’t rely on an open-source committee approach, because you’ll end up with the horse designed as a camel… This is the ‘Achilles heel’ of VRM… and (I still think) you have to address this ‘elephant in the corner of the room’, before you try and address ‘managing vendors’ on behalf of customers.

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