Infomediaries: Trusted third parties that aggregate consumer data and then use its collective allure to negotiate with vendors.
Infomediaries are seen by many as the dominant marketing concept of the future. In fact, the recent publication of Net Worth, Shaping Markets When Customers Make The Rules, by McKinsey guru John Hagel and co-author Marc Singer, has spurred business plans galore by elucidating this concept.
Companies such as PrivaSeek and Lumeria are early entries into the fledgling infomediary field, with (at least initially) the former emphasizing vendor relationships and the latter stressing advanced software solutions. Both have the common challenges of building brands and gaining consumer trust in order to thrive in this projected billion-dollar industry.
So what’s the problem? The problem lies in the “trusted third party” aspect of the infomediary equation. Privacy and integrity violations have already come to light in the early years of the Internet, placing under a microscope the abusive marketing practices that have occurred offline for decades. Combine that with the pressures placed on venture capital backed or publicly traded new media and e-commerce companies, and one can understand why I have little use for the concept of trust in this area.
The one step beyond that Hagel has not taken when he’s preaching the coming consumer empowerment, is the concept of member-owned virtual communities. Seth Godin has given us permission marketing. How about equity marketing?
Without doubt, technology solutions and vendor relationships are essential aspects of the infomediary mix. However, the foundation of business relationships has always been the law, and not after-the-fact litigation or government regulation, either. Consumers are not truly empowered until they can bargain for better terms with their own Internet communities in the form of up-front contractual, fiduciary and equity relationships.
The Value of Personal Data
A few web ventures have already locked onto the concept of offering free stock in exchange for site registration. The Securities and Exchange Commission has thrown cold water on this technique as practiced by the pioneers, by rightly recognizing that shares may not be free when personal data is extracted from the registrant. Because personal data has “value,” (as that term is used by the securities laws, and is exchanged for shares) these publicity and web site traffic-building stunts may well be offers subject to securities registration.
Although a formal opinion has not been issued as of this writing, the SEC is on the right track, and web marketers know it. Instead of trying to fight the SEC, forward-thinking Internet companies should work to establish a new type of securities offering that involves the swap of consumer data in consideration of a slice of the company pie. Contrary to the gimmicky nature of previous “free” share offers, communities can provide a means to create a legal structure that adds significant value to an individual’s demographic and purchasing data.
When you factor in the potential of increasing returns that have made virtual communities the darlings of the IPO set, consumers now have true motivation to be loyal. If vendors are properly motivated to redirect the massive amounts of money currently spent on brand advertising and direct marketing, consumers could conceivably realize annual profits equal to or even higher than the amount spent. This would encourage further spending and further profits. How’s that for consumer empowerment?
The Internet has wrought drastic changes upon the established mentality of corporate marketing. Still, I suspect that most of the revolutionary talk coming from one-to-one Internet marketers and infomediary candidates is simply that. For now.