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Markets Are Networks

My talk at the Canadian Marketing Association

I gave a keynote at theCanadian Marketing Association’s Marketing Week conference in Toronto a couple of days ago. It was a new talk, and I tried to structure it carefully. I’ve gone through my slides, and here’s an extended summary of what I said (or meant) in this 35-minute (?) talk.

Title: After Conversation: Markets as Networks.

Part I: Networked Markets

As Doc Searls said, markets are conversations. But, Doc said something else that I think is just as brilliant: “There’s no market for messages.” That’s harder for marketers to hear, since it points to the essential fact of traditional marketing: The people marketers are talking to generally don’t want to hear from them. And I want to add one more thought to this mix: Markets are also networks.

Traditional markets consist of demographic slices, i.e., “social groups” of people who have never met one another. We choose particular demographics because we think they are susceptible to the same message. Thus, traditional markets are not real things to which we send messages. Rather, messages make markets.

Now, markets are networks…networks of people who converse and interact, spread out across the Internet. For example, at any one moment there are some number of parents with sick children who are on the Net talking and posting, on blogs, discussion boards, social networking sites, Twitter, etc. etc. etc. But that networked market is substantially different in 12 hours because their kids are getting better. And of course 12 hours is an extremely long periodicity for these networked markets. They change constantly. Think of how ideas ripple through Twitter. Furthermore, not everyone in the market of parents with sick kids are in it the same way. The illnesses vary, the seriousness of the illnesses vary, the relationships vary. Think about the gay network in this regard: I’m sometimes in this network because I blog about gay marriage. But if you, as marketer, fail to recognize the complexity of the interests in this group, then you’ll be sending gay dating solicitations to people who don’t want them, including some who are in this network because they’re posting homophobic comments. Networked markets are rippling, ever-changing, hugely complex, inherently unstable, and thus thoroughly unlike traditional markets.

In short: You can’t step into the same market twice.

In fact, these webs of connected people are characterized by their differences as well as by their agreements, by their individuality as well as their connection. (Q: What is the opposite of message discipline? A: The Internet.) This is very different from traditional markets which are defined by demographic similarities. Networked markets are equally defined by their differences.

Part II: The network properties of networked markets

Networked markets take on some of the properties of networks. Let’s look at a few of those properties.

1. Markets at every scale. The Internet works at every scale, unlike any other medium. [I should have said: ...perhaps except for paper.] E.g., Twitter works for Ashton Kutcher with 3M followers and for a tween with her 10 friends. But it is a different thing at each scale. The same is true for networked markets. It’s crucial to understand the social differences at each scale; thinking of Twitter as a single phenomenon is a mistake (for example).

2. Markets are held together by the same “glue” as networks. What holds the network together (not at the level of bits ‘n’ routers, of course) are the interests people express through their links. Likewise for networked markets. Shared interests, not messages, make networked markets.

3. Markets are transparent like networks. Because the connective tissue of the network consists of links, and those links tend to be public, the network tends towards transparency. (Note: tends towards.) I want to mention three types of marketing transparency that I think are crucial.

a. Transparent sources: We need to be able to follow links to the sources (the facts and conversations) that lead you to what you say.

b. Transparent self: We need to know you are who you say you are (no astroturfing or phony reviews!), but we also need to know that you know that you’re a fallible human like the rest of us. The posturing and perfectionism of traditional marketing increasingly will decrease the company’s credibility.

c. Transparent interests. The customer’s interest in a product often are not aligned with the company’s interest in selling it to her. The customer’s interests are complex (buying a bike to save gas money and to get some exercise and to save the earth and to feel like a kid), while, at worst, the company has a single interest. Because of this potential mismatch of interests, we need transparency about the company’s interests.

Summary: Transparency of (a) sources to trust your facts, of (b) self to trust you, of (c) interests to trust what you’re up to on our Internet.

Part III. Four challenges (plus one)

1. How does a marketer deal with the non-alignment of interests? At the very same time, the market may range from wanting to sing kumbayah to being near-violently politically opposed. Tough problem. Part of the answer is to be willing to embrace a straightforward advocacy (with facts and reasons and full transparency) about positions much of the market may disagree with. In a network based on difference, honest disagreement is better than a phony agreeableness.

2. Cluetrain advocated authenticity. Over the years, I find myself agreeing more with Chris Locke’s skepticism about the concept. What does it mean for an organization to be authentic? It’s hard even to make sense of the term. E.g., does it mean that everyone has to agree with the founder’s opinions? Does it mean that people who are working there simply because it’s a job have to pretend to be enthusiastic?

3. Companies are hierarchical because hierarchies scale up to the size of an army (= the number of Ashton Kutcher’s Twitter followers). But hierarchies don’t interact with networks very comfortably. E.g., who speaks for the company?

4. Respect the conversation. Although markets are conversations, conversations are not markets. The conversations are more important than your marketing. And if you participate, then truly participate; don’t participate with the secret aim of subverting the discussion.

5. The hardest thing for marketers: Resist opportunities.

The End.

(By the way, here’s Marketing Magazine’s brief write-up of the talk.)

Read the original blog entry...

More Stories By David Weinberger

David is the author of JOHO the blog (www.hyperorg.com/blogger). He is an independent marketing consultant and a frequent speaker at various conferences. "All I can promise is that I will be honest with you and never write something I don't believe in because someone is paying me as part of a relationship you don't know about. Put differently: All I'll hide are the irrelevancies."

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