Nearly a decade ago, a fundamental shift began reshaping Madison Avenue as the world's biggest brands realized their relationship with consumers was changing and that digital media was shifting the power of communication from the marketer to their customers. Big brands began adopting language like "boss," "king" and even "god" to describe the "consumer 2.0." The rhetoric crested in the fall of 2006, when uber marketer Procter & Gamble chief A.G. Lafley told the industry it was time to "just let go." More than seven years later, it now seems like it was all a bunch of lip service, and that instead of ceding genuine control to the consumer, the world's biggest marketers -- aided and abetted by sophisticated new data, analytics and technology -- have simply figured out even more ingenious ways of hijacking the attention, data and pocketbooks of consumers.
During this same period, a quiet revolution has been taking place among a group of academic thinkers and developers to create a much more holistic marketplace -- one that truly puts the consumer in charge of how, when, where and why they consume brands. And just like the world of ad tech, it's got its own acronym -- it's called VRM -- and surprisingly, few people on Madison Avenue have ever heard of it. But that may be okay as far as some of these developers are concerned, because their end-users are not big businesses, but average consumers. VRM stands for “vendor relationship management,” and it is the exact opposite of the concept the industrial marketing world likes to use to describe its approach to consumers: CRM, or “customer relationship management.”
“The idea from the start has been to encourage development of tools that make customers both independent and better able to engage,” explains Doc Searls, and author (The Intention Economy) and the de facto leader of the academic movement, codenamed “Project VRM,” which he operates out of the Berkman Center for Internet & Society at Harvard University.
Despite a groundswell of activity from its own cottage industry of developers, and some bouts of broader attention from the mainstream marketing world, Project VRM has largely been operating in the shadows, or at the very least, on the fringe of marketing. Some major agency groups have units within units -- typically small venture capital groups exploring next generation ad tech start-ups -- that have been tracking it. (You can see the handiwork of one, MDC Partners KBS+ Ventures’ “Intent-Based Landscape” here.) But when I asked the president of one of the largest independent media agencies if he'd ever heard of VRM, I was met with a blank stare. When I prompted him, “Vendor Relationship Management,” he feigned recognition, replying, “Isn't that some kind of consultant?”
To benchmark VRM's awareness on Madison Avenue,"MediaPost Weekend" asked the business intelligence researchers at Perceptions Group to field a quick study earlier this month, and the results indicate that while a majority claim to have heard of the concept, few have any real sense of what it is. And only a tiny percentage say they are currently using it in some form. Interestingly, marketers seem significantly more aware and informed about it than agencies, meaning Madison Avenue has some catching up to do. When asked how important VRM would be to their company in the “year ahead,” more than half (56%) of respondents said “very” or “somewhat” important, and when asked the same question for 2017, the percentage shot up to 76%.
Despite pockets of buzz over the seven years Project VRM has been active, the group recently has a bout of soul-searching on its listserv, prompted by a question from Searls about whether it should change its name and identity altogether. Among the suggestions from the community were changing the V-word to “value” from “vendor,” but in the end Searls says it will likely stick with the original version and simply focus on doing a better job of spreading the word.
“I think the breakout year will be 2014 or 2015,” he says.
Because the concept still seems so abstract -- if not antithetical -- to many on Madison Avenue, "MediaPost Weekend" plans to begin profiling individual
players in the VRM sector over the next several months in an effort to showcase their ideas, business models, and methods for shifting the leverage in marketing from brands to consumers. Stay tuned
for more soon.
Thanks, Joe. Good report, and much appreciated. The soul-searching you mention led us to focus on a category within #VRM called "first person technologies" (#1ptech). I wrote about it here: http://bit.ly/OxPQVP . There is a good follow-up from @Jeremie Miller here: http://bit.ly/NDxRMR. (Jer is the alpha geek who brought us the protocol on which much of the worlds messaging runs today.) The relevance of both #VRM and #1ptech to marketing is that the market's inhabitants will gradually get much more control over how they interact with the companies that serve them. The appeal to marketing (and Madison Avenue) is interacting with customers who want to relate first hand and on a voluntary basis, rather than second-hand through surveillance and "personalized" analytics. Fortunately, there are a variety of VRM companies eager to stand in the middle and help. You can find them on this list here: http://bit.ly/KNZE40
Joe, like you, I read alot and think alot. I appreciate this refresher and links to Doc's work. Good brainy stuff. The promise of a first-person approach that still provides benefits to all members of the ecosystem is attractive.
Thanks for this post, Joe. Although the awareness and utilization curve has been flat for some time, the platforms and tools have developed to the point that many in the VRM community are using them routinely and are actively improving them. We are in the long tail but we believe that VRM is at or very near the shoulder of the curve.
One aspect of VRM that is often overlooked is that the scope is actually greater than the individual's commercial relationships. Yes, we wish to interact deeply with vendors, but to put the information we gain to good use we also wish to utilize the information from our Quantified Self devices and Internet of Things devices, automobile telematics, health data and social data. Many of us do not feel comfortable giving that dataset to any external vendor and that is driving the need for personal analytics.
But it also presents an interesting opportunity because the combination of all those sources of data into one dataset creates an entirely new class of high-resolution, broad and deep profile of the individual. Even though we do not anticipate giving that entire dataset over to any one company, those companies who do participate in the community and help build tools can help the community determine the right trade-off of value from the vendor for information from the customer. For example, a vendor might provide personal analytics tools in return for anonymized results of that analysis that are presently impossible to get through existing channels. With this value proposition for vendors and marketers, it isn't necessary to believe in VRM to see the opportunity to shape the technology and establish a presence in this space.
I'm actually a bit surprised we do not have more participation from vendors than we do. But that's OK. There's enough momentum that this will happen. The party is rocking and industry is invited. We hope your readers come join us!
Doc sums it up so well when he says that the intent of VRM is "to make Consumers both independent and better able to engage."
Independent from 3rd parties that surreptitiously collect consumer data and guess what it means.
Better able to engage to make sense of our data and send the right signals.
Most Big Data 3rd parties will tell you that consumers don't want to actively participate. But, in my opinion, that is an excuse to rationalize existing solutions as "good enough".
The truth is it is hard to engage consumers. Especially because there is so much crappy content and nefarious characters in the way.
One way to overcome this hurdle is to create an oasis of the willing - a safe haven where developers, researchers, marketers, media, and content creators can experiment with it takes to engage consumers in making sense of their own data.
When the idea is proven by winning consumer adoption, then the idea will gain enough strength to create momentum in the marketplace and survive.
It may be as hard to get these industry silos to collaborate as it is to win the trust of consumers. But if anyone is interested, let's talk.
Katherine Warman Kern
For more than four years I have been trying to develop a concept in online dispute resolution for low value consumer disputes which would enable to interconnect various ODR stakeholders anywhere in the world – buyers and sellers, ODR providers, trustmarks or consumer organizations. When I was thinking about it (it is now called Youstice and we are two months before launch), I had no idea about the concept of VRM. Only recently I discovered the concept and I recognized immediately that it is the same concept and ideas that I want to achieve with my venture. I could immediately identify myself with it! So – thanks a lot for the VRM concept, Doc and thanks for the article!
Zbynek Loebl from Youstice