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My talk at the Canadian Marketing Association: Markets are networks

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.)

13 Responses to “My talk at the Canadian Marketing Association: Markets are networks”

  1. Very useful post – I strongly agree with this David!

    My only quibble would be with section two, which seems to say more that markets are like networks, rather than that they are networks.

    The interesting thing about this perspective is that you get new insights when you view markets as networks metaphorically, but also it give you access to new analytical methods through complex (social) network analysis.

  2. […] markets really are networks For my money, David Weinberger is one of the sharpest thinkers around on the topic of the impact of the internet on business. All three of his books are worth reading (see my brief thoughts on Small Pieces, Loosely Joined). Today on his blog he posted the transcript from a speech he gave to the Canadian Marketers Association called Markets are Networks. […]

  3. I tend to think that currently networks are markets, rather than markets are networks. It may be my cockamamie thinking, but it seems to me that marketers are seeking to connect with whatever networks suggest the possibility of clients or customers. Many networks form around one or more conversations … is “conversations are markets” an added precision, or am I just engaging in mental masturbation ?

    Existing and potential markets are indeed clearly networked, and the people in them are increasingly operating in networked ways, but I think marketers today see a network forming or formed, and then work at making it into a market or treat the network as a market and try to find there way into whatever conversations may be happening.

    There may not be any real difference …

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  5. First, you have to love the irony of dumb-ass, intrusive marketing by San Diego Dentists showing up as a comment on this post. So wrong in so many ways.

    Jon, I believe we’re saying roughly the same thing. I had two main reasons for talking about markets as networks. First, I wanted to stress the that markets aren’t just liquid, they are the intersecting ripple patterns across the surface of liquids. They are loose-edged, complex, transient… Second, I wanted to talk about some of the properties of networks inherited by markets-as-networks.

    As long as neither of us are saying that marketers should have carte blanche to interrupt any network-connected gathering of people they come across — are you listening, San Diego Dentists? — I don’t think it matters whether we say it your way or mine.

  6. Markets are networks. The fact hard to question.

    Now, accroding to Metcalfe’s law, the value of network is proportional to the square of its participants.
    While I do not know about any hard data, my premenition says, that the value of our current highly networked markets is not scaling that fast.

    Where is the disruption? In the ironical, yet omnipresent metaphorical “San Diego Dentists” ?
    Some of today’s networks are indeed so spam ridden that we almost revolt at them – and just refuse to participate.

    Or – does the Metcalfe’s law really apply to all kinds of networks?

  7. […] find Weinberger’s take on Joho the Blog. He affirms stuff which can also be found in the original Cluetrain Manifesto or which can be […]

  8. Reed’s Law might be more applicable: The value of a network comes from its group-forming capabilities, which means it scales exponentially.

    But: I believe that that value is (and Metcalfe’s value) is the value to the _participants_: A net with just two people on it doesn’t have the value to the participants that a net with ten people on it has, because there just aren’t as many people to connect with or possible groups to form.

    The value of networks to _marketers_ may be related to these laws inversely since, if these networks enable the extremely rapid creation and dissolution of loosely connected groups, then it’s much harder for marketers to reach their markets than in the old broadcast days. Worse, there may be a penalty for failed attempts to reach a market (e.g., San Diego Dentists).

  9. Indeed – in original Matcalfe formulation, the value growth was for both participants and network operators, because the very network activity create value (like in any classical commercial telecommunication network).

    When the participation itself is free – these law (laws if you add Reed’s) are no longer applicable – or – worse – may work in the opposite direction – I’m convinced you are right.

    Now, if that is true – this should make today’s marketers quite sad :-)

    Does the transparency and true participation is THE cure ?

  10. Mirek, it might make today’s marketers quite sad. What it means though, I think, is that to successfully market in these networks, you have to be an actual part of them. You can’t market TO networks, you have to market within them. This requires a new set of skills, but it also provides some opportunities as well. The big one is that if you are a genuine part of the network, your connections with people will be stronger.

  11. Where authenticity in marketing does make sense is language. The lingua of Big Brand Advertising where everything is shiny, bright and white doesn’t really make sense in a conversational world. In my experience language is also the most challenging for brands. If you can’t be Number One, then what are you?

  12. Where is it confused? Satirizing, but does one of metaphor existing everywhere guide one angstrom of fruits in a dentist? Some people of network we detest they and refuse junk email that ride that join only nearly really today.

  13. Your post is really nice.Your note on Canadian marketing association is a worthily idea.It is a new topic.

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