Guardian column: Dell and the ad earthquake

My Guardian column this week expands on a conclusion of mine about media from my Dell reporting. Snippet:

As the media become more dependent on advertising, so advertising becomes less dependent on the media. With the recent death of the New York Times’ pay service, TimesSelect, and the rumoured razing of the Wall Street Journal’s pay wall, any final hopes of readers paying for content are fading. We prophets of free content are being proven right – whether we like it or not. Advertising is all we’ll have to support content and media. . . .

But the real threat to the advertising gravy train comes not from any change in media, but from a fundamental shift in the relationship between companies and customers that has been made possible by the internet. This hit me like a fist in the face when I went to Texas to interview Michael Dell for Business Week magazine, and to write the coda to my very public blog battle with the company. . . .

Dell’s executives say their new problem is managing and spreading all this knowledge from customers. Its chief marketer said his new opportunity is to rely on customer-advocates to sell computers. And Michael Dell predicted a future of “co-creation of products and services” with customers.

There it is: the fist. Dell and its customers are collaborating on the creation of content, media and marketing – without content, media or marketing companies. Advertising is no one’s first choice as the basis of a relationship. For marketers, it’s expensive and inefficient. For customers, it’s invasive and annoying. And targeted advertising is only slightly more efficient and slightly less annoying. Clearly, the direct relationship between a customer and a company is preferable. But that direct connection cuts out the middlemen – that is the media.

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  • http://www.graphicsplus.info Greg0658

    We live in a systems before folks world.

    How about the other way around for the 21st Century?

    The Times are ripe.

  • Crawford

    There are vanguards. Look at Nike+ and the massive shift in spending that is currently underway on all Nike brand efforts. Co-creation applies to not just products and services but also to the media choices/usage and the content. This is scary stuff, of course, for marketers used to controlling the dialogue (monologue?). But this is now old news, of course. The surviving brands are already onto co-creation. But that doesn’t necessarily mean the death of mass media. Just less reliance on it, and a different approach to it when used. Think Apple for a good example. Co-creation in all forms. But with a keen and discerning designer’s hand at every turn. There’s an artfulness to it. No doubt.

  • http://nevadaappeal.com Kirk Caraway

    Right on target. Also note that with the plethora of new social media sites, blogs, etc. that are relying on advertising to pay the bills, you have a classic supply and demand problem. When you increase the supply of advertising space a hundred fold, what do you think will happen to the prices paid for that advertising? Combine that with the fact that companies are finding ways to reach their customers without advertising (like Dell), and we are going to see one hell of a crash.

  • http://fasterfuture.blogspot.com David Cushman

    Jeff, there remains a requirement for something to serve as the network in which trust is created. That is a role media (not necessarily in its traditional forms) can fill.
    Media is one mediator. Corporations are another. Which one is best suited to creating the conditions for communities of trust and purpose to flourish?

  • Nasser Gurang

    Again – totally away with the fairies – how are people who create the content expected to live…on your kind words – that’s never going to put food on the table.

    Your writing shows a total misunderstanding of the whole newsgathering process. I don’t know why I’m surpised.

    Regarding corporations and advertising – sounds great doesn’t it, advertising pays for the news, the news suits the advertiser – worked for Hitler

    Wonder if you’ll let this go up on your site

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  • Nasser Gurang

    BTW – you talk in glowing terms about The Guardian – but it is a slave driver, did you know that if you don’t write enough for ‘comment if free’ they will not publish you in the paper – this forces people to write, even if they have nothing to say….and they don’t pay for their ‘blog’… Very kind of them, forcing the contributors, enslaving them to a waste of time blog.

    Doesn’t that all slot in well with all your ‘thoughtful’ words of genius of how the internet is a new world order where everything should be free and the public should give all their good ideas to the corporations to exploit. Maybe you should get Dell to give away free PCs and next time I need milk I’ll tell the farmer you said it should be free.

    What’s the difference?

  • http://verabass.com Vera

    “Dell’s executives say their new problem is managing and spreading all this knowledge from customers. Its chief marketer said his new opportunity is to rely on customer-advocates to sell computers.”

    Content providers already have 30+ million unpaid writers.
    Now product providers should have unpaid salesmen?

    The powerful potential of this medium is not in we the people scrambling for a few crumbs of income while the wizards happily use our free content. It is in truly free speech as a complement to free markets between people (rather than between institutions and corporations).

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  • jervis961

    Jeff,

    I loved your interview with Michael Dell but there is more to the story that is left out. I’ve been on IdeaStorm since the first couple of days and it has been a constant struggle to get Dell to interact on the site. Moderation is not equal and sometimes Dell administrators make mistakes and do not act properly. I suggest you take a look at the site and you will see that many of the posted ideas are not for improvements to Dell products but pointed to the site and Dell’s involvement. You may find the comments in this particular idea interesting as to how Dell is REALLY doing when it comes to interacting with customers.

    http://www.ideastorm.com/article/show/74790/Dell_should_post_all_Dell_interview_videos_on_Direct2Dell_or_Studio_Dell

  • http://www.pixelkraft.in Christie Fernandez

    Its time the world had an alternate form of advertising, that is non-intrusive, non-interruptive, and that does not spy on one’s personal life (in the guise of profiling).

    Its time the internet, which is emerging as an alternate media, gets more organised. Why do we need to search for a branded product or service, when it would be easier if it was organised in a directory format.

    A small beginning in this direction has been made in India, where the first online video directory for brands has been launched. http://www.indibiz.tv hosts Commercials and Informercials – with the by-line : “Recall, Compare & Respond”

  • Joseph Thomas

    I believe that the role of media will change and they will become facilitators between the company and the target audience for the product.
    But I want to share this personal DELL story
    I live in India and tried to buy a DELL machine. I wanted to pay by credit card. Rather than guide me to a payment gateway the sales guys here wanted me to give them all my credit card details over the phone.

    Is this how they do business in the USA.?
    Really want an answer.

    Joseph Thomas

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  • http://t3kbiz.com Mahesh Sharma

    It’s extremely ambitious to expect a single platform (the internet) replace the entire role of the media. Without somebody to hold them accountable, the companies will only provide the consumers with only the positive information and not the whole story.

    One of the biggest benefits of the internet is that it will expose a lot of the hack journalism that goes on where reporters just regurgitate press releases without doing any legwork.

    This article assumes that the media’s role is purely as vehicle to deliver advertising. There is some part of the media that purely does this, but this will largely be overtaken by the internet.

    however, it will free up more time for the proper journalism that the media is capable of.

  • http://nickreynoldsatwork.wordpress.com Nick Reynolds (BBC)

    I thought this was a great column Jeff and it reminded me of Heather Gorringe – see this:

    http://nickreynoldsatwork.wordpress.com/2007/11/09/advertising-theres-not-enough-to-go-round/

  • David Marshall

    At the end of the day, companies want to make a greater profit; period. If there is the “appearance” that customers are really dictating to the companies, what to give the customers, and if that sells more product, than let the “appearance” be publicized. I have seen both sides of the fence. It is not nearly as “clean” as you would make it appear; not even close to the reality of what is going on. It just sounds wonderful to think that a big giant corporation is really listening to the customer, because it makes the customer feel really important, and if the customer “feels” important than he will buy from the one that made him “feel” important. Profits go up and unbeknownst to the customer, his input had absolutely nothing to do with the change that took place, or at the very least; a negligible impact.

    Show me the “rubber meets the road” stories where the customers took hold of the horns of the bull and wrestled him to the ground and had his way, and in the end the company shouts out, “The customer has changed us forever and this is what they did!” No one is publicizing those stories. All I see is bloggers talking to bloggers about the impact that bloggers are having on companies’ bloggers, but where are the real success stories? You know; customers rise up, company listens, company makes major adjustments, customers are excited, and the world sees a real company-changing-event where the customer caused it, the company listened, the customer benefits, and profits soar because of the newly discovered reputation of a corporation that is committed to putting the needs of the customer first.

    As I have stated here before, I have not been able to get anyone to actually follow up on one of those honest-to-goodness, customer-impacts-company success stories. The Wall Street Journal started but than in the end didn’t finish. We had some ongoing contact Jeff, and it appeared that you might document a bit of a powerful customer impact story in your article, but I guess there wasn’t room. I guess I am going to have to go this one alone.

    I believe that the first company that actually takes the chance and isn’t afraid to implement all that it would take to do it right, verses just giving the appearance of wonderful customer/company communication, will be the one that becomes the new trend setter in what it means to genuinely care about the customer and his concerns and feelings; at all costs. The risk, is that there is the appearance that a company will have to cease being ruthless and substitute it with kindness; and kindness doesn’t sell. And there is the rub. I believe that kindness will sell. I believe that it is the missing ingredient that is causing the American Corporation to lose ground to Asian Markets.

    The entire concept of the “customer evangelist” is built on the foundation of integrity. To build the customer evangelist model in a company will require a person that not only “lives” integrity, but is able to inspire leaders and workers within the corporation as it is the one ingredient that cannot be faked to sell more goods. As this trickles down to the customer care reps that come into contact with customers, they will not be able to “not care” and when that happens, walls will be broken down. Customers will begin to trust. They will begin to share with others. They will buy and not want to return what they bought; one, because the product was made and advertised with integrity and two; because the customer wants the company to prosper. They will in turn share ideas with the corporation that will benefit the corporation because they want the company to grow and be the ones that will be selling them the next generation of products.

    If I only do one thing in my life within Corporate America, it will be to bring about a revolution that causes corporations to soar and enjoy every minute of it. Happy workers, happy customers, happy investors will be nothing more than a by-product of a vision to genuinely care for the concerns of the customer and do it with integrity. If there is a failure: admit it, say “I am sorry”, and fix it. No hidden agendas. Imagine someone calling Dell and saying that, “I am looking to buy a new state of the art gaming machine and I could use your help.” The customer sales rep responds, “Intel will be launching their new Penryn 45 nm CPU within the next couple of weeks and I believe that will be the better machine for you. Let’s have you wait just two weeks, and I will contact you and set you up with the perfect sale at that time. Otherwise you will be right back here again in 6 months having to upgrade. Granted that would give us two sales and more profit, but we are the real deal when we say, “we genuinely want the very best for our customers.””

    This might sound like “pie in the sky”, but from where I have been sitting, and the customers that I have been in contact with, I believe it is the “only” way for today’s American Corporation, that is trusted by few, to set themselves apart from all the others.