In the increasingly tense struggle to get the advertising model right, Apple and Facebook – amongst others – are at each other’s throats. Reminiscent of the Kroes vs Vodafone battle (quote of the year –“Vodafone aren’t against roaming alliances. They just want a monopoly on them.”) here is the story so far…
Apple CEO Tim Cook said that companies with built-in advertising as a business model are treating their customers like products. He included social media sites in his statement. He followed this up with a note while explaining Apple’s privacy policy by saying that “When an online service is free, you’re not the customer. You’re the product.” Leaving aside the fact that someone is capable of explaining Apple’s privacy policy – ‘I have read the terms and conditions’ (Oh no you haven’t!) – the statement caused some irritation down Facebook Alley.
In response, Mark Zuckerberg responded by saying that Apple’s products do not align with their customers because they are very expensive. They would align with their customers if they were a lot cheaper.
There will, we are sure, be a lot more name calling before this one is over.
The problem is more fundamental. Until the relevant arenas actually understand that their knowledge of customers is historical, even by a few seconds, and work out how to solve this, advertising will be irritating. Reading the report of Zuckerberg calling Apple expensive and non-aligned, the BillingViews operative was confronted by two adverts. One was for greasy skin – offering a cure, not greasy skin. The other was for an online photo album. Just the previous evening an online photo had been collated and ordered. The BillingViews operative does not suffer from greasy skin (and not because he uses the product on offer) and having spent an hour and a half creating a thing of beauty, he is unlikely to want another album for a while.
Of course we need to experiment to get it right. Of course we will get it wrong. But this, surely, is a case where common sense must be engaged.
The critical thing is how information is combined, not the scale or complexity of it. We know how to do the technical stuff. Having contextual information on where, why and how a traveller is travelling is much more useful than knowing that he is at the airport. Amazon is still the only company that has got the ‘recommendation engine’ approach right. They, at least, attempt to take a purchase decision and align it with similar products. This idea must be taken further to truly succeed.
Advertising will undoubtedly be critical to the success of many companies in the digital world. So, showing customers an advert of what they just bought is simply not going to do it.
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