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Rushes Sequences - John Battelle interview - USA (Video)

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Dan Biddle Dan Biddle | 16:38 UK time, Tuesday, 17 November 2009

John Battelle is a journalist, a founder of Wired Magazine, and Chairman of Federated Media. He joined the Digital Revolution team to discuss the power of adwords, the paradigm shift imposed upon marketing and businesses by the web, and what he describes as 'the conversation economy'.

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Transcript:
(Please note that this transcript is the 'raw data' text we receive from a transcription company. It is a tool commonly used in production to facilitate editing and review the content. We publish it for users in that same spirit, rather than it standing as a 'perfect' representation of the content.)

Intv How important was Ad Words in bringing money to the web?

John Um, I think Ad Words was the single most important economic milestone of the internet um, to date.  I think there'll be others that are more important in the future um, but and you know, and you're, and you're speaking as, to someone who worked on the team that put the first banner on the web so I'm, I'm giving quarter.  Um, more important than that, than the AT & T ad on Hot Wired in 1994.  But um, it, it provided a platform and inverted the model of marketing and forced marketers not immediately, but over a number of years to recognise the power of the internet. And to have to shift the ay they thought about how they had conversations with customers.  Because the model was you didn't pay until someone clicked. Completely opposite than the model of almost all the rest of dollars in marketing which were you paid and hoped someone called.  You, You paid for impressions not for actions.  Um, and when people did click you wouldn't be successful unless you had something on the other end of that that delivered value.  So now you are not only had to understand someone's intent, you then had to offer a service that would deliver on that intent.  Um, which meant that marketers had to start seeing the internet as something that was essential to their business as opposed to another marketing channel. So it really shifted you know, it, it augured a very important shift of all of business to using the internet as a platform for business as opposed to oh it's that thing over there where we buy some ads and put some banners on.  And I think we're only beginning to see that shift truly take you know, fruition.  I think it was a pivot point in, in, in the history er, of how the internet economy works.  Um, and I, and I think we're kind of in a second inning really.  But it was a very big first step.

Intv Expand on that second point?

John So this is something that I call um, the, the, the conversation economy or you know, the economy of conversation but if you imagine a search as the opening er, salvo of a dialogue you know.  And I say to the machine right, which I increasingly don't see as a machine, I see it as a er, intelligent agent or something of that nature.  And I say um, mortgages, Greenbrae.  OK I am, if, if you're an intelligent marketer I am declaring my desire to either refinance and mortgage in a, in, in, in a town  called Greenbrae or I'm buying a house in a town called Greenbrae or something in that general neighbourhood.  So you unpack that sentence I have just spoken as an opening salvo of a conversation. And you respond back saying something back to me which is your ad that says you know, lowest mortgage rates, Greenbrae California or whatever it is.  Um, if I hit on that ad um, and I, where I come next and what I do next you better be ready to engage with me in a, in a deeper dialogue.  I want to tell you more.  Well I just bought this house and I'm looking for a good mortgage or you know, my sister bought a house and I'm researching it for her or whatever the you know, but you need to be able to go back and forth and instantly know how to be in a dialogue with a customer who you've never met, know very little about except they said these two word right. That will change over time.  The, now you may know their Facebook profile and you may know a lot more about them and technology platform is getting much and mu, and we'll get in to that conversation.  But in essence as a business you need to understand how to go back and forth, have a conversation.  This is not something that most businesses are very good at right.  I mean just call and 800 number and get someone you know, half a world away who you know, doesn't know who you are and is reading a script right. So this shift to understanding how to leverage a technology platform to have a conversation with a customer at scale is a huge shift in business.  It's, we, we don't yet really understand how big a deal this is.  It changes how you think about marketing from a vertical practice to a horizontal one.  It chi, it shifts how you think about product development, it shifts about you know, the kinds of er, er, approaches you take to pricing in real time.  I mean there's just, it makes my head hurt to think how big a shift this is in business.  And it all starts with the blinking cursor and a sentence you know. And before that we didn't have any way to demand a, a brand or a marketer hey we want more, we want to hear from you right.  And now if I put in something like you know, Chevy Camero mo, you know, lease and I don't get results you know, if, if, sorry, did I kick that over? If you put in Chevy Camero lease and, and, and, and I don't get results that, that create a universe of possibility for me around a lease for a Chevy Camero I'm upset right.  And if I click on one and it's a site that doesn't deliver to me some value that brand, whatever that brand might be perhaps its Chevy Financing or GMAC or whatever it is, is dead to me right. And, and that is a, a pretty cruel environment.  And so if you're good in that environment you can win bug time.  And we've seen huge wins where companies get very good at understanding how to have a conversation on line.  Amazon.  Very good at that right.  And, and what do they do?  Well they pretty much displaced I don't know, 10 to 15% of the retail business in the United States right.  That's' pretty good right.  So it's a er, it's, it's understanding how to have that conversation with customers at scale and leveraging a technology platform to do it. And leveraging the fact that as a culture we've shifted how we ask for things and what we expect in return when we ask.  The, the speed with which, the fluidity, the um, expectation that, that whoever we ask will know enough to give us a smart answer.  Its' all Google's fault right.  Because in, in essence if you looked at the interface of computing prior to the internet and prior to Google you'd take a mouse and you'd hover it over something and click on it and, and, and something would open. And then you'd click again and then something would open and then you got in to a spreadsheet or a word processing and then you're like disconnected working like this.  Now you speak and expect a response.  And you don't use your spoken word yet although you can with a new, er, an IPhone Ap but generally you speak through typing the words.  But it's natural language.  It's a big shift in, in interface, and, and, and we expect the world when we speak to completely reorganise around what we say in point 2 seconds. Cos that's what Google does.  And so now you're Wal-Mart and you're supposed to do that.  That's a huge business challenge and, and Wal-Mart has thousands of people on that business challenge right now and they have for the last well, since Google came out.  And, and they're not alone.  Every major company is focused on this and that's a huge story.  Its' a story I find compelling, it's a story I started a business in er, it's a story that you know, I think will have legs for a few decades anyway.

Intv All the information we now give these online retailers.

John That come with us that we're unaware of that are telling wherever we are things we've done in the past that we had no idea that they know but somehow they knew right.  The, the, there's, there's more of this than we could possibly describe.

Intv Does this matter?

John It does.  So a metaphor that I use and, and I don't know how successfully but I'll give it a go is um, this is a societal shift not unlike when we moved from the farms to the village, from the village to the, to, to London right.  And, and all of a sudden we had to develop a social system that understood how we lived cheek by jowl in crowded areas.  And we needed a system of social etiquette, we needed a class system, we had to understand roles and responsibilities that were being redefined.  Um, and er, you know, anthropologically it, com, we, we remade society when we shifted over several generations, hundreds of years really from an agrarian lifestyle to an urban lifestyle.  Um, we didn't at the beginning or even in the middle of that declare that the clothes we wore said things about us that other people judged us by and therefore we became certain people in other people's eyes.  But that is what we're doing on line.  We are clothing ourselves in data unawares and we are being judged as we are walking around the internet by who the cookies say we are um, and who we declare we are by our Face Book profile or our Twitter Stream or um, you know, er, what information we put in to whatever website we might go to. Some of us are more aware than others that this is occurring.  Most of us honestly have no idea.  And if it got turned off tomorrow we'd be upset because all of a sudden the services we had wouldn't be as good because Amazon wouldn't know what they know about you and EBay wouldn't know what they know about you.  And er, for whatever reason when you went to your favourite news site the er, content you got wasn't customised to who you are er, and so on and so forth. Um, we're not aware of the information shadow that we cast and the response to that shadow that, that occurs automatically now.  Um, but as a culture we are going through that process right now and it's fascinating.  I think it's as important as, as important as an agrarian shift to urban, I think this is as big a deal.  And, and it's accelerated right.  So we have, we have done 10 years of this so far really of the commercial, commercial web and 20 years of, of the web generally.  And yet you know, generationally it's one generation right.  A, and, and, and what's happened in those 20 years I think is extraordinarily er, fast.  You know, we've gone form it being open to the, to the public, commercialised; you can buy a domain right to um, you know, people buying domains for millions of dollars. To I don't think there are many people left on the planet who have access to electricity and computers who would ever go back ever go back to not having the internet right.  And, and, and in, in 20 years.  And, and we have a whole cultural you know, set of morays that, that have to catch up with the fact that we've all kind of logged in.  And we, we, we're not there yet and we, and we don't understand the implications of it but we sense it. I mean we're not dumb, we're social beings and we want to be out there.  We just don't' have a clear picture of where we are you know.  And, and we're going to get there and we're going to, I think the way we get there er, is through some tragedies and some successes.  You know, the successes look like Twitter, the tragedies look like people who are murdered because someone stalked them on line.  Or you know, someone's information is stolen and they lose their credit and they lose their life savings. Um, but as a culture I, I really think we haven't had the conversation and I find that fascinating and a huge opportunity like to tell a story right.  Because there's er, there's so many good stories er, to be told about what this all means.  Um, matter of fact talking to you just makes me want to go write again.  It's like what am I doing running this company I got, I got to go write.  Um, God!

Comments

  • Comment number 1.

    CONVERSATION IS CHEAP BUT MEANING MAKES MONEY.

    That's clear from the strategies of all the major Web companies who are adopting Semantic methodologies, investing in artificial intelligence agent development and moving towards sentiment engines (Google, Facebook, Twitter, Wolfram Alpha, SIRI, et al).

    Tim Berners-Lee refers to one of the products of this meaning extraction and connectivity as the "Semantic Graph" whilst Mark Zuckerberg calls it the "Social Graph". That in itself is also simply.........semantics --- lol.

    The objective is the same: to connect us as data objects to people / companies / brands / interests we know and like (and/or consume or even dislike) as relational data objects. Understanding what we consumers mean when we type in some words into a search box and being able to surface more relevant and timely links is a US$trillion business.

    That, though, is not where the story arc of the Web will apex to any form of Enlightenment or conclusion and the Hero wins the day and rides off into the sunset. It's only the baby steps which might one day propel us towards leaps of the magnitude of jumping into warp space for the Web.

    Most likely, the "success" will be when the Web is a true tool and manifestation of global human consciousness about common challenges (preservation of peace, wealth distribution, educational equivalence, cures for cancer, inventory intelligence to prevent over-production and food mountain wastage, energy security, etc.). A Web that has the collaborative technologies to enable us to solve those challenges.

    Also, when the Web (via artificial intelligence, NLP, some amalgam of OOP) is itself.........conscious.

    The "failure" will be if the Web becomes a tool by which we're marketed to death to over-consume; continue to go around in circles and remain ignorant about the consequences to our communities, other countries and the planet of that excess (that too is an example of us not being aware of the information shadow that we cast); develop sociopathic behavior from that culture of excessive want; engage in cyber crime, and plot the downfall of good and sensible society, etc.

    The conversation that's worth having and valuable is how to evolve the Web to be about human global consciousness to resolve those challenges whilst also fostering online business models rather than a Web which purely accelerates excessive consumption and pushes even more marketing information at us.

  • Comment number 2.

    That's some view through the window. :-)

 

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