Doc Searls writes a fantastic treatise on Vendor Relationship Management.
The link to the post is here. The core bit from Doc:
"…the larger trend to watch over time is the inevitable decline in
advertising support for journalistic work, and the growing need to find
means for replacing that funding – or to face the fact that journalism
will become largely an amateur calling, and to make the most of it.
trend is hard to see. While rivers of advertising money flow away from
old media and toward new ones, both the old and the new media crowds
continue to assume that advertising money will flow forever. This is a
mistake. Advertising remains an extremely inefficient and wasteful way
for sellers to find buyers. I’m not saying advertising isn’t effective,
by the way; just that massive inefficiency and waste are involved, and
that this fact constitutes a problem we’ve long been waiting to solve,
whether we know it or not.
Google has radically improved
the advertising process, first by making advertising accountable (you
pay only for click-throughs) and second by shifting advertising waste
from ink and air time to pixels and server cycles. Yet even this
success does not diminish the fact that advertising itself remains
inefficient, wasteful and speculative. Even with advanced targeting and
pay-per-click accountability, the ratio of "impressions" to
click-throughs still runs at lottery-odds levels.
holy grail for advertisers isn’t advertising at all, because it’s not
about sellers hunting down buyers. In fact it’s the reverse: buyers
hunting for sellers. It’s also for customers who remain customers
because they enjoy meaningful and productive relationships with sellers
- on customers’ terms and not just on vendors’ alone. This is VRM:
Vendor Relationship Management. It not only relieves many sellers of
the need to advertise – or to advertise heavily – but also allows CRM
(Customer Relatinship Management) to actually relate, and not just to
capture and control.
As VRM grows, advertising will
shrink to the the perimeters defined by "no other way". It’s hard to
say how large those perimeters will be, or how much journalism will
continue to thrive inside of them; but the sum will likely be less than
advertising supports today.
The result will be a
combination of two things: 1) a new business model for much of
journalism; or 2) no business model at all, because much of it will be
done gratis, as its creators look for because effects – building
reputations and making money because of one’s work, rather than with
one’s work. Some bloggers, for example, have already experienced this.
Today I have fellowships at two major universities, plus consulting and
speaking work, all of which I enjoy because of blogging. The money
involved far exceeds what I might have made from advertising on my
blogs. (For what it’s worth, I have never made a dime of advertising
money by blogging, nor have I sought any.)
On the with
effects side – money made with journalism, rather than because of it -
perhaps the new institutions of journalism will become more accountable
as journalism’s consumers pay its producers directly. I don’t know how
we’ll get to that, but it will necessarily involve VRM, and I would
love to help build it."
Although Doc’s post is primary related to how VRM can apply to journalism, the points in there can be generalized to be relevant in nearly any industry. Every industry is faced with the problem where "advertising itself remains
inefficient, wasteful and speculative" and (nearly) every industry would love to get to the grail where "customers remain customers
because they enjoy meaningful and productive relationships with sellers."
The VRM movement keeps growing.