Giving Customers Scale

scale-leverage

Customers need scale.

Scale is leverage. A way to get lift.

Big business gets scale by aggregating resources, production methods, delivery services — and, especially, customers: you, me and billions of others without whom business would not exist.

Big business is heavy by nature. That’s why we use mass as an adjective for much of what big business does: mass manufacturing, mass distribution, mass retailing, mass marketing, and mass approaches to everything, including legal agreements.

For personal perspective on this, consider how you can’t operate your mobile phone until you click “accept” to a 55-screen list of terms and conditions you’ll never read because there’s no point to it. Privacy policies are just as bad. Few offer binding commitments and nearly all are lengthy and complicated. According to a Carnegie-Mellon study, it would take 76 work days per year just to read all the privacy policies encountered by the average person. The Atlantic says this yields an “opportunity cost” of $781 billion per year, exceeding the GNP of Florida.

We accept this kind of thing because we don’t know any other way to get along with big business, and big business doesn’t know any other way to get along with us. And we’ve had this status quo ever since industry won the Industrial Revolution.

In 1943 — perhaps the apex of the Industrial Age — law professor Friedrich Kessler called these non-agreements “contracts of adhesion,” meaning the submissive party was required to adhere to the terms of the contract while the dominant party could change whatever they liked. On one side, glue. On the other, Velcro. Kessler said contracts of adhesion were pro forma because there was no way a big business could have different contracts with thousands or millions of customers. What we lost, Kessler said, was freedom of contract, because it didn’t scale.

So, for a century and a half, in economic sectors from retail to health care, we have had dominant companies controlling captive markets, often enabled by captured regulators as well. This way of economic life is so deeply embedded that most of us believe, in effect, that “free market” means “your choice of captor.” Stockholm syndrome has become the norm, not the exception.

Thus it is also no surprise that marketing, the part of business that’s supposed to “relate” to customers, calls us “targets” and “assets” they “acquire,” “control,” “manage,” “lock in” and “own” as if we are slaves or cattle. This is also why, even though big business can’t live without us, our personal influence on it is mostly limited to cash, coerced loyalty and pavlovian responses to coupons, discounts and other marketing stimuli.

Small businesses are in the same boat. As customers, we can can relate personally, face to face, with the local cleaner or baker or nail salon. Yet, like their customers, most small businesses are also at the mercy of giant banks, credit agencies, business management software suppliers and other big business services. Many more are also crushed by big companies that use big compute power and the Internet to eliminate intermediaries in the supply chain.

It gets worse. In Foreign Policy today, Parag Khanna reports on twenty-five companies that “are more powerful than many countries.” In addition to the usual suspects (Walmart, ExxonMobil, Apple, Nestlé, Maersk) he also lists newcomers such as Uber, which is not only obsoleting the taxi business, but also the government agencies that regulate it.

It also gets more creepy, since the big craze in big business for the last few years has been harvesting “behavioral” data. While they say they’re doing it to “deliver” us a “better experience” or whatever, their main purpose is to manipulate each of us for their own gain. Here’s how Shoshana Zuboffunpacks that in Secrets of Surveillance Capitalism:

Among the many interviews I’ve conducted over the past three years, the Chief Data Scientist of a much-admired Silicon Valley company that develops applications to improve students’ learning told me, “The goal of everything we do is to change people’s actual behavior at scale. When people use our app, we can capture their behaviors, identify good and bad behaviors, and develop ways to reward the good and punish the bad. We can test how actionable our cues are for them and how profitable for us”…

We’ve entered virgin territory here. The assault on behavioral data is so sweeping that it can no longer be circumscribed by the concept of privacy and its contests.  This is a different kind of challenge now, one that threatens the existential and political canon of the modern liberal order defined by principles of self-determination that have been centuries, even millennia, in the making. I am thinking of matters that include, but are not limited to, the sanctity of the individual and the ideals of social equality; the development of identity, autonomy, and moral reasoning; the integrity of contract, the freedom that accrues to the making and fulfilling of promises; norms and rules of collective agreement; the functions of market democracy; the political integrity of societies; and the future of democratic sovereignty.

And that might be the short list. And an early one too.

Think about what happens when the “Internet of Things” (aka IoT) comes to populate our private selves and spaces? The marketing fantasy for IoT is people’s things reporting everything they do, so they can be studied and manipulated like laboratory mice.

Our tacit agreement to be mice in the corporate mazes amounts to a new social contract in which nobody has much of a clue about what the consequences will be. One that’s easy to imagine is personalized pricing based on intimate knowledge gained from behavioral tracking through the connected things in our lives. In the new world where our things narc on us to black boxes we can’t see or understand, our bargaining power falls to zero. So does our rank in the economic caste system.

But hope is not lost.

With the Internet, scale for individuals is thinkable, because the Internet was also designed from the start to give every node on the network the ability to connect with every other node, and to reduce the functional distance between all of them as close to zero as possible. Same with cost. As I put it in The Giant Zero,

On the Net you can have a live voice conversation with anybody anywhere, at no cost or close enough. There is no “long distance.”

On the Net you can exchange email with anybody anywhere, instantly. No postage required.

On the Net anybody can broadcast to the whole world. You don’t need to be a “station” to do it. There is no “range” or “coverage.” You don’t need antennas, beyond the unseen circuits in wireless devices.

In a 2002 interview Peter Drucker said, “In the Industrial Age, only industry was in a position to raise capital, manufacture, ship and communicate at scale, across the world. Individuals did not have that power. Now, with the Internet, they do.”*

The potential for this is summarized by the “one clue” atop The Cluetrain Manifesto, published online in April 1999 and in book form in January 2000:

Cluetrain's "one clue"

What happens when our reach is outward from our own data, kept in our own spaces, which we alone control? For other examples of what could happen, consider the personal computer, the Internet and mobile computing and communications. In each case, individuals could do far more with those things than centralized corporate or government systems ever could. It also helps to remember that big business and big government at first fought—or just didn’t understand—how much individuals could do with computing, networking and mobile communications.

Free, independent and fully human beings should be also good for business, because they are boundless sources of intelligence, invention, genuine (rather than coerced or “managed”) loyalty and useful feedback—to an infinitely greater degree than they were before the Net came along.

In The Intention Economy: When Customers Take Charge (Harvard Business Review Press, 2012), I describe the end state that will emerge when customers get scale with business:

Rather than guessing what might get the attention of consumers—or what might “drive” them like cattle—vendors will respond to actual intentions of customers. Once customers’ expressions of intent become abundant and clear, the range of economic interplay between supply and demand will widen, and its sum will increase… This new economy will outperform the Attention Economy that has shaped marketing and sales since the dawn of advertising. Customer intentions, well-expressed and understood, will improve marketing and sales, because both will work with better information, and both will be spared the cost and effort wasted on guesses about what customers might want, and flooding media with messages that miss their marks.

The Intention Economy reported on development work fostered by ProjectVRM, which I launched at the Berkman Center for Internet and Society in 2006. Since then the list of VRM developments has grown to many dozens, around the world.

VRM stands for Vendor Relationship Management. It was conceived originally as the customer-side counterpart of Customer Relationship Mangement, a $23 billion business (Gartner, 2014) that has from the start been carrying the full burden of relationship management on its own. (Here’s a nice piece about VRM, published today in CMO.)

There are concentrations of VRM development in Europe and Australia, where privacy laws are strong. This is not coincidental. Supportive policy helps. But it is essential for individuals to have means of their own for creating the online equivalent of clothing and shelter, which are the original privacy technologies in the physical world—and are still utterly lacking in the virtual one, mostly because it’s still early.

VRM development has been growing gradually and organically over the past nine years, but today are three things happening  that should accelerate development and adoption in the near term:

  1. The rise of ad, tracking and content blocking, which is now well past 200 million people. This gives individuals two new advantages: a) The ability to control what is allowed into their personal spaces within browsers and apps; and b) Potential leverage in the marketplace — the opportunity to deal as equals for the first time.
  2. Apple’s fight with the FBI, on behalf of its own customers. This too is unprecedented, and brings forward the first major corporate player to take the side of individuals in their fight for privacy and agency in the marketplace. Mozilla and the EFF are also standout players in the fight for personal freedom from surveillance, and for individual equality in dealings with business.
  3. A growing realization within CRM that VRM is a necessity for customers, and for many kinds of positive new growth opportunities. (See the Capgemini videos here.)

To take full advantage of these opportunities, VRM development is necessary but insufficient. To give customers scale, we also need an organization that does what VRM developers alone cannot: develop terms of engagement that customers can assert in their dealings with companies; certify compliance with VRM standards, hold events that customers lead and do not merely attend, prototype products (e.g. Omie) that have low commercial value but high market leverage, bring millions of members to the table when we need to bargain with giants in business — among other things that our members will decide.

That’s why we started Customer Commons, and why we need to ramp it up now. In the next post, we’ll explain how. In the meantime we welcome your thoughts.


* Drucker said roughly this in a 2001 interview published in Business 2.0 that is no longer on the Web. So I’m going from memory here.

Privacy is an Inside Job

The Searls Wanigan, 1949
Ordinary people wearing and enjoying the world’s original privacy technology: clothing and shelter. (I’m the one on top. Still had hair then.)

Start here: clothing and shelter are privacy technologies. We use them to create secluded spaces for ourselves. Spaces we control.

Our ancestors have been wearing clothing for at least 170,000 years and building shelters for at least half a million years. So we’ve had some time to work out what privacy means. Yes, it differs among cultures and settings, but on the whole it is well understood and not very controversial.

On the Internet we’ve had about 21 years*. That’s not enough time to catch up with the physical world, but hey: it’s still early.

It helps to remember that nature in the physical world doesn’t come with privacy. We have to make our own. Same goes for the networked world. And, since most of us don’t yet have clothing and shelter in the networked world, we’re naked there.

So, since others exploit our exposure — and we don’t like it — privacy on the Internet is very controversial. Evidence: searching for “privacy” brings up 4,670,000,000 results. Most of the top results are for groups active in the privacy cause, and for well-linked writings on the topic. But most of the billions of results below that are privacy policies uttered in print by lawyers for companies and published because that’s pro forma.

Most of those companies reserve the right to change their policies whenever they wish, by the way, meaning they’re meaningless.

For real privacy, we can’t depend on anybody else’s policies, public or private. We can’t wait for Privacy as a Service. We can’t wait for our abusers to get the clues and start respecting personal spaces we’ve hardly begun to mark out (even though they ought to be obvious). And we can’t wait for the world’s regulators to start smacking our abusers around (which, while satisfying, won’t solve the problem).

We need to work with the knitters and builders already on the case in the networked world, and recruit more to help out. Their job is to make privacy policies technologies we wear, we inhabit, we choose, and we use to signal what’s okay and not okay to others.

The EFF has been all over this for years. So have many developers on the VRM list. (Those are ones I pay the most attention to. Weigh in with others and I’ll add them here.)

The most widely used personal privacy technology today is ad and tracking blockingMore than 200 million of us now employ those on our browsers. The tools are many and different, but basically they all block ads and/or tracking at our digital doorstep. In sum this amounts to the largest boycott in human history.

But there’s still no house behind the doorstep, and we’re still standing there naked, even if we’ve kept others from planting tracking beacons on us.

One of the forms privacy takes in the physical world is the mutual understanding we call manners, which are agreements about how to respect each others’ intentions.

Here at Customer Commons, we’ve been working on terms we can assert, to signal those intentions. Here’s a working draft of what they look like now:

UserSubmittedTerms1stDraft

That’s at the Consent and Information Working Group. Another allied effort is Consent Receipt.

If you’re working on privacy in any way — whether you’re a geek hacking code, a policy maker, an academic, a marketer trying to do the right thing, or a journalist working the privacy beat — remember this: Privacy is personal first. Before anything elseIf you’re not working on getting people clothing and shelter of their own, you’re not helping where it’s needed.

It’s time to civilize the Net. And that’s an inside job.

__________________

*If we start from the dawn of ISPs, graphical browsers, email and the first commercial activity, which began after the NSFnet went down on 30 April 1995.

 

 

 

Electronic Health Records and Patient-Centric Design

CIO’s story Why Electronic Health Records aren’t more usable offers an interesting perspective on the current (improved?) state of affairs in medical care records. From the article:

The American Medical Association in 2014 issued an eight-point framework for improving EHR usability. According to this framework, EHRs should:

  • enhance physicians’ ability to provide high-quality patient care
  • support team-based care
  • promote care coordination
  • offer product modularity and configurability
  • reduce cognitive workload
  • promote data liquidity
  • facilitate digital and mobile patient engagement
  • expedite user input into product design and post-implementation feedback.

Nevertheless, it does not appear that EHR vendors are placing more emphasis on UCD. The Office of the National Coordinator for Health IT requires developers to perform usability tests as part of a certification process that makes their EHRs eligible for the government’s EHR incentive program. Yet a recent study found that, of 41 EHR vendors that released public reports, fewer than half used an industry-standard UCD process. Only nine developers tested their products with at least 15 participants who had clinical backgrounds, such as physicians.

Note that this situation is not due to a lack of user-centric efforts to make medical records more useful. Indeed there are several efforts underway, including HealthAuth, Kantara’s Healthcare ID Assurance Working Group, Patient Privacy Rights, HEART working efforts with OAuth and UMA, and more. As the article noted, there are regulatory complications as well as crazy-complicated workflow requirements imposed by the software designers/vendors. We need a shift in focus here.

Volvo’s In-Car Delivery Service

In Volvo launches in-car package delivery service in Gothenburg, Volvo’s new service “lets you have your Christmas shopping delivered directly to your car.” Intriguing idea that saves on parking hassles like those people who are waiting/idling around the favored spots.

With just days to go before Black Friday and Cyber Monday – the busiest online shopping days of the Christmas season – Sweden’s Volvo Cars has unveiled a brand new way to take some of the hassle out Christmas shopping.

The premium car maker has launched the world’s first commercially available in-car delivery service by teaming up with PostNord, the Nordic region’s leading communication and logistics supplier, Lekmer.com, the leading Nordic online toy and baby goods store, and Mat.se, a Swedish online grocery retailer, to have Christmas toys, gifts, food and drinks delivered to its cars. …

The Volvo In-car Delivery works by means of a digital key, which is used to gain one-time access to your vehicle. Owners simply order the goods online, receive a notification that the goods have been delivered and then just drive home with them.

Alas, not available everywhere. Yet.

We are not fish and advertising is not food

This is how the Internet looks to the online advertising business today:

2manyfish

This is how they approach it:

fishfeeding

And this is the result:

fishfeeding_mess

Advertising is a huge source of the “data pollution” Fred Wilson talked about at LeWeb a few weeks ago. (See here, starting at about 23 minutes in.)

What’s wrong with this view, and this approach, is the architectural assumption that:

  1. We are consumers and nothing more. Fish in a bowl.
  2. The Net — and the Web especially — is a container.
  3. Advertisers have a right to target us in that container. And to track us so we can be targeted.
  4. Negative externalities, such as data pollution, don’t matter.
  5. This can all be rationalized as an economic necessity.

Yet here is what remains true, regardless of the prevailing assumptions of the marketing world:

  1. We are not fish. Rather, as Cluetrain put it (in 1999!), we are not seats or eyeballs or end users or consumers. we are human beings and our reach exceeds your grasp. deal with it.
  2. The Net was designed as a wide open space where all the intelligence that matters is at its ends, and each of us sits (stands, walks, drives) at one.
  3. Even if advertisers have a legal right to target us, their manners are terrible and doomed for correction.
  4. Negative externalities matter. A lot. As Fred said in his talk, we eventually dealt with the pollution caused by industry, and we’ll deal with it in the virutal world as well.
  5. The larger economic necessity is for a well-functioning marketplace. We’ll get that online once free customers prove more valuable than captive ones.

The key is to replicate online the experience of operating as a free and independent customer in the physical world.

For example, when you go into a store, your default state is anonymity. Unless you are already known by name to the people at the store,  you are nameless by default. This is a civic grace. There is no need to know everybody by name, and to do so might actually slow things down and make the world strange and creepy. (Ask anybody who has lived in a surveillance state, such as East Germany before it fell, what it is like to be followed, or to know you might be followed, all the time.) We haven’t yet invented ways to be anonymous online, or to control one’s anonymity. But that’s a challenge, isn’t it? Meaning it is also a market opportunity.

We’ve lived in a fishbowl long enough. Time to get human. I guarantee there’s a lot more money coming from human beings than from fish whose only utterances are clicks.

AT&T’s paint job on confusing pricing

attstoreIn AT&T Ridding Some Retail Stores of Cash Register, Counters and Other Clutter, John McDermott of AdAge explains how the company is making its stores “warmer” to improve the “shopping experience” there. Which is all fine, as far as it goes.

Where it doesn’t go is toward fixing AT&T’s pricing. I explain that in a comment under the piece, which I’ll format in a “warmer” way here:

Nice as these showrooms may be, they are still just a paint job on the complicated shell game called “plans.” Right now AT&T is pushing “mobile share” plans, which are confusing in the extreme, and pointless if you’re single. Then you’re here with individual plans, or here if you’re new and solo.

Look closely at the small print. You can pay $30/mo for 3Gb of data or $50 for 5Gb. The overage charge for both is $10 per Gb. So you’re a sucker if you go with the 5Gb plan, and you use only 3 or 4 Gb. I mean, buy the 3Gb and you’ll also pay 50 if you use 5Gb. Confused? Sure. That’s the idea. AT&T, like Verizon and most other mobile carriers, is a confusopolist. See Dilbert for the definition.

AT&T runs these shell games to confuse the customer. Here’s how your mileage may vary::: If you have an iPhone, go to Settings/General/Usage/Cellular usage. See how much Cellular Network Data you’ve used since the Last Reset. Even if you’re a heavy data user, I’m betting it’s way less than 3Gb/mo, which would mean you’re overpaying. But if you want to save by paying for a lower level, there’s only one: $14.99 for 250Mb, or 1/4 of a Gb. The overage charge at that level is $14.99 per 250 MB. That means you pay 4¢ less than $60 per Gb.

Now, how many of us actually look at what we use? And what is the first cost of a bit in any case? (Operations have costs; bits cost ~$0.)

Back when I consulted BT in the UK, an executive there told me the core competence of phone companies was not telephony or communications, but billing. Or, you might say, bilking. Fortunately for the marketplace, Sprint has ceased being a confusopolist and offers unlimited data. If AT&T is truly serious about being good to customers, it should do the same.

Reasonable customers don’t just want a “better shopping experience.” They want a best possible service experience, especially from companies that bill them every month. They also don’t begrudge any business from making money. In fact there are plenty of studies — as well as ample experience in the world — suggesting that people will gladly pay more for better service and human-to-human engagement. For example: Apple stores.

Here’s hoping that AT&T’s new changes are deeper than the paint job they appear to be so far.

Bonus linkage from The Wall Street Journal.

Bringing manners to marketing

The Cluetrain Manifesto was a success, and remains so, because it gives lessons in manners to marketing. Thus Cluetrain is also highly sourced by manners-minded marketing folk, who have eagerly leveraged Cluetrain‘s first thesis: “markets are conversations.”

It is now almost fourteen years since the Cluetrain website went up, thirteen since the original book came out, and three since the 10th anniversary edition hit the streets.Here are some stats, as of today:

Most of those results are generated by polite marketers. Unfortunately, there are still too many marketers of the rude sort. To these marketers, customers are “targets” to be “captured,” “controlled,” “managed,” “locked in” and otherwise treated without the full respect we grant human beings we interact with personally, in actual conversation. These marketers are the types about which the great Bill Hicks said this:


 

That was in 1992. Imagine what Bill would say about marketing at the dawn of 2013. Here’s how that picture looks to Luma Partners:


 

Rotate that thing 90° to the right, so the movement is top to bottom, rather than left to right. Then think about the combined weight of all that marketing, pressing down on the consumer.

No doubt some small pieces of that great mess of marketing are respectful of the consumer. And some of these categories (such as, for example, “publisher tools”) are comprised of companies providing tools for actually interacting with customers, rather than just for targeting at consumers. (The distinction is critical. Doug Rauch, retired President of Trader Joe’s, calls consumer “a statistical category.” He says, “We say customer, person, or individual.”)

Cluetrain was written in 1999, when — compared to the above — digital marketing was still in its Precambrian stage, and was essentially a declaration of independence from marketing. As Jakob Nielsen told me later, Cluetrain‘s four authors essentially defected from marketing and sided with markets against marketing. This was made clear by the Manifesto’s alpha clue, which was written by Chris Locke. Though less quoted than the 95 numbered theses below, it remains the most important:

if you only have time for one clue this year, this is the one to get… 
Unfortunately, that clue was not yet true. Our reach did not exceed marketers’ grasp. That much became clear after Cluetrain became a favorite of clueful marketers, but remained largely unheard-of by the rest of us — who were the ones Cluetrain spoke for, and who actually needed help against marketing’s persistent bad manners.

So, in 2006, I launched ProjectVRM to foster development of tools and services that would provide the reach to exceed marketing’s grasp. As of today there are dozens of VRM developers working on the customers’ side.

We have a model for that reach in the brick & mortar world, in the form of well-mannered one-to-one interactions between vendors and customers, in what the CRM business calls the buy cycle and the own cycle. As I wrote here, “Nobody from a store on Main Street would follow you around with a hand in your pocket and tell you ‘I’m only doing this so I can give you a better shopping experience.'” But online, and through our mobile devices, we are being tracked like animals by a business that often rationalizes the (almost literal) hell out of it.

It would seem a lot worse if surveillance-fed “big data” advertising algorithms didn’t also suck at it, most of the time. One case in point: Facebook. Here is my Facebook profile picture and top-level data, plus some screen shots of ads Facebook has presented to me in the last few minutes:


facebook profile and ad guesswork
Here Facebook fails to respect a fact recorded in my Facebook profile — that I’m married — and assumes I’m cool with being reminded of my age (which has edged into the final demographic). There is zero evidence that I have (or am interested in) foot fungus. (Is that something old people get? If so, is this ad how one would want to find out about it?) There is no evidence, on Facebook or anywhere in the world, that I might be interested in referral marketing, home security, or a career in hospital medicine (much less in Ohio, to which I have been just once since 1963), or that I’m up for a place in South Beach (where I’ve been just twice, long ago). I’ve also told Facebook, back when its ads came with a feedback mechanism, that I consider Classmates.com a rude pain in the ass. (I am sure they are the source of “classof1996.net” — a year off from my actual high school graduation, by the way.)

So, almost across the board, the ads I see on Facebook are rude, wrong, or both. And I’m sure, in this respect, that I’m no exception.

A couple years ago, the top guy at one of the advertising companies told me something interesting about Facebook and Google. He said they were extremely jealous of what the other could do with advertising, but that they could not do themselves — or, at least, not yet. Facebook was jealous of Google, he said, because Google could advertise all over the Web. And Google was jealous of Facebook, because Facebook could get far more personal with its advertising than Google could. Yet, because we are consumers of those companies’ services, rather than customers, we have no direct, money-backed, truly conversational mechanisms for giving them useful feedback. Such as, “Excuse me, but your manners really suck here.”

Although I am not a heavy Facebook user, I have been on the thing since 2006, and have hundreds of friends there. I am also a highly public person and not hard to figure out if you want to get personal with me. Yet I have never seen a personalized ad that appealed to me with anything I’d call accuracy. Once in awhile I’ll see an ad for something photographic, but I don’t know whether that’s because I do a lot of photography, or because the advertiser is carpet-bombing some large population, or… whatever. As Don Marti eloquently points out, the targeted individual in the system diagramed above doesn’t know what’s actually going on. Should he or she bother to care about an ad, the thought balloon over his or her head would say “I don’t know if your company is really spending a lot on advertising, or if you’re just targeting me.”

In Facebook and Google may be forced to ask permission to use personal data, The Guardian visits the prospect of regulatory relief. My problem with that approach is that it assumes that we, as poor “consumers,” are naturally weak. But I don’t think we are. I think we are strong, and only bound to get stronger. That’s why I invite everybody reading this to join Customer Commons, and to start using VRM tools and services. Let’s demonstrate genuine market power, for our good, for the health of the Internet we share, and to give real help to every business that wants to treat real customers with real respect.

Free vs. Followed

grasped hand The fight between the free market and the followed market is about to begin. And the way to bet is on the free market, because it’s what we know works best. Also because the followed market is nuts.  It only persists because it’s normative at the moment, and an enormous sum of investment is going into improving what’s most nuts about it: following people around and constantly guessing at what they might want (or trying to make them want something some algorithm thinks it might be able to make them want).

Let’s look at those norms a bit more closely. In the followed market, we —

  • Maintain separate logins and passwords for every site and service with which we do business, which might number in the hundreds
  • “Agree” to terms of service and privacy policies that we don’t bother to read because we have no choice but to accept them if we want to use the offered services
  • Acquiesce to stalking by sites and their third parties, even as we travel out of those sites and around the Web

In the physical world where the free market remains defaulted, you are free to be who you say you are (or to remain anonymous — that is, nameless in the literal sense), and to arrive at whatever terms are agreeable to you and the sellers you engage, with minimal coercion. This is what we enjoy when we walk through a bazaar, down Main Steet, or through a shopping mall. We don’t have to become a member of Nordstrom, or Trader Joe’s, The Container Store, or the corner grocer, to shop there, or to buy anything from them. And, when we do, we usually assume that we are not being tracked by the store after we leave.

In the followed market, we are free to choose between captors who make all the rules. Our personal identity is the separate one we have with each of them, and which they administrate. Our relationship with each of them is fully contained within their separate silo’d systems. Worst of all, we are stalked after we leave, as a matter of course. “Social” sites such as Facebook aid in surveillance by making it easy for us to spill all kinds of personal data — about ourselves and our contacts — when we “login with Facebook” elsewhere.

And its getting worse.

On July 30, 2010, The Wall Street Jounal inaugurated its What They Know series (http://wsj.com/wtk) with The Web’s New Gold Mine: Your Secrets, by Julia Angwin. Here were the key findings she reported:

• The study found that the nation’s 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none.

• Tracking technology is getting smarter and more intrusive. Monitoring used to be limited mainly to “cookie” files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them.

• These profiles of individuals, constantly refreshed, are bought and sold on stock-market-like exchanges that have sprung up in the past 18 months.

The new technologies are transforming the Internet economy. Advertisers once primarily bought ads on specific Web pages—a car ad on a car site. Now, advertisers are paying a premium to follow people around the Internet, wherever they go, with highly specific marketing messages.

On the 17th of this month, in Online Tracking Ramps Up, Julia begins,

Online tracking on 50 of the most-visited websites has risen sharply since 2010, driven in part by the rise of online-advertising auctions, according to a new study by data-management company Krux Digital Inc.

The average visit to a Web page triggered 56 instances of data collection, up from just 10 instances when Krux conducted its initial study, in November 2010. The latest study was conducted last December.”The main reason for the difference is live online auctions of data about you:

Krux estimated that such auctions, known as real-time bidding exchanges, contribute to 40% of online data collection.In real-time bidding, as soon as a user visits a Web page, the visit is auctioned to the highest bidder, based on attributes such as the type of page visited or previous Web browsing by the user. The bidding is done automatically using computer algorithms.

On June 26, the Journal published On Orbitz, Mac Users Steered to Pricier Hotels, by Dana Mattioli, who writes,

The Orbitz effort, which is in its early stages, demonstrates how tracking people’s online activities can use even seemingly innocuous information—in this case, the fact that customers are visiting Orbitz.com from a Mac—to start predicting their tastes and spending habits.

Imagine walking with a friend down 5th Avenue in New York and attempting to have a conversation about the totally different scenes both of you see when you look into the stores you pass or enter together. One of you sees hats in a store window while the other sees shoes. One sees a door where the other sees a wall. One sees a counter of candies while the other sees an aisle of garden tools. When one of you pauses to look at the cosmetics counter, the colors of lipstick suddenly change, because the store — or its third parties — know it’s you and start making guesses about what you might want, or that the companies paying for shelf space in the store hope to make you want. When the other looks at the store directory, she finds that the departments have been re-arranged. Now the shoe department is to her right when it used to be to the left. The dress shoes are now in the back, and all of them are red and black. Athletic shoes are now in front, because she paused to look in the window of a sporting goods store back up the street.

Whether or not this kind of personalization works is beside a more essential point: that in today’s online marketplace we are being followed constantly, with at most only our tacit approval. Without the conscious involvement of fully human customers, operating as free and independent actors possessing full agency, the online environment has gone insane. That is, without coherence, or grounding in reality. It makes sense only to the vendor’s side of the marketplace, and even there it’s not fully together. Writes Julia Angwin in her most recent story,

More than half the time, Krux found that data collectors were piggybacking on each other. For example, when a user visited a website that had code for one tracking technology, the data collection would call out to and trigger other tracking technologies that weren’t embedded on the site. As a result of such piggybacking, websites often don’t know how much data are being collected about their users.

‘It may be the first medium where the buyers have more information about the price, the value and the amount of inventory than the seller,’ said Krux President Gordon McLeod.

In the free market, as it has been understood since our ancestors first traded shells for seeds, certain things are stable and well understood. These include not only the physical nature of locations, but social norms and protocols for interacting with each other, which begin with the assumption that the other party is a free, independent and sovereign being who controls what is public and what is private about themselves. (Which is why, for example, we tend to wear clothes in public and live in enclosed spaces.)

In the free market it would be absurd for a guy from a store to put a hand in your pocket and hold onto your leg while you walked around, saying “Don’t mind me. I’m just here to see what you’re up to. Actually I don’t want to know your name, but just to track what your body is doing so you can get the best advertising and product offerings, based on what some machines think at the moment would be best for you and for us. It’s for your own good.” Or, more literally, to do the same with an invisible robot tick that attaches to your body and sucks out your data. But in the followed market, that stuff is normative in the extreme. And it works well enough, so far, at least for the advertisers and their intermediaries, that it persists in spite of its absurdities.

The followed market will fail not only because it is absurd and offensive to human sensibilities, but because it is not as effective as the kind of simple human interactions we were all built for in the first place. We don’t have those online yet — not in the commercial space comprised of billions of competing silos. But we will. Count on it. The Web we know is just seventeen years old (dating back to the first graphical browsers in 1995).

In a general way, what the free market still lacks online is a build-out of capabilities on the customers’ side to match the build-out of capabilities on the vendors’ side. That’s what ProjectVRM has been working toward for the past six years. The result so far is a growing list of developers, projects and prospects for major breakthroughs in customer capacity to assert independence, establish privacy boundaries, and deal with vendors as self-empowered equals and not as vendor-defined and -controlled dependents.

Customer Commons’ mission is to preserve and improve the free market, both online and off, by helping customers become free and independent participants in that market. So, while ProjectVRM remains focused on development and developers, Customer Commons is focused on putting those developments to work for customers — and for giving customers a way to participate in that development, and to lead it forward.

And we welcome your help with that.