This post is a response to a fascinating post by the remarkably thoughtful Venkatesh Rao at RibbonFarm. Trying to summarize his post would take an entire post in itself, so I’m simply going to respond and see where the conversation goes.

My only quibble with Venkat’s post is the description of marketing as inherently a numbers game, “by definition”. My argument is that we have distilled marketing into a numbers game because that’s a convenient way to reduce perceived uncertainty and market risk. The reason marketing and engineering look so much alike is that businesses have ~made~ marketing more like engineering, because engineering customers with the efficiency of a machine is far more attractive to the numbers-oriented inmates running the corporate asylum. The average marketing executive answers far more to the CFO these days than they do to customers.

The problem with the marketing funnel as the defining metaphor for marketing is that it’s a machine of efficiency, not effectiveness. It’s like a speedometer–knowing how fast you’re going is great, but it doesn’t tell you if you’re driving off a cliff. You can be incredibly efficient in marketing going entirely in the wrong direction. Which is why partnerships between marketing and engineering, as Venkat points out, are critical. But a more perfect partnership for the purpose of simply creating a better machine to manufacture customers is still missing, I think, the point that the social media revolution signifies.

Let me say clearly, first, that I don’t think social media itself is the point–or the really even the revolution that matters. It’s an indicator of something far deeper at play, which I’ll summarize now, but which requires a more lengthy post to give it the kind of justice Venkat has given to the topic in his post.

Underneath humanistic rhetoric about authenticity, the creation of a customer is an act of control…This explains why customers need to be created, and what innovations really are. Innovation isn’t about creating novel products or services. An innovation is a stimulus that causes a novel and stable pattern of human behavior to emerge.

I think that’s a perfect description of the elevation of what I call “The Magnificent Machine”–the distillation and abstraction of business as a self-substantiating institution, connected to society only through the lens of predatory economics. But business has *always* been a social construct as well. The marketplace is social. Business ecosystems are social. Deals are made and brands are built on trust, which is a social contract. And over the past 100 years, business has arisen in many ways to become the defining construct of human and social identity: More people know themselves by what they do for work, what they buy, what they wear and drive, than by the more traditional frameworks of religion, geography and clan.

But business as a social construct is not convenient for businesses. It’s far more convenient, far less risky, to manufacture customers than to participate meaningfully in a customer community–to the degree that most businesses even accept the importance of the social environment, it’s used as a tool to exert leverage in the customer manufacturing process. As a fungible commodity, customers produce greater short-term margins if you can jettison all that messy social contract stuff labeled as corporate responsibility, green business, not to mention all the costly legislation that protects consumers. The problem is, customers are not isolated patterns of human behavior–they interact. They share impressions, compare product notes, and through the growing accessibility to social networking technology, exert a greater influence over brand reputation and purchasing decisions than the marketers trying to influence them in an “act of control”.

My argument is that what’s driving this change is not social media technology–that’s the enabler. What’s driving it is a fundamental response to generations of being preyed upon by business as a fungible commodity–of being targeted by relentless campaigns that reduce the meaning of the social/business interaction to a process of efficiency that’s convenient to businesses, but not to their customers. Why else have we created do-not-call lists, spam legislation, and government programs for consumer protection? In the simple terms, “consumers” are tired of being minimized in the social contract with businesses. Most would not be able to articulate an intention to change the equation, much less identify any chain of causality between their behavior as consumers and the outcomes shaking so many stalwart markets. They just know that listening to commercials sucks–so they buy a Tivo, or watch more content online. They just know that the fun of buying a product is often killed by finding out the product is junk–so they go online to find out what other people have experienced with the product before they open their wallet. They just know that the realm of social relationships defined by school, work or home are now only slice of what’s available–so they connect with distant friends and new colleagues they meet online to expand their base of knowledge and engagement, much in the same way I’m interacting with Venkat now.

This is a ~real~ phenomenon, and again, the technology is a great enabler, but the drive is more fundamental, more human, more social, than just media. If the relentless drive among humans for understanding, for finding meaning in our lives, can give rise to religion, philosophy and science, why would it not also generate a response to a social and economic equation that has minimized the essence of being human to a stream of consumption behaviors manipulated for the benefit of business?

In sum, businesses are motivated to create the most efficient machine for manufacturing willing customers at the greatest profit. Unfortunately, that motivation is predatory by definition to the people framed as the target consumers. Technology enabled businesses to sway the equation in their favor, by using it to improve the cost of production, to enlarge markets with the technology of transportation, and to flood those markets with carefully choreographed messages to influence purchase decisions. As long as all that technology was expensive, it was an equation defined by business control. But as technology has been increasingly commodotized, consumers have found the means and the opportunity to stem the overwhelming influence of business–a reaction I’m arguing has a fundamentally social root. It’s messy and chaotic, but trends are emerging that show how new lines of power might emerge.

I don’t think any of this minimizes the importance of numbers-driven marketing–businesses are still in a game of survival with aggressive competitors, and they need efficient processes to succeed. But I think that’s only half the story businesses need to understand in today’s changing environment. Customers are not isolated and mass-replicated patterns of human behavior. They are communities of real people who function increasingly as self-organizing systems of market influence, and engaging them profitably and sustainably means a lot more social participation in the process of marketing and innovation than asymmetrical and efficient acts of control.

Brilliant post, Venkat. I agree with so many of the details you describe–and wish I did them better justice with a more refined and less rambling response–it’s only the abstracted picture of where those details drive most businesses that I offer a counterpoint.

Update: In one of the funniest emails I’ve gotten in a long time, a company just notified me that my discussion of the concept “manufacturing customers” violates their trademark, so in the future, they’d like me to know I’m required to capitalize it in acknowledgment of their ownership. I would post the name of the sender, but a) it was a private email, and b) I don’t want to advertise the company. However, if they’d like to post their email as a comment, and make good on their offer to “join the conversation” maybe we can start with a discussion of the fair use doctrine.