The agency and advertising need to get out of the way in the relationship between companies and customers. Agencies may help solve problems—teaching companies how to build networks with customers, assisting them with product launches—but once the consultation is done, the good consultant leaves town.
Tobaccowala suggested agencies remake themselves as networks. He quoted University of Chicago economist Ronald Coase in his seminal 1937 essay, “The Nature of the Firm”—which is also quoted in Wikinomics, Here Comes Everybody, and, it would seem, half the business books published lately. Coase reasoned that firms exist and grow when internal friction is less than external friction, when it is easier and cheaper to deal with insiders than with outsiders. “In a networked world, it’s easier for us to work with outside people than inside people,” Tobaccowala said. “Google, even in its grandiosity, still is a company that believes in forms of partnering.” Agencies and other companies, he said, will look more like Hollywood studios, where 80 percent of what goes into a movie comes from outsiders. Google even provides technology to make such collaboration possible. So Google doesn’t change just the essence of advertising. It changes the essence of the company. The network is becoming more efficient than the corporation.
Google is an avalanche and it has only just begun to tumble down the mountain. Media was closest to what Google does and so Google’s impact on media has been profound and permanent—and it’s not over yet. Next in Google’s path is advertising. Even though it, too, is close to Google—they are in the same industry—the rumble is only beginning to be heard. Agencies are about to be buried, and they still don’t see it coming. Th e industries we examine next may think they are safe, far away in the valley, under a bright sun. But the Googlanche will hit them, too.
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