The Big Money in 'Instrumenting' Consumers

Why and Oracle are buying social-media marketing startups
Photograph by David Paul Morris/Bloomberg

Last week, Oracle Chief Executive Officer Larry Ellison appeared at the All Things D technology conference and—while wooing the audience with his charisma and comedic stylings—talked about “instrumenting” consumers.

While Ellison plays the role of the playboy very well, he’s a geek at heart, and instrumenting is geekese for “monitoring the performance of a computing system as it’s working.” Programmers, for example, have special tools that let them watch the behavior of their code as an application runs to see if anything goes haywire. Hardware engineers have similar tools for monitoring the performance of their computers. The instrumenting holy grail is a tool that lets you spot and fix problems on-the-fly, rather than having to shut everything down.

Ellison’s talk of “instrumenting” consumers came as he explained Oracle’s recent purchase of Vitrue, a six-year-old startup that helps companies manage their brands on social networks. A company can use Vitrue to create a social-marketing campaign, bombard people with tweets, coddle people on Facebook, and then run a data analysis to see if all this socializing made people feel warm and fuzzy enough to buy something., a rival to Oracle in the customer relationship management (CRM) software market, just paid $689 million in cash and stock for Buddy Media, a company whose mission is similar to Vitrue’s.

Twitter has, of course, opened a huge avenue for consumers and companies to engage in a two-way dialogue. People go through an irritating experience with a phone company or airline, tweet about it, and then some company official responds with a soothing message about how sorry they are and how much they want to fix the situation. Indeed, it seems that one of Twitter’s central reasons for being has been to give consumers a new outlet for complaining.

As Ellison pointed out at the conference, companies used to just have databases of what people bought and how much they earned. “Now we can track not only what you’re buying, but what you’re saying,” Ellison said. “We know who your friends are and what you’re saying to your friends. We suddenly have consumers instrumented because they are willing to share their information. Consumers just tell us everything about themselves. Every time you make a comment or tweet—all of this stuff—we have all this detail of people’s lives online, which allows us to market things and sell things and service the consumers in a more insightful way.”

So in Ellison’s world, consumers are basically computing systems that can be instrumented when things go wrong and eventually made to see a company in a more positive light.

Companies certainly want to believe that they can alter someone’s opinion of them through a helpful tweet, or by offering up a coupon on Facebook. Vitrue and Buddy Muddy offer virtual control panels that help companies manage all this work. Buddy Media talks about turning normal tweets into “conversation igniters with messaging power that extends beyond simple text” and scheduling messages “so you can connect with fans when they are most engaged without logging in.” How unromantic. I’d like the person tweaking my subconscious on Facebook to at least be logged in.

So much of the social-media branding push centers on this notion that consumers want to have an ongoing relationship with companies. It all feels very reminiscent of the great Second Life heyday, when IBM, Coca-Cola, and plenty of others set up shop in the virtual world to create deeper bonds with consumers. The virtual stores were empty, though, and the Second Life ad fad went away.

It’s unclear to me that consumers can really be instrumented in the sense that Ellison means. Companies might like to feel that they’re being proactive and having a dialogue with their customers, but ultimately brands aren’t our buddies. My guess is the behavior of the average consumer is more easily manipulated by a scantily clad model in a TV commercial than an “igniter” in a tweet stream.

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