As soon as the Internet made one generation of middle men redundant, it introduced a completely new one – at a great cost to brands.
The first generation of middle men (helping brands and products meet people) was at a cost to the consumers; by adding a premium to the price. The new generation (helping consumers to products) puts the burden on the brands; turning products into commodities and deleting the brand value from the equation.
It has been said by others (rather unimaginatively I must ad) that the Internet first and foremost does two things: removes middle men and distributes content.
The second generation
Aggregator sites are the new middle men, helping consumers to products by collecting and organizing offers in a way that is designed (by the aggregators) to help consumers make better decisions (where the aggregators decide the terms for what constitutes a better decision).
In this process they are compressing all offers into the same condensed formats and removing the brand values from the equation. Distilling down products to its mere physicality and forcing categories to fight it out based on best possible price.
As an example look at hotels.com; it’s a site where you search for and find a place to sleep, all brands are presented equally, all rooms equally – all in order to give the visitor the best possible outset for picking the best product.
(In addition to this aggregator sites end up with owning the valuable customer relationships, an increasingly critical asset in the world of digital business models)
- The first generation rightfully concludes that a generation of middle men are disappearing. As an example he looks to the media industry: Why would brands need media vehicles to traffic in their consumers when they can invest in their own vehicles? Media becomes an expensive wedge between the company and their most important asset.
There are two issues at stake here. The first one is the fact that the new middle men are turning categories and products into physical objects, commodities without any additional value. This not only strips brands of their advantage and takes an important tool away from the consumers decision process (especially when prices are forced to become essentially identical) – but it is also removes a large part of the experience of using the product.
- - We should be careful with underestimating the value of the story part when it comes to products and companies. Carefully designed by generations, marketers (or both) in an effort to make the situations where the products are used more valuable.
The second issue is highly connected to this talk: Eli Pariser: Filter Bubbles. Where as a consequence of the aggregators good intentions these applications and programs are influencing/directing customers on why they buy products and by that limiting people from experiencing or choosing based on their own personal opinion or want.
This new generation of middle men already seems more advanced and unpredictable than the first one, and it should be in our best interest to keep our ears to the ground and antennas to the sky in regards to how widely it affects the conditions for marketing and branding in some categories.