Ben Thompson on new middlemen

Ben Thompson contends the Internet did not do away with middlemen. Instead, he argues, direct-to-consumer companies (e.g. Harry’s) pay Google and Facebook (the leaders in targeted advertising) for customer attention in the same way consumer goods companies have historically paid brick-and-mortar retailers for shelf space.

Ben neglects to mention an obvious counterpoint: direct-to-consumer companies—selling cloud services, undershirts, pillows, or mattresses—frequently advertise on podcasts, and neither Google nor Facebook control podcast advertising. If podcasts can drive sufficient customer acquisition, Ben’s thesis doesn’t hold up—direct-to-consumer companies can successfully integrate retail and marketing acumen and thereby profit.

This is by no means certain. Google could launch a dynamic ad insertion product built with superior ad-targeting technology, and companies would still be beholden to it for customers. Alternately, there may be too few podcast listeners for a direct-to-consumer company to build a sufficient customer base. Either way, I am interested in how Ben’s thoughts regarding direct-to-consumer companies and podcast advertising.

Finally, I enjoyed the following excerpt—the Internet may giveth market access, but taketh away competitive advantage:

…way back when the world wide web first started publishers looked at the Internet and only saw the potential of reaching new customers; they didn’t consider that because every other publisher in the world could now reach those exact same customers, the integration that drove their business — publishing and distribution in a unique geographic area — had disintegrated.