For the last quarter century Apple fans have flocked to San Francisco in January for the Macworld Expo that opens this week. But Apple recently torpedoed the event when it announced that Steve Jobs would not speak at the show and that the company would shun the next year's Expo.
The announcement caused speculation that Jobs, who has been treated for pancreatic cancer, was in poor health. Jobs' response — stating that he is suffering from a "hormone imbalance" — hardly quelled the fears.
But Apple's decision also reveals how global brands are using the Web and other technologies to bypass traditional marketing channels. As Apple said, the company can now "directly reach more than a hundred million customers around the world in innovative new ways."
With a global recession causing companies to trim expenses, using technology to eliminate marketing middlemen could make mass media, retailers and other selling partners less necessary to companies with powerful brands.
Disintermediation, or the elimination of middlemen, is part of the process of creative destruction that makes economies more efficient. The milk man once delivered bottles door to door, but disposable packaging and refrigerated cabinets made him redundant. Disintermediation is a tradition in the tech industry.
Dell Computer rose to prominence on two innovations — direct sales to large accounts and build-to-order manufacturing, cutting inventory costs before and after it put PCs into boxes. Direct selling helped bring about the demise of COMDEX — short for the Computer Dealer's Exchange — the trade show that had been held from 1979 through 2003 until the disappearance of independent dealers made the event irrelevant.
Trade media are also vulnerable to disintermediation. PC Magazine mailed out its last print edition in January as it converts to all-digital distribution after 27 years. Glossy trade magazines, like the Macworld Expo, have become endangered species of commerce.
The decentralizing power of the World Wide Web continues to change industrial ecosystems by enabling organizations to talk directly to their customers or constituents — while giving formerly passive audiences the means to talk back. One-way publishing or broadcasting is morphing into two-way communication.
An early expression of this new reality was the "The Cluetrain Manifesto." Published in 1999 by four high-tech marketers, it makes the simple but profound observation that people buy what they talk about. Buzz drives business, and thanks to blogs and Web videos, people can now buzz amongst themselves.
Web chatter can hurt or help global brands. Web videos of laptop batteries catching fire have forced Sony into embarrassing and costly product recalls. On the positive side of this trend, global brands from Toyota to Frito-Lay have sponsored contests urging customers to create ads, some of which have aired during the Super Bowl. This practice has become so mainstream that the U.S. Air Force recently asked enlisted personnel to make video testimonials about their jobs for use in recruiting commercials.
In short, individuals and organizations can now tell their own stories and create their own buzz. That is one of the takeaways of "Here Comes Everybody," the new book in which New York University professor Clay Shirky explains how the Web changes the way we win friends, influence people and even design products. For instance, Nokia has created a Web site to let customers beta test new phones, using their feedback to improve designs.
Most companies haven't yet figured out how to listen to customers. But they have become adept at using new communications tools to control their media and marketing destinies. Tech firms like Oracle, SAP and Intel now talk directly to their engineering clientele through dedicated Web sites and company-run trade conferences.
The general purpose trade show, open to competing vendors, is now useful only when a firm is trying to crack a new market. So this week, as Apple retreats back into its marketing cocoon, Cisco Chairman John Chambers will speak at the Consumer Electronics Show in Las Vegas. Cisco has many ways to talk to the engineers who buy its Internet routers but it needs this new venue to support its bid to sell home networking products to consumers.
Macworld was an anachronism, a trade event run by a publishing company somewhat independent of Apple. Given that Steve Jobs is a control freak who boycotted the first Macworld Expo in 1985, the question is not so much why he abandoned the venue but why he waited until now.