Information Intermediary Market

by Tim Smith, PhD, 13 October 2004

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Information intermediaries are communication vehicles that transfer concerns between buyers and sellers. Distinct information intermediaries can be identified for the transference of ideas, concepts, desires, and concerns from buyers-to-sellers and from sellers-to-buyers. They are distinguished by their ability to aggregate information into manageable chunks and their ability to aggregate audiences for consuming ideas.

Seller-to-Buyer and Buyer-to-Seller
Classic information intermediaries that communicate in the seller to buyer direction include broadcast media, publications, and the growing internet portals. Buzz marketing information intermediaries include individuals who, through their position leaders within a well defined domain, possess the power to influence behavior of individuals within that domain. Seller-to-buyer information intermediaries are valued by their ability to aggregating audiences for companies to use in communicating their promotional message.

Market researchers are the best known information intermediaries that communicate in the seller-to-buyer direction. Sellers can also use editorialists and columnists as information intermediaries when they understand customer needs and express customer concerns through the media. Buyer-to-seller information intermediaries are valued by their ability to uncover customer concerns and trends, and position these issues within a relevant context.

Number & Density
The information intermediary market for consumer goods and services is highly developed, both in number and in density. In the seller-to-buyer direction, broadcast media and numerous magazines and periodicals aggregate audiences and communicate concepts to potential customers. In the buzz marketing domain, trend setters such as Sarah Jessica Parker show audiences clothing, hair, and cosmetic styles through roles in popular sitcoms. Many of such information intermediaries cross over each other in addressing the same audience. For instance, BMW markets the Mini with advertising, events, and movie / TV placement to show their target audience the joys of the Mini. In the buyer-to-seller direction, numerous researchers, polling agencies, and journals compete for the role of reporting customer trends and demands.

In business markets, the number and density of information intermediaries is greatly reduced. This scarcity is caused by the relatively few potential customers for information on either side of the equation. There are fewer customers and there are fewer sellers. Outside of a handful of targeted publications, the strongest information intermediaries in business markets are non-profit industry associations that host conferences and tradeshows. These tradeshows exist for the primary purpose of bringing buyers and sellers together for direct communication. Here, a few market researchers may be found that are able to communicate some of the buyer’s concerns to sellers.

Distributing & Collecting Information
The scarcity of information intermediaries in business markets force marketing managers to take a different approach to marketing communications and customer demand identification.

With fewer media outlets and tradeshows that only occur a few times a year, business marketers are forced to extract as much value as possible from the outlets available. New product launches, brand repositioning, and major accomplishments are often packed into a single tradeshow with multiple marketers competing for the attention of the same audience of potential buyers. Concurrently, business marketers are forced to rely on more direct approaches in reaching their audience, often bypassing the information intermediary market altogether. Direct mail, telesales, and search marketing are more heavily relied upon in business markets than in consumer markets due to the lack of suitable alternatives. (Search marketing is an approach to optimizing websites and web key word searches for search engine optimization.)

Likewise, business marketers will heavily supplement information gained from market researchers with direct customer interaction in order to better understand buyer demands. While market researchers may be able to communicate overall industry trends, much of their research lacks the specificity required to identify new features and benefits that buyer’s desire. Periodically, a few business marketers will contract for specialized market research to address a particular management issue or reorient the marketing agenda, but the use of market researchers in business markets is not as prevalent as that in consumer markets. User groups, technical groups, executive groups, and other hosted customer events are regularly scheduled by business marketers for the primary purpose of understanding customer needs and guiding product strategy.

Fully exploiting a small and finite number of information intermediaries or tradeshows that are held infrequently is a hallmark of business marketing. On one hand, the scarcity of information intermediaries makes a business marketer’s job easier. Once identified, the potential path for distributing and collecting information is well defined. On the other hand, it makes it more difficult. If the path has not been uncovered or one has been closed, the business marketer may have no options other than going direct.

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Author
Tim Smith, PhD is Editor of The Wiglaf Journal, Principal of Wiglaf LLC, and Adjunct Professor at DePaul Graduate School of Business.

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