Friday, April 07, 2006

A reminder to me - what has the Internet done?

There are many economic implications that stem from the digital tsunami.

We are now seeing empirical evidence of how relationship management using digital relationship building is changing the value and trading advantage of companies. An
Empirical Investigation of Net-Enabled Business Value by Anitesh Barua, Prabhudev Konana, Andrew Whinston, and Fang Yin. MISQ Dec. 2004 is but one example and there is a much more evidence.
Information and Communications Technologies (ICT) have wrought many changes. And the pace of change is accelerating.
We have seen many exmples of Internet driven disintermediation. This change was well established in the
PR literature half a decade ago. We see it web sites like and eBay.
Google disintermediates the print and distribution of newspapers with
Google News. In response newspapers have gone direct to thier markets and in some cases very profitably. In the Guradian's case the return on discounted real term investment in year to February 2006 is quite acceptable (5%).

This is an economic and marketing shift that relevant to the practitioner with an interest in newspaper publishing, press relations and reach of message.

How far disintermediation will affect retailing is uncertain. What we know is that
it is a lot with implications for retailers, rents for city centre and out of town malls, the pension funds that own them and civic urban renewal and economic planners. This affects jobs, investment, transport and much more. The chain reaction is already noticed and soon enough will be dramatic.

For the practitioner involved in any of these sectors, this change is significant. Old relationships need to be managed and new relationships built and sustained. Some of these relationships will be personal and local others will be global. One of the important issues is that a local issue in Leeds can have an effect in California. The ability to to develop relationship (stakeholder)strategies that recognise these fast changing influences and deploy public relations objective setting and strategies is a management function that will become, progressively more important.

Rockwell Automation in ten years has created technologies that embed in mechanical processes that are, in their own right 'intelligent'. They can make decisions. They are so good that they are embedded in the engines of aircraft taking you on holiday. Most aircraft can do the whole trip without a pilot! In Afghan airspace, most aircraft do not have pilots! The cost of filling supermarket shelves is continually being reduced through more efficient technologies. The cost of food production in both the developed and developing worlds is dropping because of better ICT systems. This in important because it shows how even the fundamentals of primary production are affected. It is not just the 'weightless economy' that is being affected. ICT efficiencies
throughout the supply chain are sought all the time.

In 2006, a software programme was taught to identify the extent to which a number of press clips were favourable from any number of human perspectives. It also identified issues that were of concern to millions of bloggers by reading and assessing millions of blog posts. Add Web sites, on-line media, discussion boards and Usenet and other communications technologies to this mix and there are two problems. Finding all the relevant stuff which can be hidden in the 'long tail' is one and reading it is the other. Neither can be done by a human, but this is content that offers competitive advantage and corporate protection from unhelpful issues.
Such developments will be commonplace and in use before the 2006 intake of PR students finish their final dissertation.
Key in all this is an ability find and process the content (and have an open mind about developing technologies and their deployment) and the ability to advise the client in such a way that the effect is as near as possible two-way symmetrical relationships.

As things stand, there is no way that such students can be taught about these advances. After four years of study they will not be competitively competent. But the most successful organisations will be using such tools and will be gaining confidence in their abilities.

They will need to. The market and issues intelligence derived from these capabilities will determine who wins in the market place and which organisations are most in tune with their constituents.
There is a need to develop this thesis and there is plenty of evidence to help make the case.
This is the kind of hard fact that is important for corporate affairs managers seeking both corporate commitments and a reason for pursuing digital strategies.

In addition, we are used to a process of market disintermediation. This is where the value chain is broken down when the consumer circumvents one or more elements in the supply chain. It is is
great significance to marketing.

Picture: "Creating Meaningful Communities" by Nita Tiffaha Jawary