I just finished reading the updated version of The World is Flat by Thomas Friedman.
I am sure many of you have read it, and for those who haven’t, Friedman examines the many influences shaping business and competition in a technology-fueled global environment.
He gives several examples of how businesses need to catch up with technology and how the Internet has brought the idea of globalization to the forefront of everything we know.
The communications industry is mirroring Friedman’s observations and has hit a major inflection point. Quickly passing are the days when PR firms, marketing firms, and advertising agencies each had their own piece of the communications puzzle. Today, each industry is vying to capture a share of the market created by the Internet.
Meanwhile, today’s businesses see the Internet as a single entity. Isn’t a blog a blog?
Not to the communications industry. PR firms want to craft the messaging on that blog; marketing firms want to use the blog as a platform to promote their brands; ad agencies want to monetize the blog through advertising. Each brings a different strategy -- and, of course, required payment options -- to the table. It is hard for a company to understand three different strategies and pay three different firms for the same blog.
At the same time, communications companies are starting to offer the same kinds of Internet-related services, such as search engine optimization (SEO). Today’s businesses are smart enough to know they need this kind of service, but they are confused about whom to buy it from, since everyone offers it with their own methodologies behind it -- usually stacked in favor of their core business.
And this is just the beginning. It’s no longer true that it’s tough to apply ROI to communications services. The Internet has changed all that; today you can follow the path of prospects and see what led them to a particular Website as they click on a banner ad or type keywords into Google, etc.
So as the economy stabilizes and more dollars are allocated to digital communication strategies, I believe we will undoubtedly see communications companies form strategic partnerships with each other to offer complementary services. We will also begin to see a series of mergers and acquisitions designed to offer businesses a single approach to their communications needs.
Finally, I believe we will see new business models being formed in the communications sector, models that will combine the right team with the right financial structure. The smart group will figure out how to combine several traditional business models together to create the one-stop communications shop.
There needs to be a clear and immediate understanding across each industry that the walled gardens are coming down. Advertisers need to take note, because today’s graphic design and media buying requirements need to be developed with a corporate story in mind or influenced by a business’s keywords. Marketers need to take note that whatever they are marketing must be wrapped around a company’s corporate messaging and the perceived value to their audience. And PR people need to take note that they need much wider distribution platforms, the ones advertisers and marketers can provide.
You can quickly see where the inflection point lies and how convergence begins to make a lot of sense. I look forward to seeing how it all plays out.
While your industry jargon is a bit inscrutable to me, it's still refreshing to come away with the sense that you do understand the creative destruction your industry is experiencing due to all the assorted internet related technologies being developed, deployed and used.
I'd love to be demonstrated to otherwise, but I don't sense any understanding of the loss of the old, one-way communications model. Internet communication, by historic design and current implementation is a two-way communication medium and efforts to run against that dynamic will be brutalized by your industry's targets:
IMHO, your future is not a single model, or even a three-track model, as I understand you see quite well, but rather an amorphous model of presence, discussion, involvement.
Think of a cocktail party with a bunch of folks standing around chatting about subject x: the owner/seller of x, her communications assistant, the host of the party who blogs professionally, the guest who's a political activist, the guest who's a lawyer, the guest who's a... etc etc. If the communications assistant just broadcasts her view of subject x, every other guest will just dismiss her outright for not being a sincere contributer to the discussion.
And they call what they do "integrated" communications, with a team thinking through the print/web advertising strategy, the social-media/blogging strategies, and the pr outreach methods, without these artificial walls between. They're typically small and nimble, like omnistudio.com here in DC, and very often small, nimble and virtual, composed of small entities or entrepreneurs who come on and off the bench as needed per project. And they employ kids for whom a PC has been their window on the world since birth, for whom all of these methods of reaching customers sort of seamlessly run from one to the next.
Characters on "Mad Men" might not know what to make of all of this!
The Internet is a new and better tool for driving business communications. No surprise then to see it adopted as the means of unifying traditional concepts of customer interaction, advertising, and promotion. Unless the old models take advantage of shape-shifting in a creative way, these businesses will lose out big time.
That's right. The value for all the marketing/advertising/PR is the customer. How well we communicate our value to the right customer will determine our success. The venues and tactics are just means to the end.
I like your thoughts about Tom Friedman's book. I don't think we have begun to tap into the understanding of multi-media and integrated messages.
What you are talking about is a true supply chain of resources to business in communicating and building awareness of the business, providing viable channels to increase the services to the customer, and of staying relevant in a changing market.
If we just use the web do amplify what we are doing independently we will never achieve the promise and only increase the cost. I think we have a long way to go!
Who cares about what appears on your business card. What counts is what impressions your target customer is receiving from your company. That defines the hymn-sheet you should all be singing from.
Done the right way all the individual impressions should be coherent and present a single, unified image of the company. If not, the ROI will undoubtedly suffer in a major way.
I think these same issues, the walls crumbling are the same internally to an organization.
20 years ago marketing published a brochure.
Today marketing needs to work with IT to publish an electronic brochure. The best marketers and the best IT people are those that can bridge the disciplines - not those who live just in one world.
You describe the challenges very well - but they apply internally to those companies that can't afford all these third party services.
Thanks Todd for the update on the state of affairs of the advertising and marketing industry.
You say:
Finally, I believe we will see new business models being formed in the communications sector, models that will combine the right team with the right financial structure. The smart group will figure out how to combine several traditional business models together to create the one-stop communications shop.
Coming from a financial background, I have become enamored with the utter failure or lack of successful business models that plague the Internet industry wide.
As someone in the know, what do you see as new business models that bring revenue and real ROI for companies to rollout marketing and advertising campaigns? At some point budgets must justify spending so eventually a business will receive fees or some revenue structure for its efforts. Is there something you can share with the reader as to how this may be accomplished going forward.
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