Doubling in size every year, the Internet has dropped out of the sky like a bomb and exploded onto the scene of popular culture. Mass media has not shown such a prolonged and intense fascination with a new technology since the introduction of the personal computer over a decade ago. This is the first technology of its kind to achieve global scope.
The first thing the business community desperately needs to know about the Net is not how to use it, but how to comprehend it. What, indeed, is the Internet? Any effective advertising and marketing will be built on the basis of a correct understanding of the Net and its implications. The Internet is a technology, a culture, and a tool. Each of these aspects needs to be understood to properly comprehend the Internet and its role in the development of cyberspace.
The Internet is a distributed and open systems technology. 'Distributed' meaning that it has no central location and 'open' referring to the fact that the operating codes are not proprietary or secret. Everyone can contribute to the design and development of the overall system.
One of the great historical ironies is that the Internet arose out of a Dr. Strangelovean plan to create a communications system that could survive a nuclear holocaust. What was to have been a communications system for the surviving elite of a military-industrial complex has mutated into a subversive neo-democratic (more precisely, anarchistic) cyberculture. The unique technological character of the Internet has endowed it with a fundamentally subversive nature. Over the past twenty five years of its growth, the Internet has demonstrated that it is not subject to privatization, centralization or control. This situates it in direct opposition to the historical dynamics of capitalism and commercialization. The unique technological architecture of the Net has generated an equally unique cultural force that defies present economic relationships.
A genetic relationship exists between the Internet's core technology and its core cultural characteristics. Every introduction of a new technology into society carries with it a latent systemic impact which is similar in fashion to the way our genes predetermine much about us. When sufficiently pervasive, any radically different technology, such as the Internet, will have an equally radical effect on the social, economic, and political structures of the surrounding cultures. As cultures integrate the Internet into their social structures they will gradually adopt the systemic characteristics of the Net. The following contemplates some of the potential systemic changes the Internet will bring to the social structures which interact with cyberspace.
The main historical contribution of capitalism is not economic but social. Its ability to define the individual worker's experience of time and place to a minute degree, simply by dictating where people will be and when they will be there to a degree never before experienced in human culture. Capitalism is unique in history by virtue of its ability to require hundreds of millions of people to accommodate the spatial and temporal demands of manufacturer-based private enterprise.
With the appearance of the factory in the industrial age the centralization of the means of production gradually developed. This process had the effect of moving millions from the countryside into the cities and changing the measure of time from seasons to seconds. Manufacturer-based capitalism placed the means of production (the factories) and the means of distribution (ships, planes, trains, automobiles ...) firmly in the hands of the elite. This same elite then used the state to ensure that all natural resources were removed from the public sphere and placed under the "management" of private industries.
Yet as we hurdle toward the third millennium, the emerging economic paradigm of the wired, digital, Information Age is beginning to undermine the structural relationships of manufacturer-based capitalism. As a result of the Information Age, economies are moving away from dependency on centralized manufacturing to distributed information creation, processing, and dissemination.
The Information Age has begun in earnest now that the primary commodity in Western Capitalism is information. This economic transformation is occurring simultaneously with a structural shift in the nature of information. In the old economy, information was paper-based, centralized, and isolated. In this new economy, information is digital-based, wired (networked) and decentralized (distributed).
Now here is the crux of the matter. The fading economic paradigm is rooted in the elite ownership of both the means of production and the means of distribution. In stark contrast to this, the emerging economic paradigm of the wired, digital Information Age removes the central means of production from the elite and places it squarely in the hands of the intellect worker. In the Information Age, the primary means of production is no longer the "factory" but the independent, creative mind and a $1,000 computer (an information storage and processing system). But how is the intellect worker going to get his or her knowledge products to the marketplace without falling under the control of one, or many, brokers?
The solution to the intellect worker's dilemma of getting products to market is not going to be found in the coming Information Superhighway. The Information Superhighway will be built, owned and controlled by a consortium of telecommunications and entertainment corporate giants. Access to this private infrastructure will be as controlled, bureaucratic, and as expensive as is access to today's mass television audiences. Regardless of the assurances of political and industry leaders to the contrary, the Information Superhighway will not afford equal access to content-providers. It will merely serve to reinforce existing economic patterns and monopolies. We can be certain of this in much the same way that we can be certain that the technological basis of the coming Information Superhighway will be a proprietary architecture. These factors ensure that the InfoSuperhighway is structurally incapable of enabling an economic paradigm shift.
If the Information Age did not also develop a substantially new means of distribution, then the intellect worker would still be indentured to those who control distribution channels. As long as there is a broker placed between the worker's knowledge, products, and the marketplace, the intellect worker's profits are marginal. But this is not the case due to the recent rise of digital, global networks. In a wired world, the intellect worker can attain the status of an independent distributor of knowledge products in an information-based economy.
Unlike the Information Superhighway, the Internet democratizes access to global markets. It levels the playing field of international markets. In the emerging wired, digital information paradigm, the means of distribution to thirty million Internet consumers today, and half a billion at the dawn of the third millennium, is accessible to all at an insignificant cost through the Net.
The Net would have no significance in the old economic paradigm because it would be ineffective for distributing products and services. But in the emerging information economy it reverses temporal, spatial, production, and distribution dynamics of elitist and monopolistic systems. At the turn of the third millennium, Capitalism will have lost its main social controlling force.
The intellect worker is no longer subject to the demands of time and place of the factory owner. The intellect worker is also no longer subject to monopolies of production and distribution. This is the beginning of a mass exodus from the corporate world as entrepreneurs engage the power of cyberspace.
The open and distributed technology of the Internet has created, quite by accident, an entirely new form of human communication — mass participation in bi-directional, uncensored mass communication. We often hear of people talking about the new culture of the Internet. A new culture has arisen because communication is the foundation on which a culture is constructed. Introduce a new form of communication and you create a new cultural paradigm.
The Internet is a new form of mass communication. Mass communication, while itself a relatively new phenomenon, has always involved controlled broadcasts to passive audiences. The mass audience has never had any significant input, or control, over the content of mass communication.
With the Internet these characteristics of mass communication have forever changed. On the Net we find massive numbers of people broadcasting information to massive numbers of people. Whereas the introduction of the Gutenberg Press made mass communication possible for the very, very few who would ever own a printing press, the Internet has turned every owner of a computer, a modem, and a telephone line into a publisher, a radio station, and soon enough, a TV studio. This is the second Gutenberg revolution. This is the new economy of information.
The main social and economic processes we are witnessing in cyberspace is the democratization of mass communication. Not only is communication bi-directional, with audience and content provider (multicaster) acting as one, but it is uncensored.
On the Net anyone has the freedom to say anything they want, within the very broad confines of libel laws, self-censorship, and liberal community norms. The only insurmountable restriction on freedom of speech in cyberspace is that conversation must remain within the prescribed topic of any given online conference. Anyone can say anything they want but they must say it in the designated forum for the subject. These mitigating forces do not lessen the significance of the Internet as the first forum for uncensored mass communication and its role as the final preserve of freedom of speech.
Throughout history, mass communication has always been tightly controlled by members of the ruling elite. In antiquity, crowds were perceived as a threat by the ruling elite and quickly (and usually violently) dispersed. In modernity, all forms of mass communication have been subject to either direct government ownership, indirect control, manipulation, and/or censorship through regulatory bodies such as the CRTC and the FCC, and further indirect control as the result of the mass media's corporate sponsorship.
Mass communication is one of the most powerful forces yet invented. This is why its control has always been the privilege of the elite classes. We see this relationship develop with the invention of the Gutenberg Press. As soon as the Tudor kings recognized the latent power of the press they immediately began to institutionalize censorship and control over early mass printing.
As a public resource, the Net's technology has enabled it to escape the capitalistic dynamics of privatization and as a mass medium, it has also escaped the censorship of the present mass media "kings". Today on the Internet anyone can legally access information banned in many countries, including Canada and the US. Whether it is the Terrorist Handbook, information subject to court-ordered publication bans, censored articles, or details on growing or making illegal drugs, one will find it on the Net. No one can stop anyone from accessing, retrieving, and reading it.
On the Internet today you can retrieve information that is daily impounded by your country's official censors and border guards. With less than a $1000 in hardware and software you can start an Internet-based radio station that would not be subject to the regulations of the CRTC or the FCC. The new paradigm of cyberspace shatters all the old categories of our antiquated and decaying institutions. The Net defies traditional bureaucratic structures and hierarchical power relationships. Cyberspace is proving to be a natural resource that is not subject to the "management" of the government or the corporate elite.
It is here that we see how the nature of the Internet and the nature of advertising (as it is traditionally practised) are at odds with each other. The Internet liberates the audience from the control of corporate and state content providers. In cyberspace, the most basic relationship between programming, content, and advertising is absent. Thus far, the Internet is the first form of mass communication to arise without the sponsorship of advertisers. In cyberspace, content is uncontrolled and reigns supreme. The challenge facing the business community is to adapt to this new medium and the emerging paradigm.
Advertising, however, will continue to exist in cyberspace but it will lack the ability to exercise the control over content to which it has grown accustomed to in other environments. Most of the present difficulties being faced by advertisers on the Internet can be attributed to the industry's painfully slow realization that it is the virtual community, and not the business world or the state, that has the final say over content in a bi-directional, uncensored environment.
Power, advertising, and the Internet are all inescapably related. Traditional advertising is not merely a matter of paying to disseminate a message. Often overlooked is the issue of what messages advertising serves to exclude from media. Advertising is a multi-billion dollar industry that underwrites all major forms of mass communication. This endows advertising with substantial power. Without question, the financial dependency created by the relationship between advertising and mass media functions as a control over the overall content of the media it has supported.
The ad industry continues to deny that it influences content, and most editors and publishers naturally deny editorial interference from sponsors. Listening to the industry constantly deny this incestuous relationship is reminiscent of listening to tobacco industry executives repeatedly trying to convince a congressional hearing that cigarettes are not harmful. Yet the past thirty years of communication studies have produced a small mountain of evidence which demonstrate that the mass media is constantly subject to the influence and bias of its primary commercial sponsors. These myths have been necessary to gain trust and to maintain the appearance of legitimacy.
The advertising industry is on the verge of being shattered into a thousand fragments due to the knowledge explosion and the proliferation of new technologies. Grand theories no longer hold sway over the entire industry. Central theories, techniques, or laws can no longer be relied upon for commercial success. All the familiar categories of Madison Avenue have been destroyed by the postmodern marketplace.
Regardless of the anarchistic environment of cyberspace, the news is not all bad for traditional businesses. As a tool, the Internet does present unparalleled opportunities for effective advertising. The Net delivers an audience for vertical marketing of highly customized products to micro communities in a cost efficient manner not previously available to the manufacturer, retailer, or service provider. One of the effects of the integration of the Internet into the business community will be the rapid growth of low-volume products efficiently marketed to small global consumer groups.
Take the narrow-casting feature of the magazine industry - which is characterized by its ability to deliver an affinity group - and fragment it to the point of infinity; one now has a metaphor for the future of the Internet: the cost effective delivery of niche markets to the business community.
The Internet is the single most significant new tool for business, particularly for small to medium-sized enterprises. What makes the Internet such a powerful tool for the world of the small business and the entrepreneur is that it provides both with the ability to communicate with a global audience that already numbers in the tens of millions.
Prior to the integration of the Internet into the cosmology of the collective consciousness, most small businesses only had access to local markets. Advertising costs of previous mass media functioned to clearly delimit possible growth of most local businesses.
The Internet's historically unique ability to facilitate inexpensive global communication is destined to have a widespread impact on the shape of national and international economies. Take the elitist nature of the past thirty years of multinational corporate economics and extend its power to every small business and you have the democratization of the global marketplace through cyberspace. This is the meaning of the Internet as an economic paradigm shift. No company has yet mastered the Internet as an advertising and marketing tool. Expect this to change as today's paradigm begins to shift into the digital, wired Information Age.