In a world full of answers you start your journey by asking the right questions
Two posts that caught my attention this morning. The first an article in BusinessWeek: The Destruction of Economic Facts
“If we can agree that the recession wasn’t about bubbles but about the organization of knowledge, we can move on to restoring the systems that allowed the global economy to expand more in the last 60 years than in the previous 2,000.” – Business Week
The Businessweek article is interesting because it re-frames our comprehension of why the GFC happened simply by changing the question. The article is even more interesting as a sign post. Pointing out just how disruptive the internet has really been to the global economy.
As regular readers will know by now I have Fauxionary disdain for the word disruptive when it is used in the same sentence as the internet or the web.
VC, Bloggers and seasoned reports alike wax lyrical about the Internet’s unlimited potential to disrupt everything it touches. And yet, as we have proven time and again here on excapite, when you look at the big picture and start adding up the dollars, you discover very quickly that actually the Internet doesn’t appear to have disrupted anything.
Yes Borders has closed and few newspapers have disappeared but examine the history of Dow Jones and you’ll soon discover that about one-third of the Fortune 500 companies disappear every decade. Death is just inevitable part of the business cycle. Well managed companies thrive. Poorly managed companies either go bankrupt or are acquired at a discount by their competitors. Disruption happens when whole industries become just a memory.
The internet doesn’t disrupt. It simply enables and fragments.
Any casual observer can see that industries, markets, cultures and, yes, even corporations and governments are fragmenting at an ever-increasing rate simply because the internet proven to be the enabler that allows this to happen.
It allows formally simplistic linear low value industry value chains to fragment into complex, non-linear and increasing granular specialist “work-packet” orientated entities that are loosely connected via the web into ad-hoc, just in time, “project focused” high value networks.
Now back to the Businessweek article.
At the core of the article is the premise that the GFC happened because of an explosion in information and information products (i.e. Derivatives). These information products evolved to become pseudo currencies that were subsequently traded in unregulated markets operating in the shadow of the global monetary system. In the end the regulated “real world” was disrupted when the full extent of this unregulated and fragmented shadow economy was uncovered.
There is little doubt in retrospect that it was the advent of the Internet that enabled these currencies to emerge and remain largely hidden from the regulators. Looking forward this is perhaps the only area of the global economy that I would concede that the Internet has the potential to significantly disrupt. It is its ability to enable both the established Banking and Finance Industry and 3rd parties (e.g. Facebook, Google, Apple, Nokia, Telcos, Retailers and start-ups like BitCoin) to fragment the monetary system to the point where the monetary system becomes so chaotic that it becomes for all intents and purposes meaningless as an exchange and payment settlement system. Indeed some would say it already has.
This idea of fragmenting into chaos is over course a counterpoint to that other fauxionary idea about the internet: Convergence.
This leads us to the second was a post of interest today: Rick Liebling’s The Cultural Singularity Project
“I believe a cultural singularity has occurred and that is what is causing the tumult within brands and the agencies they work with. This cultural singularity has taken shape over the last 25 years across all aspects of culture with the result being that, despite an abundance of available information, marketers are finding it more difficult than ever to see cultural shifts before they occur. In fact, this problem is a result of the abundance of information available” – Rick Liebling
Rick makes the mistake of confusing the convergence of media, technology and culture with the inevitable chaos of fragmentation. Put simply the reason advertising agencies struggle today isn’t because of the emergence of a cultural singularity it is because the are now tasked with the challenge of surfing the edge of chaos. If anything it is easier to state the case for a movement away from a cultural singularity (i.e. The dominance of TV … e.g. The Beatles appearance on the Ed Sullivan Show in 1964) towards the encroaching chaos of a world of nano-media than vis a versa.
The problem advertising agencies face today is in this increasingly chaotic landscape is simply this.
The original advertising model was based on providing meaning to the consumers life (i.e. a reason to buy things they may or may not need). You could say the industry was originally in the business of setting the agenda.
Somewhere along the line the model evolved into monitoring the marketplace for the trends and then packaging up a message that echoed or at best amplified the market Zeitgeist. You could say the industry was now in the business of following the agenda.
This approach of course works well if you have the time to monitor the market, formulate a creative strategy, produce the advertisement and then publish it. The problem is the internet has not only fragmented the market for messages it has also fragmented time. We are no longer operating in cyclical, industrial age time. We are operating in asynchronous, information age time. So if there is a singularity in all this it is how time has been reshaped by the internet into the real time moment.
This means the industry, which is still operating on industrial age time concepts, is now finds itself busily responding with messages to a world of “yesterdays” rather than creating the messages that will reshape the way market thinks and acts tomorrow. The problem being by the time it responds to yesterday the message has become meaningless because the marketplace has moved on from the asynchronous moment.
As I have said before the advertising industry is at its strongest when it rides at the front of the avant-garde and at its weakest when it finds itself lost in the vacuum of “analysis paralysis” that is at the heart of post-modern management theory.