Communication market: “Surgery successful, patient dead!”

Indeed, massive effects of the structural change in the agency and media market were caused by new communication technologies. Not “advertisement in media” provides the desired efficiency, effectiveness and sustainability, but “Communication with system”. This keeps the dialogue with employees, partners, suppliers, customers, and interested parties going on all levels — through a new communication structure based on intermedia communication systems.

The most important perceptions that can be derived are:

1. “Surgery successful, patient dead!”: Communication models and strategies based on “advertisement in media” are not only expensive, but ruinous in the long run.
2. “The new media economy”: Thought-through investments in communication with a system pay off, as they are widely used and are therefore more profitable, sustainable, and more successful.
3. “Analogous and digital as a team”: The future is not in the online communication, but in new, intermedial structured communication architectures that are closest to us as people, because dialogues are possible at any time.

In the following the possibilities of innovations and their economic relevance are the centre of contemplations.

Communication as an economic sector?

During the last years the role and the significance of the term ”Communication economy” has become increasingly the focus of attention. Even politics and parties have discovered this field for themselves. What is behind it?

Communication economy first of all summarises service providers (agencies) and media producers (publishing houses, broadcasters) followed by cultural or artistic organisations or single people to a lesser part. The so-called communication economy however does not pose to be a homogeneous branch, as the individual members or players are too heterogeneous and pursue interests that differ too greatly. In addition, one would have to expand this “branch” by printing houses/media production service providers, so-called internet companies, E-commerce providers, technology developers, advertisement position marketers up to telephone providers, etc. Meaning all those that offer products or services which enable communication. Thus, it seems much more profitable not to perceive communication in an isolated manner, but as a main economic factor for all of us. Everybody who distributes offers, no matter which kind, is at the same time a communication company, or must realise comprehensive communication tasks. This was more difficult in the past than it is today. Because in order to operate communication with media, many expert tools were necessary that needed to be elaborately operated. High investments in devices, training, care, and development were necessary. Today, hardly any expert knowledge is necessary, as Smart Technologies are self-explaining and easy to use.

The old world (up to the 20th Century): 

Monopolistic, advertising budget-centred business models

Specialists for media communication were active in the beginning of the industry era: Printers at first, which were also publishing houses in personal union (these tasks were separated in the course of time), in the second step the specialists for advertisement joined, who took over the sales promotion. Every fraction was assigned specific tasks and specialised, monopolistically characterised business models were developed that show the following core characteristics:

Business models from the “Old world”:

1. Agencies are in debt of advertisers and media companies to create advertising messages that act as mediator between offer and demand.
2. Media producers process data according to the specifications of the agencies, format them for specific transmission channels (print, TV, radio, etc.).
3. Media companies create content, distribute it, and refinance this effort mostly over advertisement proceeds.

Grave errors in the system lead to communication management similar to centrally planned economy

The income flows for agencies, media companies, and producers were ample, the profits were extremely high in the low to medium two-digit range, financed by an economy that had learned that success could be purchased over advertisement. Top-brands with top advertising budgets basically acted as monopolists on their part, as they were able to afford something that was not possible for others. The need of administration effort increased according to the increase of advertisement spendings. Marketing, market research, procurement/controlling, brand leader consultants etc. experienced a boom. The advertisement and sales promotion departments were shut down and blown up again in new form to micro cosmos-like marketing communication departments that organised themselves not only by task areas but by communication and media channels. In order to have this run smoothly, the brand responsibilities and the marketing service tasks were preferably joined with the sales. The consequences were and are fatal.

The majority of the real-life examples have in common that marketing, sales, and communication do not harmonise, respectively the tasks and possibilities of communication are not recognised and used. Communication became a high-cost, rigid administrative task.

This is also mostly because the company managers do not care for the communication to full extent and according to their responsibility, but only are for partial areas like public relations or finance communication. Everything else is delegated (internally as well as externally), with budget specifications that are supervised by controlling and/or procurements without possessing holistic evaluation options for controlling, optimisation, or success measurement. The evaluation of the communication success relates to single disciplines (like direct mailings, advertisement placing in print, TV, or in the online sector) and is based on conventions and currencies that media and media agencies agree on.

But examples also show that agencies and media producers do not carry the sole culpability of a bureaucratised communication practice with the likelihood of a planned economy. The companies themselves are contributors of the misery, because they rate communication as a necessary evil in the sense of an obligation, or, drastically worded, as appendix of the marketing intestines. Accordingly, no strategically relevant decisions can be made to make innovations and resulting new patterns of action reality.