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Should world leaders all have blogs? Should big companies shift more of their television advertising budgets to the Web? Is there really any value in the virtual communities now consuming huge chunks of student time?
Just 18 months ago, these questions might have been ridiculed. Today, they're not only legitimate, but the answer to each is “yes,” according to Jeffrey Cole, director of a long-term, international study of the impact of computers and the Internet on society.
The technology has empowered people and affected business, politics and social behaviour more than most ever imagined, and there has been an increasing sophistication of users and the Internet itself within the past 18 to 24 months, he said.
“There's a debate to whether there has ever been this much change, this fast, and a lot of people think yes, during the industrial revolution.
‘But it really is remarkable that it has been concentrated within just 10 years, from 1997 through to 2007,” said Mr. Cole, who is director of the Annenberg School Center for the Digital Future at the University of Southern California.
The amount of time people are spending in online communities, where they can create their own characters, is soaring, as is the emotional attachment to these virtual spaces. About 43 per cent of people participating in online communities such as Second Life say their virtual world is as important to them as their physical community, according to the USC-Annenberg Digital Future Project.
“It is more than a geeky escape,” Mr. Cole said in an interview Monday in Toronto. “It actually can be constructive. You can construct things that can move into first life. There's some interesting experiments going on with Arabs and Jews. It's more than what you think, but it's not quite what the proponents say it is. It's fascinating.”
In the commercial world, large companies have established a presence in the three-dimensional world of Second Life as marketing experiments. International Business Machines Corp., Dell Inc. and adidas AG are just a few of the big players trying to tap into a world populated by more than four million registered users.
“It would have been laughed off as a ridiculous sign of fiction five years ago,” Mr. Cole said.
The biggest change derived from the Internet is a new level of personal empowerment, and every business needs to consider what that means for its organization, he said.
Dell, for example, capitalized early on the Web's power. The personal computer maker says it is the first company to have scored online sales of $1-million (U.S.) a day, hitting the target in 1997, three years after taking its direct-order business to the Web. Today, more than half of Dell's $56-billion in annual sales are enabled by the Web.
But when Dell's customer service slipped last year, executives failed to heed the importance of the very medium that had helped make them so successful. The blog buzzmachine.com, run by U.S. journalist Jeff Jarvis, became a cauldron of unsatisfied customers' hostility and amplified Dell's service shortfalls to the broader market.
Dell eventually launched its own blog, one2one.dell.com, to try to deal with the complaints. But Mr. Cole says companies and other organizations need to be operating blogs all the time now, not just at times of crisis.
“Our general advice to companies is people are going to blog about you whether you like it or not, so you should be part of the conversation. We strongly advise companies to have blogs and interact,” he said.
Another area to which most companies have not adapted sufficiently is their advertising strategies.
Citing figures for the U.S. market, he says more than three-quarters (78 per cent) of the population over the age of 12 use the Internet and half of them shop online. More than one-third of Internet users (35.5 per cent) say that they spend less time watching TV since they began using the Internet.
Remarkably, however, only 5 per cent of all advertising is online, and in Canada the figure is even less. “It's amazing the amount of money that is still put into television,” he said.
A much more effective strategy for companies would be to allocate between 10 per cent and 12 per cent of their advertising dollars to the Internet, Mr. Cole said.
