Setting the Stage: The Revolution

Transition to the Information Age

We are in the midst of a massive technological and economic revolution.  Like the Industrial Revolution before it, the Information Revolution is changing how products are produced, distributed, promoted and serviced.  It is changing how consumers make buying decisions, purchase products and are entertained.  As the telephone, electricity and radio of the of the early 1900’s propelled us into the one-way world of mass production and mass marketing, the personal computer, digitalization, and telecommunications of the 1990’s are moving us to the two-way world of mass customization, customer intimacy and one-to-one marketing.
 

Macro Trends Driving the Revolution

Digitalization

Similar to the fundamental changes that electricity made on industry 100 years ago, digital technology is making fundamental changes on industry today.  Electricity brought easily distributed energy that was instantly convertible to light, heat or power.  Today digital technology creates homogenized, easily delivered content that is instantly convertible into whatever medium or platform the user chooses.

Digital technology transforms content (i.e., text, sound, video, software, multimedia and data) into bits.  This standardization allows information to be delivered independent of medium or platform.  The user can choose the form it takes and when, where and how to display it. That is because for communication, processing, storage and display, all information looks the same.

The NGen is coming – A Demographic tsunami
Critics argue that evolutionary forces rule the home – not convergence. That the digital convergence prophecies of George Gilder and Nicholas Negroponte are over hyped.  For example, Forrester Research writes, “Human behavior resists convergence.  Consumers demonstrate stubbornly entrenched biases in their expectations of devices like TVs and phones.  The future of home technology products depends not only on advances in components, but also on how people's expectations for them evolve.”

We would agree with this statement based exclusively on the current Baby Boomer generation.  However, we would argue that this analysis is static.  There is another dynamic here.  Generational shifts are fluid.  A new generation even larger than the Baby Boomers is poised to fulfill the Gilder and Negroponte digital prophecy.  And, they already “walk the walk and talk the talk.”

Don Tapscott in his book, "Growing Up Digital" calls them NGeneration. With 81.1 million children born between January 1977 and December 1997, the NGeneration is bigger than the 77.2 million strong baby boom generation (1946-1964). While Boomers were the TV generation shaped by a passive one-way relationship with television , NGeners are the Net generation shaped by two-way interactive relationships with video games, CD-ROMs, Online services, the Internet and networked computers.  For the first time ever, the children of an entire generation have a deeper understanding and comfort with technology than their parents.

It may be true that human behavior resists convergence, but a whole new generation who already “buy in’ to convergence are coming of age.  As Tapscott puts it, “ It's like sitting at the beach and wondering what the weather is going to be like that day and there's a tsunami 100 yards high out beyond the horizon that nobody can see. We haven't seen this intersection of technology and demographics before."

Convergence

Driven by faster, smaller, cheaper, microprocessors, more intelligent consumer electronics, cheaper, higher bandwidth, packetized communications, and digitized content, interconnected heterogeneous networks are connecting people, devices, and global content.  This convergence of  technologies is doing more then just merging devises (i.e., television, telephone and the PC).  It’s literally, shifting industry-wide competitive forces, from vertical form to horizontal, cross-industry function, creating an entirely new competitive environment.

Previously, companies competed by industry centric, vertical form.  Telecom companies competed with other telecom companies for phone and voice products.  Publishing companies competed with other publishers with printed text products and so on. Now content creators seek to put a feed on every network-connected device possible (cell phones, PDAs, PCs, WebTV, etc.

Deregulation

Deregulation is breaking down competitive barriers in the communications and media industries.  The Telecommunications Reform Act of 1996, signed into law by President Clinton February 8, 1997, deregulates telephone and cable television monopolies to spur competition.   Driven by and further fueling the forces of digitalization and convergence, this legislation frees cable, long-distance telephone and local telephone companies to invade each other's markets by offering a range of telephone, video, and high-speed data communications.

This legislation in effect replaces the Industrial  Age, vertical oligopoly, communication structures with an Information Age, horizontal free-for-all, competitive marketplace.  Again, we see this trend of horizontal replacing vertical. The intent of this legislation is to release the forces of competition to drive innovation and lower costs to consumers.

The Transition

We believe that the forces of digitalization, convergence, the NGeneration and deregulation are accelerating the Information age transition. This will forever change the way we produce, market, sell, service and communicate products and services.  It is transforming the relationship between producer and consumer and creating a networked economy. The Internet is the first phenomenon of these trends -- the first two-way marketing medium. Now Television is poised to take two-way media to ubiquity!

Our Position

MatchLogic, an online advertising management services firm, enables advertisers to easily achieve effective, one-to-one communications with consumers on the Internet. We have a focused mission: "To help online advertisers deliver the right ad, to the right person, with the right offer, at the right time... and know within seconds if that ad was successful."

Exclusively a service company, we do not buy or sell media, we don't represent web sites or sell software, nor do we compete with ad agencies on any level. Instead, we are dedicated to providing our advertiser and agency clients a complete solution for the management, measurement and optimization of their Internet advertising efforts.

The convergence of television and the Internet only serves to expand our clients marketplace and hence our potential market. We feel it is therefore critical that W3C take an active position in ensuring a homogeneous technological base for the new medium. Furthermore we would like to see the W3C work closely with standards bodies in the cable, satelite and television space, providing architectural leadership in extending the Web into this new medium.