TACTICAL INSIGHTS MANAGING THE IMPACT OF TECHNOLOGY ON
THE IMPACT OF THE INTERNET ON
PUBLIC RELATIONS AND BUSINESS
COMMUNICATIONS:
HOW NEW MODELS OF COMMUNICATIONS WILL CREATE RISKS AND
OPPORTUNITIES FOR COMMUNICATIONS PROFESSIONALS
The Internet has radically altered the nature of com-
munications. This has important consequences for the way
organizations share and distribute information with their
customers, key constituencies and the general public. In the
past, information flows were mostly linear and hierarchical,
and easy for organizations to influence or control – e.g., via
public relations and mass media advertising. The Internet
will change this. The open, interconnected nature of the
Internet is replacing this linear information “supply chain”
with a network-based, peer-to-peer communication model
that lacks clear locus points.
The impact that the Internet has had on global
commerce can be measured as a tiny fraction: under
1% of the value of all global trade is yet done online.
By contrast, the impact of the Internet on global com-
munications has been logarithmically large: in the space
of a decade the number of people communicating online
went from thousands to hundreds of millions.
IMT Strategies conducted in-depth interviews with
more than 100 marketing and communications profes-
sionals at large traditional businesses, new Internet
firms, offline and online media, public relations firms,
marketing agencies and specialized communications
consultancies. This research makes clear that public
relations and communications specialists are struggling
to recognize the impact that the Internet will have on
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SALES AND MARKETING
how communication occurs. They are reacting slowly
to the changes it will make in online business and
culture. This report aims to advise public relations
and communications professionals how to best take
advantage of new opportunities presented by the shift to
a networked model of communications.
The new mix of PR services will incorporate ele-
ments of management consulting, business intelligence,
publishing, direct marketing and Internet strategy.
Considering that U.S. businesses today spend nearly
one-third of one trillion dollars annually on the above
services, the public relations industry could double its
U.S. 1999 annual billings ($3 billion) by siphoning off
a mere 1% of the service fees spent on those industries
with a new hybrid set of marketing communications
skills.
Public relations and communications professionals
must demonstrate mastery of these new communications
models and leadership to their clients. To date, many
communications agencies are not feeling immediate pain
due to growth in demand for their services as a result
of a strong economy and the (waning) demand boom
of Internet businesses hungry for name recognition.
This near-term growth is masking the need to rapidly
evolve the role of communications services for long-
term relevance.
continued on page 3
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 IMT Strategies TACTICAL INSIGHTS The Impact of the Internet on Public Relations And Business Communications PAGE 2

Linear/Hierarchical Communication

Client Agency Media Audience

One to Many Change Agent Many to Many

• MICROSOFT O PEN S OURCE LINUX
• TOWER RECORDS F ILE S HARING NAPSTER
• DEAN WITTER T RUST C OMMUNITIES MOTLEY FOOL
• LUNG CANCER G UERILLA GLOBALIZATION
(TOBACCO) A CTIVIST N ETWORKS (SEATTLE WTO)
• JFK M ATT D RUDGE BILL CLINTON
• GULF WAR U NFILTERED L IVE A CCOUNTS KOSOVO

Corporate site

Networked Communication
Web 'zines

Tradtional media
E-mail pass-along

E-newsletters

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 IMT Strategies TACTICAL INSIGHTS The Impact of the Internet on Public Relations And Business Communications PAGE 3

Compounding this, communications services are not leverag-
ing technology as well as other marketing disciplines and are
generally thin on innovation. As communications become more
networked and complex, client organizations will place more
emphasis on communications strategy and management, and
relatively less importance on the ability to distribute informa-
tion. In the absence of strategic leadership from traditional
communications services to help navigate this communications
shift, clients will seek answers elsewhere.
5. COMMUNICATION WILL BECOME
MORE EFFICIENT – In this new era of
abundant and freely flowing information,
people will establish personal routines among
the various sources, filters and channels of
communications to get the information they
need in the most efficient way possible

INTERNET-ENABLED NETWORKED COMMUNI-

CATIONS WILL FORCE CHANGE on the communications Top Impacts of the Internet
industry, whether participants like it or not. The Internet has on Public Relations
triggered a fundamental shift in the way people communicate
with each other, and the way businesses and organizations can IMT Strategies asked 100 communications
communicate with them. Specifically, the Internet will force professionals what were the most important
change on corporate communications in six key ways: impacts the internet was having on PR. Most of
the commonly cited themes were obstacles (in
1. QUALITY AND AUTHENTICITY WILL BE
red), not oportunities. The few opportunities
SELF-REGULATED – People will vote by mouse cited (white) were about automating what PR
clicks as to the sources of information they trust already does, not using the Net to do new things
most, which in many cases will not be traditional
media outlets
Speed
2. INFORMATION VOLUME WILL CONTINUE
TO GROW – The “information glut” will
More targeted Audiences
perpetually increase across more communications
channels, which people will manage with a
More Media/New Media
combination of new technology, trust relationships
and personal information processing skills Web Site is Now a Resource

3. MEDIA SOURCES WILL CONTINUE TO

Bypass Media
PROLIFERATE – Publishing and distribution (Company to Consumer)
costs are already near zero, and although revenue
New Technology Available
models for online publishing remain dubious in
the short-term, more small and medium-sized
Noise Level Increase
operations will try their luck, many of which will
wield considerable influence with niche audiences Cannot Control
Message Online
4 . CENTRALIZED INFORMATION CONTROL
Rumors Go Unchecked
WILL CONTINUE TO DECREASE – The ongoing
demand for more information and simplicity of its 0% 10% 20% 30% 40% 50% 60%
dissemination means that traditional controls over % of Respondents
access to information will become increasingly
negative impact positive, but tactical impact
unmanageable
Source: IMT Strategies 2000

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 IMT Strategies TACTICAL INSIGHTS The Impact of the Internet on Public Relations And Business Communications PAGE 4

6. COLLABORATION WILL INCREASE – 3 . DIALOGUE FACILITATION AND

Given the ease of communications COMMUNITY BUILDING – the ability
technology and the promise of personalized to engage, participate in, host and foster
marketing, customers will demand from dialogue and community among a company’s
organizations higher degrees of interaction various online constituents

LEADERS WILL PURSUE NEW STRATEGIES to

capitalize on the opportunities created by the changing
Media Relations and Strategy
nature of communications. These new strategies will
Top PR Industry's Priorities
acknowledge and harness the two key market trends
identified in this study: 1) Understanding the Internet IMT Strategies asked 100 communications
will change the nature of communications in six meaning- marketing and media professionals to rank the
ful ways, and 2) recognizing that clients will increasingly #1 and #2 most important "value propositions
value leadership and strategy support from agencies to help for PR in the next 3 years. rank#1 was tallied with
them understand and manage this change. Specifically, 1 point, #2 with a half point
leading service providers will pursue these six strategies to
capitalize on trends and create new market opportunities. Traditional Media Relations

1. Identify key online sources of credibility Senior Management

Strategic Consulting
and influence Online Media Relations

2. Find ways to extract value from information Overall Internet

Communications Strategy
Brand Development
3. Develop new coverage models
Crisis Management
4. Redefine the value proposition from
Partner Relations/
gateway to gatekeeper Business Development
Issue Management
5. Change approaches to get faster and/or get
out of the way Reputation Management

International Reach
6. Develop new models for two-way
collaboration B2B Customer Relations

Competitive Intelligence
FOUR NEW SKILLS WILL BE MOST
Online Community Relations
IMPORTANT for communications professionals in the
future in order to capitalize on market opportunities and Investor Relations

avoid being marginalized: Public Policy

1. ONLINE CONSTITUENT INTELLIGENCE – Employee Relations

the art of extracting strategic value out of
Consumer Relations
the glut of information by and about key
constituencies Community/ Coalition Building

Analyst Relations
2. COMMUNICATIONS ARCHITECTURE –
the leadership within large organizations Labor Relations

to map a comprehensive plan for effective 0 5 10 15 20

Priority Scale
coverage, collaboration and analysis of
Source: IMT Strategies 2000
networked marketing communications

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 IMT Strategies TACTICAL INSIGHTS The Impact of the Internet on Public Relations And Business Communications PAGE 5

4. MASTERY OF NEW COMMUNICATIONS These competencies are described in IMT Strategies

TOOLS – the assembly and command
over a new set of tools and strategies to
enhance credibility, awareness, discussion,
media engagement, site traffic and online
reputation
comprehensive report, The Impact of the Internet on
Public Relations and Business Communications. Please
review the Table of Contents and the Index of Figures
on the following pages. To order the report, please
see page 8.

continued…

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 IMT Strategies TACTICAL INSIGHTS The Impact of the Internet on Public Relations And Business Communications PAGE 6

Table of Contents

1. EXECUTIVE SUMMARY:
THE NEED TO REINVENT COMMUNICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. ABOUT THIS STUDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. THE COMMUNICATIONS INDUSTRY IS NOT A LEADER
IN THE INTERNET REVOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
• Agencies Are Feeling No Immediate Pain to Force Change . . . . . . . . . . . . . . . . . . . . . . . 6
• Communications Professionals Are Not Leveraging
Internet Technology as Well as Other Marketing Disciplines . . . . . . . . . . . . . . . . . . . . . 10
• Most Communications Professionals View the Web as More Tactical Than Strategic . . . 12
• Management Is Looking for More Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4. HOW INTERNET-ENABLED NETWORKED COMMUNICATIONS
WILL FORCE CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
• Internet Has Changed Communications Flows
from Hierarchies to Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
• Networked Communications Is Causing Change in Many Industries. . . . . . . . . . . . . . . . 20
Case Study: Open Source Democratizes Software Programming . . . . . . . . . . . . . . . 21
Case Study: Online Swapping Reinvents Music World . . . . . . . . . . . . . . . . . . . . . . 22
Case Study: Collective Wisdom Challenges Wall Street Elite . . . . . . . . . . . . . . . . 23
Case Study: Online Networking Empowers Guerrilla Activists . . . . . . . . . . . . . . 24
• Networked Communications Will Force Change
on Marketing Communications in Six Ways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1. Quality and authenticity will be self-regulated . . . . . . . . . . . . . . . . . . . 26
2. Information volume will continue to grow . . . . . . . . . . . . . . . . . . . . . . 27
3. Media sources will continue to proliferate . . . . . . . . . . . . . . . . . . . . . . . 27
4. Centralized information control will continue to decrease . . . . . . . . . . . 28
5. Communication will become more efficient . . . . . . . . . . . . . . . . . . . . . 28
6. Collaboration will increase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5. SIX LEADERSHIP STRATEGIES FOR THE FUTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
• Communications Leaders Must Respond Accordingly with Six Actions. . . . . . . . . . . . . . 31

1. Identify key sources of influence and credibility . . . . . . . . . . . . . . . . . . 32

2. Find ways to extract value from information . . . . . . . . . . . . . . . . . . . . . 33
3. Develop new coverage models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4. Redefine value from gatekeeper to gateway . . . . . . . . . . . . . . . . . . . . . 34
• Get faster and / or get out of the way. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
• Develop new models for two-way collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6. FOUR ROLES WILL COMMAND A PREMIUM
FOR MARKETING COMMUNICATIONS IN THE FUTURE continued…

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 IMT Strategies TACTICAL INSIGHTS The Impact of the Internet on Public Relations And Business Communications PAGE 7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
1. Online Constituent Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Case Study: ProMarc Agency Excels in Business Intelligence . . . . . . . . . . . . . . . . . . . 38
2. Communications Architect & Editor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Case Study: Cisco Invests in Content Development . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3. Community Building and Dialogue Facilitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Case Study: Kotex Fosters Customer Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4. Mastery of New iPR Skills and Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Check List: Catalogue of New iPR Tool Chest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
APPENDIX
• Solutions Providers for PR Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Media Databases and PR Automation Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
PR Wire Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Media and Discussion Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Marketing Communications Automation Platform . . . . . . . . . . . . . . . . . . . . . . . . . . 47
• Research Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
• Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
• About IMT Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

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ORDER INFORMATION
The Impact Of The Internet
On Public Relations
And Business Communications
How New Models of Communications
Will Create Risks and Opportunities for Communications Professionals

If you are a public relations and marketing
communications professional, looking to
fully grasp the scope of the opportunity
that the Internet represents for your indus-
try, then this research is the best source in
guiding billions of dollars in new industry
revenue. This study is the only comprehen-
sive research on the public relations and
marketing communications industry with
in-depth insights into the key issues you
must understand:
• The top customer and media demands
for 21st Century PR
IMT Strategies groundbreaking new research study, The Impact of the
Internet on Public Relations and Business Communications, explains
how well the PR industry has capitalized on the Internet to date,
synthesizes critical issues, describes best practices and makes spe-
ciÞc recommendations on new skill sets and value bundles. All busi-
ness communications and public relations professionals will Þnd this
strategic, data-packed 70-page report essential reading as a guide to
help chart future business strategy and new service development.
Cost
The price for IMT Strategies’The Impact of the Internet on Public Relations and Busi-
ness Communications Report is $795

• How the Internet has shifted from a

hierarchal model of communication to a
network model
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• Four key new roles that will provide pre- age the best of today’s Internet PR and marketing communications strategies, call us at
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