Source: MyCustomer

The ‘i’ economy: Web 2.0 for business in 2008 and beyond

05-Dec-2008

More people than ever are using the internet as a social networking platform and this has had enormous implications for business in 2008. But how many firms are actually doing anything about it and how many even know what to do about it? James Paterson explores this burgeoning area and provides some predictions for 2009.

By James Paterson, Plebble.com

According to the latest figures from the Office of National Statistics (released in August 2008), nearly every single British adult (93%) aged under 70 who have a degree or equivalent qualification now have access to the Internet in their home. Two-thirds of the all households in the UK have Internet access, a rise of more than 1.2 million since 2007. According to the same figures, 23.5 million adults in the UK (69% of the adult population) use the internet “every day or almost every day”.

What are these 23.5 million people doing every day?

The answer is that, more than ever, people are not only looking for information and content online (as they did during the early stages of mass adoption of the internet in the late 90s and early 2000s), they are now providing it – in the form of reviews, Facebook updates, photos on Flickr, videos on YouTube and blog posts about any subject imaginable, providing an unending commentary on their lives and the things they care about. This is the phenomenon known as ‘Web 2.0′, ’social media’ or ‘the social Web’, and 2008 proves it’s here to stay.

“22% of surveyed companies expressed clear dissatisfaction with Web 2.0 technologies, many saying they have stopped using them as a result.”

James Paterson, Plebble.com

The evidence for this is compelling: according to traffic-ranking website Alexa.com, Facebook is currently the second most visited site in the UK (after Google). An estimated 12.5% of the world’s internet users visited the site yesterday alone. It boasts 120 million active users worldwide – i.e. people who have actually logged into the site within the last 30 days. This is a huge increase from the 7.1 million registered users it had at the beginning of the year.

YouTube is currently the UK’s fifth most-visited site. Nearly 20% of the world’s internet users (264 million people) went on it yesterday.

Interestingly, Blogger.com, a leading blog provider, has become the 14th most visited site in the UK, showing how popular and mainstream blogging has become. An average of 146 million people in the world visit a blog hosted by either Blogger, Word Press or Live Journal each day. Current estimates put the number of blogs in the world at around 186 million, including around 73 million blogs in China. This is up from 70 million blogs at the beginning of the year.

Leading search engines such as Google and Yahoo and technology companies such as Microsoft are also getting in on the act, meaning that 9 of the top 10 most popular UK websites are now either exclusively or in part involved in their users providing content.

So, what does this mean?

Growth of the ‘i’ economy

These changes in the way consumers are using the internet, I would suggest, reflect (or perhaps indeed have caused) the beginnings of a fundamental shift in the dynamic between consumers and businesses. In being able to provide content and information to each other in free and easy-to-create and easy-to-understand formats, consumers are becoming increasingly less receptive to marketing messages being pushed onto them by businesses via ‘vertical’ communication media such as the press, TV, advertising and static Web 1.0 websites. Instead they are pulling information about companies, products and services, more often than not from the most trusted of all sources – each other.

This is the ‘i’ economy – ‘i’ not meaning information or internet, but ‘me’ – it’s all about me and those like me. An example might be helpful. Think of someone wanting to watch a film. The ‘i’ consumer probably no longer studies a film poster or even reads a review in the paper before doing so. He/she will visit a peer-review film site like RottenTomatoes.com, skim a relevant discussion forum and/or search for relevant blogs via Technorati to see what ‘real’ people think about it.

They might visit Wikipedia to find out more factual information and finally download it to their PC via a peer-to-peer file sharing system like BitTorrent or stream it from a site like Watch-movies.net rather than even going to the cinema. All this is a reality for many people in 2008 – and it’s all free, can be done within minutes and, importantly, is all peer-enabled.

What this means for your business

First, the ‘i’ economy is likely to represent an extremely serious assault on your business model, particularly if it in any way relies on providing paid-for content or information. If consumers can get content and information for free, why should they pay for it? But, if they are not paying for it, who will be able to afford to create quality content or host and disseminate reliable information? Google’s unaudited costs just for Q3 of 2008 were nearly US$4 billion. Much of this can be attributed to its vast data centres that index the web and seek to provide over 81% (1.2 billion) of the world’s internet users with reliable information.

I don’t pretend to have a solution to this complex problem. Google seems convinced that the answer lies in advertising – and it certainly seems to be working for them. However, advertising cannot in my view be an applicable revenue stream in every scenario. Perhaps this is something that will be addressed more fully in 2009.

Second, whatever your business, the ‘i’ economy will also have a dramatic effect on how you do business. As above, with consumers now exchanging increasing quantities of information, businesses can less and less hide behind expensive advertising campaigns and brand-building stunts when dealing with consumers. Thanks to price comparison sites, commoditised businesses in particular such as ISPs, mobile phone network operators, utilities providers, banks and insurance companies more than ever before need to ensure they offer competitive prices.

Customer service (one of the few key ways that commoditised businesses can distinguish themselves from competitors) is also firmly under the spotlight with ’service-comparison’ websites such as my own, Plebble.com. CSR and environmental credentials are also becoming easier for consumers to measure, compare and judge. Transparency is the new watch-word – in all aspects of your business.

But, as we reach the end of 2008, how many companies understand this?

Finding their feet

Many of you will probably have spent much of 2008 being told about the importance of transparency, flattening your organisational structures and engaging with consumers on a more peer-to-peer level. But, how many are actually doing anything about it? How many even know what to do about it? Which are the appropriate platforms? What is the appropriate etiquette? Where is the business case for it? As 2008 draws to a close, businesses’ adoption of Web 2.0 technologies and techniques is still piecemeal.

My evidence for this is part anecdotal and part-statistical. During the last month, I have had two separate conversations with high-level communications executives at a leading energy company and a leading telecoms company on this subject. Both acknowledged the clear change in consumer behaviour (outlined above) and their brand’s inevitable need to become more open and transparent as a result at some point in the future.

However, both said they are not ready to do so yet – they have as yet felt no business pressure to do so. In other words, they’ve felt no pain. When their P&L is directly hit by consumers who refuse to buy from a non-transparent, ‘vertically-minded’ company (which both acknowledged will happen soon), that is when their boards will insist on changing business practices – but will it be too late for them by then?

The issues surrounding businesses’ use of Web 2.0 technologies are also well illustrated in the second instalment of McKinsey’s Web 2.0 survey, released in the middle of 2008. This found that only about a third of surveyed companies used blogs, wikis, rss feeds, podcasts and social networking sites. This was an increase on 2007’s figures but only a modest one. The number of companies using peer-to-peer technologies has actually fallen from 37% in 2007 to 18% in 2008. 22% of surveyed companies expressed clear dissatisfaction with Web 2.0 technologies, many saying they have stopped using them as a result.

This may look bleak for proponents of Web 2.0 such as me, but it is important to remember that many Web 2.0 technologies are simply not intended for business use. Social networking, for example, is not a business application. It is, by its nature (and name) social. There is arguably no place for a brand in a social network. Who socialises with Coca Cola?

So, while it is gaining momentum (slowly), business adoption Web 2.0 is still in its infancy and businesses are finding their feet.

Some predictions for 2009…

What about predictions for 2009? I have three:

1. From the consumer side, we will see further moves towards the ‘i’ economy – peer-to-peer content and information sharing will become more important. The economic downturn may actually accelerate this as people look for cheaper alternatives and spend more time at home – online. Watch out too for discussions about VRM (vendor relationship management) – http://projectvrm.net/, arguably the ultimate embodiment of the ‘i’ economy.2. Brands that take the initiative on transparency in early 2009 – listening to what people are saying about them and (importantly) engaging back – will find themselves ahead of the curve and will gain a competitive advantage in so being. Brands that do not do so will start to feel pain as a direct result of others that are taking the initiative.
3. A lot of 2009 will be about platform choice for businesses – businesses finding Web 2.0 platforms that they can use, that give them a clear seat at the table and that have a good business case for their use.

2009 is going to be an interesting year.

James Paterson is co-founder of Plebble.com.

By SALVATORE PARISE , PATRICIA J. GUINAN and BRUCE D. WEINBERG

Sourced from The Wall St Journal

For marketers, Web 2.0 offers a remarkable new opportunity to engage consumers.

If only they knew how to do it.

That’s where this article aims to help. We interviewed more than 30 executives and managers in both large and small organizations that are at the forefront of experimenting with Web 2.0 tools. From those conversations and further research, we identified a set of emerging principles for marketing.

But first, a more basic question: What is Web 2.0, anyway? Essentially, it encompasses the set of tools that allow people to build social and business connections, share information and collaborate on projects online. That includes blogs, wikis, social-networking sites and other online communities, and virtual worlds.

Millions of people have become familiar with these tools through sites like Facebook, Wikipedia and Second Life, or by writing their own blogs. And a growing number of marketers are using Web 2.0 tools to collaborate with consumers on product development, service enhancement and promotion. But most companies still don’t appear to be well versed in this area.

So here’s a look at the principles we arrived at — and how marketers can use them to get the best results.

Don’t just talk at consumers — work with them throughout the marketing process.

Recovering From Negative Reviews

A Web site can be a marketer’s lifeline with its customers, but what happens when it’s marred with negative reviews and comments? Bruce Weinberg, marketing professor at Bentley University, tells WSJ’s Erin White how to address and recover from poor feedback.

Web 2.0 tools can be used to do what traditional advertising does: persuade consumers to buy a company’s products or services. An executive can write a blog, for instance, that regularly talks up the company’s goods. But that kind of approach misses the point of 2.0. Instead, companies should use these tools to get the consumers involved, inviting them to participate in marketing-related activities from product development to feedback to customer service.

How can you do that? A leading greeting-card and gift company that we spoke with is one of many that have set up an online community — a site where it can talk to consumers and the consumers can talk to each other. The company solicits opinions on various aspects of greeting-card design and on ideas for gifts and their pricing. It also asks the consumers to talk about their lifestyles and even upload photos of themselves, so that it can better understand its market.

A marketing manager at the company says that, as a way to obtain consumer feedback and ideas for product development, the online community is much faster and cheaper than the traditional focus groups and surveys used in the past. The conversations consumers have with each other, he adds, result in “some of the most interesting insights,” including gift ideas for specific occasions, such as a college graduation, and the prices consumers are willing to pay for different gifts.

Similarly, a large technology company uses several Web 2.0 tools to improve collaboration with both its business partners and consumers. Among other things, company employees have created wikis — Web sites that allow users to add, delete and edit content — to list answers to frequently asked questions about each product, and consumers have added significant contributions. For instance, within days of the release of a new piece of software by the company, consumers spotted a problem with it and posted a way for users to deal with it. They later proposed a way to fix the problem, which the company adopted. Having those solutions available so quickly showed customers that the company was on top of problems with its products.

Peter & Maria Hoey

Give consumers a reason to participate.

Consumers have to have some incentive to share their thoughts, opinions and experiences on a company Web site.

One lure is to make sure consumers can use the online community to network among themselves on topics of their own choosing. That way the site isn’t all about the company, it’s also about them. For instance, a toy company that created a community of hundreds of mothers to solicit their opinions and ideas on toys also enables them to write their own blogs on the site, a feature that many use to discuss family issues.

Other companies provide more-direct incentives: cash rewards or products, some of which are available only to members of the online community. Still others offer consumers peer recognition by awarding points each time they post comments, answer questions or contribute to a wiki entry. Such recognition not only encourages participation, but also has the benefit of allowing both the company and the other members of the community to identify experts on various topics.

Many companies told us that a moderator plays a critical role in keeping conversations going, highlighting information that’s important to a discussion and maintaining order. That’s important because consumers are likely to drift away if conversations peter out or if they feel that their voices are lost in a chaotic flood of comments. The moderator can also see to it that consumer input is seen and responded to by the right people within the company.

And, of course, it’s important to make a site as easy to use as possible. For instance, there should be clear, simple instructions for consumers to set up a blog or contribute to a wiki.

Listen to — and join — the conversation outside your site.

Consumers tend to trust one another’s opinions more than a company’s marketing pitch. And there is no shortage of opinions online.

The managers we interviewed accept that this type of content is here to stay and are aware of its potential impact — positive or negative — on consumers’ buying decisions. So they monitor relevant online conversations among consumers and, when appropriate, look for opportunities to inject themselves into a conversation or initiate a potential collaboration.

For example, a marketing manager of a leading consumer-electronics company monitors blogs immediately after a new-product launch in order to understand “how customers are actually reacting to the product.” Other managers keep an eye on sites like Digg.com and Del.icio.us that track the most popular topics on the Web, to see if there’s any buzz around their new products, and whether they should be adjusting, say, features or prices.

In one case, a company found a popular blogger who had spoken highly of the company’s brand. Just prior to launching a new product, the company sent the blogger a free sample, inviting him to review it with no strings attached. The end result: The blogger wrote a favorable review and generated a flood of comments. So the company got nearly free publicity and feedback.

Peter & Maria Hoey

Resist the temptation to sell, sell, sell.

Many marketers have been trained to bludgeon consumers with advertising — to sell, sell, sell anytime and anywhere consumers can be found. In an online community, it pays to resist that temptation.

When consumers are invited to participate in online communities, they expect marketers to listen and to consider their ideas. They don’t want to feel like they’re simply a captive audience for advertising, and if they do they’re likely to abandon the community.

The head of consumer research for a leading consumer-electronics organization created an online community of nearly 50,000 consumers to discuss product-development and marketing issues. One of the key principles of the community, she says, was “not to do anything about marketing, because we weren’t about selling; we were about conversing.”

In short order, community members not only identified what it was they were looking for in the company’s products, but also suggested innovations to satisfy those needs. The company quickly developed prototypes based on those suggestions, and got an enthusiastic response: Community members asked when they would be able to buy the products and if they would get the first opportunity to buy them. They didn’t have to be sold on anything.

Don’t control, let it go.

In an online community, every company needs to find an effective balance between trying to steer the conversation about its products and allowing the conversation to flow freely. In general, though, the managers we interviewed believe that companies are better off giving consumers the opportunity to say whatever is on their minds, positive or negative. Moderators can keep things running smoothly and coherently, but they shouldn’t always keep the conversation on a predetermined track. The more that consumers talk freely, the more a company can learn about how it can improve its products and its marketing.

One marketing executive recalled the first time she let an online community created for a client interact with very little control or moderation, resulting in an animated discussion about the look of the company’s product. The client, with great concern, asked. “Who told them [the consumers] they could do this, that they could go this far?” Of course, when this process resulted in totally new packaging that helped boost sales, the client was ecstatic.

As another executive of a company that creates online communities for clients told us: “You have to let the members drive. When community members feel controlled, told how to respond and how to act, the community shuts down.”

Find a ‘marketing technopologist.’

So who should direct a company’s forays into Web 2.0 marketing? A number of managers identified an ideal set of skills for an executive that go beyond those of a typical M.B.A. holder or tech expert. We coined the term marketing technopologist for a person who brings together strengths in marketing, technology and social interaction. A manager said, “I’d want to see someone with the usual M.B.A. consultant’s background, strong interest in psychology and sociology, and good social-networking skills throughout the organization.”

Foot soldiers need to be carefully selected as well. One large technology company weighs employees’ proven skills to choose writers for blogs that are read by consumers. The company has long used blogs internally to help employees discuss technical issues, products, and company and industry topics. When it decided to use blogs to raise its profile online, it recruited those who had shown the most skill at blogging within the company. The company currently has about 15 employees who blog publicly, mostly on technology trends, and is recruiting more the same way. Meanwhile, the bloggers plan to meet occasionally to share the lessons learned from their experiences.

Embrace experimentation.

One Web 2.0 strategy does not fit all, and sometimes the best way to find out what’s best for a given company is to try some things out and see what happens.

Blogs, wikis and online communities are among the tools that companies are most commonly using for marketing, but there are other ways to reach consumers. Some of the companies we talked with have gotten their feet wet in the online virtual world Second Life, where millions of users interact with each other through avatars. Companies can sell their goods and services and sponsor events in Second Life just as they do in the real world; one sponsored a contest for the best avatar.

Others are considering new ways to use more-familiar tools. For instance, many companies have long used instant messaging on their Web sites to allow shoppers to chat with customer-service representatives. One executive we spoke with said he would like to experiment with allowing consumers to chat with each other as they shop on his company’s site.

—Dr. Parise is an assistant professor of technology, operations and information management at Babson College in Wellesley, Mass. Dr. Guinan is an associate professor of technology, operations and information management at Babson College. Dr. Weinberg is chairman of the marketing department and an associate professor of marketing and e-commerce at Bentley University in Waltham, Mass. They can be reached at reports@wsj.com.

Unless you have been living under a rock you would of heard about Twittter which is a wonderful tool for marketing. Twitter describe themselves as micro blogging. The concept is that you constantly update it with 140 character message with what you are currently up to. This can be done several ways. More then just you going there occasionally and updating your status like you do on FaceBook, it allows for a lot more. It’s flexability and abilty to integrate with thrid party apps make it a bit of a marketer’s dream. A another good article, by Sarah Milstein, describes How Twitter Can Help at Work.

Twitter

Twitter is a great tool for conecting to people who are just interested in what you are up to. Yes this is very late Gen X, Gen Y and Gen Z. You can connect to family, friends, strangers, colleagues, clients, bosses etc. Though you might want to keep in mind that people might not quite be interested in the fact you are taking the garbage out. They however may be more interested in developments or something new you can share with them like a cool link to a website. Why not make this easy for your readers?

Quick Tip

You can let readers add your website to their twitter by have a link to http://twitter.com/home/?status=<<type your website address here and message>> i.e.

<a href=”http://twitter.com/home/?status=I am reading about Twitter on http://www.whyitwas.com”>Add to Twitter</a>

Micro Blogging

Micro-blogging is basically providing little short updates on your world. The main two is Twitter.com and FaceBook’s status updates. Twitter allows for users to create their updates via their website, SMS, and third party apps, which you can integrate into your website.

For Marketing

It’s API allows for website (and desktop) designers to include tools into their website that take advantage of Twitter. These tools can either receive or post updates from/to Twitter. A couple of webmasters have used the ability to receive updates to analyses trends of links people a Twetting about. They then post the links to their websites and the names of the users posting them. http://twitturls.com/ and http://www.microblogbuzz.com/ are both sites which do this. People interested in these sort of sites then visit the site which are Tweetted.

How to make the most of Twitter for marketing

1. Use something like Twitter tools for your WordPress site. Set it up to post updates to Twitter when you post something new on your blog. This is used on both ToolNames.Com and whYitwas.Com.
2. Include a twitter-posting-script into your site for non-wordpress pages like on ToolNames.Com for the tool wall.
3. Use Twitter buttons on your site for people to click so they can add your site to their Tweets. This is really simple (detailed below).

You shouldn’t just limit yourself to the above, there is FaceBook, MySpace, Fark and many more you can setup to send links and updates to.

Create a Twitter button

1. Find an icon that you want to use like to use like this one
2. Decide on a message you would like the reader’s Twitter to say like I really think this website http://ToolNames.com is cool
3. Create a link <a href=”http://twitter.com/home/?status=I really think this website http://ToolNames.com is cool“><img src=”http://www.milkaddict.com/images/buttons/twitter-button.png” /></a>

Google Insights (http://www.google.com/insights) is a great little tool from Google in the Beta stage at the moment. You are able to look at the latest Google search trends going on around the world. You can narrow your search down to dates, regions, and category. For instance, your company wants to do a new campaign for the aging population, alzheimers is the most searched for item related to aging and health care and memory walk is the fastest growing searched topic. Or if you want to connect to over a billion people, blog about India’s cricket.

In Australia in the past 7 days the top 10 searches are:
1. games
2. youtube
3. facebook
4. google
5. myspace
6. ebay
7. weather
8. hotmail
9. yahoo
10. news

If we dive deeper into the games topic we see that Monday’s there is very little searches for game related topics and on Thursday there is a growing interest, to Saturday where it peaks. We also know people are mostly using generic terms like game, games, cheats etc. So you have a game, advertise your game on Thursdays to Saturday and use game and games in your meta data etc.

What is really interesting is that there is an indirect corralation between game related searches and fitness. Fitness is most popular on Mondays, maybe to much eating out over the weekend and little exercise lead to guilt.

What is also interesting is the top searches which are still in the top 10 which were in the top 10 in 2004.

Wii fit is a very hot product at the moment. As of June 2008 it has sold world-wide 5.27 million copies. The Wii Fit is a lot of fun, especially playing in groups, with the exception of having to exit right out to swap players. People move around their lounge-rooms looking like fools and everyone has a great laugh. The Olivia Newton John Wii Ad is a far cry from the actual experience of Wii Fit. What you see in the ad is two aging women mildly being entertained by the Wii Fit.

[kaltura-widget wid="eggn9u97ny" width="410" height="364" /]

The ad follows on from Olivia’s frist Nintendo Ad for the DS Brain Training, which is little to be inspired by. The basic outline is Olivia playing the game and ignoring her assistant.

So what could Nintendo of done different? Some people have come with some innovative ideas.

Tinsley Advertising decided to make a viral ad. The ad is using a long proven formula that sex sells. Of course the claim is that the boyfriend made the video without his girlfriend’s knowledge. Who cares!? The couple are getting their lot of fame and enjoying and getting blogger and vloggers attention.

[kaltura-widget wid="5ctcmhrknw" width="410" height="364" /]

Matt Downham & Matt Spill took a different spin with his viral ad. Going for comedy.

`[kaltura-widget wid="d03k8s8kas" width="410" height="364" /]

But it seems not everyone is a fan of the Wii Fit. Sarcastic Gamer, who has made plenty of parodies has ripped off the original USA Wii Fit ad. Using wit and a fair bit of rational SG has managed to produce quite a funny video.

[kaltura-widget wid="7ifrvemw4g" width="410" height="364" /]

Will it blend?, is a totally interesting concept. BlendTec, a real blender manufacture takes popular products and blends them to show the strenght of their blender. The infomercials are sort of like the knifes that can cut through a frozen tin of soup. By blending popular products like the Wii Remotes people come and watch the infomercials.

[kaltura-widget wid="m1von1uq9c" width="410" height="364" /]

The guys from G4 have made a great viral ad for Wii, which is still playing on the sex sells concept.

Finally one from SG again on how to kill your brand.

[kaltura-widget wid="d1e4jt1ivc" width="410" height="364" /]

Mother by Coca-Cola (http://www.youtube.com/watch?v=HvgIopzPflI) have managed to produce an ad which makes anyone in marketing go “what were they thinking?”. The ad starts off with saying they got it completely wrong and fired everyone and to buy a new one. What happen to the great old “new and improved taste”. It seems that the “new and improved taste” of new taste ads is in this case is not an improvement.

Watching the ad anyone would get the impression that the message is “we got it wrong the first time (an insult to anyone who liked the original), but we would like all the people suckered in to trying it the first time to give it another go”. This is an example of one of the worst brand management ads.

[kaltura-widget wid="97fj0a6okq" width="410" height="364" /]

We all know viral marketing is hot, if you can get it to work. When a great viral ad comes along it’s spreads across the internet like wild fire. Technologies like YouTube, blogs, wikis, and forums have been great avenues for viral marketing, in some cases it is the advocates of your products which are producing these ads. That is something money cannot buy. True advocacy is the Again & Again Apple Mac Music Video by Dennis Liu. Dennis also maintains a website featuring other viral videos he ads produced (http://www.dennisaliu.com/)

[kaltura-widget wid="dz3ea96wls" width="410" height="364" /]

Dennis is promoting Apple, The Birds and The Bees, and Adobe all in the one video. He provides links for people to find out a lot more about the products.

The Gruen Transfer (http://www.abc.net.au/tv/gruentransfer/) (which is like crack for anybody in marketing or adversing) in one of their first season episodes displayed the Cadbury Gorilla Ad. The ad is by Fallcon London and had 500,000 hits on YouTube in it’s first week. Though the ad was commissioned by Cadbury they have enjoyed the success of advocates creating their own versions on the ad, either using the orginal ad and remixing it to other songs or recreating the ad with stuff toys.

[kaltura-widget wid="oos0hav1s4" width="410" height="364" /]

A few years back the boys from the Chasers (http://www.abc.net.au/tv/chaser/war/) did a viral ad with Sunrise (http://au.lifestyle.yahoo.com/sunrise/) which one of the boys tried to ask his wife for a divorce. The ad did the rounds and a lot of people thought it was real even after the boys annoucned on Triple J (www.abc.net.au/triplej) that it was a fake.

[kaltura-widget wid="z8v1x2r1y8" width="410" height="364" /]