Web 2.0 needs time to grow

The article pasted below is a very accurate portrayal of many of the conversations I have with businesses in my daily consulting practice. It doesn’t suprise me that:

1. Businesses use of Web 2.0 technologies seem to be slowing down

2. Web 2.0 techniques and even language is not embraced or understood at the executive level

What this says to me is not that these tools are ineffective, but that they need to be used not only in conjunction with the right blend marketing tactics but also over time so more data can be gathered to evaluate their effectiveness. Its similar to the challenge with websites back in the ‘old days’ and even to some extent now; If you build it, it doesn’t mean that they will come.

Web 2.0/Social Media applications are still in their infancy and are thus evolving at a rate that makes it hard to establish the true ROI for them. Like it or not, these types of mediums are here to stay and those who embrace and leverage them for their businesses are likely to do better than those who don’t.

I think the challenge is in understanding when and how to use these new tools to optimize the overall effectiveness of your goal, whether it be marketing, customer support, new product development or brand awareness.

Web 2.0 Needs Time to Grow

Emerging technologies will take two years to demonstrate their worth Janie Davies, Ambrose McNevin, Computing 13 Aug 2008

Adoption of the latest technologies such as green IT, cloud computing and Web 2.0 applications including social computing platforms for business transformation, are two years from having a major impact on business.

Two separate sets of research this week revealed that adoption of the latest technologies has some way to go.

Analyst Gartner highlighted 27 technologies in its 2008 Hype Cycle for Emerging Technologies while McKinsey’s Building the Web 2.0 Enterprise examined the adoption of tools such as wikis, blogs, social networks and mash-ups.

According to McKinsey’s research, businesses are finding that effective use of Web 2.0 tools such as social networking, wikis and blogs can be short lived, and some are abandoning them altogether.

Despite an increase in take-up since 2007, 22 per cent of executives at global companies are dissatisfied with Web 2.0 tools and only 21 per cent are happy, the survey found.

And while just a quarter of respondents said nothing was holding back their Web 2.0 initiatives, 28 per cent cited a lack of understanding about the potential financial benefits as a key barrier, and 37 per cent said their company culture or leadership team did not encourage Web 2.0 use.

Other problems included a lack of sufficient incentives and skills to implement technologies, and the view that potential legal and HR risks would outweigh the benefits.

Web 2.0 use for internal purposes has increased by one per cent between 2007 and 2008, but interfacing with customers dropped four per cent and connecting with partners and suppliers fell eight per cent see The growth of Web 2.0, below.

Knowledge management was the most common use for Web 2.0 for internal purposes, cited by 83 per cent of respondents, and 78 per cent said the tools supported collaboration across the company.

When used to interface with customers, 73 per cent said customer service was improved and 71 per cent said Web 2.0 helped them acquire new customers in existing markets.

Gartner’s annual Hype Cycle research said that following the phenomenal success of consumer-oriented social networking sites, companies are examing the role that enterprise sites using networking elements will play. Key areas for development will include the notion of social platforms for developers to build on basic social networking applications.

“Although Web 2.0 is entering the trough of disillusionment, it will emerge within two years to have transformational impact, as companies steadily gain more experience and success with both the technologies and the cultural implications,” said Jackie Fenn, Gartner vice president.

“Later, in between two and five years, cloud computing and service-oriented architecture will deliver transformation by driving deep changes in the role and capabilities of IT.”

Cloud computing is drawing interest, but, said Gartner: “Many types of technology providers are aligning themselves with this trend, with the result that confusion and hype will continue for at least another year before distinct submarkets and market leaders emerge.”

Gartner believes that the next two to five years will also see video telepresence and microblogging begin to affect the day-to-day corporate world. Currently the high cost of entry is stopping mass adoption of video telepresence.

“Other technologies that have begun to be interesting to business include 3D printing, surface computing, augmented reality and mobile robots,” said Fenn.
“We expect early adopters to start applying these in novel ways and driving new classes of applications.”

How analysts view the growth of Web 2.0

Although Gartner’s Hype Cycle places Web 2.0 as now entering the trough of disillusionment, it says that it will emerge within two years as having a transformational impact as companies gain more experience using the technology.

What McKinsey’s research says about how Web 2.0 tools are being used both internally and externally:

Internally Web 2.0 tools are being used to managed knowledge, foster collaboration across the company, enhance company culture and for training.

Externally they are used for improving customer service, finding new customers in existing markets, engaging customers in product development, and letting customers interact with each other.

DIY – Allowing Consumers to Create is here to stay

We all know that Generation X and Generation “Why” as some refer to them are coming into the work force with new expectations and desires. One big one is the work life balance – many don’t feel the need to have to ‘climb the corporate ladder’ because they would rather be with their partners, spouses or families.

Another big trend is individualization. While these generations are brand loyal to some degree, they prefer the opportunity to individualize their products; just look at Scion and Mini Cooper and you will see that they have grasped this need and are super-serving the market.

On a smaller scale, creating custom dresses, duvets and lingerie are just of few of the newer DIY businesses that have taken off. I just read an article on a new designer who has launched a website where you can customize your own purse from dozens of different styles and even more fabrics, snaps and other accessories.

From a product marketing perspective this is genius, it allows the customer to really have what they want so the chances of returns or refunds (if you even take them) are eliminated. Add to that the viral effect that this will have for if you see a dress or a purse that you like and you ask someone where they got it, the ability to say you made it yourself and it is unique is a key sales driver for this target. What a great way to advertise!

Social Media Impact – Thoughts?

The ongoing conversation. I would love to hear from others on this topic. I believe that, while difficult in some respects, social media when done right can have a big impact on brand, sales and revenue over the long term. Certainly being able to track traffic – UVs and PVs on a site are one way to see the impact if you have an existing benchmark, and the viral aspect is trackable as well.

The trick with social media is that is is constantly changing. Its not something that can be ‘turned on’ and left to run on its own. The marketplace itself is about thinking outside of the box and understanding what potential is right around the corner. Its about keeping an ear to the ground and a voice in the conversation. It is about new possibilities.

The social media industry is about understanding that anyone, even some geeky college intern can invent the next YouTube or Facebook or Google. There is no barrier to entry and there is no “on-going consistency” in the online world. It is fluid, changing, and amazingly imaginative, which makes it easier for someone to breakthrough.

Its a difficult conversation to have with some companies who don’t necessarily know what social media is let alone how to implement it. Add on top of that the desire to see results immediately and its an interesting conversation.

I still see social media as part of the overall media mix and, just like TV in some instances, while you can’t measure its direct impact, you know it has a significant impact when done righ. However, since this particular medium is constantly changing, you need to flex your measurement and conclusions as a result.

1 Interesting Recycling Business Idea

I am sure we’ve all been there, you have just broken up with your boy/girl friend (or been broken up with) and you need to move on….what do you do with all the stuff they gave you? You certainly don’t want it anymore (well, unless its present worth keeping like a nice Maserati or a big Diamond Ring), what do you do with all of it?

Well now you can sell it! Classic idea. Sell all the stuff your ex gave you that you don’t want anymore. Although this site focuses just on jewelry and more specifically jewelry from ex boyfriends (I still wouldn’t give up that bid diamond!). In addition, it provides a place for users to share the stories behind the gifts. Along with basic description details including “for good karma give away” option, users are asked to provide the story behind the gift, such as whether the breakup was a bad or amicable one. They are also asked to rate the gift. There is also a blog section that features thoughts from the team behind the site. The blog will be expanded to allow users to blog as well.

Another added benefit albeit to advertisers — good place to advertise your female-focused goods and services!

Mobile Social Networking, The Next Frontier

Recently I read a blog entry that discussed how consumers with cell phones are beginning to use their down time or in between meetings/appointment time to read or write books on their cell phones. I believe it was referred to as ‘cycle time’. It seems that more and more people are using their spare time and their cell phone to do things like write books or manage their portfolios during the day while waiting for a bus or a lunch date. As cell phones become more integral to every day life, the natural extension is social networking.
Moreover, since most teens and young adults don’t go anywhere with out their cell phone, it make sense that there are more applications that would be used if popular Web sites offered mobile functionality. Early signs suggest there could be demand, particularly from teens and young adults. Already, 33.2% of 18- to 24-year-old Americans post photos to Web sites via mobile phones, according to mobile consultancy M:Metrics. By contrast, only 18.7% of these young adults play downloadable mobile games, one of the most successful forms of mobile content to date — and a $600 million market in the U.S. last year, according to consultancy IDC. “This suggests to me there’s absolutely interest in participating in mobile social networks,” says Mark Donovan, an analyst at M:Metrics.
Many companies are starting to bridge out beyond pcs to connect. So, how practical is that? Well as you might imagine, the two most well known social networks MySpace and Facebook are trying to figure that out. MySpace and AT&T/Cingular make it easy for customers to view friends’ profiles and post comments and photos.
Wireless social networking could mean big bucks for the service providers that charge $5 or more a month for Web time. MySpace users spend an average of 215 minutes a month on the site.
Within two years, at least 5% of all text messages sent through wireless networks may relate to social network interaction, estimates Tole Hart, an analyst with Gartner. Today, SMS is a $3 billion market in the U.S. The application could also encourage more users to buy unlimited data plans, allowing for mobile Web access. This is where mobile advertising gets interesting because you can target clusters with relevant advertising, making your advertising dollar go farther. This might allow mobile advertisers to charge a premium for mobile ads.
Judging from the earlier successes internet social networking, transferring social networking to the mobile phone may not be a very tough sell at all.

Crowdsourcing – A new social network application?

I love the Springwise newsletter. Its chock full of new ideas and companies that are making consumers lives better. In its most recent newsletter http://www.springwise.com/, there was a write up on Crowdsourcing. This is social networking at its best because it’s a platform that enables crowds (networks) to develop new ideas. It specifically talks about a company called Kluster. They have a set of project management tools to enable crowds to develop new concepts. This type of application can also be used to create brand identities, plan events or any other project that would benefit from crowd input.
Kluster joins the ranks of a few other crowdsourcing providers; Cambrian House and CrowdSpirit. Springwise states that the main advantage that Kluster has over its competitors is that it offers crowds an incentive for participating. Kluster has developed a rather creative and engaging system of rewards which we all know is critical to keeping people coming back to these types of Social Networking arenas. And, we all know if you don’t keep the content new and fresh and/or offer contributors some other reason to come back, the network will die over time.
With Kluster, members can earn “Watts” by helping solve problems or suggesting refinements or enhancements. They can invest their “Watts” and cash out if a project is purchased by a third party. This provides an opportunity for reward in a way that has never been contemplated before and I bet that more people will contribute just to have a chance at making it big with a cool idea. This is a big differentiators for social networking because, as we know, the biggest problems corporations face as they look to social media to help drive innovation and brand is keeping people coming back. As explained by Kluster: “Watts encourage users to participate and stay on target, keeping the community productive.”
In the best case scenario, the crowds will help brands create new hit products. At the very least, using Kluster will enable companies to interact with their most dedicated customers. Smaller companies can use Kluster as an instant research and development lab, enlisting (and rewarding!) the community to help ‘flesh out’ ideas that they might otherwise not be able to develop.

I like the model behind Kluster and I think it will enable many companies who are willing to embrace social media to communicate with consumers as well as give them a valuable incentive for continuing the dialog.

Executives Must Realize the Power of Social Media

I just read an article on BusinessWire entitled “Executives Must Realize and Learn the Power of Social Media” http://www.businesswire.com/news/home/20080228005828/en. The report is based on 71 phone interviews with marketing professionals in four countries – US, Canada, UK and France in late 2007. While 71 phone interviews does not a statistically significant study make, the findings are encouraging in that none of the respondents thought Social Media was a passing fad. Additionally, it validated for me the need for marketing firms to help educate corporations on how to embrace social media and leverage the capabilities to jump the curve of its competition and ensure success.
Furthermore, nearly 50% of the respondents agreed that the use of social media for corporate, brand and product marketing believe it is a vital component of corporate communications that should be monitored at the executive level and allocated significant resources. Additional findings include:

• “When asked about the uses of social media, respondents endorsed it as a strategic tool to gain consumer insights (37%), build brand awareness (21%) and increase customer loyalty (18%).”

• “…88% of U.S. respondents and 65% of global respondents were in agreement that reading and analyzing social media to understand unfiltered consumer perceptions would have the most impact on the future of their businesses. Word-of-mouth campaigns were cited as having the second greatest impact. All countries were in broad accordance at 62%, but the U.S. once again led with three-quarters agreeing on the effects of these marketing campaigns.”

• “The potentially most effective use of social media, chosen by more than 50%, is creating a user community of bloggers to provide user experience feedback. Another 47% believe using social media vehicles, such as YouTube, to generate a viral campaign would also be very effective in a product launch. Specifically in the U.S., more respondents support the idea of utilizing social media to boost the effectiveness of their social media efforts than their global counterparts.”

The article goes on to say that the early adopters of Social Media (they refer to them as the Revolutionaries) are more advanced in their understanding of social media and how to embrace it. The more cautious marketers (called the Wait –and-Sees) are only at the beginning stages of understanding social media.
Most importantly for us marketing consultants, the barriers cited for not embracing social media included lack of senior executive commitment and lack of expertise among business suppliers. The time is now for service providers to help educate companies to this new way of marketing. It validates why we started focusing our services in the space as we too saw a knowledge gap both in organizations and in suppliers at large.
For the full research report, visit www.SocialMediaInBusiness.com.

Blogs..growing trend or niche communication tool?

I recently attended a presentation given by Dan Lackner, Senior V.P., comScore on blogging insights. Interesting stuff..one of the trends (granted, they only started monitoring blogs 6 months ago, so the term “trends” may be an exaggeration on my part) they noted was that the number of bloggers out there wasn’t growing by leaps and bounds, unlike other online activities such as social networking. The other interesting finding was that the U.S. is way behind other countries when it comes to blogs, with average minutes/visitor and “reach” scoring well below the global average. I was somewhat surprised to find out that blogging, as a form of communication, was completely blown away by IM and email….according to comScore statistics, blogging represents ~1% of total communication minutes.

That said, blogging clearly does represent a marketing sweet spot..the people who write them are influencers, and the people who read them are highly engaged in the Internet. Would be interested in hearing from anyone about other blogging stats.

Interesting Social Media Campaign for Tide to Go

Nicely done campaign. It includes a TV spot (no pun intended) that builds product awareness and drives traffic to “My Talking Stain” landing page. What I like is the clearly defined target market strategy and its execution. The ad features a 20-ish guy in a job interview. The look, tone and feel of the ad spot is designed to appeal and have relevance to the target. The same for the landing page-the content includes downloadable ring tones and a contest integrated with a YouTube channel.

The landing page gives site visitors the option to purchase online via selected vendors.

Smart strategy, great execution. Does anyone know the agency behind this?

The End of the Technology “Early Adopter”?

We do a lot of segmentation work, and one of the tried and true target segments for new technology products has always been the Technology Early Adopter. You know, the geeky guys with a lot of money who always seem to have the latest technology craze. And what’s more, they are smart enough to know how to make it work.

But I think the days of this species are numbered. In the coming generations, everyone will be a technology early adopter. Kids today are growing up under the new wave of user friendly, intuitive technology, like the Mac and the Ipod. The ease of use of these new devices is a given, and is setting expectations that all other manufacturers must follow. Add to that the fact that these kids grow up online, perceiving and using technology as a practical enabler, not as a luxury or something that has to be figured out.

So what does this mean for marketers, especially when it comes to segmentation? There’s a new key segment in town..the influencer..stay tuned for more…