So what is it? The apparent second stage of the Internet’s evolution defined by new technologies enabling people to interact in such a way that the experience is enhanced by the contributions of each individual. Where we once had pages of action data we now have social networking behaviour, blogs, and user generated content to add to our analysis. While consumers are adopting these new web behaviours, we marketers must understand the opportunities they represent.

Social Networking Sites

It is estimated that there are over 300 known global social network sites with the largest being MySpace, followed by Facebook and Bebo. Internet visits to the top 20 social networking websites grew by 12% from January to February 2007, demonstrating the increasing popularity of these sites. In the UK, 34% of online consumers are members of social networks which has made them Europe’s biggest users of social networking sites. The market share of Myspace trebled in size from 2.4 million users in March 2006 to 8.7 million in February 2007, according to ComScore.

Users of social networking sites are growing less susceptible to the influence of traditional ads as they turn to their peers for information and recommendations through online networks. Click here to view full table.

 However, “Web 2.0” activities have the potential to save considerable marketing expenditure in the long run and lead to stronger brand loyalties. For example, TopShop.co.uk received more then twice as much traffic from MySpace than from MSN and Yahoo in February 2007 their MySpace profile included special offers and discounts, which led to the increase in traffic (Hitwise, March 2007). However marketers need to be thoughtful with their efforts as research has shown 49% of social network users don’t like ads appearing next to their personal profiles or that of their friends and 49% of users who saw an ad on the social networks claimed they did not remember it, according to research by YouGov March, 2007.

Blogs

According to Technorati there are now over 66 million blogs, suggesting marketers should pay increasing attention to this emerging content category. 9.2% of the UK Population has created a blog, and 77% of those people have claimed that they would use the information from blogs to influence their purchasing decisions (Internet Statistics Compendium, March 2007). In China the number of bloggers is over 17 million, compared to the US were there are currently over 12 million bloggers (Internet Statistics Compendium, March 2007). The growth of blogging has been a result of the ease with which users are able to publish information about their own personal experiences and opinions, then share this with whomever chooses to read it. Over the past two years ad networks have aggregated many blogs, each with relatively small audiences, thus increasing their appeal to advertisers. Blogvertising has already started to explode with PQ Media expecting its own US blog advertising to rise over $300 million by 2010. FeedBurner supports these expectations as its own blog inventory has increased by 300% in the 1st quarter of 2007.

In a related tactic Proctor and Gamble sent free Gillette Fusion razors to active and influential bloggers who then shared their experiences with it on their blogs. The opinions then trickled down to the readers of these bloggers thus influencing their decision to buy (Digital Branding: Fresh Growth, March 2007). With such big brand examples of “Web 2.0” marketing integration, we are likely to see more developments, new marketing opportunities and greater investment in this category of content.

User Generated Content (UGC)

Nowadays anyone with a digital camera or a mobile phone can create a film and share it with a global audience via sites such as You Tube (video), Bebo (images), My Space (videos and images), WikiPedia (SP) (knowledge) which have contributed to the explosion of UGC. People no longer rely on traditional media and are now able to create and distribute their own content on the Web. However as marketers it is important to understand that UGC is not a marketing medium but a platform where conversations take place amongst consumers’ about the products/services they want to buy, might buy or have bought. This presents an opportunity for marketers to understand and converse with customers at the most critical time in their purchase process - when looking for information about a product or service.

However, before UGC ventures are considered it is important to note that in any given online community around 90% of users will only consume the content, or “lurk”, and not participate i.e. upload videos or take part in discussions. 9% of users will contribute occasionally while the majority of the content will be produced by about 1% of users (Internet Statistics Compendium, March 2007). So why are only 10% contributing? Not all users are openly expressive of their views and prefer to let those users who are opinionated share the views which they may not wish to share themselves. Additionally, not everyone in the community may have the experience to have formed a personal opinion, thus relying on the conversations within the community to inform their own perspectives. For marketers, these active participants or ‘influencers’ present the opportunity to build conversations and close the brand gap through tactical marketing and customer service strategies.

Why take notice? So how can marketers benefit from “Web 2.0”?

Intelligence – Information, experiences and opinions contained within the conversations in online forums, review sites and the like represent valuable insight to the members of those online communities. Likewise, it should be regarded as such by the marketing directors of the brands they’re discussing. A methodical measurement and monitoring of online conversations can yield intelligence about consumers and brand health that traditional forms of research simply can’t match.

Influence – Knowing where and how people are commenting and sharing opinions about brands gives marketers an opportunity to respond and influence their perceptions. In 2007, after more than a year of methodical CGC monitoring a measurement Avis and Web Liquid launched the www.wetryharder.co.uk blog to help reinvigorate the “We Try Harder” consumer proposition. The blog is used as a tool by Avis to pass on useful tips and as a platform for customers to share their own experiences, feedback and ask questions.

We don’t advise that all online marketing activities be reinvented to make use of “Web 2.0”, rather that marketers be open to experimentation. Finding the right strategy and investments can make the use of “Web 2.0” technologies pay off, but the results must be measured over time rather than in a direct response model.

Skookumchuck (n. skoo-kuh-m-chuhk meaning: strong water) is designed to highlight what is happening in the world of online marketing with a splash of Web Liquid thinking.