Is Web 2.0 right for you? Industry experts weigh in about its meaning and the significance of catching this next Internet wave.

By David Lustig

Web 2.0. It's a term that has been bandied about for a while now. But what exactly is it? Is it a new and improved version of the Internet or just the next progressive step upward? Is it even real? A state of mind? Something worth going after? The answer to all those questions, as unrelated as they are, is yes.

Or as Dr. Stephen S. Kelley, chief technical officer of hawthorne direct inc. in Fairfield, Iowa, says, "Ask 10 different people what Web 2.0 is and you will get 10 different answers."

Using Kelley's statement as a factual given, consider Web 2.0 a comfortable handle to codify the deepening of the web experience on business, consumers and the world in general. For some of us, it may be one of the answers for future web work. For others, it may be something to stay far away from.

"Web 2.0," says Bill Hildebolt, president of Expo TV in New York, "is a lot of different things to a lot of different people. It's all about not only taking control of their experience, but also creating it. This is where everything turns upside down.

Bill Hildebolt of Expo TV cites Videopinions as an example of Web 2.0. The product enables people to create video reviews of products and then upload them to the company's websites.

"Now all of a sudden the media outlets need to listen as much as they need to talk. If you're a marketer, listening to what the media is saying back to you--because the media is the people--is as important as what you're communicating outwards. If you're communicating outward in a way that is not consistent with what the market is telling you, you will just end up being irrelevant."

Tim O'Leary, CEO of Portland, Ore.-based Respond2, weighs in with this definition of Web 2.0.

"It is the next phase in the Internet's evolution, where users start to really take the power made possible by broadband. In many ways," he says, "this is kind of a revolution.

"The web goes from a venue of primarily written communication, commerce and online cataloging to becoming a user-dominated portal for unlimited television networks, entertainment and user-generated and controlled video communication and expression."

ASSESSING THE IMPACT
Okay, so we have defined something that hasn't truly gelled into its final form yet, but even as it is today, it can hold tremendous potential for those able to try and harness it. Can the impact of Web 2.0 be examined? Yes.

"Web 2.0 has a huge impact on marketers," explains Kelley.

"Technology capable of delivering and enriching the value of almost all media by transmitting and processing it using Internet/web technologies exists and is quickly embracing and conquering all media," Kelley continues.

O'Leary agrees that Web 2.0 will potentially have an enormous impact on marketers.

"In the old days, advertisers held most of the cards," he says. "They bought the advertising, and accordingly that gave them a lot of control in controlling their message as much as possible. Now, however, consumers are creating a lot of the programming that people watch in this new web environment, and that environment can potentially exist without advertising.

"The paradigm has shifted. Consumers are also having free and open discussions about products, as well as the validity and honesty of advertisers' claims. This means that going forward marketers will be much more accountable to consumers, so there often needs to be more honesty in their presentations."

Hildebolt adds that as marketers, we're used to saying this is what it is and creating a story. Today, that doesn't necessarily work.
"Somebody else can talk and be louder about my product than I am," he continues. "If that resonates more with consumers, then my story about my product is going to look out of context."

Is this a case of lesson learned from the dot-com bust that left so many people out in the cold?

"I think we're seeing and will continue to see some of the same mistakes," says Kelley. "The technology for building rich, interactive websites has significantly improved.

"I think the many lessons of the dot-com bust relates to advertising and advertising valuation," comments O'Leary. "The bust occurred primarily because of advertising-related issues. First, dot-comers took the 'build it and they will come' approach, incorrectly surmising that consumers would flock to websites just because they existed. The early web was a catalog and a communication tool, and marketers soon found out that the site was a small part of the equation. Getting the people to the site and converting them to customers was the real challenge, and most were not up to this reality."

"Secondly, the web eventually put to rest the flawed advertising formula of 'eyeballs equal sales.' Advertisers soon discovered that clicks potentially meant nothing, and that web advertising valuations needed to equate more directly to potential profits. Advertisers learned this lesson--which is the basic premise of direct response advertising --and now they are insisting on similar efficiencies in their off-line advertising, hence the growth of DRTV. Web 2.0 is more about broadband technology advances and user innovation that has shifted control back to users."

SHOW ME SUCCESS
Examples of Web 2.0 successes already can be found.

The uploaded video reviews to Videopinions are cataloged with no constraints on them--whether positive or negative. The results have garnered 85-percent positive product reviews.

Service Oriented Architecture (SOA), Atlas and increasing broadband penetration have made it easier than ever to construct rich, interactive, distributed applications that can be used from a web browser.

"These technologies have allowed companies liked Google, Flickr, YouTube and others to do things that would not have been attempted just a few years ago," says Kelley. "Moreover, these technologies have quickly progressed to where small companies and even individual developers can create similar applications on budgets of practically nothing."

Okay, all this sounds like it is brimming with possibilities. So how could marketers use some of these technologies more effectively?
"They first need to understand the opportunities and the risks," says O'Leary.

"Unhappy consumers, whether or not they are justified in their dissatisfaction with the product, could potentially have millions hear their voice. Conversely, a happy customer will also be heard, so marketers need to analyze their claims knowing they will be scrutinized and discussed. They also have taken participation in the conversation. The first major step toward this is through blogs and blog management, which can be a huge asset to marketers from several perspectives.

"It allows marketers to learn from their customers and be a part of the discussion. It avails them of opportunities and ideas for new products, and alerts to them to issues they might not be aware of."

POWERLESS NO MORE
"It's about being more pro-active," says Hildebolt. "It's about getting your message into the market first and setting the tone of the dialogue."

"There is a belief that if I engage someone who is antagonistic, it will encourage them," he says. "But the research suggests the opposite.

"The worst feeling in the world is the feeling of powerlessness. Things break, the weather turns bad, flights get canceled. That happens and we understand that. But what we really hate is that we feel like we're the little guy. That is what is so powerful about the Internet. We feel empowered."

Hildebolt adds that if you engage with your customers, particularly those who feel frustrated or may have complaints about the brand or product, what the research tends to say is, in many cases, you can actually make them your greatest proponents. "Because when it is negative, there is a huge chance to turn it around. Ten years ago, we thought consumer feedback and customer service were necessary evils," he says

He cites a product his firm has called Videopinions. People taking their camcorders and creating video reviews of products and uploading them to the company websites, where they are cataloged with no constraints on them whether they be positive, negative or neutral. The results, he said were surprising, with a whopping 85 percent of the reviews being positive, 10-percent neutral and 5-percent negative.

STOP, LOOK AND LISTEN
"The most important step for marketers to take is to really observe, use, and be part of this new world," says Kelley. "In one sense, it is a simple as buying 'time' on new media. However, to excel, survive and really innovate in new media, marketers have to live and understand it."

He continues, "Start a blog, use an RSS aggregator, consume podcasts, make and upload videos to YouTube. Get young people who have grown up in and live in the new media world into your company. Listen to them, let them try things and drive new innovations in collaboration of more experienced members of your company. Read science fiction!"

O'Leary believes many marketers are ignoring Web 2.0 because they think it is "too new" or not applicable to their target demo. Balderdash.

"That's a big mistake," he says. "It is moving too fast to be ignored. "You need to regard Web 2.0 as a new language. Successful marketers don't go into a foreign country with no concept of the language or culture and expect to be hugely successful. In that same way, they need to learn the new language and customs of the web."

LESSONS LEARNED
So since change is inevitable, what pearls of wisdom are there for marketers?

"Many marketers think the web is a simple little component of their businesses and hire the cheapest and easiest resources to assist them," says O'Leary. "Don't. Hire an expert. Also, web strategies should be integrated into your overall marketing plan, so having a global view is essential.

The web is now a response channel and a broadcast channel--and you need a strategy to accommodate both."

David Lustig is a contributing writer to Electronic Retailer magazine. We would appreciate your feedback. To submit comments, please e-mail the magazine at editors@retailing.org.