According to a study by the management consultancy Booz Allen Hamilton, more than 12 Million Germans already use blogs, wikis, social communities and other dynamic Web 2.0 features – and the upward trend continues. Given the persistent salience of the World Wide Web, the penetration of Web 2.0 sites and services is consistently at a high level throughout Europe, as evident in the 2007 NetObserver study.  In Spain and in the UK, the usage of certain Web 2.0 technologies is even far more widespread than in Germany.  Another very vivid example: 20% of all Norwegians have a profile on Facebook, currently the fastest-growing social community with tens of millions of users worldwide.

More and more users base their buying decisions on virtual word-of-mouth recommendations. The internet is the force behind the integration of formerly detached and self-contained communication channels (TV, radio, print) and an increasing number of net users actively engage in the further development of this interactive communication platform – by uploading videos, rating products and joining communities. Or by launching start-ups which will eventually be bought by Google.

Many companies also benefit from the opportunities provided by Web 2.0 technologies. The “participatory web” offers unique chances to engage in direct communication with target groups and individual customers. The changing role of the user from a passive consumer to an active “prosumer” also requires that companies meet the challenges of the “age of participation”. Additionally, companies should push systematic monitoring of the World Wide Web to the top of their agenda and constantly be on the virtual lookout for trends, innovations, the company’s image in blogs and communities, and potential communication crises.   

Viral Marketing: Web 2.0 for companies

Viral marketing is a prime example of the multi-faceted possibilities of online-communications. Viral marketing strategies use social networks and communities to raise brand awareness and to instigate positive word-of-mouth campaigns. One common element is viral advertising: companies produce short videos – funny and/or technologically sophisticated – which they upload to popular online video platforms such as YouTube. Their hope is to ride the two point zero wave by utilizing the uncanny speed of distribution inherent to online communities. Several companies have triggered highly successful viral marketing campaigns: Sixt recently launched a video-campaign featuring German crooner Matthias Reim which spread beyond the internet and proceeded to get media coverage from newspapers and television outlets. An animated spot which placed the Toyota Tacoma within the popular online-game “World of Warcraft” got one million views on YouTube - within 48 hours.   

However, a complete reliance on videos or games increases the risk that the blogosphere will focus on these and end up neglecting or simply ignoring the company and its product. Companies should therefore embed viral marketing strategies into a communication mix and support their consumer communications with additional Web 2.0 features.

Blogs: From Online-Diaries to Newspaper Substitutes

Aside from online videos, weblogs (or blogs) are the most well-known feature of Web 2.0. What started as virtual diaries by internet pioneers has become a mass trend. Today more than 70 million weblogs exist – techblogs, music blogs, corporate blogs, photoblogs, and purely personal blogs  - and this collection grows at a daily rate of 12,000. Some of the more popular blogs have far more visits than the websites of newspapers. It is then not surprising that for some people blogs have become a substitute for a daily newspaper.

Thanks to the interconnectedness of weblogs, every blogger is part of a huge and growing community which is in a constant state of flux. A single blog entry may scarcely create a stir – but a large number of interlinked blogs which convey the same story or report on the same incident can certainly have a measurable impact. Occasionally, even single blog entries can wreak havoc: When the popular technology blog (and podcast) Engadget reported that the delivery of the iPhone would be postponed, Apple’s stock plummeted. It did not matter that the report proved to be false – traditional media outlets had already weaved the story into their news coverage without any fact-checking.  

This type of damage can happen to any company. Not surprisingly, blog- and community-monitoring has been at the top of the agenda for many agencies in 2007. And only agencies which have identified the current and future needs of their customers and thus have established the relevant expert knowledge can meet the growing demand of the market. 

Collective Intelligence: Virtual Knowledge Management

Web 2.0 also gives companies the opportunity to tap into the collective intelligence of their employees by implementing an architecture of participation – expanding and developing its internal business knowledge. Social software like wikis, tags, blogs, RSS feeds and intranet platforms are valuable resources in the process of indexing knowledge by linking people. The accumulated expertise is not stored on a local server – the network now is the server, and net-based applications allow users to share and access knowledge and information on the move.  

The early adaptation of Web 2.0 technologies also promises to be a deciding competitive advantage, according to a 2007 study conducted by the German software trade association Bitkom, which concludes that the embrace of Web 2.0 software by business companies will lead to a comeback of corporate knowledge management.  Harvard Business School professor Andrew McAffee consequently coined the umbrella term “Enterprise 2.0” to account for the emergence of Web 2.0 technologies within corporate intranets.

The Task: Providing Guidance in a Virtual World

The interactive technologies and features of Web 2.0 have changed the premise and the scope of  communications within the World Wide Web. It has given net users and consumers a powerful and independent voice which continues to have a lasting effect on how companies conduct their business. It will be the task of agencies to help its customers prepare to meet the challenges posed by the “participatory web” and guide them safely through the ever-changing and dynamic virtual space which determines Web 2.0.

Authors: Adrian Rosenthal, Igor Schwarzmann, Frank Lehmann