Wherever a company is in terms of adopting Web 2.0, it has to be ready for big changes in marketing roles, customer relationships, selling processes and product development, according to observers and marketers committed to Web 2.0 features.
But first, what is Web 2.0?
There are numerous definitions stemming from a five-page offering coordinated by publisher Tim O'Reilly three years ago. In general, Web 2.0 represents an environment where communities of participants with common interests contribute to a collective intelligence, and where dynamic, hardware-independent applications can be developed with the help of customers. In practice, Web 2.0 features include blogs, podcasts, shared news social networking, wikis and other technology-based capabilities that allow users—businesses or individuals—to connect with and learn from each other.
For some tech companies, Web 2.0 today means little more than having a public relations specialist write a blog-style commentary under the name of a senior executive to promote a new product. Much farther along the implementation curve, Web 2.0 has created a new thought process and a revolutionary way of doing business in which executives and staff reach out to contact current and prospective customers, and those customers are given forums to shape products and services. This is most noticeable in the open source software field, where a vendor's mere existence calls for close interaction with its user community.
Web 2.0 in the tech sector is being driven not only by technology but also by customer buying patterns.
"Research shows that customers want to learn about products, services and innovative IT applications, but they want to hear more from each other," said Richard Vancil, VP at IDC's CMO Advisory Practice.
"The balance of power in the buying equation is shifting in favor of the customer," Vancil said. "So they want to learn from multiple channels, and that includes the vendor; but they will put more weight on what hear from their peers."
In a survey of 512 IT professionals, IDC found that 27.5% valued information from their peers more so than from any other information source.
Sun Microsystems took a page from the book of b-to-c companies by adding customer ratings and customer comments to its product marketing pages.
"Most people, when buying a digital camera or booking a hotel room, typically want to read what other people say versus what the corporation has to say. That's our belief moving forward: How do we get more folks to talk about our products and technologies than we do?" said Curtis Sasaki, VP-Sun Web Properties.
Advocates of Web 2.0 repeatedly mention the word "listen" when asked what a company can do to be successful on the Web. By following blog entries and forum posts, product developers can hear what existing and potential customers and commentators have to say about a product or a problem, then address customer needs. For marketers in the tech space, Web 2.0 may present the first real opportunity for them to listen to their customers, according to experts who say marketers have tended to be insulated from their customers by sales and engineering groups.
"Part of the problem with a lot of marketing people, certainly within b-to-b tech is that many of these guys don't even know who their customers are. They've sold through two tiers of distribution; they don't have real insight into the customer; they haven't interacted with the customer," said Donovan Neale-May, president of Global Fluency, a communications firm that also operates the nonprofit CMO Council, which claims more than 3,000 marketer members in a variety of industries.
Neale-May and other observers note that in many technology companies, the primary communication with customers tends to be via sales or sometimes engineering. Web 2.0 should change that, but only if marketing recasts itself.
Too many marketers are locked into traditional programs such as trade show booths and e-mail blasts that don't show them what their customers want and don't allow them to segment their customer base, Neale-May said. "One thing that marketers lack is technology, data-management, data-mining, database smarts," he said. "That's one of the challenges marketing organizations are facing; they have to reskill and bring in folks with analytical backgrounds who can crunch algorithms and extract more meaningful information, so that they spend their marketing dollars more efficiently."
Web 2.0 is about connectivity and being able to measure everything that you are doing online, which means companies can create "entirely new revenue streams that can then reach out to their supplier base or their customer base and allow them to form an alliance" said Kevin Heisler, an analyst at JupiterResearch. In many cases, a new application may not even be on the company's site or servers, but rather hosted by another provider.
Heisler cited the example of SalesForce.com supplementing its existing sales force automation services with a feature that allows marketers in its customer base to track the effectiveness of sponsored search engine keywords.
A company that can add such an application, based on a software-as-a-service approach, can find new business opportunities or become more efficient at minimum cost and without disrupting current business processes Heisler said.
At creative agency Traction Corp., CEO Adam Kleinberg helps high-tech clients leverage Web 2.0. "Marketing is evolving completely. It used to be top down, the company talking at the customer. In the past few years, it's kind of evolved with the Web into a conversation with the company and its customer," he said. "What's happening now with Web 2.0, your marketing is no longer just about you having conversation with your customer, it's Customer A talking to Customer B. While you can't control what Customer A says, it's vital to nurture those relationships, and participate in the conversation and be more open as a company."
That act of nurturing relationships is all about community.
Some companies make it clear from the moment a user hits their home page: Community is crucial. That is most noticeable in the open source software sector, where vendors such as Hyperic Inc., (see sidebar, page 26) share their code with customers, and customers share not only their comments but their own enhancements. Open source companies promote blogs by their staff members, user forums or a forge—a discussion area where developers inside and outside the company can swap code—and marketers look for ways to reward and recognize active contributors in the community.
Community isn't just about developers speaking with developers or marketing staffs monitoring customer feedback. CEOs such as Sun's Jonathan Schwartz and Mark Cuban, chairman of HDNet, are regular bloggers on technology and other issues.
"CEO bloggers who embrace and take the risk that is involved with blogging open it up to an exchange of ideas, to criticism, and show they are willing to go beyond just the idea that we control our own message through corporate communications and everything is carefully scripted when we say anything publicly," Heisler said.
In Web 2.0, a successful blogger reaches beyond what they post on their own site. Even executive bloggers, such as Schwartz, read and respond to comments made to their blogs and participate in blogs written by others far from their own home pages. Such activity helps position the executive and their company as thought leaders who are open to feedback from everyone.
Commit to your blog
Experts warn that it's crucial that executive bloggers be directly involved in writing their blogs and that they stick with the commitment. Good blogs are consistent, said James L. Horton, a blog-watcher and principal at Robert Marston Corporate Communications. "It's information I need to know about my market space or the equipment/service you have sold to me," he said. "The most successful blogs and podcasts are those that are like a good newspaper or trade magazine. They bring strong content with regularity (preferably daily) to bear in an inviting presentation, even if that content is picked up from elsewhere. There is a benefit to aggregation of articles because most of us don't have time to look in many different places for information."
Some companies are going beyond opinion-based blogs and offering sponsored, independent content. One example is security software vendor McAfee Inc., which works with content provider Realtime Publishers to produce a community-oriented site and blog featuring security content written by an independent expert.
"We specifically focused on messaging and Web security, finding ways to gain thought leadership in certain categories and start to educate customers and prospects on the threats and pain points that they deal with every day. We are able to deliver some industry-independent content not specifically branded as McAfee content or opinion. We're finding that format works well in educating people and letting prospects decide on their own how valid it is," said Lisa Matherly, director of North America field marketing. The site also offers white papers on a registration basis to generate leads. Matherly said that measuring thought leadership is tough today, but that lead generation has exceeded expectations, surpassing 1,200 between the time the program was launched in December and early March.
In a way, Web 2.0 remains a bit shapeless, and that is spawning creativity. IDC's Vancil said, "It's very much in trial-and-experimentation mode. I think it's coming at [marketers] as an opportunity a little faster than they can digest it and process it, given some of the trends that they need to respond to, especially as far as tech marketers having to listen more closely to customers. If they can successfully tap into the communities or construct the communities, it does allow them to listen faster to customers, listen more closely, and more objectively. [And] I think it's going to be a very good opportunity."