Use of Web 2.0 Tools

Back in the spring Forrester released a report that predicted that enterprise spending on Web 2.0 technologies will grow to $4.6 billion by 2013. Since they estimate $764 million in 2008, that’s a high rate of growth! That alone is interesting, but what I thought was especially interesting was the fact that they find enterprises currently spending more on internal uses of Web 2.0 tools than on customer-facing uses. Forrester expects that trend to reverse by next year, with customer-facing uses taking precedence and growing faster over the next five years. You'll find more detail here.

McKinsey has just released a study that sheds more light on what’s going on. They also find companies using Web 2.0 tools more for internal purposes than for external. Web services leads the way because this collective set of tools makes it easier to exchange information and conduct transactions; the importance of both being obvious. Nevertheless, the lowest rate of usage is with partners and suppliers where both information sharing and ease of transactions are key to smoothly-functioning supply chains.

The McKinsey study also finds differences in satisfaction with results of using Web 2.0 tools, with only 21% extremely or very satisfied with their experiences with both internal and external uses. There are also substantial global differences in the use of tools (enterprises in the US are more likely to use social networks, for example). They note that the list of tools was expanded for this study; I wonder if that will be an annual occurrence! The entire report can be accessed on the McKinsey Quarterly site (free registration required).

One of the breakdowns by satisfaction level concerns the barriers to successful deployment of Web 2.0 tools. None of them are surprising--except maybe that 25% say there are no barriers. Only 15% of respondents say that the leadership of their companies doesn’t encourage the use of Web 2.0 technologies, but 49% of respondents who are not satisfied with their Web 2.0 results say that. Why does that not surprise me!

I see two major take-aways from these two important studies:

1. Internal use of Web 2.0 technologies provides important benefits to the enterprise. Improving business operations in a variety of ways is the obvious one. Making the enterprise comfortable with the technologies and the changes they require—in management and in dealing with customers—is less obvious but perhaps more important in the long run.

2. The leadership of top management is needed to facilitate the adoption of Web 2.0 tools in the enterprise. Without it, there will be less use of important new technologies and the uses that are implemented will have less satisfactory results.

Important lessons about marketing in the Web 2.0 world have been reinforced once again!

Knol--An Alternative to Wikipedia?

When I made my last post on Thursday there was a post on my Google dashboard about a new product just entering Beta—a Knol. It looked interesting, so I did some investigating. Of course, being a writer, I couldn’t resist writing a Knol.

A Knol uses some of the same technology as Blogger, but it has a different purpose. Knols are to be authoritative articles on a single subject. There are quite a few listed already; my guess is that some may have been imported and others written specifically for Knol. I found one listing called “Encyclopedia,” which seems to suggest Google’s intent.

Knols really work like Google Documents and have some of the same features. You can write, save, and collaborate. Notice that I can invite authors and reviewers to my just-begun Knol. I saved but didn’t try to publish it, because it was incomplete. I’m sure that publication would be the point where they would ask me to establish my credentials, which I don’t think would be a problem. However, individual articles are vetted and categorized, and I’m sure they wouldn’t take this one-sentence beginning.

Notice on the third screen capture that they are encouraging Creative Commons 3.0 licensing, which essentially says that readers can use the material as long as they give proper attribution. That seems to be the emerging standard for web content of many kinds, and it makes sense to me.

In a lot of ways this is just an extension of Google docs, which I use and really like. They are great for getting work done, but not so great for being found. There are also no standards for format or content of Google docs, and Google clearly wants Knols to be respected for their informational content. Knols are searchable from the Knol site and from a Google web search. From the Google toolbar I searched for one of the featured Knols using (and misspelling, as usual) the exact title, and it came right up.

Will this become an alternative to Wikipedia? Will it be more respected in terms of the quality of its content? Only time will tell. In the meantime, it provides a good platform for people who have something to say and wish to encourage their colleagues to contribute. Since it can be closed, it provides a forum for internal corporate documentation on specific subject matter.

My Knol on social media could be a good one. Would anyone like to contribute a case study or their own observations on the subject? We could write something together!

Who Owns the Social Network?

I’m still scratching my head over an article I found in a recent newsletter from Foviance, a British customer-experience firm. It describes a recent British court decision that awarded partial contents of an employee’s social network to his employer.

The employeer, Hays Specialist Recruitment, is an executive recruiting firm. The former employee, MarkIons, had set up his own recruiting firm before leaving Hays and used the LinkedIn network he built while in the employment of Hays to solicit business for his new firm. According to the British Computer Weekly (note two interesting links at the bottom of this article):

A court judgment ordered Ions to disclose his LinkedIn business contacts and all e-mails sent to or received by his LinkedIn account from the Hays computer network, but stopped short of requiring him to disclose his entire database of clients, as requested by Hays.

Interesting, as is another article referenced by Foviance in the Times Online in which employees were urged to keep business and social network contacts separate. One, that’s hard to do; and, two, if your business and personal life is as entwined as mine is, you wouldn’t want to anyway.

The Foviance newsletter pointed out that the articles it referenced did not comment on implications beyond this case. The fact that the firms involved are recruiters is probably important, even though contacts are the life blood of other industries also. I wonder if it mattered to the court that the employee had started his business while still employed by Hayes.

This seems counter to what is going on in the US. Not only are there networks springing up all over the place, especially the B2B verticals, there are efforts to move data seamlessly between them. I’ve written about FriendFeed and OpenSocial. There is, in fact, a trade organization devoted to the subject.

So I bring up the issue without knowing whether it is--or will become--a problem. If it does, I don’t know what the best solution would be. But social networks are here to stay, and the business vs. the personal use of them may create issues that need to be considered.

The Growing Importance of Cocreation

I recently wrote about DoubleClick’s effort to get users to help design their new site. That’s an application of what is often called cocreation. The current edition of the McKinsey Quarterly has an interesting article on the subject (note related articles listed on the sidebar).

Their thesis is that cocreation is in its early days and companies are trying to determine how best to take advantage of the collective wisdom of their customers. Amen to that! According to the article,

Our research suggests that 25 percent of Western Europe’s Internet users now post comments and reviews about consumer products of all kinds (exhibit). User-generated media sites are growing in numbers of visitors and participants by 100 percent a year, traditional sites by perhaps 20 to 30 percent. (p 6)

This chart also once again illustrates the importance of word of mouth as well as the importance of soliciting consumer feedback, especially by outbound phone calling. The growing number of customers who are willing to interact with companies online is obviously of great importance.

Their research into uses of Second Life suggest that 1 in 10 members is already cocreating with companies, mostly helping to design new products and services. They go on to say that most of their respondents didn’t know that was a possibility and, when informed, 60% would be willing to interact with corporate entities. I’d add ones that they trust and in situations where they see benefit from the interaction.

If you have any doubt that the same phenomenon applies in the US, download the “User Reviews a Must” whitepaper from PowerReviews. In it PetCo VP of E-Commerce, John Lazarchic says:

“No matter how many reviews they receive customers continue to add their voice. A product may already have a rating of 4.9/5 but someone will still write another positive review.”

Wow!

The McKinsey article also identifies issues that need to be dealt with in creating community to participate in cocreation. They are:

•Attracting and motivating cocreators
•Structuring problems for participation
•Governance mechanisms to facilitate cocreation
•Maintaining quality

I’ve frequently pointed out that not all audiences are willing to participate (think older consumers) while some are eager to take part in collaborative efforts (think members of B2B vertical markets).

Looking around the web to see who else was talking about cocreation, I came across Cisco’s Executive Thought Leadership page and an interview with Prof. Thomas Malone of the MIT Center for Collective Intelligence. He points out that, as a result of the ability to share information at low cost, businesses can enjoy the economic benefits of large scale coupled with the human benefits of small scale which include flexibility and decision-making power. It’s a video worth watching. As you can see, there are other interesting ones on the site.

Is focused cocreation perceived to have some of the same dangers to the brand—mainly that people will say bad things—that opening to comments and ratings has? Maybe. However, good cocreation, as McKinsey suggests, directs the collective energy to making positive suggestions for the future. I’m confident it also leads to further bonding with the brand. Why not? The customer now has a stake in resulting products and services. That’s two highly desirable outcomes!

Herding Virtual Sheep

Last Friday I noticed an article on MediaPost about a new product to allow the creation of branded virtual worlds. I imagine a lot of marketers would have the same two questions I did:

1.Why?
2.Who cares?

So I spend some time over the weekend exploring The Electric Sheep Company and some of their applications. The exploration turned up some interesting information.
The company is over 3 years old and has built virtual worlds for various clients on existing platforms like SecondLife. The WebFlock product, according to founder Sibley Verbeck, is “a tool set for embedding flash-based virtual spaces within Web sites and integrating those into any existing Web applications. . . Primarily we see it as enabling virtual spaces for casual audiences who are already coming to a given Web site.” The first WebFlock project is a virtual world for Showtime’s The L Word series, which I’d guess has an audience that would enjoy the interaction a virtual world will offer.

But that doesn’t answer the broader “why” question. I looked farther; not difficult, since Electric Sheep has a robust Flickr site (why don’t more companies take advantage of sites like Flickr to demonstrate product use/happy customers?). I see projects for the NBA Finals (broadening the customer experience, as I remember), the USG Division of Siemens (looks like a virtual pavilion in Second Life), Best Buy’s Geek Squad (what it’s like to be a Geek Squad member), a Starwood hotel under construction (a preview of a new “select service” concept under construction at the time), and many others. Many are targeted at a young adult audience, but companies like USG/Siemens and IBM clearly have a business audience. If you look carefully, you see that many of them are either event- or entertainment-oriented. The content also makes sense.

If there are reasonable strategic answers to “why,” that still leaves the issue of whether website visitors will use them. These are corporate applications; I’m sure the owners know but equally sure few will reveal any specifics. I did find some more general information about virtual worlds, however, that suggests there is more going on in this space than most of us probably know about.

KZero, a British research firm that specializes in virtual worlds, has a graphic of the virtual world space. It’s segmented by content type and shows whether each world is open or in private beta. There is a lot going on, even though it doesn’t appear to cover the short-lived event and other branded worlds. And, yes, I know it’s small and hard to read. The good news is that they have this data broken out by content type and also by age group. It’s interesting reading.

MediaPost notes that a company can expect to spend less than $100,000 for a branded virtual world using this platform. If you have a good reason for doing it, and an audience that is willing to participate, that’s not much in the greater universe of media expenditures. WebFlock is an interesting development that’s worth watching.