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What is Web 2.0?

May 29th, 2008

Web 2.0 is a term that has proliferated rapidly over the last few years. The term has become so popular that it’s now being used by about anyone for about anything (Web 2.0 Easter greeting card anyone?). For most businesses, it’s not necessary to understand Web 2.0 in much technical detail. What is important to understand are the massive social and business environment changes that the Web 2.0 phenomena is driving.

Web 2.0—The widespread acceptance and use of technology that allows continually changing or active communication.

Web 2.0—The Basics

Web 2.0 is simply the widespread acceptance and use of technology that allows continually changing or active communication. As you may be aware, some of the most common Web 2.0 applications are blogs, podcasts, Content Management Systems (CMS), social networking sites and user forums. Each of these technologies can be defined within Web 2.0 depending upon how they’re utilized. Technology is a prerequisite for Web 2.0, but it’s the widespread acceptance and use part of the definition that really matters.

Let the Buyer Beware

The most important aspect to Web 2.0, from my perspective, is that it has sparked a grassroots revolution by consumers. The era of caveat emptor (let the buyer beware) progressively grew through the 20th century until we languished under a never ending stream of unbelievable advertising. Regardless of consumer protection laws, the reality was that we were largely forced to rely on the naturally biased advertising and promotional information provided by businesses.

The losers in this environment were of course the consumers, but also those businesses who truly did offer unique value and could not afford to carpet-bomb our televisions, magazines and mailboxes. Nor could a business offering real value do much in their advertising to show they were different, since their competitors would make the same claims.

Consumers who wanted unbiased information about a seller relied on personal referrals—the most unbiased and believable feedback available. They were limited however by the finite capacity of their own personal networks.

Let the Seller Beware

Web 2.0 has ignited a new era of caveat venditor (let the seller beware). The rapid change in the marketing nvironment is not due to legislation or litigation, but rather the widespread practice of consumers sharing unbiased
information about a sellers product to other customers and prospects.

A simple example can be seen with books. Outside of our friends’ recommendations, we’ve had to rely on the
publisher’s information or from the questionably neutral editorial reviews. Now, thanks to Amazon and others, we have access to a large and active community of other consumers who provide us their unbiased feedback. Of course this is not a perfect system, those with ulterior motives can post reviews but we can use common sense to evaluate the reviews collectively and form a more reliable conclusion about a product.

For example, if I were to rely on attractive cover and glowing editorial review for Deck Planner: 120 Outstanding Decks You Can Build I might convinced to buy this book. But when I look at relatively low rating by consumers and their mixed reviews, I opt for a better choice.

The important point to understand about Web 2.0 from a business perspective is that our products and services will increasingly be promoted or demoted in the marketplace by consumers, and that advertising and PR will continue to lose effectiveness. Consumers now have better choices of where to get information before making a purchase decision.

The Web 2.0 revolution is only bad news for those sellers who have gotten away with neglecting their customers. In my next post, we’ll explore some of the unprecedented opportunities and strategies for businesses offering true value.

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