Tuesday, 23 June 2009

Why Web 2.0 is Important for your Business

There is little doubt that the internet and specifically, the World Wide Web, has had a tremendous and profound effect on all aspects of our personal and professional lives. Further, as technology continues to advance, a whole new realm of online possibilities continue to evolve.

Consider Web 2.0, a concept first popularized in 2004 by Tim O’Reilly as a way to describe the trends in collaboration, information sharing, communication, access and integration that are changing the rules on how business, consumers, and people all interact and use the web. Wikipedia defines Web 2.0 as the second generation of web development and design. Proponents of the term add that it heralds the inclusion of ‘people’ and not just technology in the use of the web.

A simple way to describe Web 2.0 is in terms of how the web is being used today versus a few years ago. No longer do individuals passively read content that was provided to them on websites. With the introduction of social media such as blogs, wikis, and social networks, individuals also contribute to content and can engage businesses on their own terms in a much more dynamic and frequent way. From Wikipedia, social media is “a fusion of sociology and technology, transforming monologues (one to many) into dialogues (many to many) and is the democratization of information, transforming people from content readers into publishers”. In other words, Web 2.0 provides the tools that allows a shift in the way that information is discovered, stored and shared, where businesses can literally engage in an ongoing, 24/7 interaction with their customer base.

From a technology perspective, this shift is based on the notion that software applications are run on the web itself instead of a computer desktop. Economies of scale and ‘network effects’ significantly reduce the cost of access to this technology, and in many cases business and individuals can gain access to the most common services for free.

While too numerous to mention (see www.go2web20.net for an amazing array of Web 2.0 applications), the key services fall under five categories: 1) Communication (blogs, micro-blogs, social networking); 2) Collaboration (wikis, social bookmarking, social news); 3) Multimedia (photo sharing, video sharing, livecasting, audio sharing); 4) Review and Opinions (product reviews, Q&A, employer reviews); and 5) Entertainment (virtual worlds, game sharing). Of these, some of the most popular services are Facebook, Myspace, Blogger, Twitter, LinkedIn, YouTube, Flickr, and Digg – but of course popularity and ranking vary by country.

There are several significant benefits to utilizing Web 2.0 for your business. For instance, according to Nielsen Online, the total time spent online by U.S. consumers alone has increased by 83% over last year, which represents a tremendous opportunity for businesses to build brand awareness. Strategic use of blogs, social network groups, ‘tweets’, ‘tags’ and RSS feeds combined with a well designed website allows businesses to build online identities that engenders trust and repeat interaction with their customer base. Utilizing blogs, wikis, and forums to create ‘customer communities’, allows customers to contribute their knowledge and expertise to assist others with the net result of improved online customer service and an increase in customer loyalty. Importantly, Web 2.0 technologies and services allows business to stay in contact with their customer base in real-time, enhancing their ability to respond to market changes and deal with issues as they arise. In all, strategic and effective use of Web 2.0 will drive more traffic to your website, increase sales, and improve customer retention.

If you are now asking yourself the question, “how does this affect my business in Cayman”, then consider this: there are over 3,000 members in the Cayman Islands group on Facebook; and over 2,200 Cayman-based individuals on LinkedIn. Even Twitter’s 130+ users with a location stated as Cayman seems to have doubled in the last few weeks.

Usage of social media is also changing. While online posting related to jobs, classifieds and social activities still dominate, individuals and businesses locally have recognized the power of social media to influence and engage the public. For example, the use of Web 2.0 was very apparent in the recent general elections, and Facebook groups such as ‘Equality Cayman’ quickly achieved public recognition. Businesses and agencies are also using social media to inform their customers and clients of activities and initiatives. Take for instance the Cayman Islands Film Commission which can be found on a number of different sites, including Facebook, Twitter and Blogger.

To summarize, Web 2.0 is about on-line tools that become more valuable the more your customers and potential customers use them. With numbers that are growing on a daily basis, you have to ask yourself if you can afford not to integrate these cost-effective tools into your marketing strategy.

For more information on Web 2.0 concepts, view the presentation below.

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