In the recent annals of terms misused and cliche, Web 2.0 ranks near the top. We hear it breathlessly spoken of by various media, PR and marcom flacks 'n hacks, usually without reference to its meaning or purpose. This, it becomes clear, is because they don't fully understand what it is they are referring to.
The term has become iconic. For them it means the "new, shiny, internet" - whether the internet of the present or of the future, they seldom specify. But, to be fair, in the most general and shallow sense, their understanding is not entirely wrong.
Tim O'Reilly and colleagues popularized the term (originally coined in 1999 by Darcy DiNucci) as a catchy phrase to help market a web-related conference they were promoting in 2004. His conceptualization is complex and abstract, while Paul Graham's is much more practical, and, true to character, my musings here on Web 2.0 and its impact on business are greatly informed by his.
Regardless, Web 2.0, as any Internet Project Manager, or anyone focused on Internet Marketing will tell you, is about considerably more than an abstract, "next generation" internet, popularized by social networking sites, web apps that do things we never realized we needed done, and web sites of a certain style that have a bright, colorful and (mostly) uncluttered appearance that has itself become the metaphor for Web 2.0.
In fact, for business and the process of buying and selling, Web 2.0 is the single greatest agent of change in our time.
What the printing press did for the written word, Web 2.0 technologies and concepts are doing for the process of business. It's the paradigm shift that has enabled this process for the first time to favor the buyer, rather than the seller, and in doing so, it has changed forever what businesses must do to win and keep customers.
Web 2.0 de-mystified
Lets cut right to the chase - essentially, Web 2.0 has 3 core elements, each of which have emerged in reaction to the public's generally poor past experience of doing business on the web.
Vastly improved functionality and usability
The historic web was conceived of and initially standardized in relative isolation by a small cabal of poorly supported intellectuals, and subsequently thrown together by programmers pulled-off their real jobs of developing desktop apps. The implementation was often poorly conceived, barely worked, generally looked awkward, and offered no real ROI to business for years.
There were essentially 2 elements - text and hyper links. In other words, the experience was similar to that of reading a typewritten document, with the addition of being able to jump instantly to other documents through hyperlinks.
By the late 1990's, with the GUI refinements offered by Windows 95, and the availability of the Netscape Navigator browser, websites were beginning to add graphics, font styles, colours, and useful functionality through Javascript . Websites, albeit superficially, were becoming interactive!
Initially, however, there were computer hardware limitations that restricted the number of available colours to 256, of which 216 were "browser-safe" - would render the same across browsers and operating systems. This meant that style and image choices were limited.
One of the first substantial projects that I led, was the development of an Intranet for one of the Government of Canada's largest and most technically savvy departments.
At the time, there was an ongoing program to upgrade the thousands of computers within the department, but it was expected to take quite some time to accomplish. This meant that the Intranet had to work equally well across both old and new hardware platforms, and, having had a tough enough time championing the web and convincing management that web-based systems were in fact going to replace the client-server networks they had just finished implementing, we were determined to build to the highest standards, rather than the lowest. As a consequence, we built a 256 colour version, as well as a hi-colour version - on top of the requirement for cross browser compatibility and content in two languages!
In the corporate world, as we moved into the dot-com era, what then passed for "flashy" websites had become a status symbol, and enormous amounts were paid for them - feature for feature, probably ten times what is currently paid. A quarter-million dollar corporate brochure site, was not entirely unusual, although, to be fair, it required a team of developers and creative folks, and for a much longer duration, to accomplish what are now much quicker and more trivial tasks, requiring fewer resources.
In the web-based, business applications space, (as opposed to static information presentation websites), Web 2.0 was already emerging, despite the technological constraints. While leading a web applications development project for Mitel , that saw us designing and developing a web interface for the management of VOIP phone networks, it became clear that the ubiquity of the types of tools we were building was inevitable - that once the technology caught up to the types of useful functionality we were imagining, it would change the world.
And now, in this, the era where Web 2.0 practices are pretty much mainstream, its clear that we were right. One need only study the internet usage and E-commerce stats, or stats reflecting the drop in TV viewer-ship and newspaper readership, to grasp the overwhelming growth and success of online.
This happened because web development and Internet Marketing has now become highly professionalized - in terms of standards, core technologies, and implementation. As a consequence, browser-based applications can now compete with desktop apps in terms of powerful functionality, to meet the needs of both web User and website operator.
An examination of the online shopping cart of today, versus just a few years ago makes the point well. In-depth analysis of the reasons for shopping cart abandonment - perhaps as many as 60% of all prospective purchases are abandoned - and the consequent steps taken to prevent this, make online shopping fast, easy, satisfying and stress-free for consumers, and immensely profitable for businesses that do it right.
Such items as factoring shipping costs so they are apparent up-front, rather than at the end of the process, and providing an "express checkout" that does not require customer registration, reduce the friction in the sales-funnel, allowing customers to get in one end and out the other as quickly and painlessly as possible. And of course, should they leave, and then return, the ability to keep their items in the cart, and perhaps even email them a reminder, all helps to close a sale that would otherwise have been lost.
Turns out, not surprisingly, that forcing people through an uncomfortable buying process takes away their acquisitive appetite, and the converse, that reducing friction in the sales funnel, helps to close sales. Marketing 101 applies to every platform.
Interactivity - both vertically and horizontally
Historically, business has been conceived and conducted in a top-down manner. Businesses have controlled information about their vertical, products and product categories, and, either implicitly or explicitly, have colluded to ensure that consumers are restricted only to them as the single source for market intelligence. This has resulted in consumers having to buy whatever businesses have told them to, and having to pay the retail price (MSRP) demanded. Those were the days!
The early web reflected this conceit. Websites were self aggrandizing brochures, with little useful information for product comparisons or other market research, and certainly nothing that could be considered unbiased. Business simply duplicated their off-line practices to ensure their continued dominance in relationships with consumers.
This of course is no longer the case. The ideal nature of the web for locating and communicating highly specific information, means that consumers can now find well-documented information about products and services from a wide variety of different biases that include those of both consumers and business competitors.
The business information funnel has been inverted. Rather than business informing consumers what consumers need to know, consumers now inform business what business need to provide. Consumers do this in the same way business used to - by colluding to ensure that other consumers have exhaustive information available on which to base an excellent buying decision, and on how little that purchase need cost.
Because information is ubiquitous, business, to avoid being forced out, has had no choice but to "buy-in" to this new paradigm. They now compete on the basis of who can best inspire sufficient confidence to generate a buying decision, through full disclosure of product information, and provision of facilities for other customers to interact and share their own experiences.
Whenever I shop online, I invariably spend the most time on sites that provide product reviews by customers discussing their particular use of a product that I can otherwise know only through a small picture. This allows me to understand whether or not the product meets my own criteria or not, because price is simply but one element.
What used to be a business monologue, has now become a dialogue between businesses, their competitors, groups of consumers, former customers, and existing prospects.
Accountability
If anyone got the short end of the stick, it was usually the consumer - business is far too savvy for that! Either the consumer paid too much, or the business failed to completely deliver on what was promised. And then what could they do? With the deck stacked against them, they invariably had to swallow their bile, and move on. So-what if the business lost them as a customer ? - there was no shortage of prospects out there.
The ability for anyone to widely, and instantly, disseminate information has however meant that business can no longer expect to indulge in free-reign behavior while being protected by anonymity. Any business that crosses the line - accidentally or otherwise - risks a full, one-sided account being published on the web, for all to see - the victim telling the full story as a "public service".
And this is not restricted just to individuals spewing bitterness on their personal blog, or consumer-related forums - the pro-business "Better Business Bureau" , which generates revenue from businesses in exchange essentially for managing customer complaints, publishes the results of those complaints on their website, as part of the public record. Any hard-done-by customer can co-opt the BBB's credibility - either to mediate an accord with the injuring business, or, failing that, to attach a negative score to the businesses reputation, on which prospective customers will base their future buying decisions.
Interestingly, from this has emerged a new maturity amongst consumers, with their realization that the issue is less about the mistakes made by a business - statistically, out of a zillion transactions or operations, something bad is bound to happen - the issue is really about how the business responds to its alleged mistakes.
It's now okay for a business to admit an instance of fallibility, and to engage in a conversation with customers to figure out what went wrong, and how it can be fixed. They may as well, since their customers have already seeded outraged discussion threads on the web, telling all. Nothing defuses outrage faster than contrition, and a commitment to fair resolution - and now business has an opportunity to tell their side, and to neutralize the possibility of bad karma.
What a fantastic marketing opportunity - probably the most cost-effective method of winning customers, and keeping them for life!
A separate reality?
We can see that these elements of Web 2.0 have enormous implications for the manner in which business can be conducted, and the ramification for businesses that don't move ahead with the rest of us. We can also recognize these elements in much of the web that we frequent. But they are not ubiquitous, by any means.
Some businesses either don't engage in the web at all, or they do so in a perfunctory pre-Web 2.0 manner. Their view is often informed by the notion that there is a dichotomy between "online" or so-called "bricks-and-mortar" businesses.
The notion is that some types of business can do well online, and some are completely unsuited for it. Businesses, that, for example, sell highly commoditized products - like cameras - and for whom price is the only differentiator between them and their competitors, are thought to do well online, because the process can be completely automated, (which drives down the cost of sale), since the buyer most often already knows what they want to buy.
Other types of businesses - high-end products, such as cars or airplanes, or highly specialized industrial widgets - are thought to be unsuited for the internet, as are products like, well, bricks and mortar.
This is of course an entirely false dichotomy. While the ease and simplicity of making product purchases online has created new opportunities for the purveyors of those products, the internet has also created new opportunities for other types of businesses.
The internet is now the center of all marketing
To understand how all types of businesses can leverage this revolutionary marketing tool, lets remember that the sales process doesn't start when the customer arrives at the sales counter, it starts when the customer recognizes that they have a need, and begins to ponder how their need might be fulfilled. That's why we invented marketing - to make sure that, as the customer pondered, it was our product that came to mind. (The more cynical would suggest a causal relationship between the marketing process and the customer's initial need, and they would not be entirely wrong!).
We have a client, for example, that sells the stuff they dig out of holes in the ground. Yep, they sell sand and gravel - tons at a time - and their internet business is doing really, really well, because, when people have a need they don't know how to fulfill, they go to that great big shopping mall called the internet to figure it out. If you search for sand and gravel in our locale, our client is front and centre, which means that their competitors are losing market share, and may just lose their businesses.
So, in essence, characterizing a business as inappropriate for online merely reflects a limited understanding of Internet Marketing. Online is an important and much more accessible additional portal to any business, and this fact is what makes Web 2.0 such a powerful concept - because it has shaped customer expectations of how business needs to be conducted online, and these expectations have now bled into off-line interactions as well.
Some businesses still don't quite get it, and inevitably, they will be left behind, because business, globally, has changed radically, and forever
How did we get here? - the Web 2.0 Wayback Machine
Web 2.0 is really the outcome of "lessons learned" from 10 years of doing business on the web. Its also the consequence of cataclysmic events in our recent history.
Only 10 years before these notions of "the next internet" arose, eBusiness, if it existed, was largely an in-house thing. There was very little eCommerce, and most business websites were essentially brochures comprised of lofty statements and b.s.
Design work and architecting generally was done by technical staff, (programmers, largely), since there was little online knowledge outside of that domain. As such, the web was an under-developed resource, with really poor usability and even worse aesthetics. But, as it became increasingly clear that the web was more than just a passing fad, and that there was money to be made, managers began to target resources towards specifically online projects, and thus new domains of expertise were developed - web GUI design, web programming languages, web usability, and web marketing.
These folks found the existing online paradigms, largely inherited from the "desktop" world, were unnecessarily narrow and rigid. Web development is principally an exercise in publishing and marketing, rather than only software development, and the acceptance of this fact and its implications, and the new online-specific paradigms that arose as a consequence, led to an exponential increase in eBusiness uptake by customers and previously reticent businesses.
As new domains of online expertise developed, online usability improved, customers responded favorably, and before long, we had a phenomenon, and the dot-com era had arrived.
Dot com to Dot bomb
It seemed that no promise was too extravagant - the over-hyped web could overcome all challenges, could cure all ills. Dot-coms without revenue, and little more than a vague idea about how their USP could be monetized, were valued for absurd amounts through well-orchestrated IPOs. The bubble inflated without cease, creating a level of confidence that was, well, maniacal.
Even otherwise sensible folks day-traded, monitoring their tech portfolios minute by minute as they held down their regular jobs. It was intoxicating. While previously, a 5% return, per annum, was thought to be not an unreasonable return, (albeit sedentary), and 10% was considered somewhat extravagant, during the bubble a return of 10% per day was a reasonable expectation. I recall, on one occasion, earning, and losing, 10 times my original investment in a single afternoon.
The delicious irony is that the deflation of the dot-com bubble, the halt to this orgiastic behavior, was in large part precipitated by the very technology that was the cause of it being inflated in the first place. One Monday morning in March, 2000, the planets aligned such that software programs based on all-to rigid and narrow logic, began to issue stock market "sell orders", which resulted in other programs following suit, and a momentum that could not be stopped by human traders. The rapid gutting of the market that resulted - of companies valued far, far beyond their assets or earnings - caused a chain reaction that eventually disappeared $5 trillion ($5,000,000,000,000 U.S.) of technology company market value over the next 2 and-a-half years.
This of course effected other areas of the marketplace, as the implications of company closures, massive layoffs, and debt abandonment cascaded through the global economic system.
And then, while the marketplace was still reeling out of control from this economic disaster, came the 9/11 attacks on the United States. This savage blow to the American psyche caused an almost immediate evaporation of another $1.4 trillion in U.S. stock value, and further precipitated additional company closures and layoffs.
Our own home town, Ottawa, once titled "Silicon Valley North", had about half of its workforce directly or indirectly based on tech. Ottawa never recovered from the dot-bomb, and whatever recovery had been nascent, was extinguished by the aftermath of 9/11. And now, with the implosion of Nortel, Ottawa's telecom cornerstone, and the inevitable consolidation of global telecom companies brought about by the recent 2008/2009 economic collapse, Ottawa's tech sector may shrink to as little as 10% of its former size, leaving only the civil service sector to support the city's economy.
Globalization and Web 2.0
As economic, social and political calamities, upheavals, and mis-management at the highest levels of both government and business have forced the re-structuring of local economies like Ottawa, and so many other small communities across North America, Europe, and just about everywhere else, a well developed, low cost and reliable Internet, with increasingly refined and optimized practices of interaction, is helping to sustain these local economies by extending the reach of both businesses and consumers.
Not surprisingly, the largest and most innovated economy - that of the U.S. - is leading the way, with better internet infrastructure, and more sophisticated leveraging of the online platform for business. In Canada, we are falling further behind. Our infrastructure, once near best, has been largely neglected for close to a decade. High-speed connections are largely an urban phenomenon, and increasingly priced out of reach for consumers.
Canadian businesses, in general, also tend to lag far behind their U.S. counterparts in the exploitation of online business opportunities - certainly in the implementation of Web 2.0 practices and tactics.
There are notable exceptions of course. Software vendor Corel Corporation , for whom I consulted when they acquired an enormous competitor and needed to integrate their global eMarketing and eCommerce systems, has begun to practice highly refined Internet Marketing tactics. As has wildly successful beauty products manufacturer Fusion Beauty , on whose Internet Marketing account I spent some considerable effort.
A recent project, VideoPages , which is a Canadian online video platform for business advertising designed and architected by me specifically to integrate with search engines so that clients rank higher than their competitors in search engine results, represents some of the most highly refined automated Internet Marketing and Web 2.0 tactics - and some magnificent innovations are still to come!
While globalization - the notion that entire economic sectors can be stripped from the developed world and moved to lesser developed areas in order to keep the costs of consumer goods down and corporate profits up, all without fatally de-stabilizing the entire world - has now been largely discredited as an overriding economic policy, the web and its infinite possibilities for creating a "global village" may rehabilitate the concept by totally re-defining it.
The economic dislocation that has occurred globally since Y2K has been devastating, but, interestingly, it has helped to accelerate the refinement of online services and the development of Web 2.0, because, quite simply, business - certainly in the U.S. - has become more motivated than ever before to make online work.
The mastery of online business promises a huge dividend - due to the minimal requirement for initial investment and operating costs, the ability to sustain high margins, and a reach that is global. Business is motivated enough that they are willing to turn the paradigm upside down - bottom-up, rather than top-down, customer-centric, rather than all about business. Whatever moves product online, is the Holy Grail - because the cost of sale and fulfillment is miniscule, and the market is global.
Its clear that manufacturing moved off-shore is never coming back. Service industry jobs probably will, because its now less expensive, overall, to fill these positions locally. But those communities that have lost their anchor employers, now have the capability of using online technologies to create jobs. An online business can be serviced from anywhere, and employees don't all have to be located in the same, or any one place.
Web 2.0 is life changing
Almost all of our shopping at home has an online component - except basics, (like beer ). Even our grocery shopping - we check the weekly flyers online, before deciding where to shop.
When needing to buy just about anything else, we tend to check availability online. Books, clothes, electronics. housewares - just about everything is researched online first. And our shopping territory includes both Canada and the US.
Because of Canada's small population and the conservative nature of most Canadian businesses, there is less competition here, so prices are significantly higher and product selection is considerably smaller. This extends to Canadian online business, where product selection is limited, and prices are often twice that of American competitors.
As a consequence, every 6 to 8 weeks we order a number of items from various U.S. online retailers, and have them shipped to an agent in Ogdensburg, New York - about a 40 minute drive from where we live in Ottawa. Even after paying Canadian taxes, its generally less expensive. The real clincher though, for us, is the selection. Instead of compromising, and buying something that doesn't do exactly what we need, or is of a lesser quality - while costing more - we get exactly what we want, for a price that is the lowest from among a selection of online retailers.
And U.S. online retailers will ship product across the continent for less money than Canadian retailers will ship product from only a few hours away.
For example, last fall, when the cost of oil had peaked at $150 per barrel, it looked like our home heating bill was going to triple. We live in an old, drafty house, in a climate that sees minus 20 degrees for weeks on end - often minus 30. Something had to be done to keep us toasty through those cold, long nights - without breaking the bank!
We liked the idea of electric blankets, but were disturbed by the inconclusive risk data - with respect to fire and burning, and cancer-causing magnetic radiation. Online research led us to an entirely new technology, perfected by a single U.S. manufacturer , that uses low-voltage DC current, rather than the conventional high-voltage AC current. The benefits are two fold - low voltage means low heat and therefore inconsequential risk of fire or burning, and DC current does not generate a magnetic field. Plus, the quality of the blanket was really high, and they use as little power as a light-bulb.
Further research led us to a small mom-and-pop retailer in Minnesota, run by
Kimberly and Thomas Carlson, evidently from their home outside of St. Paul, with a ware house nearby. He was a cop, she was a social worker. They started an online business together to have a better life - and in doing so, Web 2.0 helped them make our life better too!
When destabilizing geo-politics led to an increase in the price of oil that caused a risk of hardship for us in Ottawa, Web 2.0 technologies and practices enabled a couple in St. Paul, Minnesota to help solve our problem.
OMG! World Peace!
This then is the true power of Web 2.0. In helping to support a "global village", it makes us all neighbors, with relationships based on reciprocity. And, as we all eventually learn, the recipe for a healthy life is to develop cordial relations with your neighbors!
As already alluded to, Web 2.0 has begun to transform expectations for off-line transactions also. The cost of successful online business is acceptance by businesses of certain principles and practices. But customers don't really distinguish between the online and off-line side of a business. Failure of any business to acknowledge this reality - by providing a lower quality of service in the off-line environment, will however lead to the same consequences as a business failure online - broadcast of the details, resulting in loss of reputation, and then sales revenues.
What comes next?
For many, the notion of Web 2.0. is old news. Been there, done that. Invariably, wags over-use the nomenclature and opine upon Web 3.0 - the so-called "Semantic Web".
Current notions of Web 3.0 refer essentially to the deriving of meaning (semantics) from content. When searching for "wag", do you mean the movement of a finger or dog's tail, or the "person given to droll, roguish, or mischievous humor; wit"? Currently, you have to be more specific, to receive useful results.
The "Semantic Web" is one that understands what you mean in context, and that can combine existing data in new ways, to provide, for example, a map that plots licensed dogs of a certain breed, within a kilometer of your location... in 3D!... on your phone!
Is this a shift of the same magnitude that transformed what we had previously to Web 2.0, or is it simply another refinement, an additional feature or layer of complexity? Is Web 3.0 simply a matter of... semantics?
Either way, our world is changing, and changing at an exponentially faster rate. As always, we will continue to refine and redefine our technologies to meet our needs - that is our nature.
An Internet Marketing Project Manager has responsibility over tasks pertaining to promotion and sales of products or services online. For the purposes of online promotion, tactics such as search engine optimization - SEO and search engine marketing - SEM, are deployed, which may include pay per click advertising - PPC, for example, and use of social media applications, electronic direct mail - EDM.
The objective of Internet Marketing however, is to sell, and this is accomplished online through e-commerce and fulfillment applications, the development of which are also overseen by the Project Manager.
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