Thursday, January 10, 2008

Is Web 2.0 Bad For Business?

"I must confess that I've never trusted the Web. I've always seen it as a coward's tool. Where does it live? How do you hold it personally responsible? Can you put a distributed network of fiber-optic cable "on notice"? And is it male or female? In other words, can I challenge it to a fight?" ~ Stephen Colbert, an American comedian, actor, and writer
"Web 2.0"

Yes it's another buzzword. But this one is not going away anytime soon. In fact, it's being embraced by marketers around the word.

Is Web 2.0 a part of your online strategy?

If you're not sure what I'm talking about let's start by de-bunking the buzz...

Web 2.0 refers to a "so-called" second generation of web-based communities and hosted services — such as social-networking sites, wikis, etc. — which seeks to assist in online creativity, collaboration, and sharing between users.

The term suggests a new version of the Web, not in the sense of technical updates to the Internet itself, but to changes in the way software developers and end-users use and/or experience the web.

For example, a traditional or "web 1.0" site allows users to retrieve information. The site owner has sole control over the content and the user is limited to only reading or converting to a buyer or leaving.

There is nothing wrong with this model. A value oriented site like this is a benefit to its users and a company can make millions selling their products in this fashion.

However, a web 2.0 site allow users to do more. The user can still retrieve information and convert but they can also build on the that info... adding there own information to create a more interactive community.

On sites such as Wikipeadia, Myspace and Facebook users can own the data and exercise full control over that data. Other sites seek user data along side its own, using techniques such as, comments on articles, customer reviews on products, and syndication opportunities in which the users can take site content and republish it on their own sites.

Many call this an "architecture of participation" as it encourages users to add value to the site as they use it. It CVoD to the next level... CVoD 2.0, eh?

This is also described as "social-networking" and "participatory web"'s all under the web 2.0 buzz. Bottom line... by conceptually involving the users more you'll build a better and larger community of more active participants and thus it will result in better traffic and conversion numbers for your business.

That's why every online marketer I know is rushing to do more 2.0 activities. The question is... can it actually be bad for your business?

I say yes.

Adding too many Web 2.0 features to your website may actually decrease your conversions. If you're spending too much time building the interactive experience you may not be spending enough time on your marketing copy and conversion numbers.

Increasing the traffic and not increasing the conversions may send you to the poor house. Or worse... the new increased user experience and high traffic numbers may be of a different demographic, one that you can't monetize.

A business built on selling to 50 year olds that now has an audience of 20 year olds needs to adjust their offers. And not all business are that flexible.

Would you be?

Web usability guru Jakob Nielsen agrees. He states while features like user reviews can benefit consumers, others can make sites overly complicated.

According to Jakob Nielsen:
"While a modest 2.0 infusion can be beneficial, advanced features are rarely the most important contributor to good user experience or profitable websites... if you get caught up in the hype, you divert attention and resources from the simpler things that really matter. This opportunity cost is the real reason to take it easy on Web 2.0."
In other words, when applying these new 2.0 ideas... don't over do it. The last thing you want to do is overwhelm your existing return users. Don't let these loyal users get frustrated by new technologies or trying to force them to participate in interaction that they don't seek.

Don't bite the hand that feeds you, eh?

My advice is to ask your users what new features they would be interested in and test them. Most will appreciate the interaction. But test them over time... one at a time. AND while exploring this new world, don't lose the focus of making money.

I am all about creating value... so if web 2.0 helps you add value to your site then do it for that very reason. Not because it's the new buzzword.

Buzzwords don't feed the bulldog.