Fleishman-Hillard Inc. and Harris Interactive have published an excellent white paper which examines how the internet influences the modern consumer.

The study is titled  “Digital Life Index Study”  and highlights how the internet influences shopping behaviours, making particular comparisons between the UK, Germany and France.

4 key insights of the study were:-

Digital Influence:

The Internet is by far the most important medium in the lives of European consumers — but companies are underinvesting in that influence.

Behavioural Framework: Consumer use of the Internet falls into five distinct classes of behaviours.

Research, Communication, Commerce are the 3 more established behaviours.
In the expanding web 2.0 environment Consumer Generated Content is rapidly rising in importance.
The 5th behaviour is consuming Internet content on Mobile devices.
Smart marketers will clearly understand the mix of behaviours that is most critical to their business — and formulate integrated campaigns to address that mix.

Consumers use the Internet in different ways to make different decisions.

The differences are driven by the impact of the decision on their lives and the range of available choices. e.g. Buying commoditised items like airline tickets are made with less consultation with online consumers than choices that have higher personal impact such as healthcare, or major electronic purchases.

Consumers see the clear benefits of the Internet to their lives, but they still have strong concerns that need to be addressed.

Clearly consumers recognise the value of the internet as a medium, but are also voicing concerns over internet safety.

Far from being a buzzword, Web 2.0 is providing new opportunities for marketing professionals to reach new audiences and develop new products. So why is this next generation of Internet so headache-inducing?

Simply, the rules have changed. And there are many traps for unsuspecting organisations.

Increased bandwidth, combined with a critical mass of users, means that organisations who do not carefully consider the pros and cons of Web 2.0’s increased flexibility risk digging a nice big hole for themselves.

Mistaking Web 2.0 as a technological issue can also lead to many dead ends. Technology is often the easy bit. Web 2.0 is merely a facilitator, albeit a powerful one, allowing for more meaningful interaction with your target audience. Think of it as a focus group on steroids—super honest but occasionally aggressive and capable of hurting you.

So why exactly is Web 2.0 different from the same old web, or Web 1.0? Wikipedia says that Web 2.0 is “…a perceived or proposed second generation of Internet-based services—such as social networking sites, wikis, communication tools and folksonomies—that emphasize online collaboration and sharing among users.”

Let’s not get bogged down in jargon. Web 2.0 is different because it turns the traditional broadcast model—which we have known and loved for its predictability since the first headline was carved in stone—upside down and inside out.

For users and consumers of product, Web 2.0 brings us a step closer to the original promise of the Internet as a multi-directional, amorphous hub of interactivity and commerce. For most of the Internet’s history so far the web has just been a convenient, more up to date extension of the traditional publisher-consumer model, where an organiser publishes content for its audience.

While still keeping jargon at bay, I can say that the old way of creating websites suited the traditional publisher-consumer model to a tee. Content was difficult and time-consuming to produce, and inflexible because web content was inextricably tied to the form of the site.

This shift in building websites separates content and form, allowing users to upload web content without complicated code; now anyone can easily create web content.

Therefore Web 2.0 subverts the traditional broadcast model, and chaos reigns. Now anybody can be a publisher and find an audience, and consumers have more clout through blogs, forums and ratings sites; influential Web 2.0 sites include social networking site MySpace, interactive broadcasting site YouTube and file sharing site BitTorrent.

Power to the consumer

If there is one theme that marketing professionals need to keep most front of mind, it is ‘power to the consumer’.

The business-customer relationship has irretrievably changed. Customers now have an outlet they didn’t have before and it’s much more public than a letter of complaint.

Big business knows they cannot control it, hardly a comfortable realisation, yet how they respond to this lack of control is most important. Some businesses view it as a threat, but forward thinking businesses recognise the new online opportunities available and have embraced feedback forums and blogs.

These forward-thinking organisations stand to gain the most; their clients appreciate the goodwill in being open and available, and appreciate being valued by an organisation that actually listens. For the organisation itself, while it is dangerous to bank on a certain amount of business growth from embracing Web 2.0 systems, a closer relationship with clients can be most productive and provide direction for future products and services.

Never before has such quantitative and qualitative customer analysis been available, but the value depends on how it is mined.

A focus group on steroids

Smart organisations are realising that Web 2.0 provides access to the largest and most diverse focus group ever. Manufacturers can more easily obtain feedback from their customers and turn that around into new designs and new products even faster than before, particularly online.

Not only is this focus group available at all times, it is more forthright. Focus groups are known for being inaccurate due to participants ‘need to please’, but Web 2.0 allows for a vast amount of response which is timelier.

Such feedback will produce extremes of view, so organisations need to make careful use of that feedback. Chasing an authoritative voice is an easily committed mistake. You won’t get one with a group this size. A larger sample is somewhat grittier, yet by looking to the middle and focussing on the majority view, an organisation can get a feel for their audience in a more valuable way than with traditional means.

Traps

There are several traps waiting for organisations that approach Web 2.0 in the wrong way, all of which have more to do with the internal governance of Web 2.0 than the actual implications of the technology itself. Here are five common traps which can hold progress back:

Trap 1. It’s not about the technology:

The biggest mistake a business can make is thinking Web 2.0 is a technology issue. In actual fact it is a business process issue and an online governance issue, working with existing technology.

Remember that the technology is merely a facilitator for an interaction amongst people. The real issue is a growing expectation that all organisations should be available and responsive.

The technology has been around since the web’s early days, but with greater broadband penetration combined with the critical mass of users, the interactive nature of the net is finally being realised. What has to change is the way business interacts with its customers and uses technology to deliver advantages.

Trap 2. Don’t create, syndicate:

Syndicated content is a key part of Web 2.0, and widespread syndication has altered user expectations: a huge variety of websites now collate syndicated content, such as news headlines, weather and entertainment from other sites for a small fee. These are a cost effective way of adding richness to data, translating to a richer experience for consumers and in many cases are now considered a minimum standard by your potential and existing customers.

Collating syndicated content adds value for consumers and gives visitors a reason to stay on your site. In some cases business will be wasting money by creating their own content, when they can collate cheaply.

An obvious example is to take a street map from Google Maps and use a pin for the location of your business, along with other information such as parking, public transport information, nearby bars etc.; it is a basic yet valuable example of ‘mash-ups’.

Trap 3. Anticipate problems:

Businesses who fail to recognise Web 2.0’s consumer clout can be in for a nasty surprise. Disgruntled customers can go to surprising lengths to discredit you, and Web 2.0 makes it easier for them to spread the word, whether it is via blogs, forums or even their own site.

The rule that a satisfied customer will tell two people about your business, yet a disgruntled customer will tell ten seems quaint in these Web 2.0 days. If only it ended at a nasty letter and some bad referrals at the tennis club.

Web 2.0 is potentially an eye on the business at all times. If this sounds far fetched, consider the example of a U.S. cable company whose reputation was severely tarnished when a disgruntled customer videoed one of its employees sleeping on the job and broadcast it on YouTube.

Companies need to anticipate problems and have procedures in place to contact disgruntled customers and diffuse situations. At times these customers will be most unreasonable, and the criticism undeserved, but the power for their message to reach a wide audience has to be respected.

Trap 4. Monitor at all times:

Okay, so your company has started a forum or blog and it has been well received, but a common trap is failing to monitor and keep up to date. Business needs to plan how they will support these functions.

At present there is no magical technology that can automatically keep web pages relevant or which can update and monitor blogs. They have to be done and to be taken seriously; the damage to credibility from a stalled blog (depending on your industry, even a week of no activity can count as ‘stalled’) can be worse than not starting one in the first place.

If a blog has not been updated for six months then your credibility is damaged. If forums are not moderated they can get out of control and become a breeding ground for non-constructive criticism.

Trap 5. Misjudging ROI:

In many cases business needs to forget ROI when it comes to certain aspects of Web 2.0. What they get back by participating is goodwill. That’s not to say there won’t be benefits in terms of customer retention and new sales opportunities, but it’s a mistake to bank on a certain level of increased sales.

Businesses are now expected to be more available and responsive. While there is a cost to interacting with customers, it is hard to put a price on goodwill. Focussing purely on ROI can lead to a kind of paralysis where nothing gets done, and invite customers to look elsewhere.

In the end

Some things never change: organisations always want to know what is going through the minds of their public; and consumers favour organisations which can anticipate their needs. It is apt that Web 2.0 can facilitate this awareness both ways.

Theresa Cunnington is a Senior Usability Consultant with Bullseye – Theresa has been active in the usability field since 1994 and is a passionate advocate for creating useful, usable and engaging user experiences.