Web 2.0 is a hot topic at the moment, at least within the tech community in the West coast of the USA where tech publisher O’Reilly has just held the second Web 2.0 conference. Here, we briefly look at what Web 2.0 is and review implications for how companies reach and interact with their customers online.

Web 2.0 refers to a collection of new technologies which facilitate certain behaviours online.

The first thing to be clear is that it isn't a standard or a paradigm shift as the name implies, rather to me, it's an evolution of technologies and communications approaches which have been grown significantly in importance this year. Many of the principles such as collaboration and participation date back to the inception of the web.

The main technologies and exemplars have been highlighted in this influential article by Tim O'Reilly

Web 2.0 characteristics

The main characteristics of Web 2.0 services are that they typically:

• Encourage participation – many of the applications are based on altruistic principles of community participation.
• Encourage creation of user generated content – blogs are the best example of this
• Encourage rating of content and online services – services such as deli-cious and Traceback comments on some blogs. These services are useful given the millions of blogs that are available – rating and tagging systems indicate the value of the content.
• Are often ad funded – the funding of web services such as Google Mail/GMail and many blogs such as this site is often based on contextual advertising such as Google Adsense or Overture/Yahoo! Content Match. Alternatively social networks all offer advertising space (See, for example, YouTube advertising offers five different alternatives for brands to interact with their audiences including Display Advertising, Brand Channels, Contests, YouTube Video Ads and YouTube InVideo Ads.
• Are hosted as web services – different interactive applications hosted on the web such as Flickr, Google maps or blogging services such as Blogger.com or Typepad.
• Involve data exchange through sites through XML-based data standards. RSS is based on XML, but has relatively little semantic markup to describe the content. We can expect a move to the Semantic web envisaged by Tim Berner Lee some time ago. An attempt by Google to facilitate this which illustrates the principle of structured information exchange and searcing is Google Base. This allows users to upload data about particular services such as training courses in a standardised format based on XML. New classes of content can also be defined.

XML-based data exchange is already advanced in e-retail and travel. For example, retailers exchange data with intermediaries such as Kelkoo or Pricerunner through XML. Amazon has also provided access to its product catalogue to partners. These XML approaches are important in extending reach which is mutually beneficial to both parties. For example, Paypal recently launched an online shopping services linking to retailers which enables those without credit cards to purchase from retail sites using Paypal.

• Use interactive/response technology approaches known as AJAX. The best known Ajax implementation is Google Maps which is responsive since it does not require refreshes to display maps. These sites often offer great user experiences with a WOW factor - and these will increasingly be used commercially. For many, this is the biggest implication of Web 2.0.
• Simplicity in design and style - Many Web 2.0 applications are focused on a single activity such as social networking, mapping or photo sharing. To make the task as easy as possible, they have a simple appearance using design techniques such as simple pastel colour schemes, rounded box corners, gradients and reflections. See this practical Web 2.0 design tutorial.

You can read more on the marketing implications of Web 2.0 and social media in this extended article

Web 2.0 marketing approaches

Associated communications approaches of Web 2.0 include:

• User-generated content (blogs and wikis)
• Content syndication and access through RSS
• Collaborative rating of content (e.g. http://del.icio.us)

Many of these characteristics are encouraged by the increasing of always-on, high-speed broadband connections.

I see the main marketing challenges of Web 2.0 as:

• Achieving targeted reach – the participation of Web 2.0 encourages more use of the web, but it encourages greater participation on niche community sites. This implies that web users will spend less time using large portals such as MSN or Wanadoo and less time on destination sites
• Greater knowledge when comparing retailers in terms of product range, price and service quality. Services such as Kelkoo.com, Pricerunner.com and Shopping.com are well established and increasing in use. But Web 2.0 also encourages sites such as blagger.com where consumers can express their opinion on services in an unmoderated way.

Marketing tactics for Web 2.0 include:

• RSS Feeds - Opportunities to syndicate content to third party sites on long-tail
• RSS Feesds - Offer more granular updates to customers on content (see BBC site for explanation or deal upates.
• Blogs - opportunities to demonstrate expertise (B2B) or create a buzz (B2C)
• Online PR – managing reputation increases in important
• Supporting community – Tourism Taxi Challenge.
• Viral marketing to extend reach
• Ad networks across content sites. Ability to tailor.
• Content-based plays

This is a work in progress article that will be refined for an article in CIM What's New in Marketing.