foundation and marketing issues

This paper identifies the technological and commercial foundations of the new category of online applications commonly described as Web 2.0 or Social Media. It examines the relevance of Web 2.0 for Marketing Strategy and for Direct Marketing in particular. The issue is not a clear-cut one: while several observers saw in Web 2.0 a new stage in the evolution of the internet, others simply rejected it as a new High-Tech hype while there is still no generally accepted definition and demarcation of the term. Paradoxically, even without an accepted definition and despite lack of extensive research, the corporate world seems to embrace the Web 2.0 concept: high-profile mergers and acquisitions have already taken place or are under way while corporations are rushing to integrate various forms of social media into their marketing planning. The experience so far, based to a large degree on anecdotal evidence, is that Web 2.0 has a substantial effect on consumer behaviour and has contributed to an unprecedented customer empowerment. The consequences are far reaching, affecting not only the area of technology development but also the domains of business strategy and marketing. From the academic but also the practical point of view, attention must be placed on the demarcation and evaluation of the new technologies and trends so that the real value of Web 2.0 as a component of the modern marketing can be determined.

Keywords: 

Web 2.0, social media, internet marketing, online marketing, online consumer behaviour, direct marketing, marketing strategy

Topof page

• Introduction

On the 2nd of April 2005, The Economist published an article titled ‘Crowned at last’ and TIME magazine, breaking a tradition of almost 40 years, assigned the title of the 2006 Man of the Year not to any particular personality but to the modern virtual consumer. The underlying theme of both publications — and many others that followed — was the effect of the new kind of internet applications on shaping a new class of consumers increasingly integrating the web into their daily life. Both articles describe how the phenomenon commonly referred to as Web 2.0 or Social Media is affecting the way people communicate, make decisions, socialise, learn, entertain themselves, interact with each other or even do their shopping. They also suggest that the Web 2.0, next to transforming peoples’ individual and group behaviour, has also affected the power structures in the marketplace, causing a substantial migration of market power from producers or vendors towards customers. The main reason for this is that today's online consumer has access to a previously unknown reservoir of information and knowledge as well as unlimited choice, available at the click of the computer mouse.

The terms Social Media and Web 2.0 are often used as interchangeable; however, some observers associate the term Web 2.0 mainly with online applications and the term Social Media with the social aspects of Web 2.0 applications (participation, openness, conversation, community, connectedness; SpannerWorks, 2007). In this paper, we will use the term Web 2.0 as an umbrella term of web applications fulfilling a number of criteria to be defined further on.

Web 2.0

The growing importance of the Web 2.0 and the effects on consumers and organisations are issues frequently making headlines and increasingly attracting academic attention. The interest is often focused on the ways in which these applications contribute to customer behavioural change and on new challenges facing strategists and marketers (Urban, 2003; McKinsey Quarterly, 2007). There is little clarity as to the exact nature of Web 2.0; for all intents and purposes, there is still no generally accepted definition of the term and no systematic research on its importance and its effects on the marketing practice. This paper will attempt to define this phenomenon and identify its dimensions in an effort to help marketers understand the potential of Web 2.0 as a (direct) marketing tool.