Businesses still confused by Web 2.0

April 24, 2007

The Economist Intelligence Unit and the search company Fast have collaborated on a report on attitudes to Web 2.0 in the corporation.

Apparently senior execs are latching on to the term and see it as a way to increase revenue. Concerns lie in the fact that most corporations don’t actually understand the concept, what it could do for them and don’t have the knowledge in-house to make the most of the opportunities it presents.

Key findings of the report include:

  • Customers are helping to develop and support products. Nearly 60% of the surveyed companies say that they are inviting customers to contribute content that explains, supports, promotes or enhances their products, or that they plan to do so within the coming two years. About half of companies say they are, or are planning to, treat customers as co-developers of products that are in a constant state of improvement.
  • Ease of acquiring and supporting customers provide the biggest financial benefits. Most companies cited marketing and sales as an area where Web 2.0 could help to increase revenues, primarily through customer acquisition and service. Web 2.0 technologies were seen as a way to reduce costs in the areas of customer support, advertising and public relations, and product/service innovation.
  • Early adopters are to be found in many countries and industries. Companies based in the US, Germany, China, India and the UK are among the early adopters of Web 2.0 tools and methods, according to the survey. The top early-adopter industries are entertainment and media, technology, travel and tourism and professional services.
  • The C-suite is more enthusiastic than lower-level executives.A full 85% of C-suite executives see the sharing and collaboration aspects of Web 2.0 as an opportunity to increase revenue and/or margins, versus 75% of middle management. The C-suite is also more inclined to view Web 2.0 as transformative, affecting all parts of the business (35% versus 28%) and having a significant impact on the company’s business model (41% versus 22%).
  • CFOs are the most skeptical about the potential of Web 2.0. Compared to CEOs and the rest of the C-suite, CFOs lag in understanding and support of Web 2.0 initiatives. CFOs are less likely to view Web 2.0 as transformative, less likely to think that it will affect all parts of the business, and less likely say that it will change the company’s business model. They are also less optimistic than their C-suite peers about Web 2.0’s potential to increase revenue and margins.

This is another indication of the potential openings we will see at large corporates as they try to manage the move to a social web and engage their customers. The early forays will be agency lead, but I’d expect to see corporates trying to bring this in-house so as to control and maximise their revenue opportunity. Worth getting your CV up to scratch with Web 2.0 buzzwords!!

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