Web 2.0 marketing: What it can do for you

Today's Web technologies offer more creative and interactive methods for midsize companies to target new audiences and measure marketing results. But you must research the options — and potential problems — carefully before jumping into this fast-paced new world of marketing.

In Summary:

The advent of Web 2.0 characterizes the shift in the World Wide Web from a collection of static sites to a global space where broadband connections and multimedia applications deliver more extensive content and closer interaction with audiences. Some of these Web 2.0 services and companies have become well-known in a short amount of time to quickly change the dynamics of Internet marketing and advertising. For instance, the online video sensation YouTube was founded by two young California entrepreneurs in February 2005; less than two years later it was sold to Google (in October 2006) for US $1.65 billion.

This is good news for midsize marketers. Because new applications such as blogs, wikis, and online video advertising are more affordable than traditional advertising methods, midsize marketers can compete more effectively with larger companies. Yet, because of the number of options, it can be confusing to devise an online strategy.

A thorough appraisal of the world of Web marketing can help ensure that your company spends its Internet marketing dollars wisely. The overview below provides some of the more popular online marketing methods and how you can take advantage of them.

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1. Social networking sites

Sites like YouTube, MySpace, and Facebook in the United States; Friends Reunited in the United Kingdom; Cyworld in South Korea, Mixi in Japan, and others, allow people to upload content such as videos or personal profiles. Wildly popular with young people, marketers are starting to invest in social networking advertising. (Microsoft provides the digital advertising technology for Facebook.)

The good: Marketing on such sites helps companies reach a younger audience that is beginning to ignore traditional advertising. Unilever, for example, promotes its Axe deodorant on a MySpace page dedicated to what it calls "Gamekillers" — people who interfere with a young man's efforts to find romance.

What to watch out for: Anyone can set up a page on these sites, but it pays to keep the concept fresh, as Volkswagen learned with its 2005 launch of a MySpace profile for a character in its commercials. Already, Volkswagen marketers told The New York Times, the "Helga" profile is losing appeal as other marketers have invaded MySpace. In addition, recent media reports indicate that members of such sites are becoming disgruntled with the way advertisers are targeting them.

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2. Blogs

Blogs, online journals of commentary and chat, are everywhere on the Web. The corporate world is now using them to market their products or develop a brand image. Microsoft engineers blog about Windows Internet Explorer and other products, for example, while General Motors runs a blog that discusses topics ranging from auto racing to car design.

The good: Executed correctly, blogs give marketers a chance to build an informal dialogue with customers. Companies can test new product ideas, for instance, to see how customers react. Blogs are generally inexpensive, too, costing perhaps US $2,000 to $5,000 for design.

What to watch out for: To be successful, marketers must spend time regularly updating blogs, which makes them a high-maintenance option. In addition, blogs must be honest. Wal-Mart posted a blog about a couple who traveled across the United States and parked their motor home at Wal-Mart stores. But it was revealed that the blog was a fictional story written by Wal-Mart's public relations firm, and the retail giant wound up with a major credibility problem. With blogs so common — it's estimated that 35 million of them clutter the Web — it's tough to distinguish yours from all the others. Your best strategy is to drive traffic to your blog by marketing it through other channels, such as within e-mail newsletters or online advertisements.

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3. Podcasts

Podcats are audio programs that people can download and play anytime on an MP3 player, and they can hold someone's attention as much as a good book. U.S. appliance manufacturer Whirlpool, for example, has developed a series of 20-minute family-oriented podcasts that cover topics such as how to make children's costumes or manage a gambling addiction.

The good: While not directly selling Whirlpool products, the podcasts attempt to connect consumers with the Whirlpool brand before they shop for a washer or dryer, says Audrey Reed-Granger, Whirlpool's public relations director, who creates the podcasts."These are people who want to listen to good programming while in their cars, or as background when they're working at home," she says.

What to watch out for: Since marketers can only measure the number of podcast downloads, it's impossible to know whether people actually listen to them.

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4. Intelligent press releases

These "direct-to-consumer" press releases about products or company services include search-friendly terms. Companies submit the releases to online news sites that index or "aggregate" them and send headlines to subscribers.

The good: A company selling marketing tools or services, for instance, might write releases with terms such as "accelerate sales cycle" to direct people to company information. Windows Internet Explorer 7.0 will create opportunities in this area, as it has features that simplify subscribing to news feeds.

What to watch out for: News feeds and releases have saturated the Internet, which makes it difficult for your release to stand out from the rest. Make sure to invest in high-quality copywriting services, so that your headlines and storylines are credible, compelling, and appropriate to your customer base.

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5. Targeted advertising

Search-engine advertising — where companies pay to have their Web site displayed on search-engine results — has been popular for several years. But now companies can target their advertisements within the context of what people are reading online.

The good: Using technology and services from companies such as AdValiant, Touch Clarity, and Pulse 360, for example, a mortgage company's advertisements might appear in articles about home improvement or real estate. It can also target advertisements to readers within a geographic area, such as regions where the mortgage company operates

What to watch out for: Most targeted advertising contracts stipulate that the advertiser pays a certain fee per click. In case an advertisement generates a surge in page or site traffic, be sure to set limits on what you are willing to spend without notification from the marketing company.

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Measure what you do

Web 2.0 marketing has one great advantage: Technology today makes it fairly easy to measure results. For instance, through conversion-tracking services, you can analyze Web traffic to see how many site visitors actually do what marketers desire — read about a product, order a product, or subscribe to a newsletter. ClickTracks, one online tracking service, charges US $500 for a package that measures basic activity on a Web site, according to the company's site. For companies posting blogs, firms such as BlogPulse and Technorati can help them monitor who is linking to a blog site and what's being said about it.

With so many options available — and most of them priced at a small percentage of the cost of television, print, or radio advertising — experts advise that you experiment to determine which method or combination of methods suits your customers. With the right approach, a company can take advantage of Web 2.0's incredible reach and the opportunity it affords to connect with customers in an entirely new way.

A journalist for more than 20 years, Douglas Gantenbein writes often on technology for Microsoft. His work has appeared in Business 2.0, Scientific American, Popular Science, and other magazines.

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