The market for Web 2.0 and social media marketing tools has been growing at a rapid clip over the past few years. As the technologies broadened and the deployments deepened, prices rose substantially. However, that average deal growth will diminish in the next few years as competition heats up and vendors increasingly rely on price competition to stand out. It won't quite be a race to the bottom, but the market will get tougher, and discerning buyers will increasingly focus on analytics, integration, and customer service when evaluating providers.
Marketing for social media and Web 2.0 was arguably the hottest trend in 2008. Through the course of the year, a growing number of consumers plugged into social media like blogs, user-generated video, and community rating and reviews. Increasingly, the demographics of social media users began to resemble the population as a whole, not just the young, hyperconnected early adopters who frequented these media just two or three years ago. Accordingly, marketers followed consumers and major brands like Marvel Comics, Procter & Gamble, and Starbucks launching or extending Web 2.0 and social media marketing in 2008. Even business-to-business (B2B) marketers have gotten into the act; although, so far, high-tech firms like Hewlett-Packard (HP) have been leading the charge, while other B2B companies have mostly sat on the sidelines.
I think these are few things which will really play a major role in the coming years on the Web 2.0 getting evolved and being used more by the marketers.
1. Social networks will continue to command the largest average market size on Web 2.0. The primary reason is that the social networking paradigm of communities, profiles, and interactions is very well received by consumers, making it an ideal paradigm for marketing as well. Second, social networks are becoming the lenses through which other social media is viewed, giving social networking marketers the inside track to evolve into the providers of tomorrow's integrated social media suites.
2. Blogging will reach its peak in 2010. Marketers first tuned into the power of blogging several years ago. Since that time, many corporate blogs have been launched from companies like Boeing, General Motors, and Kodak, and blogging has become the most recognizable and common form of Web 2.0 marketing. Blogging will continue to be a valuable tool for marketers looking to drive transparency, industry and thought leadership, and customer dialogue; however, it will increasingly become just one tool among many instead of the major focal point it is today.
3. Widgets will post the strongest growth during the next four years. Most Web 2.0 and social media marketing efforts have focused on creating conversations. Over the next four years, many marketers will shift focus to using widgets to target content delivery and enhance user experience, seeking to create a seamless experience across the Web, the desktop, mobile devices like Apple's iPhone, and mainstream social networks like Facebook and MySpace.com. Most social media marketing efforts will continue to include an anchor component like a social network or microsite, but widgets will become an increasingly critical tool for success. Widget providers, like Clearspring Technologies and Widgetbox, will be the main beneficiaries of this shift.
4. Podcasting platforms will begin a slow, steady decline. Podcasting came on the radar for marketers shortly after blogging, catching mainstream attention starting in 2005. At the time, there was a great deal of promise in podcasting; like blogging, it appeared to be a great new way to drive customer engagement. Reality, however, has yet to match that promise. For example, last year Dell, a leader in most social media marketing efforts, let its podcasting effort go dormant for seven months (Dell Podcasting). There are a few podcasting success stories here and here, but, on balance, the results have been a disappointment.
5. RSS innovation will remain stable as there is not much to add in the technology.Today, most of that revenue is attributed to tracking and analytics, and, over the next five years, one should not expect much change. The innovation in RSS marketing has mostly petered out, and most RSS feeds today are created at no cost through blog, wiki, podcast, and other Web 2.0 technologies. Thus far, marketers have had much more valuable initiatives to focus on, and therefore do not expect this to change anytime soon.
6. Wikis will become a true technology product for marketers. For marketers, wikis have always been a marginal tool, and today the average price marketers pay for wiki technology reflects that fact. While marketers at Marvel Characters — the company that creates and licenses Marvel Comics — have created an enviable user experience with its Marvel Universe wiki, few other companies see such an impact. Simply put, few marketers have use for a customer-facing wiki, as most marketing efforts do not lend themselves to wiki-style interaction.
7. Mashups will become more relevant — and dearer — for marketers. Marketers have not been big adopters of mashup technology. For 2008, less than 1% of marketers made use of mashup technology in their marketing efforts. This is not to say that marketers are not providing mashups to their customers; however, most are doing so through custom-developed rich Internet applications, not with paid mashup technology. Over the next five years, mashup technology penetration will grow, but only to little more than 3% of the potential opportunity.
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