Phil Muncaster

Say hello to my lil’ friend Web 2.0. Anyone familiar with Al Pacino’s gun-toting, psychopathic drugs baron character Scarface may be forgiven for wondering what he has to do with Web 2.0 and IT. To be honest, he doesn’t really. I just wanted to get your attention. But actually, if you truly embrace this new social and computing phenomenon like an old friend, you could find your business flourishing.

Just take Wispa, the famous Cadbury bar that was discontinued a few years ago. Some chocolate enthusiasts organised a Facebook campaign to bring back the bar. And now it’s back.

Cadbury’s strength here was not just to embark on a whole bunch of hip viral marketing campaigns, user-generated content, blogs, promotions and other Web 2.0-type stuff to sell its chocolate, but to listen to its customers. As we hear time and again, Web 2.0 is all about engaging with your customers and letting them contribute, rather than pushing out what you think they want.

Now Cadbury has got a load of great PR about how much people love its products, and a new opportunity to make more money. Once again, the power of social networking sites is revealed. And these sites are being used in other innovative ways, according to Neil Morgan of web analytics firm Omniture. Aside from your basic ad placements in social networking sites, the networks are signing up retailers with the lure of users endorsing their products on the sites, he told me. If you have bought an item from a well-known retailer that is signed up to Facebook, for instance, somewhere on the site, instead of saying, “Phil has updated his status or ‘Is bored of life and needs the toilet’”, it might say, “Phil has just bought a Terry’s Chocolate Orange from Rawlinsons”.

The genius of this and the value to advertisers is that word of mouth and peer recommendation is likely to be far more persuasive and relevant than, say, an also-boughts recommendation from Amazon. In addition, Bebo is opening itself up to media firms to place their own video content and ads on the network, with its Open Media initiative. Finally, Omniture is reporting that around 15 to 20 per cent of referrals to retail sites now come from social networking sites.

Morgan believes that just as search has effectively replaced the browser in our computing environment, our favourite social network sites will replace internet portals such as Yahoo as our default homepages.

There is a clear commercial opportunity for online merchants to benefit from the burgeoning popularity of these sites. You don’t have to like them, but it would make sense to be friends.

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