In tune with the times

Enter Web 2.0, the new sales and marketing approach to online consumerism.

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By  Administrator Published  August 4, 2007

Internet usage that involves online collaboration, networking between individual users, and user-created content - known as Web 2.0 - is growing rapidly and is changing the way companies in the Middle East and around the world should operate, a new Booz Allen Hamilton study has found. Consumers no longer visit the internet to passively take in content; rather, they are actively creating content themselves.

"In this new era of inter-activity, corporations must be aware of what is taking place on the internet and in social media spaces like MySpace, Wikipedia, and Second Life. They must also decide how to participate in this new world. They must develop a strategy to address the threats posed by Web 2.0 and seize the opportunities it offers. This is equally true for corporations operating in the Middle East, where Web 2.0 sites have a dedicated following," said Jad Hajj, an associate with Booz Allen Hamilton, a global management consulting firm with offices throughout the MENA region.

He added that companies also may need to change their business models to better fit the new online environment. "Those that ignore the growing trend of Web 2.0 usage do so at their own peril," he warned.

To understand the full scale of Web 2.0 activity and learn how it might affect consumer behaviour, Booz Allen conducted a first-of-its-kind study to investigate trends in Web 2.0 usage, including social behaviour and networking, usage of communication, internet services and customer expenditure.

As part of the study, 4,570 individuals in the Middle East, Germany, the United Kingdom, Brazil, and the United States were surveyed between August 2006 and January 2007. The Middle Eastern countries surveyed included Egypt, the United Arab Emirates (UAE), Bahrain, Kuwait, Qatar and the Kingdom of Saudi Arabia.

What is Web 2.0?

The term "Web 2.0" describes online activities, sites, and applications that allow individuals to interact in online communities, directly exchange information with one another, and create their own content online. It involves technologies such as blogging, Wikis (i.e., websites such as Wikipedia that allow visitors to add, remove, edit, and change content, typically without the need for registration), social networking sites such as Facebook, MySpace, LinkedIn, and Classmates.com, virtual meeting places such as Second Life or FunkySexyCool, media sharing sites such as YouTube and Flickr, podcasting and vidcasting.

Web 2.0 also describes the new ways in which people use the web, such as writing a blog rather than creating a static personal site; participating in social networking sites rather than sending emails to isolated colleagues; or accessing voice-over-internet protocol (VoIP) rather than using landline phone services. In general, Web 2.0 sites are distinguished by the wide-scale harnessing of collective intelligence - such as that which goes into creating Wikipedia, the ubiquitous online encyclopedia - and the enlisting of virtual users as content co-developers.

The scale of Web 2.0 activity is astonishing. For example, MySpace, a social networking site, boasts 120 million users with a half a million new users added per week.

YouTube, a site that hosts user-generated videos, has 100 million video clips downloaded per day and 65,000 video clips uploaded. Flickr, an online photo management and sharing application, has 7 million page views per day.

"The survey enabled Booz Allen to identify some major social and behavioural trends related to Web 2.0 usage - and it showed unequivocally that Web 2.0 usage is a growing phenomenon that has important effects on consumer behaviour," said Karim Sabbagh, partner and vice president with Booz Allen Hamilton.

Key Findings

Some of the key findings from this study, particularly as they relate to consumers in the Middle East, are set out below.

Web 2.0 is a worldwide phenomenon

In terms of sheer numbers, Web 2.0 usage is indeed revealing itself to be a mass phenomenon. Worldwide, 50% of individuals who use the internet report that they use social media sites such as Facebook, MySpace, Friendster, and Hi5 - resulting in more than 420 million Web 2.0 users globally.

In the United States, 71% of users report visiting social media sites at least once a week. This is number is 73% in Germany and 41% in the United Kingdom.

Penetration of Web 2.0 sites in the Middle East is not yet as prevalent; only 15% of users in Arab countries report that they frequently visit Web 2.0 sites. Of the sites that Middle East users did report visiting frequently, Amazon, Wikipedia, Hi5, and YouTube topped the list, followed sequentially by Mp3.com, MySpace, Blogger, and iTunes.

Web 2.0 usage is prevalent across both genders and all age groups

Contrary to popular belief, the phenomenon of Web 2.0 usage is not just a "young male" trend, the study found. Worldwide, people of all ages, both male and female, are using these sites.

"This, however, is not the case in the Middle East, where usage fell along more traditional lines. Usage continues to be dominated by younger males - even at very established sites such as Amazon. However, this too is expected to evolve as sites become more established and their audience grows," said Ghassan Hasbani, a principal with Booz Allen Hamilton.

Web 2.0 users share and participate

One of the hallmarks of Web 2.0 is that users play the role not just of observers, but also of active content creators. The survey confirmed that significant numbers of users are sharing content - as well as private information - online.

For example, of the MySpace users surveyed in this study, 78% in the United States, 70% in the United Kingdom, 51% in Germany, and 52% in the Middle East - report having created their own online content in recent weeks.

"Creating web content," for Middle East users, means a variety of things: Creating web pages, writing personal blogs, uploading photos, music, or videos, and even participating in online gaming.

Web 2.0 users rely on recommendations from anonymous peers

The internet is increasingly seen as a reliable source of information, with users viewing the internet as providing faster - and often more honest and unbiased - news and product information than the traditional media channels.

Individuals not only use the internet to gather third-party product recommendations and opinions, but also to seek recommendations on buying decisions from their social networks. And importantly, many seem just as prepared to take recommendations from unknown contacts as they are from friends or acquaintances.

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