Web 2.0: Costs and monetising

It seems I am not the sole voice talking about the costs of Web 2.0, but I’m still not getting the idea across to my fellow Web 2.0 advocates – because let there be no doubt about it, I am an advocate. I just think that some of the comments out there talking about how to mobilise social media for personal, community and business benefits – all for free – are not just misleading, they are wildly inaccurate.

My fellow IT Strategic Partner, Pete Laurie, sent me a link to Clay Shirky’s latest post on Web 2.0 being the product of a cognitive surplus, and the identification of the internet and other social media as a more productive use of our time than sitting in front of sitcoms on television. This is a cost for media, but it’s not the cost I’m referring to. Besides anything else, I see the transfer of time people spend from passive to active media as being somewhat led by mainstream media; since the introduction of more channels and greater choice, there has been a growing activity on the behalf of the viewer, and with Teletext – remember that? – and interactive news services and so on, there has been a growing expectation among viewers for interactive content. The cost involved with time investment and intellectual investment in Web 2.0 is in terms of organisations having a growing expectation that their staff can use their ‘free time’ to research and participate in social media, related to their daily work, thus spreading the length of the working day beyond the standard eight hours, to more like 12-15 hours a day. It may start innocently enough, with people pursuing their interests. But work is an interest, and inevitably, businesses will start to use these technologies to gain competitive advantage. And the more people use social media for their competitive positioning in employment, the more that people will have to do this to remain competitive. It starts to become infrastructural as well as intellectual, with entire communities built around a professional interest.

Now – contrary to some opinions – I am not suggesting this is necessarily a bad thing. I just recognise it as a cost, and believe those of us who are calculating the benefits of these technologies should take it in to consideration when building social networks. Because when you see it as a cost and evaluate it as such, you can also evaluate the accrued benefits to the firm. So when you begin to talk about monetising social media, you should not simply be looking at the standard business models of subscription services, sponsorship/advertising and net sales. You should also be looking at improved business knowledge, reduced costs in software, increased brand awareness and improved customer relations.

The truth of the matter is that until the WWW came along, the two most powerful means of organisations accessing business services were Word of Mouth, and the yellow pages. And frankly, that provided a very skewed and rather absurd view of the competitors in the market. The service providers were in a position of power over the businesses that needed those services, and could charge much higher rates, because there was less understanding of competion. Now with almost instant access to companies and sophisticated job-allocation services online, businesses have a much better idea of what is out there and are in a stronger position to bargain on the costs of professional services. So that’s a clear cost reduction. Then there’s the time for services to be carried out. With an expectation of immediate responses, any company who fails to respond in a timely and accommodating manner will lose business to their competitors. You snooze, you lose. There’s another cost reduction for businesses. I could go on, but the point is that Web 2.0 costs – in terms of building, maintaining and continually improving social media – are real, and the benefits are also real.

We just need to be clear that we’re not saying these technologies are free, when in fact they are quite easily measured.

Be Sociable, Share!
This entry was posted in Uncategorized. Bookmark the permalink.