Will Recession Help or Hurt Web 2.0?


Will the recessionary economy be a good thing or a bad thing for Web 2.0?


There are two starkly different outlooks, both of which are outlined in a recent SearchCRM.com story.


According to Forrester Research's G. Oliver Young, who recently predicted that prices of Web 2.0 tools will drop in the next five years, such tools may fall out of favor in the near term since they are often used for sales and marketing, and those functions may be in the line of budgetary fire.


Web 2.0 tools also don't exactly satisfy the growing demand for "solutions with a high and fast ROI," as I wrote back in August. In that post, I cited an expert who said demand for such tools had "atrophied."


Yet their falling costs could make the tools more attractive, especially the ones which can foster the kinds of close relationships between companies and their customers that "would be extremely valuable in a recession," says Young. A similar view was espoused earlier this year by Bob Suh, Accenture's chief technology strategist, who noted that companies risk turning off their customers with clunky technologies.


The result may essentially be a wash for Web 2.0, with many companies maintaining an uncertain stance on adoption. Says Young:

My estimate on this is it's probably going to wash out. The reduction in marketing spend is probably going to hurt more than the proximity to customers is going to help.

Others, including Gartner's Adam Sarner, are convinced that Web 2.0 will help differentiate companies from competitors who continue to rely on advertising and other traditional methods of communicating with their customers. Says Sarner:

I think we're only looking at the beginning of this as a communication tool. When you start talking about CRM, CRM is about how to treat different customers differently. I can't think of a more promising tool than social applications to start making those connections.

Sarner cautions companies to avoid using Web 2.0 simply in an effort to keep up with competitors, however. It's important to figure out the "mutual purpose" of such tools, the value they can provide for both customers and the company, before deploying them.