In November 2006, a survey of 400 marketing professionals, by the San Francisco Research firm MarketTools concluded that nearly 80% of marketers were clueless about Web 2.0. That statistic by itself isn’t as disturbing as the fact that there is a flurry of new startups that are relying on the Marketer’s knowledge and usage of Web 2.0 tools.
Should the geeks in Silicon Valley be worried? Heck, ya! Business 2.0 came out with its list of Next Net 25 startups and guess what the majority have put down as their revenue model – ADVERTISING. Holy smokes!
If your revenue model is based on advertising, but your potential customer ie. marketers don’t know anything about your offering or how it works, that’s a very scary scenario. There is a clear need for educating the target audience but the question is who’s doing anything about it? Should the marketers educate themselves in the latest and greatest technologies? Or should the folks peddling the web 2.0 tools be the ones reaching out to them? Probably both.
The majority of web 2.0 startups seem to be banking on Google’s Adsense to rake in the moolah. But there’s one problem, if upstarts like Quigo start forcing more transparency in the online advertising model, advertisers will be able to pick and choose which sites they want to advertise on. Say, there are 20 social networking sites (there are probably hundreds, if not thousands), which ones do you think advertisers will select for their precious online advertising dollars?
Google, YouTube, MySpace win because they are the top-dogs. Even #2 and #3 may get some share of the dough, but rest of the pack really need to think long and hard about how they are going to convince the advertiser to spend money on their sites.