Global spending on Web 2.0 technologies will surge over the next five years to reach $4.6 billion by 2013, according to a new report by Forrester Research.
The growth rate of 43 per cent per year is a response to the rocketing popularity of social networking sites such as Facebook and blogging services like Windows Live Spaces, which draws over 17 million unique users across Europe according to NielsenNetRatings’ figures for February.
Web 2.0 technologies, which also include rss feeds, wikis, mashups, podcasting and widgets, represent a fundamentally new way to connect with customers, and many global companies including General Motors, Sony and McDonald’s make heavy use of the tools already.
But Forrester analyst G. Oliver Young stressed, “Web 2.0 marketing is still in its infancy; and in general the market is still in an experimentation phase. In the long run, the effect of Web 2.0 will be enormous.”
Today’s Web 2.0 market is small but growing fast: global spending by enterprise-class companies (firms with 1000 or more employees) will touch $764 million in 2008. Social networking is the top-spending category, attracting $258 million of investment globally this year.
Across Europe, 56 per cent of big businesses consider Web 2.0 to be a priority in 2008, with European firms planning to invest in Web 2.0 in 2008 at almost exactly the same rate as their North American counterparts.
For 2009, Forrester predicts that Europe and Asia Pacific will get “hot”, and recommends that strategists make a foothold in these markets now. The report advises companies to “think of 2008 and 2009 as a time for experimentation and optimisation, by enhancing native language support, improving the user experience and familiarising themselves with cultural differences in the use of social software.”
In Europe, big companies spent $112 million on Web 2.0 in 2007, a figure that will rise to $184 million in 2008 and $957 million by 2013.
In Forrester’s view, the ultimate goal of Web 2.0 is to use technology like blogs, wikis and social networks to foster productive, advantageous behaviour among consumers and other partners.
Young people between 12 and 17 are the most avid users of social computing technologies, with more than a third engaging as content creators. Only 7 per cent of those aged 51 to 71 engage in the same way, but Forrester expects older consumers to climb the learning curve and closely mirror younger consumers in their behaviour by 2011.
