Do Home Pages Have a Place in Web 2.0's Future?

Avenue A/Razorfish: Brands' Main Sites Decline in Importance as Consumers' Reliance on Search Grows
By Abbey Klaassen AD AGE

Published: October 01, 2007

Garrick Schmitt was sitting in a meeting, listening to a client talk about the need to make its website "Web 2.0-compliant," complete with tag clouds and profile pages. "Tag clouds?" thought Mr. Schmitt, VP-user experience at Avenue A/Razorfish. "Really?"

The request seemed curious to him -- do that many people really use tag clouds that a brand marketer's website needed to incorporate them? Surprisingly, he couldn't find the answer to that question. So he decided to find out.

The following months, his team conducted a study of almost 500 connected consumers to figure out how people were using marketer websites and forecast what would be important in web design during the next year. It's a prioritization effort, said Mr. Schmitt. Marketers have to ask themselves how do they want to maximize their sites' real estate?

'Sanity check'
The report, out today, will serve as a "sanity check" for some early Web 2.0 adopters and technophiles. And, he said, "for more traditional marketers, there's a whole new world we have to introduce them to."

One of the most surprising things the team found was how many people are starting their online shopping with search -- more than 54% of the study's panel, in fact. The idea that more consumers are coming to brand sites through the side door of search means search engines are starting to circumvent brands when it comes to online shopping. While a consumer looking for a pizza stone offline might drive to her nearest Williams-Sonoma, in the online world she's more likely to just type the product name into Google and see what comes up.

"Marketers need to stop thinking so much about their site and more about what's happening outside their site, such as widgets, viral and search," Mr. Schmitt said.

It also means home pages are becoming less important as search drives those visitors deeper into a site, meaning marketers need to treat product pages like home pages, adding navigation and sharing functions.

Bookmarking together
Speaking of sharing, social recommendations continue to grow in importance. More than 85% of people on the panel used "most popular" links on sites to decide what to look at and more than 55% made purchase decisions based on user reviews.

"Peers still drive consumer preference," Mr. Schmitt said. "Nothing else even comes close."

Another trend: Incorporating more data into design. While designers and developers have many rich technologies at their disposal, they also have better ways to mine behavioral data and adapt their sites in real time. Four tips for digital design

1. Make content portable with widgets and RSS so people can interact with it anywhere.


2. Turn on consumer ratings and reviews and allow commenting wherever possible.


3. Invest in online video.


4. Think outside your site -- how do search, social media, offline ads and blogs relate?

Search logs, site analytics and behavioral data can provide guidance for design, as can offline channels such as call centers. The study highlights Red Bull as a marketer that's making its content fun and portable via RSS and applications for platforms such as Facebook and the iPhone.

"It's baked into its DNA to be everywhere its users are, and it's all fun, custom stuff," Mr. Schmitt said. "None of it pushes product, but it all reinforces the brand."

Oh, and what of those tag clouds Mr. Schmitt set out to analyze? Almost 65% of consumers never use them; a little more than 11% use them all or most of the time.

What's Facebook's cost in Bill bucks?

The chatter about Microsoft mulling a 5% stake in Facebook worth $300 million to $500 million is a sign of just how hyperinflated valuations have become. Consider, Facebook's revenue is an estimated $150 million this year, yet the price of that stake would value Facebook at a whopping $6 billion to $10 billion, less than a year after it turned down a $1 billion offer from Yahoo.

Of course, $500 million in Microsoft money is not all that much. This is the same company that paid $6 billion for aQuantive. (According to an executive familiar with the company's ad plans, Microsoft is also looking at Yahoo but said it's unlikely such an acquisition would happen.) The Facebook investment was reported by The Wall Street Journal, which cited unnamed executives and couched the claim by saying the discussions were still preliminary.

A Facebook investment could mean two things: It could signal how serious Microsoft is about data and targeting. It could also be a defensive play to keep Google out of the Facebook fold.

Michael Seidler, CEO of U.S. Corporate Ventures Group, called the stake's price tag "astronomically high" but said it is "indicative of the strategic value of a social-media network to Microsoft. ... It gives them strategic access at a relatively reasonable [total] price tag." In other words, $500 million is cheaper than $10 billion.

Regardless, it makes Interpublic Group of Cos.' investment in the summer 2006, when it received a 0.5% stake in Facebook in exchange for spending $10 million in advertising on the site, look like genius in its foresight. If Facebook is indeed worth $10 billion, a stretch according to many, Interpublic's stake would have quintupled in just over a year. And it got $10 million in advertising on the world's hottest social network to boot.

-Abbey Klaassen, Ad Age