Analyzing McKinsey’s 2008 Web 2.0 Global Survey

McKinsey & Co. released their 2nd annual survey on the business use of Web 2.0 last month and it is available from the McKinsey website for free after you register. (As a comparison, the March 2007 version of the survey is also available – How businesses are using Web 2.0: A McKinsey Global Survey.)

The survey asked companies about their business use of Web 2.0 technologies (wikis, blogs, social networks, and mash-ups), which of these social and interactive tools their companies have adopted and for which purposes, what they are doing to encourage adoption and how satisfied they are with their use of these tools.

Here’s McKinsey’s final takeaway of the results:

Tougher competition. Almost 60 percent of the respondents satisfied with Web 2.0 initiatives (but only 42 percent of other respondents) see them as a driver of competitive advantage. Expect these companies to become more aggressive in the marketplace against rivals that are slower to get on board.

Higher investment levels. Satisfied or not, all companies plan to spend more on Web 2.0 tools—an opportunity for software developers.

Building Web 2.0 success. There are few differences in size, region, or even tool use between companies that are satisfied with their Web 2.0 experience and those that are not. This suggests that today’s seemingly insurmountable barriers could be overcome through the adoption of managerial methods that satisfied companies use.

Innovation. Successful companies already use Web 2.0 for business applications such as communicating with customers and suppliers; soon they may use it to drive innovation.

And here is my 3 cents. What do you think?

Tool adoption is still low – When looking at the chart of Web 2.0 tool usage, I am encouraged that blog usage is up from 21% to 34%. But I am still blown away that this percentage is not larger. Setting up and contributing to a blog is pretty simple and doesn’t cost much. You do need a dedicated blogger or two – but the continually fresh content does drive and keep people on your website. For example, the blog at my former company was responsible for about 5% of all website traffic.

Similarly, the RSS adoption is also still low despite the relatively low investment and effort. THe issue is that you have to make it easy for people to consume your content and you cannot always expect them to come to your site for the consumption – which means you need to make it available to them when and where they want to view it. Related to RSS is the ability to easily share content on your site with social sites like Digg and del.icio.us, post to Facebook or email.

Social networking adoption remains the same even while individual adoption for some of the leading tools like Facebook, LinkedIn and Twitter are exploding. I suspect that most of the activity comes from the lower to middle ranks and until the upper management ranks widely adopt the tools, then enterprise adoption will remain low for social networking. This is an issue where management needs to lead the effort including recognizing and incenting participation. I heard of one company that has “Facebook Fridays” where the entire company spends an hour dedicated to networking and experimenting with Facebook. More companies need to consider similar initiatives to increase participation and adoption.

Satisfaction among North American respondents is the lowest – At 29%, respondents in North America reported the lowest satisfaction in their usage of Web 2.0 tools. My explanation for this is that North American managers are not as patient as their global counterparts, and they expect results in 6 to 12 months instead of the 18 to 24 months it generally takes for investment in most Web 2.0 initiatives to pay off. The answer to this conundrum is more education from consultants, bloggers and vendors is needed in North America about on pay-offs, including a general re-setting of expectations.

Significant barriers to adoption still exist – The respondents were asked to identify their top 3 barriers to adoption and I totally agree with the top three barriers identified:

  • My company doesn’t understand the potential financial returns
  • My company’s culture doesn’t encourage the use of Web 2.0 tools
  • My company doesn’t provide sufficient incentives to experiment with or adopt Web 2.0 tools

I wish there were some easy answers to these barriers, especially the company culture issue which has plagued me in the past. More evangelism and hard work is needed to overcome the barriers. The good news is that 25% of the respondents reported that “nothing is holding back their Web 2.0 adoption”.

I want to recognize the contributors to the development and analysis of the Mckinsey Web 2.0 Global Survey – Jacques Bughin, a director in McKinsey’s Brussels office; James Manyika, a director in the San Francisco office; and Andy Miller, a consultant in the Silicon Valley office. The authors gratefully acknowledge the contributions of their colleague Michael Chui.

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