3 brands that flunked digital 101

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There are hundreds of brands that continue to be stuck in the "old way" of thinking, pre-Web 2.0. Some survive because they didn't jump on the next fad, and some perished because they did. Many brands are starting to get it, but for many it may be too late and Web 2.0 has passed them by. It's time to take a look in the mirror and figure out why your company didn't embrace Web 2.0.

What is Web 2.0 anyway? Web 2.0 is more often used in the negative than the affirmative, and it's really not what you think. Web 2.0 is not about technology; it's not even about design. It's really nothing but a piece of jargon to differentiate an "old way" of thinking from a "new way" of thinking. So in the end, you can be on the web but not have changed your thinking. You can have a website, but not be very forward thinking. Web 2.0 is exactly the same as Web 1.0 -- if you "got it" the first time. What holds your company back is "old thinking" in a new-thinking communications world.

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So what companies are not Web 2.0? What companies just blew it, or continue to blow it online? I'll illustrate a few here, but there are hundreds to choose from. Start asking yourself the tough questions. Are you looking out for your own backside? Are you willing to fight for a better future? Because that is what's at stake here. What the future looks like is being determined and defined by the choices we make now. So let's make some good ones.

Zagat
You really can't start a conversation about Zagat without mentioning Yelp. Yelp shouldn't even exist. It should never have gained traction. It should not be where people get restaurant reviews. For those reading this who don't even know about "The Zagat Guide," there is a reason, and it's Zagat's fault. Zagat's web presence is painful for me. I loved Zagat, I used it, I had a personal relationship with that maroon-colored book for years, and yet the company didn't get me, but it could have. It had a website, and I tried to have that "brand love" that straddles all media, but it kept its good content behind a pay wall.

Many of us got our Zagat guides for free. Companies that knew their employees were often entertaining clients would give them as gifts, so I never had a relationship with Zagat where I had to pay for information. And there were a lot of people out there like me. If The New York Times couldn't get me to pay for its content online, then Zagat had no hope. But even though Zagat understood this, it still had to go ahead and charge its fan base. Bad idea.

Never before have I seen a brand so painfully miss an opportunity for being shortsighted. Zagat missed an entire generation, while consumed with its bonfire of the vanities. It was too worried about eating into the profits of that little maroon-colored book that it kept its premium content behind the pay wall, and that prevented it from becoming the meme on the internet for restaurant reviews.

Zagat failed, and it failed because it was too tied to its old way of thinking. It was, for lack of a better phrase, not Web 2.0.

Zagat had the best content for restaurants that existed. It may still. The company's mission was about real people going into restaurants and writing reviews. These were not reviews done by the food critic of The New York Times, or a food magazine; these were real people who just loved food. Zagat owned the foodie culture at the time, and thus it missed another very important trend: the reviewer as star power. It wasn't just the restaurant that could be the star, it was also the reviewer. Then Yelp came along, and it understood this very clearly.

 

Comments

Sean X
Sean X December 15, 2010 at 12:17 AM

No, I propose that Zagat be smart enough to realize that if you do not build the user base first, that you will lose out as someone crowd sources more efficiently (as did Yelp.)

And that you continue to offer the maroon book while doing it. People, and companies will still pay for the maroon book because it always makes a great gift, and sometimes you want to quickly just take a quick look in the book rather than start up a computer.

Zagat's believed too strongly that they had to lock down the internet. I believe they thought it would too cannibalize their book sales. It's a very short sighted view. If Zagat had taken to earning less over that period of time, and had opened up their content, they would have had the user base that those lone banners would have brought in significantly more income than the few users they did attract online.

AND Zagats could have stolen away the concept from YP.com and other yellow pages type sites where you can buy advertising when you know someone is local, due to contextual relevancy, which they could have even outsourced the sales portion for.

That combination makes Zagats a significant multiple over when the rev they would be getting from their estimated online user base (I ran the numbers.)

The Zagat's audience is also a premium foodie audience and the CPM's they could have demanded IF they were smart enough to go for the user base first would attract some very high end marketsers.

So, you have the ability to know where someone is looking to go to eat. [geo location]

The type of food they would be looking at [context on multiple levels]

An ability to book restaurants and tie into Open Table for a lot of reservations [significant rev share]

A premium foodie user base [high income attracting local high end merchants which could be syndicated]

What they have now, from what they could have been with a little more vision, and a little less fear of holding the golden goose [maroon book] too tight has cost them hundreds of millions of dollars.

Kent Murphy
Kent Murphy December 14, 2010 at 8:39 AM

You say Zagat had the best content that existed. How do you propose they get paid for that content? By a few lowly banners on their website?