Web 2.0: Turning Browsers into Buyers

By Elizabeth Bennett Print this article Print

Stormhoek Vineyards created the equivalent of a digital grapevine to promote its products and more. Did it work?

A year ago, Stormhoek Vineyards, a South African winery, launched a public relations campaign called "100 Geek Dinners in 100 Days." The goal was to get one person to host a wine-tasting party each night for 100 nights, in honor of Stormhoek's debut in the U.S. Stormhoek would supply the wine.

To plan the dinners, Stormhoek employees did absolutely nothing except blog about the parties and ship one case each to 100 hosts across the U.S. and Great Britain. Jason Korman, CEO of Stormhoek's parent company, London-based Orbital Wines, wrote dozens of blog entries about the events, one of which proffered the idea of a Stormhoek dinner for non-drinkers without the wine:

"To those people, why can we not ask the question: How can Stormhoek fit into your life? For them, where Stormhoek fits in may be an interest in Web 2.0, marketing, packaging, open source, the technical aspects of growing grapes or South Africa ... from our perspective, it's all good."

Volunteer hosts, including well-known bloggers, wine enthusiasts and those who just wanted to throw a party, organized the dinners by contributing contact and location information to a wiki, a form of open-source collaboration software. They (and guests) posted more than 150 photos of the events on Flickr.com, a photo-sharing Web site. In all, about 4,500 people attended the dinners, including popular bloggers like former Microsoft employee and outspoken technology critic Robert Scoble; John Edwards' presidential campaign manager, Joe Trippi; and high-profile Internet marketing consultant B.L. Ochman.

While Stormhoek (pronounced STORM-hook) is small it expects to sell $10 million in wine this year its innovative and integrated use of blogs, wikis, Web video and digital photos offers companies of all sizes lessons in how they can use social networking technologies and some of the Internet's more popular sites to turn browsers into buyers.

Stormhoek's sales have tripled since 2005, a gain Korman attributes entirely to a marketing push that exploits so-called Web 2.0 technologies. Web 2.0 is a catch-all phrase for a constellation of Web applications and links between and within applications that allow users to generate and interact with content, rather than just consume it. People tend to think of Web 2.0 in terms of open collaboration software, like wikis, or social networking software that lets users communicate with each other and tap into others' personal or professional contacts.

But the Web 2.0 lexicon also includes Web content feeds (enabled by RSS and eXtensible Markup Language formats) used to push updated content, such as blog posts, news feeds and podcasts, to subscribers' in-boxes. Content tagging, which also falls under the Web 2.0 rubric, is the assigning of detailed labels to information on a Web site or blog. For example, a recent post about Sun Microsystems' strategy on James Governer's Monkchips blog, which offers analysis of the software industry, includes hyperlinks to other posts on "Sun," "2.0," "Java" and "dynamic languages." Search engines scan for tags, which means that the results of a search on one of these topics are more likely to include a link to the blog post than if the topics were listed as static text.

In the last five years, a confluence of technology advancements such as Ajax (Asynchronous JavaScript and XML) a collection of Web-oriented programming technologies and concepts like an emphasis in online user participation have created a market for Web 2.0 technology and experiences, according to Forrester analyst Oliver Young.

Even though CIOs know they need to embrace this next techno-wave for both internal and external use, many executives regard Web 2.0 technologies as a nuisance, says Young, who likens their emergence to instant messaging several years ago. "CIOs didn't want to deal with IM, but it was squeaking in anyway," he says. Employees in some companies are starting their own Web 2.0 efforts, he says, which means that CIOs are being forced to investigate and purchase platforms for the technology.

Even by starting small with a wiki or RSS feed, Young points out, the adoption represents a major change for most organizations. Take customer management: Many large organizations use highly structured and pre-defined customer relationship management applications to keep track of clients. Using wiki technology for CRM, where the software structure is emergent and based on the ongoing needs of users, often requires flexibility and a shift in organizational thinking.

But implementing a technology and using it to enhance the bottom line are two different things. Companies like General Motors, Burpee Seeds and Stonyfield Farms have been communicating with customers via blogs for at least two years. Burpee, which sells flower and vegetable seeds and provides gardening advice and customer testimonials on its blog, has drawn a correlation between sales and the blog effort; in this case, it was a small incremental boost, according to Don Zeidler, Burpee's director of direct marketing.

This article was originally published on 2007-06-14
Senior Writer
Elizabeth has been writing and reporting at Baselinesince its inaugural issue. Most recently, Liz helped Fortune 500 companies with their online strategies as a customer experience analyst at Creative Good. Prior to that, she worked in the organization practice at McKinsey & Co. She holds a B.A. from Vassar College.
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