Technology Companies Target Customers Direct Via Web 2.0

By Gabriel Madway

SAN FRANCISCO (Reuters) - Recognizing the limits of traditional advertising, established technology companies are diving headlong into the sometimes chaotic landscape of social media to promote their products.

Companies ranging from PC maker Dell Inc to storage equipment maker NetApp Inc are increasingly turning to outside blogs, viral videos and websites such as FaceBook, Twitter, FriendFeed and Digg -- and their tens of millions of users -- to reach consumers.

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These social networking sites harness the age-old power of the word-of-mouth recommendation and can be potent marketing tools. If nothing else, they demand a higher level of consumer engagement than conventional ads.

"This is 180 degrees from that sort of advertising," said Debra Aho Williamson, a senior analyst at eMarketer. "Having a conversation with them (consumers) is a very new skill."

For tech companies with big marketing budgets, the shift to social media is an implicit acknowledgment that television and print are not necessarily the most effective ways to reach buyers, particularly younger ones.

In addition, with a recession looming, corporate budgets are being slashed. UBS has forecast global ad spending will fall 3.9 percent in 2009. In such an environment, social media could prove to be a cost-effective way to sell to consumers.

But the strategy is not without some risk. While every company wants to generate buzz, online backlash can be brutal.

Consumer healthcare giant Johnson & Johnson learned that the hard way with a recent Web video ad for its Motrin painkiller. While apparently trying to be irreverent about the pain of wearing a baby in a sling, the ad offended many mothers who savaged it on Twitter, the wildly popular "micro-blogging" site where users communicate with short "tweets" of 140 characters or less. J&J was forced to apologize on Monday.

Brian Keeler, a vice president at media consultancy VShift, said the key to social media is credibility and enlisting consumers in the act of marketing itself. But if you upset your audience, it can mean trouble.

"With the online media, things can go viral and spin out of control really fast," he said.