One of the smart people I follow on Twitter sent a link to this report by Rubicon Consulting entitled “Online Communities and Their Impact on Business: Ignore at Your Peril” and I recently sat down and read through it making some notes for myself. I figured I had not written for a little bit of time (more Twitterviews coming soon I promise) and as such I owed it to you all to have a decent comeback post. So here is my set of take aways from a large report that I found pretty useful.

“Working with online communities has long been touted as a great way for a company to save money in its marketing, support, sales, and even product development. But for most companies, the diversity of communities online, and the challenge of how to work with them, is daunting. Most companies don’t understand how online communities work, how they make a difference, and how to engage with them.

Among the companies that have tried to work with communities online, many have found that the conversation is dominated by extreme enthusiasts rather than average users, and have concluded that online community is a distraction from their real customers.

That turns out to be a very dangerous mistake…Key findings of the survey, and its implications for companies, include:

• It’s true enthusiasts do dominate online conversations – Most web users are consumers of information, not creators.
  • About 80% of the user generated content on the web, including comments and questions, is created by less than 10% of web users.
• User reviews drive product purchases
  • This means that the old idea of consumer influence over other consumers is confirmed and explained. The most frequent contributors are the influencers, and they have a strong influence on purchase decisions because they write most of the online recommendations and reviews.
• Web discussion is theater
  • This essentially means that online community matters enormously to companies, but not in the way that most of them expect. Online discussion is a poor way to communicate with the average customer, because average customers do not participate. But it is a great way to communicate to them, because average customers watch and listen.
• The most frequent contributors are also the most diverse
  • Those who contribute to websites tend to be more ethnically diverse; more technically skilled; more likely to be single; more likely to work in technology, entertainment, or communication companies; and more likely to be Democrats. But most of all, they are younger than typical web users. Half of the web’s most frequent contributors are under age 22.
• Search is the leading web category, but what comes after that?
  • Sites generating the most daily traffic are Social Networking (e.g. Facebook), General News (e.g. CNN) and Online Banking (e.g. insert bank here)
  • Sides generating the greatest breadth (sites which are eventually visited by the largest percentage of web users) are Mapping (e.g. Mapquest), Retail (e.g. Amazon) and Reference (e.g. Wikipedia)
• Yahoo is the second most valued website
  • Measured by asking users if they would pay to have access to a site, Google was the obvious number one choice where as Yahoo was clearly second.
  • Of interest is that among web users over the age of 30, Google and Yahoo are still the top two sites but they are followed by eBay and MapQuest.