CNET: Gartner warns against Social Networking hype

According to CNET, "Many companies are thinking about how they can take advantage of social-networking technology, but analysts at Gartner are warning against getting caught up in the hype." See here.

I thought they meant warning businesses against advertising or working with a Facebook or myspace. As I mentioned in my post about FaceBook, there is no solid business model in this space. The best they can do is Google Adsense.

But what Gartner really meant was "Businesses are advised to consider certain issues before investing in or developing internal social-networking tools."

Yes.. DEVELOPING internal social-networking tools. I guess in hopes of replacing the water cooler crowds, the photocopy pests, and the late lunch laggers? May be to help those busy bees find the right mate in their cubicle-land? Or find those colleagues that they haven't seen in 3 weeks? Will my yearly review depend on how much I corporate twittered since that is how my boss will keep up with what I do?

"But the Gartner report says the hype around social networking doesn't necessarily mean it's a mature enough technology to make it a critical business requirement... There is also little evidence that social networking will be as beneficial for businesses as other Web-based communications technology, such as instant messaging."

It takes a STUDY to find this out? Shouldn't the study look at how much productivity is WASTED on social networks. Whenever I log into Facebook (which is not often and usually during lunchtime only BTW), I see VPs, Directors, and Managing Directors "poke", "superpoke", playing "texas holdem poker", giving "gifts" or writing on "Funwalls"... all during business hours.

And since when did a social network become a "Web-based communications technology"? See the wikipedia definition of "communication" here. According to Wikipedia, key to communication is an exchange between the parties and "Exchange requires feedback." Instant messaging fits this definition, social networking does not. Even twitter does not. My Facebook "friends" answering "My questions" could almost be considered communication.. almost.

"The analysts recommend that IT departments think very carefully before committing to expensive 'social-networking white elephants.'"

Actually, don't think of it at all. Forget it completely. If you do, consider it a moment of madness... then forget it completely.

Evolution of OTA vs Direct Marketshare

I ran across an article on Hotelmarketing.com by Neil Salerno that reminded me of a slide that I used in the recent OTA panel. The article was titled "Supplier direct hype: Who needs third-party travel aggregators?" - see link here.

"...it amazes me that there are still many hoteliers who reluctantly participate in third-party travel portals."

But that reluctance is due mainly to the fact that they are worried about the loss of control of their rate. Even if they don't work directly with travel portals, they put their rates to wholesalers who then resell to travel portals and any hope of rate parity goes out the door. Check Kayak.com and Sidestep.com and you see so many cases of OTAs selling cheaper than hotel direct. So they are worried that this would get worst.

That is understandable, but obviously, not engaging aggregators is not the solution. The hotels must tighten up their contracts with wholesalers and engage directly with the OTAs to cut out the wholesalers from selling to those guys. Not easy, but it is a start towards rate parity.

"I read another article which stated that supplier web sites are gaining more ground against third-party sites in overall market share; they state that like it’s a really big deal. Don’t these people realize that hotel supplier sites had nowhere to go but “up” in market share? They are now where they could and should have been several years ago; that’s nothing to celebrate. "

In M & C's case, we are still not there. We are only crossing the 50% mark for online between OTAs vs direct. Here is a repeat of the chart that I posted earlier:

(Click to see a higher resolution). Here is the original post.

So I do celebrate as we break 50% and start going to where the rest of the industry is heading. I celebrate because we are winning the war and clawing back marketshare that should be ours. There is a place for OTAs and there is a share that is fair. This "share" varies hotel to hotel depending on a hotel's brand, location, and infrastructure.

A few more of Neil's points:
- While the hotel industry was in Internet denial during the late 1990’s, third-party aggregators like Expedia, Travelocity, and the rest were already actively promoting travel on the Internet.
- Since the explosion of a new hotel Internet awareness in 2002, hotel suppliers have been playing catch-up on the Internet
- third-parties do what most hotel franchises cannot do; they aggregate or combine air, hotel, and car rental, and market them to all corners of the world.

Sounds good to me:


"Every hotel needs to be actively involved with all forms of electronic marketing to have a complete and balanced marketing effort... supplier sites and marketing efforts are improving, but that fact doesn’t lessen the need to work with all business sources, including third-party travel aggregators. Get business from as many sources as you can. "

Agreed, but the main issue at play is rate parity and revenue management. If a hotel is not actively using analytics to optimize its relationship with OTAs, then there is a higher risk in working with them.

PPC: Getting a Google Direct Account

Millennium & Copthorne has spent a lot of money this year on Pay-Per-Click keyword bidding. Roughly I would say close to USD 1 million. Google gets a lions share of this budget, because they get us good to great return-on-ad-spend. So we are a half-a-million dollar account for them.

Earlier in 2007, I found out that we "qualify" for a Google Direct Account. This mean that we enter a contract with Google directly and are invoiced by them and pay them directly, bypassing agencies. Our UK-based PPC agency did not like this very much as they get a rebate (i.e. kickback) from Google UK and also they get the volume tier.

I looked seriously into doing this and am currently in the process of moving my account to direct. Why?

BENEFITS:
========

1) The account belongs to me rather than the agency which is how the normal set up is. The agency will transfer the account to me if I change vendors or take it in-house. While this should be ok, it can be messy.

2) I was informed at one time that an account transfer will keep historical data but not retain the quality score of the keyword/destination link combo. This is a serious problem if I lose quality score when I switch vendors. So if I have my own account, there is no account transfer and my campaign will not miss a beat. However, more recently I have been told that the quality score will be retained if you do the transfer correctly. In any case, I would rather be safe than sorry. Such policies may change in the future.

3) We manage multiple campaigns with different vendors. So rather than dealing with 3 different google accounts from each vendor, I would rather consolidate into one.

4) Any direct engagement with Google is good. Why should the agencies bask in the glory of spending my money with the advertiser? Why should they get invited to the parties when I pay the bucks?!?!?!?! hehheehhe...... But seriously, it can't hurt for Google to get to know your company better.

5) As part of Google Direct Account, Google will assign a "Maximizer" (yes that is the official job title) to my account optimize my account. They will even run the campaign for me instead of the agency and I will not have to pay any agency fees!!!!

CONCERNS
=========

1) My Finance is perpetually late in paying accounts receivables. With the agencies, they are used to this and will let you slide. Google, with its USD 15billion a year in revenue and USD 300Billion market cap, is a stickler for systems. So what's the big deal about a half a million dollar account? If they don't pay, shut them down until they pay. Where else are they going to advertise with this kind of reach and revelancy and results?

2) Do I really want a "Maximizer" managing my account? Do I really want a media owner to be the media planner? There is an inherent conflict of interest no?

3) Also, I still want the agency as I am still running campaigns on MSN and Yahoo! And soon Baidu and what not. I need the objectivism of a third party. Though the trick is finding the right agency.

======

So within the next few months or so, I should have all my PPC campaigns around the world under my own account. Will let you all know how that goes....

Emarketer says "Do Not Fear Customer Reviews"

According to EMarketer, businesses need not fear the Web 2.0 reviews because "They're usually good." They say this based on a couple of studies which they listed in their article. This is quite an interesting take on things....

"Consumers generally had good intentions when writing reviews." They are trying to help out others to make decisions apparently. (Though I would suggest that there is a bit of "wanting to be heard" as well... kinda like writing a blog).




As you can see from the Baazarvoice survey, most people say they are either "positive most times" (51%) or "positive everytime" (36%).

I am still skeptical of this though as I have, more often than not, come across "negative most times" or "equally split". Perhaps this is because the hospitality industry is different from other online retailers. We are not just selling products or services, we are selling experiences. And expectations of those experiences vary from person to person.

When we meet those expectations, the customer is "satisfied" and does not blog or write about his satisfactory stay at so and so hotel. Especially if he/she stays at hotels 30 or more nights a year.

When we do not meet those expectations, they are unhappy and will bluster and complain and can now do so on tripadvisor or whereever.

When we exceed those expectations, they walk away happy and may tell their friend, family and colleagues about it. And may even put it into some Web 2.0 site.

However, it seems that people are to be more driven to write about the bad experiences in hotels than the good.

But rather than "fear" them, we hoteliers should embrace them and take them as feedback. We need to put a role within our hotels to deal with this just as any other complaints that we get from a guest standing in front of us.

Millennium Hotel’s eCommerce Strategic Action Plan for 2007

It's 29th November 2007, and I am on my holiday in beautiful Phuket, Thailand. This is a very nice downtime and gives me a bit of time to reflect on the past year thus far. I looked back at the Strategic Action Plan for Millennium Hotels’ eCommerce that I put together last December-January, which is as follows:

There were 4 main areas that I wanted to focus on this year based on where we were as we entered into 2007: Search Engine Marketing, Reporting & Analytics, Website Re-engineering & Development and Email Marketing.

1) Search Engine Marketing:

PPC Goals & Plans –
- Increase average worldwide Return-on-adspend to 15-to-1
- Increase generic, non-branded keyword spread
- Engage SEM Specialist to manage my PPC campaign

SEO Goals & Plans –
- Review existing search engine optimization that was being carried out by Profero under the existing contract
- Plan for SEO for the new website due out later in the year
- Plan and implement other strategic SEO projects outside of the current site
- Change SEO agencies or augment the work by existing agency with other agencies


2) Reporting & Analytics

M & C implemented Omniture into our websites in early 2006 before I joined. We were getting basic web analytics like pageviews, visits, and referrer domains as well as revenue and conversion. However, the eCommerce data did not tie up directly with our Synxis data, which was supposed to be the source of the eCommerce data. Anyhow, the plan for 2007 was to clean up the analytics and set up the following reports:

- Top Level Reporting for global and corporate users like myself. The data set is more general and aggregated up so that users get the “bigger picture” to make business decisions at that level.

- Regional Level Reporting for our regions: EMEA, US, Asia, and New Zealand. The data set would aggregated up to each regions’ level so that they can view how the region is doing, but also allow them to see top level reports for each hotel to see how they perform. These reports have not yet been developed so we may need a lot of work to implement the taggings needs. The plan is to develop the initial reports by mid 2007 and take it from there.

- Hotel Level Reporting for each of the hotels so that they can see how they perform online and how their individual websites perform as well. Again, these reports were not yet set up so the tagging needed to be looked at and the first reports to be set up. The individual reports will then needed to be set up by the regions themselves.


3) Email Marketing

Our email marketing was very disparate and is managed independently by the regions and also by the hotels themselves. To cut cost, get brand consistency, instill best practices and seriously manage our CRM, we should get everyone on the same platform. Since everyone owned their own list and wanted to protect it, it does not seem practical to ask them to just simply migrate over. The plan is to develop a best practices platform for one region and then show the other regions and the hotels the benefits of the platform – one which would still allow them to control their lists.


4) Website Re-Engineering & Development

The existing website was put together in late 2005 on a limited budget and was using Lotus Domino as a webserver. It has a content management system, but this was custom built and not very flexible or user-friendly. There was already a plan to upgrade the website to IBM WebSphere running on DB2. So we needed to relook at the whole implementation from tagging to site structure to search engine friendliness and even to a new content management system that could be scalable to future development plans.

So the plan was to redevelop the new site under a new system. At the same time, update the design and build country focused sites for our major markets - .com for the US, .co.uk for the United Kingdom, .com.sg for Singapore and co.nz for New Zealand. Future plans included meetings sites for the hotels with major conferencing facilities, destination guides for each hotel, and niche sites like weddings to target those markets as well as non-English versions of hotel sites to target source markets of each hotel.

This undertaking would be the largest and most ambitious activity of the 4 listed here encompassing Search Engine Optimization and Reporting & Analytics as well as Design, Development, and Technical Systems.


*****************

Here is a quick summary and rationality of the above 4 areas of focus:



...... Well, that’s it for now. Back to my holiday. (close the laptop and refocus my eyes on the palm trees, beach and sailboats!)

“Sawasdee Kap” from Joe @ By The Sea Residences, Cape Panwa, Phuket, Thailand.

Expedia's new hybrid OTA model

Last week, Expedia announce an agreement with InterContinental Hotels Group "under which consumers can now book IHG hotels on Expedia® sites globally." As we all know, IHG stopped distributing via Expedia about 3 years ago when Hotels.com was yield managing cities and killing rate parity. Hotels were checking hotels.com to set their "rate of the day".

But now the largest OTA and the largest hotel group have kissed and made up. And they have given birth to a new hybrid. From Expedia's press release:

"IHG is participating as the launch partner for Expedia, Inc.'s new media-based pricing model. The dynamic, two-part economic model will blend transaction pricing with media pricing based on clicks on specific IHG properties in Expedia.com and hotels.com search results. Expedia and IHG collaboratively developed this innovative approach to distribution marketing -- a first in online travel -- where IHG will receive significant benefits from value-added media placement throughout the Expedia network in addition to the bookings they receive from Expedia."

This is about as clear as mud. I am not clear what this means from an implementation perspective. It sound a lot like the restatement of Expedia's "Marketing budget recontribution" in which 2% or so of the commission from the hotel is put back into a Marketing kitty so that you can use it to boost your presence in Expedia's own site. This is of course going to direct people to booking your hotel on Expedia still and hence contribute back to Expedia.
Markus Busch from Hotelmarketing.com offers an explanation:

"The media pricing element is part of a dynamic, two-part economic model that blends transaction pricing with media pricing based on clicks on specific IHG properties in Expedia and Hotels.com search results.

When a customer clicks on a hotel in the Expedia or Hotels.com search results, they are taken to that individual hotel’s customized info-site that contains not only rates and availability and the ability to make a reservation, but also rich and deep content, such as traveler opinions, virtual tours and photos of the property.

IHG hotels will be shown just like all the other hotels on Exepdia, but the agreement differs from other partnerships in that the compensation structure accounts not only for the bookings IHG receives through Expedia, but also for the clicks on IHG properties in the hotel search results on Expedia and Hotels.com sites."

Hmm.... it still sounds like a different cut of the marketing contribution kick back. Expedia is incentivized to promote IHG properties and will collect commission. I do not think that is much of a significant change for most of us at this point, but yes, it is a hybrid model and it remains to be seen whether Expedia is a good as Google in list IHG in relevant searches (not!)

What is significant and unsaid, however, are the commercial terms of this deal. Expedia has been courting IHG for years, and IHG's hotels have been pushing Eric Pearson's department to do a deal as well. IHG would not accept any commissions unless it was around 10-15% (or less!), whereas a typical Expedia commission ranges from (18-25%). Expedia then tries to make up the revenue difference by getting on the PPC bandwagon; and in exchange IHG gets increased brand exposure on Expedia networks.

Hopefully, this opens the doors for the rest of us hotel groups to DECREASE our commissionable rates with Expedia. HOORAY!!!!!

Newsweek: Facebook unveils ad targeting program

So Facebook finally grows up... and gets a proper business model. Then again.. is it a good business model?

It is ridiculous that both Microsoft and NY hedge firms are valuing Facebook at USD 15 Billion. (yes that is a big "B" and not "M".). I mean I did not blog when I read that, but certainly thought to myself "uh... why? What's the business models?" Up to recently, they were selling banner ads that do not work as well as icons ... I mean "Gifts"... to the same people who buy ringtones online. But that is not worth USD 15 BILLION!

So now they have unveiled an ad targeting program.

According to the Facebook Press Release, "Facebook Ads, an ad system for businesses to connect with users and target advertising to the exact audiences they want." You know what? It sounds like Google Adsense: " With Google's extensive AdWords advertiser base, we have ads for just about all categories of businesses and for practically all types of content, no matter how specialized. Google technology matches the most relevant and highest performing AdWords ads to your website."

I was getting excited when Newsweek started: "Facebook is giving users some control over whether to share information on their buying habits and other online activities with friends."

But the reality according to the press fodder was: "Facebook Ads launched with three parts: a way for businesses to build pages on Facebook to connect with their audiences; an ad system that facilitates the spread of brand messages virally through Facebook Social Ads™; and an interface to gather insights into people’s activity on Facebook that marketers care about."

Viral marketing is great but is it worth USD 15 BILLION SMACKAROOS?

During the a Google Panel, I actually suggested to Google why don't they let the AdSense site owners decide exactly what ad or product they advertise? This would apply to all social network sites they have and any Adsense customers. So let the market decides what it want to advertise on its pages and split the commission. Not just the product, but even choose the "etailer".

What if Facebook did this: produced a "What's in my purse?" widget/gadget/fadget and let people load up their "purse" with actual branded items. The brand marketers pay for this advertising AND facebook splits the ad dollar with the person. Extend this to "My mobile", "my watch", "my shampoo", "my computers", "my underwear", and even "my wallet" (including what type of Trojans and what flavor.). Imagine the freaking market research!!!

Now that is a business model. Not some silly "ad system that facilitates the spread of brand messages virally". This model is not viral. It is mainstream marketing and branding. And that's where the money is. It is not in viral marketing which is for product launches and market studies.

Besides transactional sites, all other web publishers are like any other media (print, TV, radio): Their main revenue comes from advertising. So get a proper business model to make the most out of that. Google currently gets the lion's share of my online marketing spend, because they perform and because I can track exactly how much money I make from the ads. And until Yahoo, Facebook, Myspace, etc get their collective acts together, they are still going to get left overs... if anything at all.

Peace. Out.

10 Mega-Trends from Google

Google held a "Google Singapore Marketing Brief" a couple of days ago (13th Nov) at my M Hotel (plug and disclosure). The agenda was:

14:30 - 15:15 Southeast Asia Internet Snapshot
by an APAC Senior Analyst from Hitwise.

15:15 - 16:00 A New Approach to Media
By Google's Vice President, Asia Pacific & Latin America

16:00 - 17:30 Panel Discussion with:
- Sukhinder Singh-Cassidy, Google's Presenter above.
- Jeffrey Seah, CEO Mindshare & Maxus Singapore
- Miguel Bernas, Multimedia Marketing Manager, Asia Pacific, Nokia.
- And yours truly, Director - Global eCommerce, Millennium & Copthorne Hotels

The Hitwise presentation had some good data, but the delivery was a bit uninspiring... Perhaps it had something to do with the fact that I had just finished a buffet lunch and my blood is working around my belly rather than my head.

Sukhinder's presentation was around "10 Mega-Trends". I will list them here, but most of the examples she used were Google pitches. Fair enough.

1) User Revolution - This is about "consumer generated media", "user generated content", "user driven content", etc. etc. etc. This is a no-brainer trend, but it certainly is MEGA. Note that we do not say "Web 2.0" anymore. That is so passe' or "Expired" per Wired Mag's categorization of "Wired, Tired, or Expired".

2) Consumers are "Always on". So what else is new? They are, or will be, on via PDAs, cellphones, Blackberries, watches, and iPhones (its not a PDA or cell; its in a class of its own.); at home, at work, in the car, on the bus, at the kids' baseball game, while watching TV... and studies have shown that people are airtyping in their sleep. (just kidding).

3) Offline drives online. Straight-forward, but I would say it is a symbiotic relationship that will one day become a single indivisible organism. With augmented-reality displays and googles, you will one day feel naked without it. From a hotel perspective, this industry is going to save so much money on renovation: all we got to do is renovate our augmented universe to a 7-star hotel and the guests won't know that they are sitting on a 20-year old sofa.

4) Local search is growing. May be this is not so apparent to most of the people in the audience, but they better pay attention. Our best PPC "campaign" segment is Google Maps UK where we get return-on-ad-spend (ROAS) between $27 and $30 for every dollar spent. Users are not just looking for "New York hotels" anymore; they are searching for "broadway hotels", "hotels near times square NY", and "bangkok hotels near soi cowboy" (inside joke and SEO inbound link for my new hotel).

5) Video is big - and getting bigger. Youtube, Joost, Veoh. Startup like TVtrip. While Sukhinder meant "getting bigger" as in more popular, I think that "getting bigger" also literally applies to size - full screen and HD in all its glory.

6) Brand connections occur across the web. Consumer are not coming across your brand only on your website. They see it on retailer sites, on social networks, on portals, on search engines... So how do you keep track of that and manage the brand or the reputation?

7) Niche sites have tremendous value. There was a chart that showed that 80% of the ad revenue is going to the Big Four sites (Google, Yahoo, MSN, and whatever), but these sites only get less than 50% of the traffic. There is much potential for reaching a targeted audience by searching out these niche secondary/tertiary sites.

8) Mass personalization. Another a no-brainer. Sukhinder used iGoogle as an example. It's a great example of a personalized DIY portal with your own widgets, gadgets, and feeds. This is from a user's perspective, but from a business perspective, I think the prime example is amazon.com. "You recently searched for....", "People who selected this also bought...". This is pushed personalization based on your behavior. Scary huh? (ooooo.. "pushed personalization" has a nice ring to it. Just Googled it. This phrase has not been used before in this way. I coined it first - right here, OK? So when Tim O'Reilly starts using at his next conference, you know he has read this blog.")

9) Creativity on massive scale. Sounds like crowdsourcing to me. She used the example of Threadless T-Shirt. I blogged about Embassy Suites in September. Sounds great to me: Cheap labor, cheap market research, and cheap customers. WARNING: design is very subjective, especially in a multi-cultural global market. You might want to segment those massive crowdsourcing creatives by region or countries or even cities. Shall we call it "creativity on a massive personalization scale"?

10) Digital is at the center of the world. With 1 billion people online (actually 791 million according to Comscore's September 07 figures), this is becoming the nexus of business, social, and familiar interactions. And the trend will only go up. Another 4 billion to go. But hey do those 4 Billion really count? I mean - we already got most of the G8 wired. G20 is moving along fine. Do we really need to worry about the G21 to G194? Just get China and India up to 50% each and we are already in the 2billion mark.

As I was listening to Sukhinder, I can't help but think, "Where is Analytics as a trend?". I wrote about the Competing on Analytics book and I am totally certain that this is where the world will be heading. I mentioned this when I was on the panel, but now that I have been giving it more thought, I have a different conclusion:

Analytics is a meta-megatrend. (Hahahahaahah....... Googled it.. another term coined by me. Take that all you highly-paid, suited Accenture/IBM/E&Y/McKinsey/BearPoint/CapGem management consultants. Better yet, pay me royalty for the usage.)

Seriously, analytics is a trend of trends. The whole online marketplace, from the perspective of businesses, will be driven by information. None of the above trends will matter unless every single detail can be tracked, categorized, filtered, consolidated and push on some digital dashboards somewhere so that someone can make business decisions. The above trends exists because there is the business world that can support it, or at least some of these start-ups think that they have the right ... what do you call it.... BUSINESS model. And business in the the future is driven by analytics. Capishe?

Book Recommendation: The Afghan (fiction)

So I was off for a long weekend because of Deepavali public holiday. The family and I went to Malaysia (Johor State) for some golf, horse-riding and general R&R. I picked up this book, The Afghan (By Frederick Forsyth) coming back from the UK the week before. I figured I have been reading enough non-fiction that I needed to let my mind have a bit of exercise. The bookshop girl recommended this, so why not?



It was actually a good quick read. Like many books these days, there is a mix of reality and fiction so you feel like you are actually learning a lot while reading. In this case, it is about the terrorist network and how it came about and some historical info as well. I always like these kinds of stories. Just try to keep the the fact from fiction.

Overall, great read, if you are in for a good espionage/action/modern setting storytelling.

Analytics: The End of Intuition?

I read an article above from Newsweek's September issue called "Era of the Super Cruncher". Very interesting read so it is worth a read (after reading this post of course). This is based on the book "Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart" by Ian Ayres. It sounds like the "Competing on Analytics" booked I reviewed here.

Newsweek:- "... a powerful trend that will shape the economy for years to come: the replacement of expertise and intuition by objective, data-based decision making, made possible by a virtually inexhaustible supply of inexpensive information."

So we go from Malcolm Gladwell's "Blink" (Jan 2005) to intuition & expertise is being replaced in 2.5 years. I have not read Super Cruncher but I would support the view that they need to both co-exist. Expertise and experience is always necessary, but having the latest and relevant information is definitely better than not having it. And even the more informed novice still would not know which is the best solution in the medium to long term, after all information is about what HAS happened and not what WILL happen.

NW:- "Those who control and manipulate this data will be the masters of the new economic universe."



He-Man and She-Ra - that's what those of us uber-geeks will become.


NW:- "Super-crunchable data can be broadly statistical or profoundly personal. Illustrating the former, Ayres chose the title of his book by running two Google ads that appeared in random order when someone searched for phrases like 'data mining.' The decision was made by the plurality who clicked on the ad for 'Super Crunchers' rather than the competing title, 'The End of Intuition.' "

KEWL!! Though I prefer "The End of Intuition"

NW:- "Increasingly, jobs that used to call for independent judgment, especially about other people, are being routinized and dumbed down. Banks no longer care about a loan officer's assessment of whether a borrower is a good risk; everything they need to know is in the numbers."

Right.. so those loan officers' assessments were good to begin with? If they were good, then they wouldn't have been replaced right? But then, some one.. some person has to come up with the algorithms and program these computers right?

He has a point though in this case though. I am getting pre-approved offers for unsecured loans and credit cards - which must have been initiated after an automated credit check. There is no need for a loan officer now.

I am still not convinced that this is the death of intuition, but then I guess I should read the book... Will check back later after I read this.

TripAdvisor's Users Predict 2008 Trends

A press release from Tripadvisor.com last week starts "Green & Clean Freaks Dominate; Traveler Say No to Cell Phones in the Air".

Germaphobia:
"Eighty percent of respondents are concerned about germs, bacteria and viruses when traveling. Airplanes are the most germy, according to 28 percent of those polled. Public transportation was next, followed by restaurants, hotels, and airports... Forty-five percent of travelers said their worst experience at a hotel was a dirty bathroom or dirty sheets, and 17 percent said their worst experience was the presence of vermin."
JOE> I don't know what the survey actually asked, but I think it is already urban legend that airplanes circulate viruses around. Additionally, Michael Crichton along with discovery channel and National Geographic has done their part post-SARS to increase awareness of how fast diseases can spread because of the ease of international travel. Lastly, if you ask a bunch of people what their "worst experience at a hotel is" and they answer something else besides dirty bathroom or dirty sheets, then you take notice. 45% saying that is a good thing; too bad it is not higher. The 17% presence of vermin - now that is disturbing. I am glad I have not experienced that in one-fifth of my hotel stays; I can't remember if I have had that experience in the last few years actually. Where do these 17% of the people stay anyway? Motel 8?

Go Green:
"Twenty-six percent of respondents said they will be more environmentally conscious in their travel decisions in the coming year. The green trend may be evident in their choice of transportation -- 22 percent said they'll go biking while on vacation this year, compared to 13 percent, last year. Forty-seven percent of travelers plan to go hiking this year, up from 43 percent, last year."
JOE> Wait... how does taking biking or hiking vacation make you any more environmentally friendly? I mean.. you are still taking a plane to get there right? Are you going further on the plane to get to that out of the way destination? That flight to the mountains might be half full rather than the full flight to a major city (fuller flights are more efficients and have lower carbon emission per passenger.).

Mobile Phones:
"Seventy-eight percent of travelers believe that mobile phones should not be allowed on flights."
JOE> So even if they were allowed on flights, the roaming fees would be freaking exorbitant. Look at what happened to Connexion by Boeing for internet access on flights. Crashed and burned because they charged too much. Let's hope some poor startup listens to TripAdvisor and keep their money in their pockets for another day.

Skewed Survey?
"Thirty-two percent of travelers (and 34 percent of Americans) are planning to engage in educational activity on vacation this year, such as a cooking or art class, up from 25 percent (and 28 percent of Americans), last year. Sixty percent of respondents from the U.S. said that the possibility of terrorism is still a consideration when planning where to go on their next vacation. Forty-five percent of Americans said the possibility of natural disasters (such as a hurricane, tsunami or earthquake) is on their mind, and 36 percent said the cost of fuel influences where to go on their next vacation, despite the recent decline in gas prices. Five percent said uncertainty with mortgage rates is affecting the way they plan travel in the next year, and six percent said the volatile stock market is affecting their travel decisions."
JOE: "US", "Americans"... how many of these 2500 surveyed were actually non-Americans? Is the press release skewed towards the US press or is the survey? Enquiring minds want to know.

R-rated to X-rated Vacations
"Twenty-four percent of travelers said they are likely to dress more provocatively while on vacation and 19 percent of travelers have had to impose the "whatever happens in X destination, stays in X destination" rule with their travel partners. Twelve percent of respondents have been to a clothing-optional or adults-only resort."
Joe> Again who is being surveyed? It looks like 12% are Europeans. At least 19% have been to Vegas. And 24% are women (men dress provocatively?).

Top 3 World Destinations:
1) Jerba, Tunisia
2) Makandi Bay, Egypt
3) Phang Nga, Thailand
JOE> So those survey either watched Travel Channel a lot or they watched a lot of E! Wild On with Tara Reid (where she just runs around in exotic destinations getting drunk.). I mean those aren't destination that just immediately come into your mind when you ask people. But then again, if TV is influencing people, then what else is new. It's just that those locations are just too small to support being "Top" destinations. Talk about being anti-ecotourism; just tell the world this tiny little place is the TOP destination. I am not going to those places next year; if I don't make it this year, then I won't bother because it will be trampled by 2009.

Google Analytics For Dummies

So I have been steadily blogging away. In the last month (October), I have been publishing an average of 2 posts per week. Traffic to this site was not steady, but it comes in. I can almost track it to the day that I publish a post as the blog spiders and readers pick it up.

Anyhoo... I noticed a week ago that my traffic dove to ZERO around the last week of October. I track this on Google Analytics which is a very easy to use tool. I did not think much of it. I was too busy and who knows what's going on with the interweb. See the graph of October traffic below:



About thirty minutes ago, I checked in again and see the above. Now I am getting a little worried. I have been pushing things out and nothing? ZERO? My ego was getting hurt, you know. Since launching this blog in mid August, I have had visits from people in 204 cities from 49 countries, who speak 18 languages. 75 % of my visitors were new visits, so I get a 25% returning visitor traffic. Each of these visits resulted in 1.55 pages viewed per visit. 25.9% were on DSL broadband, 21.3% were on cable broadband, 7.1% were on T1 (i.e. office connections), and 4.5% were on dial-up. (the rest 40% were "unknown"). Then suddenly.. NOTHING... NADA... ZILCH...

Then WHAM! SH...ZAMM, it hit me. I changed the template on my blog a few weeks ago to this brownish thing. I went to my blogspot dashboard and just selected a new template. I reviewed it and made sure it looked ok before I published it. All looked OK so "Save my template". But DUH!!!! When I change template, the Google Analytics script that I had put in the last template go wiped. So I have not had any tracking scripts on any of my pages. No wonder. Yikes!!!!!

Well, it is up now. But this is why I leave the tech to techies. Google Analytics is great for amateurs, but if you are using it for your ecommerce website, leave the monkey business to those who know what to do... sigh...

Numbers of Online Travel Customers Are Declining

According to the NY Times, "Travel Sales Still Growing, but Numbers of Customers Are Declining". See here.

It certainly sounds alarming, but maybe because alarming sells newspapers. But let's check out the highlights....

1) According to a recent survey of more than 60,000 Internet users in the United States by Forrester Research, a technology consulting firm, 9 percent fewer people booked travel online this year than in 2005.
JOE> But outside the US, the trend is the other way around. Europe is not yet as mature as the US. The Asian (with 3 billion people) are still getting online and are just beginning their shift from offline to online.

2) PhoCusWright found that among travelers with access to the Internet, the percentage who usually book travel online dropped to 62 percent at the end of last year from 68 percent in 2005, while those who say they usually arrange travel offline increased to 31 percent from 25 percent during the same period.
JOE> Interestingly enough, PhocusWright also published a report showing that between 2005 and 2006, less % of people were Shopping & Buying Travel Online. Increasing were people who Shop& Buy Travel Offline and people who Shop Online & Buy Offline. See below.


3) Industry revenues are still strong, mostly because those consumers who book travel online are doing more of it. According to the Forrester survey, the average online booker said he or she would spend 50 percent more on travel this year than in 2005.
JOE> So what does this mean? People who are online savvy are booking more and people with lesser patience or lower attention span are booking less? Are older people dropping off and younger people staying on and booking more?

4) Online travel executives say part of the reason for the dearth of innovation is that the online travel reservation systems are largely extensions of technology built in the 1960s.
JOE> Are we talking the GDS, PMS and CRS? Some of that is true enough, but the consumers are filtered and do not see a lot of that technology any more with middleware and web applications in the middle. On the contrary, meta search engines, like bezurk.com, and sidestep.com are giving consumers a lot of insight that they never had before.

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But really, the marketplace is overcrowded with OTAs and their affiliates and their spam. Consumers are becoming disenchanted with the intermediaries who are not able to provide the level of customer service that a supplier can. For example, if you book with an OTA and your friend booked directly with the supplier, who do you think has an easier time change or amending a reservation?

It would be very interesting to see if brand direct bookings have increased because consumers find it easier and more reliable to book direct rather than with an online travel agent.

Also, how many of these people who stopped buying online still research online? Looking at the destination and then finding out what is a "good" rate. They may not book online, but it would be pretty stupid not to at least Research online...

A Day @ Ecommerce Expo in London (Olympia)

I spent most of yesterday at the Ecommerce Expo here in London. I was here in London for business in any case and it was a good coincidence that the expo was here at the same time and was only a 15 minute walk from the Millennium & Copthorne office in Kensington.

First thoughts was that it was a small show. Olympia seems to be quite a large venue and we got slightly lost because signage was not very good. We initially went to the wrong hall - as did other people so we did not feel so stupid. (Note to EC&O who runs this exhibition venue, you need to get on search engine marketing - big time. The site is alright - once you find it. And you need a good domain like olympiavenues.co.uk rather than eco.co.uk.)

Anyhow, despite being a "small" show, there was a lot of buzz in the air. The companies there were mostly relevant and you had the anchor exhibitors like Google (huge booth plus the Google Academy "classroom" downstair which was 4 times the size of their booth).

So what did I find interesting to me?

WebCredible - With the recent website relaunch, I would love to run some usability test to compare with the EyeTracking studies we did last year. They seem like a good outfit. Asked them to meet me on Friday as I was leaving that evening. Let's see what happens.

Gomez - Gomez's describes themselves as "a leading provider of on-demand web application experience management solutions, helping the world's top businesses ensure quality web experiences for their customers". Yada yada yada... cutting through the clutter: "Internet performance monitoring service". I had been thinking about using a service like Gomez to monitor my site's performance from the end-user's perspective. Akamai had recommended them as a 3rd party independent monitoring service, and it had been in the back of my mind to call them up. But hey, they were here and did a decent demo. Please call me.

Omniture - OK so we already use them. I have been seeing on my Omniture Dashboard about TouchClarity product and wanted to find out more. Interesting stuff actually. Using information from their tags to tell our servers to deliver targeted content. So it can be simple like providing specific promotions to people coming from specific geographic locations. Or, in theory, marrying that with your CRM to provide personalized customer visits. Anyhow, for M & C, it probably at least 2009 stuff.

SEO Junkies - I had a call from these guys a few weeks ago so did prearrange to meet them. They focus solely on search engine optimization - no pay-per-click, no advertising, no creative. (though their parent company Advantys does some of this agency stuff.). It's a good strategy since SEO is so paramount to eCommerce strategies and is the neglected in favor of PPC. And yes, there are tons of companies offering to optimize PPC campaigns. I stayed away from those (and.. oh.. yeah.. by the way, these PPC optimizer also do SEO on the side... yeah right).

Google - of course I have to pay homage to Google. They shouted a lot about Google Checkout and how "Sellers get free processing on all orders in 2007". There is also a plan in place where for every dollar you spend on Adsense you get ten dollars of free processing value. Something like that. I asked about Google Checkout for my hotels since I am looking at a prepayment product. Alas, Google CheckOut does not service the travel sector as a policy. They are getting a lot of requests.. something like half of their requests are from the Travel sector, but the company policy right now is no travel. Don't know exactly why. Is there a lot of fraud? Is it the "mail order" merchant thing?

There are many free seminar, but they are mostly pitches for the companies that are presenting. That's actually fine, but of the 4 seminars I attended, only 1 was worth the time. It's alright to sell your product, but the delivery and the pitch could be a lot more engaging. I won't mention any names.

It's a two-day event, but one day was enough. We all have work to do!

Joe... Out.

Asiatravel.com partners with travel search engine Bezurk.com

Good news for the Asia travel meta search sector.

I had AsiaTravel's Boh Tuang Poh (Executive Chairman) and Bezurk's Craig Hewett (Chief Marketing Officer) on my HEDNA OTA panel two weeks ago (presentation here). Craig mentioned that they were working closely together and hinted at something further. So what was launched was (See Bezurk's press release here):

"Asiatravel.com, the pan-Asia total travel reservation service and Bezurk.com, Asia Pacific's leading travel search engine today announced a marketing partnership as part of which Asiatravel's hotel and flight prices will be integrated into the Bezurk travel search which will expose Asiatravel to a large new audience."

This will take advantage of Asia Travel's instant online confirmation for air tickets (see their PR piece here).

Bezurk also hinted that they would soon relaunch its brand into a "four-word" name. Something to compete with ... say... Zuji.com. Anytime now...

Online Travel Agents: Can we live without them? Part 3

Finally, the last part of this trilogy. So we ask: Why do OTAs dominate the top of the visitor report by so much? Why have hotel brands not been as successful?

OTAs innovated and have created many "firsts" in the online travel marketplace. Priceline's "Name your own price" boosted the whole opaque distribution model. A number of the large OTAs with direct access to GDS and feeds introduced the calendar availability to consumers; now calendar availability is expected. Traveler reviews: TripAdvisor is the "gold standard" in the travel sector though epinions.com was the first consumer review site ever.). True dynamic packaging is not yet available, but OTAs have long allowed you to buy airline ticket, book hotel rooms and buy parking at the airport. Affiliate model... Hotels.com in the US circa 2002-2003 ('nuff said). Those affiliates tend to be small sites that go after niches and locality, hence basic "niche marketing". And ...umm.... they are "independent"... uh--huh... sure.

But honestly, they did bring consumers online. The OTAs spent a LOT of money brand building and getting consumers to start booking online and be comfortable with giving their credit cards online. Would the online travel industry be where it is without OTAs?


Why have Hotel Brands not been as successful online as OTAs? Because the hotel industry ADAPTS slower than OTAs INNOVATE.

A painfully true comment... And all of you hoteliers are nodding your heads. And you OTAs are smirking, but you can't blame us. The hotel's core business is running a hotel, while OTA's core business is to sell hotel rooms (and other travel products.). A hotel's major investment is in the infrastructure, the rooms, and the building, while the OTA's major investment is in technology and innovation. OTA's, which grew out of the dotcom era, are naturally and instinctively tech savvy, adaptable (technology and business models), and hungry.

And OTAs are now on the defensive since a couple of years ago...

I had a bit to trouble cobbling this data together but managed to fine some stuff regarding share of online bookings between Hotel Direct (Blue line above) and OTAs (red line above). In 1999, it was 55% or so for the Blue Team and 45% for the Red team. As you see by the bubbles at the bottom, the next few years had companies IPO, being founded or spun off (Expedia, Priceline, TripAdvistor, hotels.com); the share of the Red Team rose to 48% or so. But with the dotcom bust and Wall Street getting shy, we started to see consolidation in end 2002/beginning 2003 onwards. At the same time, the Blue Team (at least the Michael Jordans, Shaquille O'Neils, and Yao Mings in the team) started getting their act together and investing in technology and people to catch up. By end 2005, it was more like 54-46 for the Blue Team. And in 2006, the star players on the Blue Team are saying they are at over 80% while the second stringers ( ahem...smaller hotel chains) and free agents (independent hotels) are bringing in the rear. So the trend for the next few years is to increase that average score to 64-36 by 2010 according to Merrill Lynch. I am not so sure about that, because us second stringers and independents need the OTAs because we do not have the brand clout and spread of hotels. We need them as part of our distribution strategy.

Meanwhile, OTA's will continue to innovate faster than most of us can follow (except perhaps the star players.)
TripAdvisor is in Facebook (which is now worth USD 15billion dollars by the way) with "Where have you traveled" application. Travelocity increase its CRM efforts with Farewatcher Plus.

And Orbitz combines social networking with information like departure and arrival times in Traveler Update. So a traveler can update (a la twitter) about the bad restaurant in Terminal 1 in O'Hare or the long security checkpoint at Gate 1. Would a hotel group do something like this? Not very likely as the ROI on such a venture would not be worth it. Orbitz does it because it is part of their "service" to customers as well as brand awareness and position.

So OTAs have their place, and they will have a share of the online marketplace. What share will depend on which hotel group, on which destination and on which property. Some properties will depend more on OTAs than others just as some hotels will naturally depend on one channel over another.

So as I ended my presentation:

"OTAs. You can't live with them, but... You can't kill them."

The End.

Online Travel Agents: Can we live without them? Part 2

So next is the Scene - i.e. What is brand online's medium to long term strategy? What do consumers think about brand online vs OTAs? How many visitors go to brand online vs. OTAs? How much cross visiting is there between OTAs and Brand Online?


1) What is brand online's medium to long term strategy?
Well brand online is in direct competition with OTAs on most fronts online since 90% of Shopping traffic is generated from search engines. Hence search engine marketing is the battleground i.e. SEO and PPC. Search for any hotel and you will always find at least 8 of the top 10 results are OTAs (or their affiliates) in the natural search results. And look at the pay per click advertising and you will see many ads from OTAs - unless the name is trademark protected (only on Google!).

Since the cost of sale for direct online channel is a maximum of 10% vs the average OTA commission which is over 20%, it makes sense for a hotel group/hotel to want the traffic direct and save on the additional commissions. So the medium to long-term strategy is to channel shift the consumer from booking with online travels agents to booking brand direct.

2) What do consumers think about brand online vs OTAs?
Consumers prefer to book brand direct primarily because they get the best rate guarantee, they think the get special prices and promotions, and they can earn loyal points and rewards.

Consumers also feel that they are more satisfied when buying direct.

So while they say they like to go direct, what do they actually do in practice? Where do they go and how do they shop?

3) How many visitors go to brand online vs. OTAs?
Here is Comscore's August 2007 data for the worldwide Travel Category. Of the 791 million internet users worldwide, 38% go to travel sites during the month (or 301 million users). Expedia tops the travel category with 62 million users, followed by Travelport, Yahoo! Travel, Priceline and Lastminute. The first hotel company that comes on the list is IHG at number 12 with 7.4 million users. So even though consumers say they like brand online sites better, most of them still shop at OTA websites.

4) How much cross visiting is there between OTAs and Brand Online?
What's more interesting is to see this overlap. Here the column data is from Hilton and InterContinental groups crossed with the same Travel Category report in the slide above. So 48% of hilton user also go to Expedia, 26.2% also go to Travelport sites during that month. The Index column reads like "hilton users are 6.11 times more likely to visit expedia sites than the average internet user". So take a look at the InterCon column against the Travel Category.

Now check out the Index for Hilton vs InterCon and Marriott and Wyndham. The Index is over 2 times that of OTAs; 18.48, 23.58, and 14.83 respectively. This means that consumers are looking everywhere and not just your brand online and OTAs. They are looking at other hotel sites too. Probably your direct competitive set for your particular hotel.

Think about it. It's not that hard. Just a few click of the keys into Google and you can see it. Better yet the OTAs may very well tell you who is in the area. You can start your research there.

So that's the end of Part 2. In the next part, we will look at: Why do OTAs dominate the top of the visitor report by so much? Why have hotel brands not been as successful? And we will come to some sort of resolution.

Online Travel Agents: Can we live without them? Part 1

I moderated a panel discussion yesterday at the HEDNA Asia Pacific Conference here in Singapore. The panelist were: Roshan Mendis from Zuji/Travelocity, Boh Tuang Poh from Asiatravel.com, and Craig Hewett from Bezurk.com.

So I had a short "scene setting" presentation (15 minutes). But the first few slides were more of setting the stage, i.e. the stage comes before the scene.


The stage, or the online marketplace, as we know it, is quite convoluted with OTAs, corporate websites, hotel websites, search engines, social networks, user generated content, blogs, etc. etc. etc. How does a revenue manager resolve all this into a revenue management strategy? (remember HEDNA stands for Hospitality Electronic Distribution Network Association so the people here are mostly Revenue Managers/Directors).

So we need to distill this marketplace from the perspective of distribution:

1) The Users, or Consumers, on the left side.
2) On the other side, you have the inventory which resides in the CRS or PMS.
3) That inventory is distributed to brand online websites by the Internet booking engine and distributed to OTAS via CRS, GDS or extranets.
4) So the big question is how do Consumers get the brand online websites and/or OTA?

A) Some go direct to the brand online site like www.millenniumhotels.com and type that in. Some go direct to OTAS like expedia.com or hotels.com.
B) BUT MOST GO THROUGH SEARCH ENGINES! At least 90%!

Look at the number of searches done worldwide (below) and see the share of the search market by the likes of Google, Yahoo and Baidu (yes that Chinese search engine).


Google has 60.8% of the over 61 BILLION searches done worldwide in the month of August 2007 (according to Comscore qSearch). This is from a base of 754 million unique searchers. Each searcher averaging over 21 search VISITS per month. (a visit is a browsing session that is not interrupted by 30 minutes of non-activity, so each visit can have many searches).

So yes.. people search... a whole damn lot. What about Web 2.0 and travel 2.0 and all this User generated content and TripAdvisor and facebook and MySpace? Don't people book from there?

Look to yourself for an answer. What do you do?

1) Research Phase: before you even go somewhere you are influenced by someone about how good or bad the destination is. After you know where you are going, you will then start to "research" into what hotels are good and where they are located. How do you get this informations? You use the search box at the top of your browser window! OK you also might wander through to your Facebook/MySpace or even TripAdvisor to see what people have to say. Now you are influenced by your research and you decide to stay at say the Orchard Hotel Singapore (obvious plug). What do you do now that you are ready to shop?

2) Shopping Phase: YOU GO TO THAT SEARCH BOX AGAIN and type in "Orchard Hotel Singapore cheap discount rate" or something like that!!!!! Don't deny it.. that is what you do. Why? Because it is easy. Just because someone said that they got a good deal on hotels.com 5 months ago, it does not mean that hotels.com has the best deal TODAY. You want to check everywhere, and it's really not that hard to do. With a few click on Google, you will know what is a good rate and what is not. AND WHERE TO BUY IT? And where is this? It is the Brand Online sites or one of the OTAs that our Revenue Managers work with. If you have time to spare, you MIGHT call a travel agent and be put on hold and wait for them to get back to you "later today"... yada.. yada... yada.

3) Purchase Phase: Then you buy....

So search engine are VERY important in this online world, Google being the top dog - BY FAR. Yahoo only has 20% of the market compared to Google's 60%. Google makes over USD 11 BILLION dollars a year and over 60% of that is from the search engine results page (SERP) that you see whenever you do a search.
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“Google reported revenues of $3.87 billion for the quarter ended June 30, 2007, representing a 58% increase over second quarter 2006 revenues of $2.46 billion and a 6% increase over first quarter 2007 revenues of $3.66 billion.

- Google-owned sites generated revenues of $2.49 billion, or 64% of total revenues,
- Google's partner sites generated revenues, through AdSense programs, of $1.35 billion, or 35% of total revenues
- Revenues from outside of the United States totaled $1.84 billion, representing 48% of total revenues in the second quarter of 2007"
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So that SERP page is not as simple as you think....

So that is the stage. My next post will be about the Scene... i.e. What is brand online's medium to long term strategy? What do consumers think about brand online vs OTAs? How many visitors go to brand online vs. OTAs? How much cross visiting is there between OTAs and Brand Online? So hold on for Part 2.

Recommended Book: "Microtrends" - A Very Interesting Read

I just finished reading Microtrends: The Small Forces Behind Tomorrow's Big Changes by Mark Penn and E. Kinney Zalesne. I actually read it cover to cover (except for the Footnotes and Glossary of course). The authors goes through the book highlighting 75 small trends (mainly in the US) that have reached the 1% threshhold i.e. 3 million people. Each trend is bitesized at 4 or so pages so you can lay the book down easily and quickly pick up where you left off. It is a great complementary to "Competing on Analytics" in that all these trends were backed up by solid numbers and statistics that Burson-Marsteller is know for (Mark Penn is the CEO of Burson-Marsteller).

Overall, it is funny, well-researched, cleverly written and makes great talking points.

See also review from Publishers Weekly:
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From "Soccer Moms," the legendary swing voters of the mid-1990s, to "Late-Breaking Gays" such as former Gov. Games McGreevey (out at age 47), Burson-Marsteller CEO (and campaign adviser to Sen. Hillary Clinton) Penn delves into the ever-splintering societal subsets with which Americans are increasingly identifying, and what they mean. For instance, because of "Extreme Commuters," people who travel more than 90 minutes each way to work, carmakers must come up with ever more luxury seat features, and "fast food restaurants are coming out with whole meals that fit in cup holders." In a chapter titled "Archery Moms?", Penn reports on the "Niching of Sports": much to the consternation of Major League Baseball, "we don't like sports less, we just like little sports more." The net result of all this "niching" is "greater individual satisfaction"; as Penn notes, "not one of the fastest-growing sports in America... depends substantially on teamwork." Penn draws similar lessons in areas of business, culture, technology, diet, politics and education (among other areas), reporting on 70 groups ("Impressionable Elites," "Caffeine Crazies," "Neglected Dads," "Unisexuals," "America's Home-Schooled") while remaining energetic and entertaining throughout. Culture buffs, retailers and especially businesspeople for whom "small is the new big" will value this exercise in nano-sociology.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
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Customer Reviews for Hotel Site????

HotelMarketing.com pushed out an article from ClickZ titled: "How to Use Customer Reviews to Increase Conversion". In it, ClickZ says:

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Consider dipping into the traditional marketing budget to invest in a customer review system. A review system allows you to let your customers market your products for you. Need more rationale? Consider these facts:

According to JupiterResearch, 77 percent of online shoppers use reviews and ratings when purchasing.

Reviews drive 21 percent higher purchase satisfaction and 18 percent higher loyalty, according to Foresee Results.

In a study of 2,000 shoppers, 92 percent deemed customer reviews as "extremely" or "very" helpful, finds eTailing Group.

BizRate found 59 percent of users considered customer reviews to be more valuable than expert reviews.

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So HotelMarketing is telling hotels to put customer reviews on our own sites? Are they mad?

Seriously, it is one thing to be an online retailer selling products made by someone else and letting customer whine about that product. It is a completely different thing to have a forum on your site to let customers (or competitors or any Tom, Dick and Harry) complain out loud for ALL THE WORLD to see. On your own site where you are trying to convert a sale? Most people know that a hotel's sites (or product maker's site) are marketing spiel. They expect it so if you don't show them the mess in the kitchen... it's ok. Airing your own dirty laundry isn't going to help.

Travelers now have A.D.D.

That's stands for Attention-Deficit Disorder. According to a study by Akamai Technologies and Babson college, "one-third of travel consumers abandoned their online search after waiting for more than four seconds for their results to load".

Lucky our website is on Akamai and we are about to bump up our service level to Dynamic Site Accelerator. Damn that sounds sexy doesn't it. Vroom... Vroom....

We are going to be as sexy as InterContinental Hotels Group as Bryson Koehler, Vice President, Global Distribution Technology said: "Akamai provides us with a complete e-business solution that addresses our requirements for 100 percent availability of critical Web, Voice and Web Service applications, massive reach to support worldwide customer demands, and the use of an extended infrastructure to support widely varying traffic on demand."

As sexy as Pegasus, Steve Lapekas, Chief Technology Officer is quoted: "Leveraging Akamai's Web Application Accelerator will further allow us to increase speed and availability, while reducing infrastructure load and increasing SaaS application adoption of our next-generation travel reservation platform."

Maybe they will quote me too, after I get the makeover to become sexier like the Hilton Brand.

"Hiring For Search (Marketing)"

Digital Media - a magazine for the Asian market by BrandRepublic - interviewed me a couple of months back for a piece they were doing on Search Marketing. Here's the piece:

(Continued below)

My exact answers to the questions were:
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Q1. When it comes to hiring a search agency, what are the advantages and disadvantages of hiring a specialist over a general media agency?

PPC is easy set up and run, so the general media agencies can compete with the specialists. However, to really optimise the return-on-ad-spend or ROI, you need a specialist who understands the ins and outs and knows the "tricks". Over the last few years, general media agencies have hired specialists to run their PPC campaigns. So this is more balanced. But as a
client, I want direct access to that specialist and not through an Account Manager. This is because even specialists would not have experience in my industry, and industry input is needed to optimise.

SEO is still such a hazy field, maybe a large part is due to the fact thatthe search engines keep everyone guessing at their algorithms. Specialists are in a better position to keep up to date with the search engines and have the necessary tools and knowledge to do this effectively. General media agencies will claim to perform SEO, but they really do not understand this
field. Many focus mostly on search engine submissions and basic meta tagging, but do not understand the need content optimise based on keyword popularity.


Q2. In general, do you think the extra revenue gained from a specialist's expertise is worth the extra management and research it may require on the part of the advertiser?

For my PPC campaigns, I use both a specialist and a general media agency. I learn a lot from the specialist and at the same time can work with them to test out ideas and tweak my campaigns further. I then try to implement these learnings into my other campaigns with the general media agency. This is the same approach I take to regular reports in order to establish
consistency across campaigns. If the advertiser does not have the domain knowledge or the resource dedicated to PPC, then it should engage a specialist. It is worth the money if the terms are correctly defined - especially for "pay for performance" contracts.

For SEO, I have not encountered a general media agency that I would feel comfortable giving my account to.

Q3. Do you need to understand the technical side of search to go with
a specialist?

You go with the specialist to get that experience. As an advertiser, you need to understand and develop the right key performance indices (KPIs) for your SEO and PPC marketing. You do not need to get "technical" but you should understand the basics of what search engines do and how SEO and PPC works. This knowledge must be integrated with your knowledge of your
industry and business. The KPIs are specific for you because even specialist do not understand your business as well as you do.

Q4. Using a general media agency usually means better integration with the rest of your media strategy. How important do you think this is?

The general media agency should be able to understand your industry and business better than the specialists because they have had a long relationship with you. For a specific integrated campaign with online, print, TV etc (with specific campaign periods), general media agencies are in a better position to understand integrated marketing. It takes more time to get the specialists involved in such a campaign.

For a hotel group, over 90% of our PPC and SEO activities are constant and on-going, rather than fixed-period "campaigns". I have been promoting internally the concept of "PPC As A Sales Channel". So this "edge" that the general media agencies have are really for a minor part of the search engine marketing portfolio.

Q5. How can advertisers best choose which option (specialist or generalist) is best for them? How important is the pitch process in doing so?

It depends on how knowledgeable the advertiser is and how much resources the advertiser can put into it. If you know your KPIs and are comfortable with steering from a strategic direction standpoint (or only have resources to do so), then engage a good general media agency. If you do not have the time and resources, or need to understand more in order to establish KPIs, or
want to get deeply involve in tacticals and new developments, then look for a specialist.

With the pitch, you want to talk to the specialist within the general media agency. You need to establish that the person doing the work understands your needs and KPIs. If you have a good AM or AD that can facilitate this, this is good, but you still want to meet the brains.
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I don't have a link, but I will find it.....

eCommerce & Revenue Management

In the Who Is Who In Hospitality (wiwih.com) forum, there is a group called Hotel Department Group that is meant for hoteliers in the various departments. There are groups like General Managers Group, and Sales & Marketing Managers Group. There is one group is called eCommerce & Revenue Managers Group.

My first thought (and I have posted most of the below in this forum) was "Why was eCommerce & Revenue Management placed in the same group?"


At Millennium & Copthorne Corporate, both teams fall under Global Distribution & Revenue Management, which in turn comes under Global Sales & Marketing. eCommerce is categorized as a sales channel. I think in Hilton both fall under a larger group of Revenue Management and Distribution as well. Marriott seems to put eCommerce under Sales & Marketing and includes "Reservations, Inventory, and Distribution" under eCommerce too. So there does not seem to be a right or wrong way.

It is not uncommon that Revenue Managers have moved into eCommerce or have taken that additional responsibility/role - not unlike the move of Reservations Management into Revenue Management. But the move from Reservations into Revenue Management seems to be more complementary...

Reservations managers have:

• Familiarity with the tools and interfaces to control rates
• An idea of the business mix and seasonality of a property
• One could argue that this is the natural evolution, or career progression for Reservations Managers.
  

However eCommerce role requires three competencies that are not necessary found in Revenue Managers:

• General understanding of technology platform (hardware/software - which is IT's domain)
• General understanding of web technologies (which is more web development domain)
• Good knowledge of the online marketplace (which is a sales/marketing domain)

What is complementary is the fact that Revenue Management are numerate and analytical. Something that is extremely important in the eCommerce field and a mindset that is not always found in Reservations Managers.

I am curious to find out:

1. How many people have made the move from Revenue Management into eCommerce?
2. How many people are doing two roles at the same time?
3. Since Revenue Managers tend to report directly to the General Manager, how has that helped push out eCommerce initiatives?
4. What difficulties you have encountered moving into this role and how have they been overcome? (that's a big question, but hey you might be helping someone else!)
5. And lastly, does anyone disagree with anything that I have mentioned above? What are other views?

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The above only generated one reply which is why I am posting this in the greater marketplace as wiwih.com is members only and the Hotel Departments Groups are only for hoteliers.

The reply that did come in was by an Area Revenue Manager of a very large hotel group and he pointed out:

"What you pictured is an example of how the role of Revenue Managers can be seen from different perspectives and how often the position of a Revenue Mangers might be confused with a yield/distribution manager... Room revenue is impacted more and more by on-line distribution but should a revenue manager stop at room revenue? As you know total hotel revenue is the optimal/most profitable combination of Room, Conference & Banqueting and Food & Beverage revenue. The role of a revenue manager is much more complex and in my view must covering all hotel's revenue generating area's."

What he says is very valid and also points out that the role of a Revenue Manager is already quite complex. And there is an overlap as explained in this article? But can you realistically place the additional role of eCommerce onto these people's shoulder?

If successful, would you end up with something like this?


Here's one for the Revenue Managers reading this: Will Your Next CEO Be A Revenue Manager?