iMediaConnection: Online Marketing vs eCommerce

I am starting to write for imediaconnection of DMG. The first article is about the difference between online marketing and eCommerce (excerpt):

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The difference between online marketing and eCommerce, and how to make sense of it all.

The internet is such a vast and confusing medium that a plethora of roles and job titles that were created to make sense of it all. Gurus, evangelists, optimizers, specialists and demand generators have all stepped up to the plate to take over the world of new media, emerging media, ebusiness, online marketing and ecommerce. But just because the terms are used regularly does not mean that the roles are clearly defined.

Having been an eCommerce Director for a hotel group, I can't tell you how many people have asked me: "What does that mean, are you like a webmaster?", or "You do online marketing, right?" So the oversimplified explanation is:

eCommerce is to online marketing as sales is to marketing in the traditional off-line business world.
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Click here to read the full article.

Joe out

"Travelers don't believe hotel marketers anymore"

As if they ever did!

This was an original piece on Hotelmarketing.com.

"They don’t trust our pictures or our adjectives. They believe each other, writes hospitality industry consultant Carol Verret."

OK so I know we are all on the Web 2.0/Travel 2.0 bandwagon but isn't this a little sensationalist? A good chunk of our visitors check out the pictures gallery, and we get millions of page views per month. The 3/4 million of visitors per month read the content on our pages and make booking. We had the best quarter ever in 1Q2008 with our direct to brand bookings online. So they have not gone away.

So please relax....

"In the hospitality industry, the customer is less likely to blindly believe the ‘marketer’s’ story as there are so many ways to access stories written by people like them about the experience they had or want to have."

Yes, Web 2.0 and customer review certainly do influence consumers and also makes hotel operations and experience more transparent to the consumer. They know better and better what they would be getting for their value.

In actuality, this drives the capitalist supply and demand economy and "survival of the fittest" mentality. If you have a crappier room than your neighbors, then you should charge less... period. If you have not spend money on renovation in the last .. oh, say ... 15 years, then you should not be charging the same as that new Hilton with LCD TVs, club floors, and new bedding.

They quoted Seth Godin: "… marketers aren’t really liars… they’re just really good at telling stories that customers want to believe."
The thing about the hotel industry is that our product is as much the physical infrastructure as it is the service. There must be a balance between what we naturally exaggerate in order to sell/market and what we deliver. And delivery is the problem now with staffing crunch and higher expectations because of higher ADRs.

"The good news is that price isn’t the only driver the bad news is that our customers don’t believe hotel marketers anymore – they don’t trust our pictures or our adjectives. They believe each other!"

I am not sure about that. People have always believed in word of mouth, but the web is full of crap. There are tons of uninformative reviews and it takes a while to sift the good from the bad. And pictures still help, if nothing than give users a view of the hotel or room. Consumers however do understand that the hotels need to "put their best foot forward".

In my own personal searches, I always look at both the hotel's site and other sites. Consumers are just doing more research and they can do it so much easier now with the web. They have lots of choices. As the flight attendants often say over the loudspeaker as you are deplaning, "Thank you for flying with XXX Airways. We understand you have many choices, and we appreciate your business. See you again."

Maybe we should get our Front Desk staff to say something similar as well....

Google and eCommerce(?)

Another late night out, so of course, I can't sleep - which means I surf and - at times like these - blog.

Anyhow, I ran across this article in eWeek with the above title. The lead-in was:

"The better question might be, what doesn't Google know about us, according to Gartner analysts."

A couple of things, they highlighted:-

- Google knows a lot of what people do online and their surfing habits as they have access to exabytes of unencrypted data and enough computing power to process them. "Clearly, Google knows the behavior patterns of its users. Do a search and the company will tailor ads based on your searches. Do some more searches, open your Gmail account and you will find about four paid links related to those searches. The company also knows a lot about the computers where its Google Apps are installed."

- BUT there is one major area that they have "scarcely touched" and that is eCommerce transaction - which is HTTPS encrypted.

- They have Google Checkout which handles about 1% of "what is sold on the internet" but they are missing out on the other 99%

- Gartner then puts forth: "think about what e-commerce giant Google might be inclined to target to fill out its information and online ad holes. Will it be Expedia? Amazon? eBay?"

OK so while I agree that this would be a scary premise, I don't necessary think that this will happen. At this point in time, being an eCommerce storefront is not what Google wants to be.

I mean - they are doing fine - actually pretty damn good - at selling advertising. That's USD 12billion per year good. They bought DoubleClick to help get into the brand advertising since they already more or less own search advertising. So strategically, they want to increase their share of the total USD 44 billion (2008) of online advertising spend (this number is according to ZenithOptimedia. )

So from Google's perspective, they are currently only getting a quarter of the pie, and there is much room to grow in the "traditional" online advertising on major ad portals (and minor ones too.) And since this space is still fragmented, Google can dive in with all of their computing power and clever gen-y scientists to optimize the efficiency AND measurability of these ad networks.

And of course, if they tie that into their search marketing platform, Google can then give advertisers an almost full, 360 degree picture of their online advertising campaigns.

Now THAT, my friends, is what you should be wary of.

They may eventually start to want to own eTailers to satisfy the Wall Street shareholders to keep on increasing their revenue (by acquisition), but that is not yet the case (I don't think.). To do so now would invite cries from all segments of the economy - consumers, business, and governments. But never say "Never".

What is the difference between Online Marketing and eCommerce?

As I was preparing my presentation for EyeForTravel Asia Distribution Summit in March, I had an epiphany ("a sudden, intuitive perception of or insight into the reality or essential meaning of something, usually initiated by some simple, homely, or commonplace occurrence or experience.")

Simple question:

What is the difference between Online Marketing and eCommerce?

This is a very simple question, but confounds most people. When I give people my business card with the title "Director, eCommerce", I often get questions like "what does ecommerce do?", "so you look after the online marketing?" or "So you are like a webmaster right?".

Simple SAT answer:

Online Marketing is to eCommerce LIKE Marketing is to Sales! (DING! the light goes on.)

I know, I know.. there are those of you out there cringing. Yes there is a huge gray overlapping area between Online Marketing and eCommerce, but ask yourselves:

What are the core objectives of Online Marketing and eCommerce?

Online Marketing is about representing your brand out there in all relevant media. This includes brand advertising in mainstream websites as well as web 2.0 sites, SecondLife, blogs, viral marketing campaigns, email marketing campaigns, etc. etc. The primary KPI for Online Marketing are the impressions, opens, and the click-through-rates (CTR) - eyeballs you attract to your site or microsite. This is not unlike "traditional" Marketing, even if you include reputation management (i.e. PR) into this mix.

eCommerce is about the money. It is the virtual storefront. It is the keyword group on the PPC campaign that generate the best Return-on-ad-spend(ROAS). And by Return, I mean DOLLARS (US$ or otherwise, cash or credit). It is about "Show me the eMoney!". So yes, eCommerce looks after the actual site, but from a platform, security, and usability perspective as it relates to getting that user to BUY BUY BUY. If we - eCommerce people - thought that it would generate the highest revenue, our website would just be a white page with a booking engine. The primary KPI for eCommerce is revenue, period (or "full stop"). So when we look at a PPC campaign or affiliate marketing proposal or Facebook app, we try to figure the $$$ that we think we can get from it.

Online Marketing looks from the advertising and branding perspective and tries to figure out what kind of eyeballs we can attract and how many of those eyeballs will book - maybe not today, maybe not tomorrow, but sooner or later.

eCommerce looks from the shopkeeper perspective and asks "Who is going to buy today? right now! Where do I find them? What do I have to do to get people into my store? What do I have to do to make them book? What features, functionality and what price will they accept?"

In "traditional" Sales & Marketing, the teams play on different playing fields. Marketing has it media plans, advertising budgets and printed materials, and Sales has their customer relationships, sales calls, salesforce.com, and tradeshows. They occasionally cross path at tradeshows and brochure development. However, in the online world, there is one huge confusing marketplace that includes both Online Marketing and eCommerce. The divisions are blurred and the point at which marketing converts to a sales is also not very clear.

Yes there is a huge gray area, and it is an over-simplification by saying "Online Marketing is to eCommerce LIKE Marketing is to Sales". But if we understand this fundamental difference, then Online Marketer and eCommerce Managers can begin to work together to formulate strategy. One that will - in the short-, medium-, to long-term - optimize ...
... um...
... revenue.

MUWHAHAHA.... MUWHAHAHA......!

PS: Just some wikipedia definition on: online marketing and ecommerce

"Online Research Drives Offline Sales"

Interesting article from eMarketer on the above.


Basically the web influenced 3.5 times more sales than what was done online. Obviously this data is for and about businesses that have both retail physical ("brick and mortar") and online stores, but it does show the influence that the web has. With respect to the travel industry, this is similar to understanding how online marketing and ecommerce (by suppliers and OTAs) effect traditional travel agent sales.




Ok so the above chart is clear as mud. But essentially what we want to understand is "how much % of the total retail sales is that 3.5 times web-influenced sales?" So if we do some simple assumptions and calculations:

Total Physical Retail Sales = 43.14 + 18.28 + 13.94 +2.44 = 77.8%
Web-influenced Retail Sales = 3.5 X (100-77.8-3.95-0.47) = 73.28%

Hahahahah... so the web influenced almost ALL Physical retail sales. Yes, I know I have taken some liberty with my assumptions, but this is the US market data. It is not inconceivable that most people will do some research online before they go out and buy some medium to big ticket items (USD 100+).



Alright, so here is the "real" data that we want... well not really. This says that web-influenced retail + web purchases = 15% of the total retail, in other words, web purchases make up 15% / ( 1 + 3.5) = 3.33 % of retail purchases. Which seems low, but then I think this data includes ALL RETAIL sales - as in, 7-11, gas stations, Starbucks, restaurants (?), etc. It does say it "excludes travel sales".

So we are nowhere close to understanding the effect of the web on offline commerce (0Commerce - which could also stand for "old Commerce") for businesses that have both channels. The 73.8% number is great but does not have sound data to back it up.

Interesting, this is the classic advertising problem of "Half of all my advertising is wasted. I just don’t know which half!" Most online marketing and advertisements are measurable, but really only when we talk about clicks, pageviews, and at best leads (I am excluding PPC from this statement because as far as I am concerned, PPC is a sales channel rather than an advertising medium). The intangible aspects of brand awareness, mindshare, and influence are not measurable unless we strap a brain scanner to users and connect that to the web.

So maybe as marketers, we have only progressed a little bit. Not "half" of my advertising is wasted, but perhaps something like I know:

- 30% works for sure because people visit my website (and of those perhaps 2% purchased)
- The other 70% I don't know much about as it relates to driving brand awareness and offline purchases.
- I know based on studies like the above that half of the 70% works but I don't know which half !!!!!