"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".

Millennium & Copthorne wins Ad-Tech SEO Awards

It's official as of last week's Ad-Tech Conference in San Francisco.

EmarketingEye's SEO campaign for Millennium & Copthorne Hotels has won the 2008 Limelight Award for "Best Search Engine Optimization Strategy/Campaign". There is a cool full-flash, SEO-unfriendly, and long-download-time-from-asia site here.

The "trophy" award looks like THIS!

This award is dedicated to all those people who said:

"What!@!# You are giving you SEO work to a small start-up instead of a big agency like us?"

"What!!@# You are doing SEO with a company in SRI LANKA!?!? Is it safe there?"

People... This is the information age. As long as you have decent internet access (which Sri Lanka has), you can participate in the Internet economy. As long as you have a decent education (which Sri Lanka provides), then you can participate in the knowledge-based workforce. As long as you are hardworking (which Sri Lankans are), you can succeed. Virtusa did it. MAS Holdings did it. So can EmarketingEye.

"The World is Flat". Peace, out.

Microsoft Bought Farecast!

In my post earlier this week, I speculated that the secret buyer for Farecast might be:

Kayak/Sidestep (40% chance)
Google (30% chance)
NewsCorp (20% chance)
Others (10% chance)

Well according to the Seattle PI which broke the original news about the purchase, the confirmed buyer is Microsoft. There goes my predictive ability. According to them, a Microsoft spokesperson said:

"We are pleased to announce that we have acquired Farecast, a Seattle-based smart travel search engine, and we welcome them to the Microsoft family. Farecast has been a partner of ours on MSN Travel and we look forward to working closely with the Farecast team to incorporate and apply its technology in new and interesting ways."

There is also a blog post from Hugh Dean confirming this.

I should have seen this coming since Farecast and MSN have worked closely. See this press release last year:

MSN and Farecast.com Launch Free Airfare Predictions, Planning Tools

But I thought that after Microsoft sold off Expedia to InterActive Corp years ago, they were getting out of the travel biz. I guess that was before their OSG (Online Services Group) was re-energized by Ray Ozzie, Microsoft's Chief Software Architect.

So it looks like Microsoft is taking out its checkbook and getting into the consumer space even more. And purchases like this will certainly push Yahoo! shareholders into a loveless marriage with the Ultimate Geek!

The game just gets more interesting every day.....

"The search wars are over, and Google has won."

I made a similar comment when blogging about the MicroHoo? merger back in Feb. ("The search engine game is over. GOOGLE WON.")

But it is now OFFICIAL, because it is printed in Wired Magazine. See here.

I had postulated that Google and Microsoft are in this fight over Yahoo! for the future of "Consumer Computing Services".

In this Wired article however, they have a different theory:

"Microsoft's Bid for Yahoo Is All About Big-Budget Brand Advertising" was the title of the article.
"But the good news for all of Google's rivals is that online advertising is about much more than search. The new battleground is display — the kind of graphics-intensive spots that were left for dead after the Internet bust — and the emerging category of video."

Great stuff. While I still think on the tech side they are going after those services, advertising is a major source of revenue. For any media owner (TV, PayTV, Radio, yahoo, etc), there are two main sources of revenue: Subscription and Advertising. Consumer Computing Services follows the Subscription revenue model whereas this article suggests that adverting - brand advertising in particular - will be the main source.

"... ultimately it comes down to advertising. Web advertising is in the midst of a metamorphosis. As television implodes, marketing chiefs are turning to the Net to create branding initiatives. They know you can't build a brand with little text ads that pop up next to search results."

I would have to agree with that, but search engines and content networks are more targeted rather than shotgun advertising approach.

"Web advertising, which passed $20 billion last year in the US, is expected to surpass $60 billion in four years, and display and video ads will account for more than a third of the total."

"mmmm... money" - says Homer.

So what would MicroHoo! look like in the brand advertising space?

"What Yahoo brings to the table is numbers: It is the world's most popular Internet publisher, delivering Web pages to nearly 140 million people a month in the US alone. Yahoo also delivers ads to a vast network of independent sites, increasing its advertising reach to 85 percent of US Internet users, according to comScore. Microsoft reaches 56 percent of the US Internet population through MSN and Windows Live, but it still lacks credibility with Madison Avenue. Put it together with Yahoo, however, and you have a scale that even Google can't match."

I don't disagree, but I can't help but refer back to the classic advertising problem of "Half of all my advertising is wasted. I just don’t know which half!" You spend money on brand advertising but you don't know what works because you can't always track people to the ultimate interaction with a brand.

But online brand advertising is soooo much more measurable than offline advertising --- with the right analytics tool - like Omniture. So the shift in ad dollars from offline to online will accelerate as the Google and MicroHoos get their platforms into shape.

Farecast sold to unknown buyer at USD75 million value

A) The only source of news for this (at the moment) is the Seattle Post Intelligencer. They seem to have gotten it first hand but no more info.

B) The CEO, Hugh Crean , declined to comment on Sunday.

C) Speculations - echoed by Hotelmarketing.com - is that the "one natural choice would be Expedia"

Well that was it for any "news", so let's spin up the rumor mill:

1) Expedia, Orbitz, and Travelocity all would love to get their grubby hands on this web property, but I think USD 75million is cheap. The FareCast founders would demand a higher price for their scruples. So I do not think anyone of them managed to charm this fair maiden.

2) Right on the FareCast website in the About Us section: "We Support Suppliers... We are committed to supporting airlines and hotels. We strive to help our suppliers lower distribution costs and build customer value." So going with an OTA is like "going to the Dark Side."

I think there are only two suitors that FareCast would not mind dancing with:

Firstly, the Kayak/Sidestep merged entity that I blogged about here and here. Together, they would make a potent force. What Kayak/Sidestep missed in their offering is what FareCast has: an algorithm and data to PREDICT fares. What a ménage à trois this would be. There is no inherent conflict of philosophy (be nice to suppliers). The three together would be a powerful meta search engine indeed. Powerful enough to demand ... say.. USD 1.5billion or so from the second possible suitor..... I'll give you a hint:

"Don't be evil."

Yep, if it's not Kayak/Sidestep, then it may very well be Google. FareCast's prediction engine is quite attractive and perfectly in line with Google's overall direction to foretell or create the future. The religious belief of "Don't be evil" can easily tie in with "We Support Suppliers" and wouldn't Google want to work directly with suppliers too? And what start-up would not want to join Google's work force and enjoy all the benefits that are tailored to this Gen-Y workforce?

Lastly, there is a "dark horse" that may be involved here. Remember bezurk.com? Remember that they "received investment from and sold a minority stake to News Digital Media, the digital media arm of Australia-based News Limited." And News Limited belongs to...

... you guessed it...

News Corp. Rupert Murdoch is gettin' in the game people. He can't let Barry Diller have ALL the fun with the travel industry. This charming, genteel old man may be able to convince the fair maiden that he supports her naïve belief of "We support suppliers", as New Corp does not have stake in any OTAs. We will have to see...

=====

Well that was a bit of fun speculation. I would say 40% chance that it is Kayak/Sidestep, 30% chance that it is Google and 20% chance that it is News Corp. The balance 10% are OTAs and whatever other flotsam and jetsam (i.e. vulture venture capitalists) out there.

Google & Friends need more power!

Alright remember the mentions in my posts about Google put buildings and server farms near powerplants? This was in Google vs MicroHoo? and in Consumer Computing Services.

Now there is evidence that Microsoft, Yahoo! and Ask.com have done the same thing along the Columbia River in Washington State, and Google is credited with starting this new "arms race".
Here is the article from Harpers with more details. It's entitled: "Keyword: Evil"

With a title like that, this article is obviously targeting Google's efforts. It is written by Ginger Strand who is the author of "Inventing Niagara: Beauty, Power, & Lies".

Google's recently announced plans "to develop a gigawatt of new renewable energy" is questioned as they also have many other negotiations to draw energy direct from the grid (near power stations) at a lower cost. The article also puts questions on Google's tactics of getting tax breaks, state givebacks and subsidized power: "YouTube is bankrolled by us."

Well, we ARE getting gmail, Google Docs, YouTube, Picasa, Blogger, etc without paying upfront. These things are worth something...

The "arms race" points to all these companies' need to "compete to offer software, music, and videos over the Web in the new era if 'cloud computing'."

"Even if Google offsets its own energy use with green power or carbon credits, it cannot guarantee that its competitors will do the same. The company's motto is perhaps due for an addendum: 'Lead others not into temptation'."

This is not realistic. It is capitalism no matter what their current or future motto says. They have to remain competitive and that means on costs as well as services.

This is a great article for highlighting these issues but there are no solutions. (Nuclear anyone?).

"American data centers consumed more power than American televisions." Scary thought, but less people are watching TV now right? And they are buying Plasma TVs and LCD TVs which hog up less energy.

SIDENOTE: Heard from the last Web Wednesday Singapore - "The new color of the Green movement is blue.".