Wednesday, July 02, 2008

The BOOT discussing content, Travel 2.0, online marketing and more

I have been working with the organisers of the upcoming eyefortravel Sales & Marketing in Travel Asia Pacific conference (July 29 and 30) on some background materials. Below if you are interested is the text of a recent email exchange/interview. In it I talk through a number of topics that will come up at the Conference including the content business model in online travel, loyalty, UGC, blogging and CRM.

Don't forget the BOOT competition for a free ticket to the conference.
Can also find a podcast I did with the organiser here.

(eyefortravel version of the interview is here)
Question:Earlier this year, you mentioned: interesting to see the Australian market having reached a new stage where a media/advertising supported travel business model is attractive enough to support expansion plans. Can you expand on the same?

BOOT:Online advertising in Australia was more than A$1.35 billion in 2007 (Q1 2008 was $385mm alone). On a per capita basis Australia is number two in the world behind the UK in online advertising based on data from PricewaterhouseCoopers and others. These stats prove that the online advertising money is there for content companies that can generate an audience.

How do you assess the battle among various online travel agents in this region, especially in the wake of consolidation in the last few months?

BOOT: The intellectual and operational challenge of competing in the Asia Pacific online travel market is that there is no one single, region wide answer to questions about facing off with competitors and associated consolidation. We have to look market by market and sector by sector. What is true in analysis for the online hotel business in Japan is not true for analysis of the online air market in Australia. But we can say this - the big four are all in Asia Pacific, in different ways and with different strategies. Expedia appears to be continuing the market by market slow and steady organic approach that proved a success in Europe (except for eLong and these rumours circulating around TravelGuru). Travelocity - again like their approach in Europe - has a multi-brand approach to the region based on a mixture of acquired, local and international brands. Priceline - in another European strategy mirror - is ignoring their initial efforts to launch the name your own price model and are instead focusing on an acquired online hotel region wide business (Agoda). I will leave it to others to comment on how Orbitz fits into that mix.

Question: Site performance and site scalability continue to be core issues for growing travel content providers as they focus on increasing their online bookings and building customer loyalty. What trends have you witnessed in this arena?

BOOT: If you want to seen online you have to be live online - all the time and with stability and security. These are now basic requirements. Environmental requirements. What is challenging now is that traffic is going up exponentially. In the past traffic growth came from more consumers coming online. Now it is driven by three factors - more consumers, searching more often and using tools that search even more often (ie meta search). Pegasus is talking about look to book ratios now on thier system of 250,000 to 500,000:1. If you want to be an online player be prepared to buy a lot of servers and a sophisticated network architecture. As to loyalty, the best way to build loyalty is to build trust, best way to build trust is to have the site work, give great customer service, great rates, great availability and market a brand that has meaning. In other words - old school delivery of customer expectations. I reject the notion that brand is dead but as I said in this post it just has a different meaning in the online world.

Question: There are advantages to increase UGC and video on sites as it will be beneficial in driving traffic through natural search, but at this stage the content must be unique as there is an enormous amount of content that already exists. What's your viewpoint regarding the same?

BOOT: Content drives traffic therefore content is good. This is the general rule but it is more complicated that this. I put together some rules for success for content companies (see here). I also put some thoughts here on the balance needed between UGC and editorial content. I also did some analysis here on the different approaches to content. Quick summary of all these is that while content drives traffic it is not enough to adopt a "write or collate it and they will come" approach. You need to have a functionality and consumer story behind the content.

Question: The travel industry is witnessing the emergence of "Travel 3.0 intelligent agents" such as UpTake's founder says the very success of the web 2.0 travel sites and content types is making the planning process harder for travelers. What sort of role do you foresee for such sites near future?

I have blogged at length about the challenge of "too much information" and discussed this with in a recent interview. It is clear to me in this phase of online travel that consumers are using the web to ask open ended questions for the first time (ie "where should I go next") rather than the traditional close questions of the earlier phases of online travel (ie "what is the cheapest price for a flight to Sydney"). The response to these open ended question is an avalanche of answers and information from a almost limitless range of content providers. Consumers need help sorting out the informed bloggers from the ranting idiots, the spurious fake reviews from the true user experience or the up to date editorial guidebook from the mothballed backpacker guide that still hasn't recorded the falling of the Wall. Am not yet ready to say that is the answer but there certainly is a need for indexing, searching and content management to help consumers sort through "too much information"

Question: An online travel agency recently launched a blog, powered by its employees. Should intermediaries or even suppliers look at driving audience from e-mails to their own web 2.0 sites like these and strengthen affiliation with the brand?

BOOT: a single editorial blog is a nice to have but not that significant a traffic driver. As good as a thematic blog like a Gridskipper is, it will generate nowhere near the traffic that a deep content initiative like a TripAdvisor will. My advice to companies is launch a blog but make sure you fully appreciate the low scale nature of it.

Question: CRM has taken new dimensions with the way the self-service technologies are integrating the customization to the customer's end. Social media can assist the customer in increasing awareness of what is available to them before the property or the airline familiarizes them with the options available. How do you assess the situation

BOOT: Consumers have always trusted word of mouth more than advertising. Social media is making word of mouth easier and faster to distribute. No one has figured out has to market properly to social networking . Then again this is no surprise as no one in the history of marketing has yet figured out the magic way to set up a guaranteed word of mouth generating campaign. People are looking for the magic solution and assuming that very soon we know exactly how monetize and advertising on social media. I am not so convinced. Instead I think we will see a continuous and never ending race as marketers try to catch up with consumers through word of mouth generating campaigns.

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