Stories from TRAVELtech: contemplating the parallel inter-verse

I was at TRAVELtech last week wondering if there is a parallel universe on the internet (inter-verse) that I am not part of. In the Internet that I live in the following rules apply:

• Search: Not all my searches start on Google;
• Starting: Portals are not a starting point but might be a destination (ie Yahoo Finance);
• Creating: I am creating more and more content very day – but writing less and less on my blog;
• Reading: Newspaper sites are fading from view in favour of RSS and news aggregators; and
• Accessing: I am accessing the internet all over place – via my computer, my Apple TV, my Xbox, my blackberry and more.

Three presentations at TRAVELtech reminded me that many people online who do not adhere to these rules and therefore exist in a parallel inter-verse:

• Mark Higginson of Neilsen Online reminded me that a third of Internet users do not use social networks. For these users (and there are a lot of them) the Internet is not a place for inspiration or interaction. It is a functional place. A place to consume content, check details and make purchases. A place to do things and find things out, not to engage, share and...well... just hang out;
• Rohan Lund of Yahoo!7 says that Yahoo! is continuing to expand world-wide as a place for people to start on the Internet. That the portal is still as strong and steady starting point on the Internet for hundreds of millions of users; and
• Warren Livingstone (founder of the Fanatics) proved that the secret to community was tents more than tweets. That communities did not need social media that much to grow and foster.
  

The obvious question upon re-discovering the parallel inter-verse is whether or not it is a place in itself or is it just a staging area. Is it a place where newer users start their internet experience – only to soon progress to the "real" Internet or do these users stay in the functional and controlled parallel inter-verse that is about more than outcomes that experience?

The reason why this is important to think about is that if the parallel inter-verse is a permanent place rather than a staging area then online travel companies need to plan for a different future. I keep talking about a future for online travel around moving from transaction engines to recommendation engines. Around helping consumers move from answering closed questions ("how much for a hotel in Melbourne?") to open ones ("where do I go next?"). A future where some combination of the tastegraph and sociograph combine to make online social interaction as (if not more) rewarding than off. If the functionally focused parallel inter-verse is a permanent place then there is more than one future. A long term functional internet means product people spending time on retail efficiency and on site content products rather than recommendations and syndication. It means more off-line marketing and brand based marketing. It will mean more in website design and less in apps, social media and under the hood data work. My guess is the parallel inter-verse is temporary. That functional only internet use will fade away to be replaced by rules like my rules. What do you think? Is there a parallel inter-verse (or I am making stuff up) and do we have to rewrite the future of the online travel business to take account?

BTW - thanks to Brianam on Flickr for the photo. The context behind the sign (which he says is real) is that Universe St was closed and traffic was being diverted to Rainbow st.

TRAVELtech 2010: BOOT will be tweeting Tuesday #travtech

TRAVELtech 2010 is on this Tuesday in Sydney (Aug 31). Registration details here. I will be tweeting all day with the hashtag #travtech from 9am.

Speakers I am most looking forward to are

• Orbitz CEO Barney Harford and HotelClub President Jeremy Bellinghausen (but I am biased:) );
• Yahoo!7 CEO Rohan Lund on what their plans are with TotalTravel;
• Traveltainment boss Andy Owen-Jones on whether or not they are coming to Asia; and
• Chris Chambers of Tourism Queensland on a year on from the best job in the world campaign.

Let me know if I will see you there and follow updates from Tuesday via #travtech.

EveryYou: using Individuation in travel to target a recommendation of one

I have just finished presenting at TRAVELtech 2009 on trends in social media, mobile and my new concept of EveryYou.

There is a concept from psychology, economics and demographics called Individuation. I will dodge the Carl Jung and Neitzche inspired definitions and give you the short one – Individuation is the process in which individuals become differentiated from each other. I am seeing the theories of individuation coming into the mobile and social media space in travel and I predict that we will all have to come to term with this notion as we develop means for capturing consumer attention.

In a recent article in Theoretical Issues in Ergonomics Science (Sep2009, Vol. 10 Issue 5) called "Individuation: the N = 1 revolution" by P Hancock, G Hancock and J Warm say that...

"a continuing increase in computational power and associated memory storage capacities will lead to circumstances in which each and every single person can be coded as, and treated as, a separate individual and therefore not necessarily as a representative part of any group, sample or population"

This is the concept of Individuation that the travel industry can now embrace to target consumers on an individual level rather than through representative group samples.

In the past we have undertaken consumer planning through analysis of the average behaviour of a group of consumers. Individuation in this context says that once we have the right matching of technology and social trends we can move from tracking the average, generic profiles or demographic groups to at scale analysis of what Hanckock et al call “specific instances of momentary behaviour of one single individual”. This already exists in psychology, neuro science and molecular genetics where the combination of data, technology and social preparedness allows those sciences to be able to track and understand for the first time “how specific individuals perform their own personal and very complex acts of cognition” (Hancock et al again) rather than rely on averages.

In travel we can use these same techniques to classify and recommend at a level of EveryYou rather than Everyone. The reasons I am attracted to this concept have arisen through the technology capabilities that we now have and the community/social environment we are now in. Let me explain how this happened and why you should care.

In the early days of online travel we revelled in the data we were able to collect from customers but really we were only able to see that data in two dimensions – Breadth and Depth. By breadth I mean that we were able to use and collect data on more than one person interacting with the site and sometimes other sites. By depth I mean that we were able to track the different things that consumers did on the site. This allowed us to manage our sort orders. To bias the display based on consumer behaviour to help generate what we think are the best result for a basket of consumers.

In the last few years we have improved on this and added a third dimension to our data collection and analysis. We have added Context. The ability to see the inter relationship between the data we have on one person and the data we have on others. Through our actions, those of the consumer and other consumers we can link previously unrelated data based on the relationship between different people and past collective behaviour rather than one off activity. We have seen this in the complex CRM systems we have all bought and use every day.

The common theme with the first three dimensions is that we have collected the data from consumers “without their knowledge”. That is not as sinister as it sounds because we have regularly asked for consent. The fourth dimension is Community – which is data that is freely given to us by the consumer. Often unrelated to a particular purchase. And not necessarily for a tangible gain. Though there is very often an intangible gain. What are examples – writing reviews, forwarding links to friends, making recommendations to strangers, building online profiles, contributing to forums, writing a blog etc. The combination of these four dimensions of data can result in an individuated experience. An experience in online media, retail, or community that is unique to an individual but also part of a group experience.

We have seen this individuation in media already. Your twitter feed, facebook newstream and RSS reader list is different to any other anywhere. As the Digital Deliverance group said in their post "What are Individuated Media (What are the New Media)?"

"...the most widely used Individuated Media vehicle today is Facebook. Its more than 200 million consumers give it a mass reach that very few of the world’s Mass Media can equal, yet each of those consumers see different content than one another

Collecting four dimensions of data is not easy. It requires technology leaps in bandwidth and computer processing power - which we now have. The technology needed to allow us to capture and process the data is now matched with the desire of internet users to seek answers to open ended questions and contribute into a community process.

For us as marketers, retailers and media people it means we no longer have to be constrained to gear our marketing to EveryOne. Sure we developed demographic cuts and installed CRM systems to improved the targeting but we were still marketing to EveryOne in the hope of catching the individual. Now with the matching up of technology and social desire we can seek to market to the EveryYou.

The four dimensions of data and technology now allows us to do away with 30 years of econometric dependence on distribution, central tendency and variation – you know bell curves – and instead we can envisage the ability to research an individual at scale rather than rely on measuring their responses as part of a group or sample. Instead of seeing individual behaviour as a “variance” or “outlier”, we can aim to target Every combination of individuals. The EveryYou rather than EveryOne.

Here is my definition of EveryYou:

“The development of a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time”

The EveryYou concept I am working on says that technology and social change put us in a place where we can work on a recommendation of one rather than relying solely on generalisations.

EveryYou marketing and planning approaches are now available to us because of new developments in:

• Social trends that favour online interaction;
• technology innovations that provide organisations with the four dimensions of data; and
• scalability.

In the travel industry, EveryYou means we can answer the question “where should I go next” with a specific answer. We can answer the question which hotel should I stay in "Rome" with an answer that references past purchase behaviour, past reviews written, friends on facebook, people trusted, media read etc. That takes into account that human beings are a mess of contradictions in the things that they like and want. For instance I love the blues, Byzantine mosaics, bad zombie movies and body surfing. No bell curve can market to that.

Companies can treat users as co-researchers in developing a bespoke solution for their individual requirements. The user's needs are met by conjoining the company's expertise in travel and the user's expertise of themselves, thereby creating a tailored travel solution for one. Consumers are and will be willing to provide information on the understanding that it will eventually be deployed to their benefit.

If we use the technological capabilities and social trends available to their fullest potential then we can conceive of a day where we do away with general principles and customisation for the group and instead market to the apparent contradictions in consumer behaviour and aim for the delivery of specific, unique and targeted answers. We could kill off the head, body and long tail of sales and replace it with a sale of one, a market of one for the EveryYou.

Want to hear more? Stay turned to the BOOT as this will be the major area of analysis and work for me on the blog. You can also see me speak on this at WebInTravel October 20-23 in Singapore.

BTW - sorry to get all proprietary but this concept of EveryYou has been put together by me and all in the IP including copyright in it is mine.

Update - thanks to Paul Baron for a photo of me speaking



PS - anyone know how to turn it the right way round?

TRAVELTech 2009: Tomorrow in Sydney. BOOT to present on new concept for customer profiling and data collection

TRAVELtech 2009 is on tomorrow (Sept 8) in Sydney. I will be presenting under the topic "What’s Hot – Mobile and Social Media". I am going to present on a new concept I have been working on a how technology and social change have come together to give us a new way of profiling and marketing to consumers. If my own technology works I will post my new idea at the same time as the conference. If you are attending the conference please come by and say hi. My presentation is at 3.05pm. Will be posting throughout the day and twittering via #traveltech.

TRAVELtech: Travelzoo announce 1 million subscribers in Asia Pacific, 100,000 in Australia

Brad Gurrie - Managing Director for Travelzoo Australia announced today at TRAVELtech that Travelzoo in Asia Pacific have hit the 1 million subscriber mark with 100,000 of those in Australia. Offices now in Australia, Singapore, Taiwan, Japan and Hong Kong.

TRAVELtech: Global Review proves what we all knew - Consumers are almost impossible to predict

At TRAVELtech we heard from Karen Grinter of Global Reviews - a company that undertakes usability surveys. She conducted a survey with 98 users on their web searching actions to search tests:

1. Find the cheapest flight from Melbourne to Perth from Tullamarine, arriving before midnight and with check-in

2. Find the cheapest hotel in Brisbane, 5 mins from Botanic Gardens, with a pool and for less than $400 for two nights.

Here is a quick summary of the results of the survey:

Search: 47% started with a search engine

• 32% used the search engine via an installed search bar;
• 37% entered in a brand name, a large proportion searched a full URL in Google. In effect treating it the means for using a browser;
  
• Of these 18% clicked on a paid advertisement - the rest clicked on organic listings; and
  
• 0% (yes ZERO percent) looked at the second page.

Aggregaters: 44% went to an aggregater. In a specific Wotif Example Grinter noted that despite there being two places in the Wotif search results for the consumer to view a map. Not a single clicked on that link. Instead they left the site and looked to Google Maps or Whereis and sometimes (but not always) returned to Wotif to book. Consumers simply did not see the map links despite what industry people would view and very prominent links.

Suppliers: 6% went direct to a supplier (in the first instance) but 45% of aggregater visitors (in the case of the air ticket) indicated they would normally go from the aggregater to the supplier to book to avoid paying booking fees and because they trusted the results more.

Themes

• All about the first page in SEO
• Air aggregaters and buying traffic and losing sales to suppliers
• Consumers continue to miss buttons and tabs that we think are clear and obvious
  

TRAVELtech: World Nomads and Footprints - building a brand by giving money away

The story of World Nomads launching Footprints is an amazing one. World Nomads CEO Simon Monk shared the story at TRAVELtech.

World Nomads is an online insurance company that decided to add an optional $2 charitable donation into the purchase path. More of the story here but quick version is that not only have they generated hundreds of thousands of dollars in charity, they also opened up a marketing channel. The donations spawned a video documentary which spawned an in-flight video series and eventually a distribution deal with National Geographic. Money raised for poor communities and global branding and marketing paid for by travel media companies and airlines.

The latest iteration of this story is that now Footprints is a stand alone charity business with an API. Means that any company that does a deal with Footprints can have access to functionality to charge a $2 charity donating and join the program. They are targeting a very ambitious $1billion. Amazing stuff. Love it.

TRAVELtech: Stayz doing more than $100mm a year. Now valued at $36mm according to Fairfax

James Cassidy - the General Manager of Australian vacation rental listing site Stayz - put a rhetorical question to the Audience. Was it worth it for Fairfax Digital to buy Stayz.com.au?

Fairfax Digital Media bought Stayz back in 2005 for $12.7 million. Cassidy claims that if the same multiple at the time of acquisition were applied to current revenues then Stayz would now be worth $36mm. Here are some of the statistics he shared with us about the business:

• 2007 Transaction Value - $107mm (value off bookings generated for owner/listers);
• Grown from 9.000 properties to 23,000 properties; and
  
• site re-launch generated conversion improvements of 30-40%.

The other interesting comment was that Fairfax Digital had spent a lot of time building a network of links and cross referral points with other sites in the Fairfax Digital network (like newspaper Sydney Morning Herald and vertical classified sites like Domain.com.au). He admitted that this is not about traffic generation. In fact the traffic generation of from these links is very minimal. Instead the value was in the SEO consequences. The network of links from high traffic sites performing different but at least contextual activities is crtical to the SEO activities of Stayz. Cassidy is claiming 80% of the Stayz traffic comes from free/organic search. Supported dramatically by the link network effect of Fairfax Digital.

Assuming this is right it is an amazing story behind media group network effects. That internal banners and buttons and not what the network is about. Instead it is the html code driving links and search traffic. Sounds very close to some of the grey/blackish hat activities I have seen online from travel affiliate companies.

TRAVELtech: Webjet CEO Noon calls the AU market sales of Expedia, Zuji and more

Final speaker of the first session was Webjet CEO Richard Noon. Had a great slide that I was able to quickly copy down to share with you. He showed his estimation of the annual Gross Bookings of major full service OTAs in Australia. Here is that graph as I copied it.

If you are interested in the Australian turnover of Webjet, Expedia, Bestflights, Zuji, Lastminute.com.au, travel.com.au and online for flight centre check it out.



He prepared a formula using comparative page views and PhoCusWright estimates of the Australia online travel market. He took the page views of each of the players locally and then apportioned gross bookings from the PhoCusWright estimates of total Australian OTA sales.

Later during the panel session these numbers were put to each of the bosses of Zuji and Expedia.

Expedia AU MD Arthur Hoffman dismissed the $80mm estimate for Expedia saying that this was a very pessimistic view. That actual number was "far north of that".

Zuji CEO Scott Blume - "took the fifth" when asked about the $30mm estimate. Saying that they do not break out their bookings.

TRAVELtech: TripAdvisor China "on its way"

Arthur Hoffman MD Expedia AU/NZ took time to talk through a lot of the non-retail activities of Expedia in Asia Pacific.

The stories have already broken around the launch of localised TripAdvisor products in India and Japan. Hoffman when on to say that TripAdvisor "on its way to build a more local model in China". Will call that a pre-announcement.

He is convinced you need to incorporate content and retail. Not in a community fashion but in a targeted fashion - personalised for the individual consumer. Gave an example of the integration of the SeatGuru airline seat information into the booking path of Egencia (new name for Expedia's corporate travel agency).

TRAVELtech: Zuji firing in Asia on "most" cylinders

Next up at TRAVELtech - Scott Blume the CEO Zuji (Travelocity's operations in Asia Pacific).

Zuji ha been prolific in launching across Asia Pacific. Has spread the business through organic, acquisition and multi-brand approach. Organic in Australia, Singapore and Hong Kong through the Zuji brand, Organic under the Travelocity brand in India and New Zealand (though NZ used to be a relationship with an offline player) and acquisitions in Taiwan and Korea (Nextour brand). Blume said that he like this diversity in markets because

"When one country is firing, others aren't. Would love to have all 7 countries firing at once. Has not happened in in my tenure [as CEO]."

His biggest concern and view on the biggest challenges being faced by the industry are the dramatic increases in search costs.

TRAVELtech: Kicking off with stats from the Airport Economist

Fist in my series of live blogging from the TRAVELtech Year of Living Dangerously conference.
Opening session led by Tim Harcout from Austrade. Also known as the Airport Economist basd on this book of the same name. He is opening up the conference by giving us a view of the Australian economy and whether or not local travel companies should be fearing for the worst given the view from the US and Europe over economic concerns.

As Harcout described it, the world economy has "...gone from the sub-prime to the ridiculous". But Tim tried to reassure all that the Australia economy is almost unstoppable with the longest expansion in history with very low unemployment and very strong terms of trade.

The part I found most interesting from his entertaining presnetation was the statics that shows that departures out of Australia numbered more than arrivals in 2007 and so far in 2008 for the first time since trackings started. In simple terms more Australians are leaving the country to holiday/travel overseas that visitors entering the country. Does not mean a complete disaster for inbound players are there is still growth for inbound but for the first time the outbound providers have the upper hand in Australia.

TRAVELtech next week - see you there

TRAVELtech is next week, August 26 at Cockle Bay in Sydney. See you there. Martin has put together a great list of speakers. He has been kind enough to offer me a media ticket so will be live blogging at the end. Find me and say hi if you are attending.

TRAVELtech is coming: Year of Living Dangerously

Next up on the conference agenda is Martin Kelly's ever popular TRAVELtech. Martin has been kind enough to offer me a media pass. I look forward to real time blogging from the back of the room. Managed to pick up some very interesting stories last year. Conference is at the end of the month in Sydney - Tuesday, August 26, 2008 at Dockside, Cockle Bay, Sydney.

TRAVELtech: the BOOT presentation

I have had a number of requests for a copy of my presentation from TRAVELtech so here it is (pdf format). My post summary of my presentation is here and my general commentary on the conference is here.

Goes without saying that you are free to download the presentation and read it but the copyright in the work remains all mine and usage of it without my permission is poor form.

The BOOT in the press

The TravelToday newsletter has picked up some of my comments from TRAVELtech. Here is the quote

Tim Hughes, commercial director of Orbitz Worldwide/HotelClub.com, said internet users were now asking much more of travel retailers. From initially just wanting the cheapest flight, they now want more information, and are asking “where do I go next”, he said. “And the thing we have to do as retailers is try to figure out how to answer this open-ended question with technology,” Hughes said.

here is the link

and here is a summary of my presentation in a post

TRAVELtech: the travel industry against the applicance industry

TRAVELtech continues. Rod Cuthbert the CEO of Viator gave a great presentation earlier this morning. He have very few slides, instead relying on pictures of destinations and activities to tell his story.

A number of these photographs showed the tough side of consumer travel from the extremes of pictures of terrorism and panic to images of the drudgery of never ending lines at airports filled with despondent people wishing they were on holiday rather than going on holiday. From this he talked about how hard it is becoming for a consumer to travel. The uncertainty of arrival times, the challenges of travel in economy class, the need to varying degree to limit what you can carry on board etc.

When travel becomes hard, he argues, people start to look at their discretionary spend and think of alternatives outside of travel such as LCD screens, new generation games consoles and home cinema sound systems. Have no data to back this up but I agree with him. Travel used to look only to other forms of travel for competition (international versus domestic, retailer vs retailer, supplier vs supplier). Not sure what the solution is or how we open up our marketing to fight the Harvey Norman, Best Buy or Dixons of the world but it reinforces the need to keep the purchase and consumption process simple for consumers.

TRAVELtech: Hotelscombined - bringing meta-search and affiliate marketing together

TRAVELtech continued. Yury Shar gave a little more insight into meta-search and his company Hotelscombined. My earlier profile of them is here.

The interesting point from his speech today is not that he is generating good traffic - though he is with 450,000 visits per month. The interesting story is that his number one source of traffic is affiliate program. He shared that 38% of traffic is coming from a network of 1,500 affiliates (here is an example bellhop.com.au). Search is still critical with SEM ranking number two at 34% and SEO third at 20%.

I was working on the assumption that paid search and to a lesser extent SEO would dominate the traffic feed for meta-search. With no data backing it up was assuming that these would be responsible for 80% of traffic for a meta-search provider, not the less than 65% that Hotelscombined generates. Congrats to Yury of building this great affiliate network.

Yury also passed on this four tips for search engine optimisation marketing efforts:

1. Give yourself time - it takes 18-24 months for a start up to "prove" itself to Google as a legitimate content provider;
2. Design the site - design the site for both consumers and search engines. The site needs to be specifically designed to be shopped and indexed by Google. As he puts it - it is easy to design a site with great content that Google cannot be "seen" by Google;
3. Register and open a Google Webmaster account; and
   
4. Design a long term link strategy - Does not mean building fake links or becoming a hard core "black hatter" but working on links and traffic generation through content optimisation has to be part of marketing plans. For example making sharing of and imbedding of links by customers and easy thing to do.

TRAVELtech: Interview with Travel.com.au CEO Adam Johnson

TRAVELtech continued. Interview on stage with Adam Johnson the CEO of Travel.com.au the operator of both Travel.com.au and now the sole owner of Lastminute.com.au.

Couple of interesting metrics and number from the interview:

• The are now profitable (measured on monthly numbers). Recent full year financial results showed a loss but now profitable on a monthly basis;
• Expecting 30-35% topline and bottom line growth for FY08 - TTV of $130-140mm;
• Marketing spend will stay around 2.5% of TTV. All of this online, 80% of it likely to be on SEM;
  
• 15,000 hotel bookings per month; and
  
• 500k subscribers to newsletters on both brands.

He is very conscious that the area they need to work on is less around brand and traffic but conversion. Would not share numbers but admitted to be behind competitors on converting traffic into booking. As he says "need to focus on utility" around pricing, functionality and product.

Travel.com.au are celebrating their 10th year this year. They were one of the first in the world to do international flights online. Not that this is much to brag about. As Adam joked, "In the early days we had 100% of the online international fares market. All two of the bookings made were made with us."

TRAVELtech: the fourth phase of online travel - "too much information"

More from TRAVELtech. I talked some months back about my theory about how the short history of online travel can be broken up into three phases. For a quick recap here is what I said

Phase 1 (1995-2003) – I know where I want to go, find me the cheapest price.

Consumers treated online as a price based flight business. They knew exactly where they wanted to go from and to. All they wanted help on from an OTA was price. Not information, not help, not recommendations, just price.

Phase (2000-2006) – I want to find a deal on where to stay, can you help me with rates, availability and advice.

Consumers gain in confidence and cheap hotel deals flood the Internet. Consumers now begin asking OTAs for limited advice on finding and booking of accommodation.

Phase 3 (2005 – now) – what do I do next, where should I go next.

For the first time ever the consumer starts to ask an open ended question of the Internet. Instead of the specific questions of phases one and two where the consumer knew most of what they wanted to know - consumers gained the confidence, tools and networks to ask for advice from OTAs, "the crowd" and the Internet at large. "What do I do next?" Content started to drive traffic and sales like never before. Best available rates and set pricing from suppliers made it harder for the OTA to offer deal advantages.

In my presentation today at TRAVELtech I talked about my thoughts on the future of online travel - phase 4 going by my timeline. Here is what I said.

Phase 4 (2009 and beyond) - Too much information

Consumers begin to feel overwhelmed. They are searching sites with 50k, 100k and maybe 200k hotels (though a comment here says that the sites like HRS claiming 200k hotels are exaggerating a little). There are review sites with 20 million or more reviews. Social networks are producing hundreds of friends with thousands of recommendations. Emails, RSS feeds, SMS suggestions and more are flooding into consumer inboxes. Too much information!!

The challenge as we head into this phase is to take all this information and build a coherent story for consumers. My expectation (and hope) is that this will produce a return to the need for customer loyalty. For online retailers making a connection with customers that they keep through the development of loyalty programs - be they actual rewards, good deals, community building and other marketing and product activities.

The reason to care about this history is that it helps us in planning our products and marketing plans for the future. One of the downsides of a maturing industry is that growth in the traditional markets (US and EU) takes more work and greater innovation. One of the upsides is that we now have a history to look to in preparing of the next trend.

UPDATE - you can find a copy of the presentation here.