Revenue model still unproven for most web 2.0 companies

EFT's Travel Distribution Summit North America 2007 Special

Even for a travel and lifestyle community like Where Are You Now? (WAYN.com), which has nine million members, the company candidly acknowledges that revenue model still unproven for most web 2.0 companies.

For its part, in the recent past, WAYN is offering access to city content providing information for more than 325 cities in 70 countries world-wide with city guides via tie-up with WCITIES, has enhanced its offering by enabling its members to take full advantage of its communication tools, travel guide, trips and full search functionality, has signed an agreement with  Hostelworld.com and launched a new product 'WAYN Desktop', a downloadable application allowing users to manage their photos and get instant alerts to update them on their account.

WAYN's Co-Founder and Co-CEO

Peter Ward, who was recently in Las Vegas for EyeforTravel's Travel Distribution Executive Conference 2007, spoke about experience of dealing with consumers, UGC and much more in an interview with EyeforTravel.com's Ritesh Gupta. Excerpts:

As the online travel environment evolves especially with social networking inherently encouraging the sharing of information among the user community, how are the expectations and the attitude of the consumer changing accordingly?

Consumers are becoming ever more demanding, particularly in recent years, what with the explosion of the internet and online web 2.0 applications. Consumers are not only able to obtain, in most cases, relevant information, at the right place and at the right time, but they are able to contribute and learn from the knowledge of other consumers. This is changing the face of how both the travel market and consumers' general attitude when it comes to making an informed purchase or decision.

We have found that through WAYN, millions of our members are sharing their travelling experiences, tips and recommendations on the things to do and the places to visit, and in some cases, are even meeting up with people on the ground to make the most of their travelling experiences. We see a continued shift in the way that consumer habits are formed, which was perhaps first identified by the folks at  Tripadvisor.com , which has had a big impact on the purchasing decisions of hotel bookings once such consumers have taken the time to collect a variety of opinions from other consumers who had visited the same hotel in the past. We see things progressing, with our members looking to their friends for advise also, as well as new acquaintances, who have inspiring tales to tell.

Earlier, online customers were very forgiving. Today, they are demanding, value-oriented and seek results. What's your opinion regarding this?

We believe this to be a true reflection of the way things are today and increasingly so going forwards. This is particularly the case when running a social community as news can spread virally if users are not being treated with respect or they think they are being taken advantage of. It also means that we have to constantly come up with new and exciting features or benefits for our users to take advantage of, as otherwise, they will look elsewhere in the market to have their needs fulfilled. Here at WAYN we focus on the users' needs before anything else, as growth in the number of visits, usage and interaction of our community is one of the keys to our success.

Your online reputation matters hugely and you don't control the message. Communities can define your identity and your brand, and perceptions that are formed are resilient and lasting. consumers recommendations generate highest levels of trust, vis a vis channels such as brand websites and email signed up for. Where do you think this places independent UGC sites in the travel industry?

UGC sometimes gets some bad rep, because it can be difficult to regulate it and companies are frightened that their brands will be positioned in a negative light, or next to content that is in their perspective – inappropriate. However, in this modern era, a companies' reputation is often a reflection of how it conducts itself in reality, rather than in the advertising campaigns, and social communities provide such companies with a healthy barometer check to see what their customers really think of their products and services. Consumers are more savvy than they have ever been, and are more likely than ever to share their experiences with others within a community that they trust. What this means is that independent, and unbiased, UGC sites and moreover, communities, play and will increasingly play a vital role in the travel industry, by drawing a distinction not only on price, but also on quality of service, and ultimately, on what people "really" think about a travel destination, hotel, restaurant, bar or experience. The travel industry needs to wake up to the fact that the users are now in control and are armed with the knowledge to make informed decisions. By working with UGC and community based sites, not only can Travel Companies become better informed of what their customers want, but also, what they can do to improve their perception overall, and ultimately, encourage positive word of mouth about what products and services that they have to offer.

Consumers' involvement and scope of dialogue has changed.  They can help enable suppliers to build or break our brands. How strong do you think this involvement is currently and can suppliers afford to ignore this?

Currently, we are still finding that many companies within the travel industry are only just starting to wake up to the opportunities and challenges that this new environment poses for their business. We are increasingly finding more and more companies that are beginning to recognize this as an opportunity, and we are working with some of the leading travel companies in the world, to better identify how to engage with their consumers, and target others that fit with their brand ethos. Suppliers need to be open minded and think creatively when it comes to engaging with such companies and ultimately the consumers. With sites like WAYN bringing back 5 million unique visitors every single month, who have an interest in travel and lifestyle, companies cannot afford to miss out on the opportunity to inform the right impression.   

What new trends have you witnessed as far as suppliers integrating user-generated content systems into their websites and booking processes is concerned?

From what we have seen, many travel companies have partnered with UGC companies to extract the value of the content, whilst forgetting that for such content to really come to life, a community element is needed. Without the ability to actively engage with the users that are sharing their experiences, there is a huge risk of such content being hard to validate. Whereas, a community member that has vested time and effort to contribute and become an active participant in the community is much more likely to be credible and influential when it comes to others deciding who to trust and ultimately what to do. Some companies are experimenting with widgets on Facebook, which in our opinion, has its place, but has a danger of becoming diluted amongst a sea of alternative gimmicks and offerings. Others are syndicating the content to help increase conversion of their existing consumer base. This can certainly be useful, but again, without gaining access to a wider distribution of potential consumers, this will have a limiting effect. Having spoken at length with many leading travel companies, we have identified a number of needs that still need fulfilling and are currently in the process of developing the right infrastructure so that travel companies that may or may not have access to rich user generated content, will also have access to the community, and thus, bring that content to life.   

Is it easy to estimate what demographic do social networking sites appeal to? 

Yes it is, and often it can be surprising, to what many people expect. Over 50% of WAYN users are over the age of 35. We have adopted an over 18's policy and this has helped us to focus on the adult populous, unlike many other social networking counterparts, who see most of their traffic coming from the younger age demographic. Depending on what services are offered and what focus is made; each social network caters to their audience differently. Given that most people that travel and go out are 18 or over and to ensure that the quality of engagement is maintained, we found that adopting an over 18's policy was the right way to go. It also helps ensure that we do not have to deal with some of the issues that many other social networks face, in relation to child protection. We also have a good geographical spread, with ~20% of our members from the UK, ~20% from the US and Canada, and a further 25% from other large travel markets such as Europe, Australia and New Zealand. Interestingly, we are also experiencing huge growth in two of the most emerging countries in the travel sector, namely India and UAE (Dubai), which shows that the appeal for sharing travel experiences and meeting new people that have an interest in travel, is popular no matter where you are from.

 

A recent Jupiter survey revealed that 69% of consumers don't trust social media sites. What's your viewpoint regarding the same?

 

This is a very broad statement, which I do not agree to be the case when it comes to the travel market. If that was the case, Tripadvisor wouldn't be as successful as it is today. In addition, social media sites are just the conduit – it is ultimately the users that are in control and who inform opinions. In addition, where users can interact and engage with others, there is a greater propensity to trust the opinions of others – particularly when you are in the process of forging new friendships. In addition, we are much more likely to trust our friends, and this is where social media community sites come in to their own, as members can share their experiences with their friends and invite them to comment or even to join them on the trip!