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Assessing the utility of mobile travel-related applications

The rise of smartphones with browsers which can both display desktop sites and make it easy for users to interact with them has been a significant development. The travel industry expects mobile usage to continue to increase as the browsers get better.

As more and more leisure travellers download travel-related applications on to their smartphones, one of the most intriguing questions facing travel service marketers today: how are travellers using these devices to plan, purchase and share information about both destinations and travel service suppliers?

According to the results of a new survey, around 19 percent have downloaded a travel-related application (app) to their smartphone.

The Ypartnership / Harrison Group 2010 Portrait of American Travellers survey, featuring 2,524 U.S. households, assessed the impact of the current economic environment, social values and media habits on the travel habits of Americans with an annual household income of $50,000 or more.

Key findings:

• Among them, nearly one-half have navigated a destination using the built-in GPS functionality (47 percent) or searched for the latest information on flight schedules and delays (46 percent).
• Nearly three in 10 have compared airfares or hotel rates (29 percent) or shared information or photos about their travel experiences (28 percent) using their smart phone.
• Approximately one in six has booked air travel or lodging (18 percent) or viewed a virtual visitor guide that provides information on things to do and see while visiting a destination (15 percent).
• Finally, more than one in ten (11 percent) has used their smart phone to download and redeem mobile coupons, while one in 20 (six percent) has downloaded an audio walking tour of a specific destination.

“Clearly, mobile devices are destined to play an increasingly important role in the distribution and sale of travel services in years ahead,” said Peter C. Yesawich, chairman and CEO of Ypartnership. “Both shopping and more real-time engagement in the discovery of what a destination has to offer are likely to rival talking and texting in the years ahead.”

Trend

An ever-increasing proportion of European smartphone owners are using applications – some 44 percent in May 2010 – with 64 percent of those who used a travel application having a smartphone. This growth, according to comScore, in all types of mobile application use offers an ever-broadening opportunity for the travel industry to engage with consumers in creative ways that deliver significant value.

According to comScore, the growth in highly capable smartphones in the market has helped to drive consumer interaction with travel services via their mobile phones: whilst accounting for only 25 percent of the installed base of active phones in Europe, 54 percent of consumers accessing travel services did so from a smartphone in May 2010.

The number of European consumers accessing travel services via smartphones grew by 125 percent year-on-year to May 2010.

Recently, in an interview with EyeforTravel’s Ritesh Gupta, Jeremy Copp, vice president, Mobile Europe, comScore, shared that around 26m European mobile users accessed maps on their device in May 2010, with the availability of free navigation systems fuelling a 100 percent year-on-year growth in this number. This increased use of mobile devices whilst travelling offers a growing opportunity for the travel industry to engage with consumers through their phones for marketing and to offer relevant, localised services.

“Our data shows that 9.8m Europeans accessed travel information via their mobile in May 2010, representing 4.3 percent of European mobile users. The most popular method of access is through mobile Internet sites with nearly 60 percent (5.8m) engaging through their browser. The next most popular access method is through SMS followed by mobile applications; European consumers were almost 3 times as likely to accessed travel services via a browser, compared to an application. However, accessing travel sites via application is growing fastest of the three methods when compared to one year ago,” said Copp.

Overall, according to Copp, there is significant growth in the use of travel planning and booking services by European mobile users – usage of Lastminute.com and Expedia combined grew 96 percent year-on-year to May 2010 but still only accounted for 1.2 percent of all mobile consumers. This indicates that there is still considerable opportunity for expansion in services for travel planning and booking via mobile phones.

Room for growth

In April this year, web analytics company Compete used its ability to field behaviorally targeted surveys to ask smartphone owners about their use of these devices for travel research and booking.

Most respondents said they do not currently use smartphones at all for online research (69 percent do not) and booking (78 percent do not). About one in four use both mobile and traditional computing for research and booking, with a greater share doing research on both vs. booking on both. But smartphones remain an additional tool, not a replacement tool as scant few respondents reported that today they do all their research and booking on mobile devices. As smartphones evolve and applications for them become more tailored, use for travel is certainly likely to increase. However, consumers may be most ready for post-booking help from their smartphones.

According to Compete, if the fastest growth in smartphone use reflects the desire for new, helpful applications, then post-booking use will evolve faster. This makes sense since it takes advantage of the combination of power and portability inherent in smartphones and needed when away from home. That also means that post-booking needs and related applications to address those needs will influence the ultimate adoption of pre-booking travel smartphone use and set user expectations around ease of use and performance.

Copp says there has been a significant growth in the use of travel planning and booking services by European mobile users – usage of Lastminute.com and Expedia combined grew 96 percent year-on-year to May 2010 but still only accounted for 1.2 percent of all mobile consumers. This indicates that there is still considerable opportunity for expansion in services for travel planning and booking via mobile phones.

Online Marketing and Social Media Strategies for Travel Summit Europe 2010

Jeremy Copp, vice president, Mobile Europe, comScore is scheduled to speak at the forthcoming two-day Online Marketing and Social Media Strategies for Travel Summit Europe 2010 (5-6, October) to be held in Prague.

For more information, click here

Or contact:
Gina Baillie
VP Global Marketing & Events
EyeforTravel
London, UK: +44 (0)207 375 7197
gina@eyefortravel.com

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Why do hoteliers need a robust direct online channel strategy?

Revenue “leaked” from the hotel industry to the OTAs in the form of abnormally high merchant commissions of 25 percent and higher will reach $5.4 billion in 2010, estimates Hospitality eBusiness Strategies.

HeBS’ chief eBusiness strategist, Max Starkov says this leakage must be stopped and reversed as it drains the hospitality industry’s bottom line and threatens the mere survival of the industry.

“With GDS and voice channels in perpetual decline, hoteliers do not have many options when considering non-OTA distribution channels. The only viable option to drastically reduce reliance on the OTA channel is for the industry to embrace the direct online channel,” Starkov wrote in a blog posting.

“Hoteliers need a robust direct online channel strategy, accompanied by adequate marketing funds, to be able to take advantage of the steady growth in the Internet channel and shift from offline to online bookings in hospitality due to declining GDS and voice channels. Hoteliers must carefully employ ROI-centric initiatives, including website redesign, website optimisation and SEO, paid search, email marketing, online display advertising, and proven social media and mobile marketing initiatives.

Starkov further explains how this billion dollar leak turned into a multi-billion dollar drain, reaching a staggering $5.4 billion in 2010:

The Billion Dollar Leak: Experiencing an Unbearable Industry Drain All Over Again

The OTAs heavily rely on the hotel industry for the bulk of their revenues. For example, hotel bookings contribute to a little over 30 percent of the OTA global gross booking volume. At the same time, hotel bookings contribute to more than 60 percent of OTAs commissions/booking fees!

In its SEC filings, Expedia acknowledges that over 60 percent of its revenue comes from transactions involving the booking of hotel reservations, with less than 15 percent of its worldwide revenue derived from the sale of airline tickets. To clarify, over 54 percent of the OTAs’ U.S. domestic reservation volume (44 percent of the OTA global gross booking volume) comes from selling airline tickets, and yet airline ticket sales produce a paltry 15 percent of Expedia’s revenues.

In other words, hotel reservations are financing the OTAs’ operations and allowing the OTAs to “make a killing” by reaping billions of dollars of abnormally high merchant (wholesale) commissions, and to survive after they stopped charging airline ticket booking fees.

In its 2007-2010 SEC filings, Expedia provides a crystal-clear confirmation that the billion dollar “leakage”, first discussed by STR back in 2003, continues in full force and at much higher levels.

Over the last several years, revenue “leaked” from the hotel industry to Expedia in the form of abnormally high merchant commissions has been increasing every single year. This “leakage” exceeded $2 billion in 2007 and reached $2.3 billion dollars in 2009!

This leakage is estimated to reach $2.7 billion in 2010, based on the results from Expedia’s first six months of this year and the rate of increase of 14.65 percent over the same period of last year.

To summarize, the $2.7 billion dollar “leakage” in 2010 is only the damage caused by Expedia. Expedia has an approximate 50 percent market share of the OTA market. If we calculate for the rest of the OTAs (Travelocity, Orbitz, Priceline), the total leakage in 2010 will reach a staggering $5.4 billion dollars!

What Can Hoteliers Do to Overcome this Massive “Leakage”?

Hoteliers must realize that a) the OTAs will not surrender their dominant position voluntarily, without putting up a fight (we repeatedly witnessed this after the end of past economic downturn), and b) increased travel demand, the beginning of which we are starting to notice, does not automatically translate into higher occupancy, ADRs and RevPARs: hoteliers must be more proactive and creative than the OTAs and the competition to get a “bigger piece of the pie” (increase market share and benefit more from the growing demand).

There are a few other important industry developments to be taken under consideration:

• GDS Channel Is in Steady Decline: GDS hotel bookings via the CRS of the top 30 hotel brands declined by 3.7 percent in 2009 vs. 2008, and constituted only 23.6 percent of the total brand CRS bookings last year (eTRAK). In Q1 2010 GDS share from total CRS booking dropped to the all-time low of 22.7 percent.
• The Voice Channel Contribution Is Decreasing: Voice channel hotel bookings via the CRS of the top 30 hotel brands declined by 2.9 percent in 2009 compared to 2008, and amounted to 22.2 percent of total brand CRS bookings last year (eTRAK).

In other words, hoteliers do not have many options when considering other non-OTA distribution channels. In our view, the only viable option to drastically reduce reliance on the OTA channel is for the industry to embrace the Direct Online Channel.

Many hoteliers claim they cannot afford to market themselves via the Internet and that is why they resort to the OTAs since their services are “free.” The following case study shows why the OTA channel not only is not “free”, but is far more expensive than the Direct Online Channel and why focusing on the Direct Online Channel provides meaningful savings that go straight to the bottom line:

Case Study: How to Add Half a Million Dollars to the Bottom Line

A hypothetical New York City Hotel with 200 rooms, 77.2 percent average occupancy rate, an ADR of $215.14 in 2009 (STR), and 45 percent of bookings being made via the Internet will incur the following distribution costs (using the industry average 60:40 direct vs. indirect online ratio):

• Cost of Direct Online Channel Distribution: 7,608 bookings x $12.92 = $98,295

(Cost per booking via the hotel’s own website, including website hosting and maintenance fees, advertising spend, campaign management fees, and Omniture analytics. Based on 530,000+ bookings in 2009 via hotel websites from HeBS’ full-service hotel client portfolio)

• Cost of Indirect Online Channel Distribution: 5,072 bookings x $107.57 = $545,595

(Calculation based on a hypothetical NYC hotel of 200 rooms @ 77.2 percent average occupancy rate = 56,356 roomnights/2 nts average stay = 28,178 bookings total, of which 12,680 are Internet bookings (45 percent of total bookings). Direct online bookings = 7,608 (60 percent) and Indirect Online Bookings = 5,072 (40 percent))

If the hypothetical 5,072 OTA bookings are instead made via the direct online channel at $12.92 each, the bulk of the OTA distribution cost, namely $480,065, would go directly to the hotel’s bottom line ($545,595 – $65,530, i.e. 5072 bookings x$12.92=$480,065). This is nearly half a million dollars added to the bottom line. Name one hotelier who would not have liked that in 2009!

Across the industry, in 2010, Direct Online Channel sales will exceed 60 percent of total online hotel bookings. In Q1 2010, 71.7 percent of online bookings for the top 30 hotel brands were direct via the brand websites, while 28.3 percent were via the indirect online channel i.e. the Online Travel Agencies (OTAs).

The ultimate goal for the industry should be as follows:

• Major hotel brands: OTA contribution (including agency, merchant and opaque model) should be kept below 15 percent.
• Average for the hospitality industry: OTA contribution (including agency, merchant and opaque model) should be kept below 25 percent (the level the indirect channel has traditionally had for many years, even before the Internet).

There is no doubt the Direct Online Channel provides hoteliers with immediate results in the current economic environment as well as long-term competitive advantages. The Direct Online Channel must always be at the centerpiece of any hotelier’s Internet marketing and distribution strategy. Travel consumers booking via the hotel website (direct customers), are more loyal, bring in more revenue and tend to travel more often.

What should hoteliers do to improve their direct vs. indirect online channel exposure?

Business Objectives:

• Maintain strict rate parityacross all marketing channels and maintain a best rate guarantee.
• Create unique product offerings and provide unique value proposition via the hotel website.
• Engage your customers directly via social media and mobile initiatives, and Web 2.0 features and functionalities on the hotel website.

Marketing Objectives:

• Focus on direct online channel marketing initiatives with proven ROI to increase market share and generate incremental revenue via the hotel website:
• • Website re-design and web 2.0 optimisations
  • Search engine marketing (SEM)
  •  Search engine optimisation (SEO)
  • Email marketing to the hotel opt-in list
  • Multi-channel marketing initiatives, promotions and contests
  • Social marketing: Facebook, Twitter, Flickr, YouTube
  • Mobile marketing via mobile website, mobile SEO and mobile marketing initiatives
  • Strategic linking and online sponsorships
  • Launch online marketing initiatives, addressing your top business segments and feeder markets.

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Google’s “reach” is declining: study

Recently, the Yahoo! and Microsoft Search Alliance rolled out its first big change to the public – Yahoo! organic search results are now driven by Bing’s algorithms in the US and Canada.

As web analytics company Compete points out for every search a consumer conducts on the Yahoo! engine, one can see the small but powerful words at the bottom of each SERP: “Powered by BingTM”.

In its recently analysis, Compete chose to look at Bing and Yahoo! as separate engines before the landscape changes.

(This data is purely for web search, and does not count a contextual link or a slideshow frame advancement as an additional query).

Overall in July, the search market continued its recent trend, with Google losing slight market share to Bing. The one notable shift in recent trend is that Yahoo, for the first time since January, increased its share of search queries in July.

• Search query volume across the 5 engines increased 2.0% from June to July, with both Bing and Yahoo seeing the biggest M-O-M volume increase.
• While volume on Google increased slightly, its share of the market declined by -1.1%. Yahoo and Bing both increased their share of the market, with Yahoo experiencing its first share increase (+3.0%) in 2010 and Bing steadily continuing to increase its share for 4 months in a row.
• The volume of queries originating from paid search is up slightly from June, which is reflective of the fact that paid ad spend has been increasing overall.
• In July, Google gained the most benefit from this industry-wide paid search ad spend increase.

New set of metrics

One new set of metrics that Compete is introducing goes beyond looking at the search market by volume and share, but measures the reach (number of people that are conducting searches) and the stickiness (average number of searches per person) per engine. Again, these numbers do not include queries conducted on vertical search engines.

A few observations about the number of people searching and how much they are using search:

• The number of people searching on Google has declined steadily during the year, staying steady in recent months. Google’s “reach” is declining.
• Some of these searchers may be going to the other engines, but it’s more likely that people are using vertical search and mobile search more and more.
• Although Google may be seeing fewer unique visitors searching on their engine, the number of searches per person has steadily increased during this year. So Google is becoming stickier for those that still use it.
• While Bing saw a decline experienced a slight dip earlier in the year, it has risen steadily since March. Bing searchers are conducting the most searches per person in July than all of this year. More reach and more stickiness.
• Yahoo has been fairly consistent in its reach, but for the most part, Yahoo has experienced a decline in the number of searches per person.

Travel sector

Google is highly valuable as a source of traffic to key U.S. industries, according to a recent analysis by online competitive intelligence service Experian Hitwise. Search engines continue to be the primary way Internet users navigate to key industry categories and this includes the travel sector, too.

Google accounted for 71.43 percent of all U.S. searches conducted in the four weeks ending August 1, 2010. Among the top three search engines, Google delivered the most visits to the four categories below year over year. Google’s percentage of upstream traffic grew for the Automotive, Shopping and Travel categories.

Bing saw double-digit growth in four categories - Automotive, Health, Shopping and Travel - including an 84 percent increase in the Shopping category.

Challenge

Earlier this year, in an interview with EyeforTravel’s Ritesh Gupta, Google’s head of Travel, Retail and Automotive for South East Asia, Sajith Sivanandan, highlighted that users are expressing a preference through the queries they input while searching.

He added, “To me, delivering the best available, the most compelling offers exactly at the time of searching continues to be the biggest opportunity that both search engines and providers (suppliers and aggregators) are preoccupied with. The biggest unsolved problem therefore becomes this: how can we reduce the time to perfect fulfillment of the users’ online travel needs?”

Approach

Traditionally, online has been held to a much more stringent metric than offline channels and it is often bought with a very fragmented approach.

Barbara Pezzi, director of Web Marketing & e-Commerce, Fairmont Raffles Hotels, says she doesn’t find SEM any more complex than offline advertising.

“We do not have a blanket approach when it comes to SEM and ROI targets are set based on each property needs, budget, location, and other unique criteria. Portfolio bid management (same bid rules for a group of properties) would only be in place if the same person owns a set of properties and has requested for the campaign as a whole to have a certain ROI target,” she says.

Travel Distribution Summit North America 2010

EyeforTravel is scheduled to conduct a session about the current state of the search landscape as part of its forthcoming Travel Distribution Summit North America 2010 event, to be held in Chicago (13-14 October). Rob Torres, Managing Director of Travel Vertical, Google Inc, and Krista Pappas, Global Director & Head of Business Development, Bing Travel at Microsoft are among the speakers scheduled to take part in this session.

For more information, click here

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Amadeus highlights the strength of its transaction-based model

Amadeus has witnessed growth across both distribution and IT business areas this year.

Both the Distribution and IT Solutions businesses have contributed to the company’s strong performance figures during the first half.

Revenue in the distribution area increased by 9.8 percent, rising from €944.9m to €1,037.0m. Year-on-year first half total bookings increased by 8.0 percent, up from 214.9m to 232.1m, and the volume of air travel agency (TA) bookings increased by 9.8 percent, up from 183.0m to 201.0m.

Amadeus says it has also maintained its global leadership position in market share of travel agency air bookings overall during the first half of 2010.

The IT Solutions business continued its growth record by increasing its revenue 20.9 percent during the period, increasing from €248.0m to €299.9m. Passengers Boarded (PBs) increased by a very strong 47.2 percent in the same period, rising from 104.6m to 153.9m as contracted airline migrations were completed successfully.

During the second quarter of 2010 compared with the same period in 2009, Amadeus continued to deliver strong results with an increase in adjusted net profit of 21.3 percent, up from €97.3m to €118.0m, an improvement in total revenues by 10.4 percent from €610.6m to €674.0m, and a rise in EBITDA by 14.2 percent from €242.0 to €276.5m.

Commenting on the first half results, David V. Jones, president & CEO of Amadeus, said that year-on-year total revenue has grown by 11.9 percent to €1,379.3m, along with an increase in EBITDA of 19.9 percent to €556.7m, and the adjusted net profit has grown by 38.0 percent to reach €246.8m.

“These results are underpinned by an encouraging growth in distribution bookings compared with the same period last year, coupled with the continuing evolution of our IT business. Our transaction-based model is both robust and profitable, and has shown that it can quickly benefit from a recovery in travel worldwide,” said Jones.

The group operates a transaction-based business model and processed more than 670 million billable travel transactions in 2009.

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Facilitating the inspirational and functional aspects of planning a holiday

IN-DEPTH: Interview with Justin Reid, head of Online Marketing, VisitBritain

By Ritesh Gupta

UK national tourism agency VisitBritain considers its website, VisitBritain.com, to be its main platform for communicating with its customers, focusing on serving up dynamic and personalised content tailored to the country the visitor comes from and written in their language.

The site is a key part of VisitBritain’s digital strategy using social media, online content and mobiles to enthuse potential visitors to Britain.

In July this year, the agency unveiled its new website. According to the agency, with 95 percent user generated image content throughout, the engaging new version of visitbritain.com will provide an immersive, multilingual online experience, including the latest social media platforms and magazine-style travel features.

In order to know more about the new site and how social media is being made an integral part of the digital strategy, EyeforTravel’s Ritesh Gupta spoke to Justin Reid, head of Online Marketing, VisitBritain. Excerpts:

VisitBritain recognises that social media has become crucial in the way families decide which holiday to go on, and so syndication and aggregation are enabled within the new site so that all content is available across a wide range of travel sites and blogs. How do you think social media features are being embraced today to fully tie together the inspirational and functional aspects of planning a holiday?

We have almost inverted our online pyramid, previously all our activity was aimed at driving all traffic to our website and ensuring it lay at the hearty of everything we did.

However, in-depth research showed us that long haul travellers primarily arrived at a National Tourist Board site after they had made the decision about where to travel. We therefore had to ensure two things:

1. Our website was aimed at converting interest into action
2. We had to start putting content into the online arenas further up the decision making process of the consumer. i.e. syndication via Yahoo! Travel and the like, and of course embracing the opportunities made available by social media. Where relevant we would bring these back into the website as feeds / teasers but only in a conversion capacity – i.e. best photos from Flickr etc.

The best social media outreach usually engages multiple departments within an organisation, ranging from marketing to product to engineering to editorial. How do you assess this approach towards nurturing a team and a culture?

First thing we did when starting our social media work was to set up a Global Working Group made up of all regions around the world and representatives from every department. This ensured we got not just buy in, but also covered all bases in terms of corporate and consumer thinking.

A key point was to get the CEO on board as well – luckily we have a progressive thinking CEO Sandie Dawe, who endorsed the project from the start, and we shot a short video that the whole company could view, giving them pointers as to what we were doing but also how they could help. De-mystifying the aura of social media and also removing the taboos of being active on those platforms. http://LoveUK.us/31

How can one ensure that when it comes to social media, the entire organisation is working off the same goals, language and to ensure focus and resourcing?

Involve everyone and share the goals out amongst the organisation. Social media is inherently fun, travel and tourism is inherently fun, we should thrive on combining the two.

Earlier this year, in an interview with EyeforTravel, Orlando/Orange County Convention & Visitors Bureau shared that as far as social media implementation is concerned, it has taken the team approach enlisting visitor services, advertising, interactive marketing, publicity, corporate communications and promotions to work together to maximise the medium. How do you assess this approach?

We are currently working under the guidelines that the main social media channels are an “inspiration” engine rather than a booking engine. As we build up trust with the online communities then they will in turn trust our more overt commercial messaging. But this can’t be rushed, trust must come first, then commercialism second. One key asset going forward though will be the harnessing of local pride and passion about tourism products, we need passionate ambassadors for the local UK products championing their regions / products in the social media arena.

Which is the best way to go about the transitioning phase? How should one go about actually implementing a social media strategy or the launch of various social media platforms, accounts or tools?

Don’t rush it. Think about your resources and goals and look for a balanced approach. If you can’t be all things to all people then focus where your strengths are and where you can have most cut through. Anyone who tells me “we’re waiting to find out what the next Facebook is before we jump in” is missing the point entirely. Facebook isn’t a passing fad, it’s a way of life.

How should one go about controlling the content, monitoring and feedback in case an organisation has multiple offices or divisions?

We went for one central account, globally fed but centrally led in each of the main social media platforms – Facebook, Twitter, YouTube, Flickr and “blogging”. Have a rough content plan to guide you but be topical. Encourage debate and let the community guide you where you want to go in terms of future planning. Its no good have a 6 month content plan that focuses on “Cool Britannia” if your first 5 post generate no comments but you find that whenever you post about Cream Teas you get huge spikes of interest. Let the customer / fan / consumer guide the content, not try and force it the other way around.

Online Marketing and Social Media Strategies for Travel Summit Europe 2010

Justin Reid, head of Online Marketing, VisitBritain is scheduled to speak at the forthcoming two-day Online Marketing and Social Media Strategies for Travel Summit Europe 2010 (5-6, October) to be held in Prague.

For more information, click here

Or contact:
Gina Baillie
VP Global Marketing & Events
EyeforTravel
London, UK: +44 (0)207 375 7197
gina@eyefortravel.com

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Google asked for more information about ITA acquisition

Search giant Google has acknowledged that it has received what’s called a “second request”, which means that the U.S. Department of Justice (DOJ) is asking for more information so that they can continue to review the deal with ITA.

Providing an update on the status of its ITA acquisition, Google’s senior product manager Andrew Silverman wrote: “While this means we won’t be closing the deal right away, we’re confident that the DOJ will conclude that online travel will remain competitive after this acquisition closes. In fact, over the past few weeks online travel companies have noted that they have alternatives to ITA’s product.” Silverman referred to Expedia’s Best Fare Search alternative and Worldspan’s e-Pricing search technology. There was a reference made to a media report, in which Continental Airlines noted that “there are alternatives to the [ITA] shopping solution in the marketplace, both internally and externally”.

“While we of course hope to continue working with ITA’s current customers, these comments demonstrate that competition will remain alive and well. We’ll be working cooperatively with the Department of Justice as they continue their review,” wrote Silverman.

“While we think this acquisition will benefit travellers as well as those seeking their business, we know that closer scrutiny has been one consequence of Google’s success, and we said that we wouldn’t be surprised if there were a regulatory review before the deal closes.”

According to a report filed by FT.com, Google has already been through protracted inquiries into two large advertising acquisitions, most recently its purchase this year of mobile advertising service Admob. The report added: The Federal Trade Commission had competed with the DoJ to see which agency would take on the case, according to one person familiar with the process. A DoJ investigation has been seen in some circles as potentially setting a higher hurdle for Google to clear, since the FTC cleared its earlier acquisitions of Admob and DoubleClick. However, David Balto, an antitrust expert not connected to the case, said that the prospects for the deal were unlikely to have been affected by the choice of regulator, and predicted that the acquisition would ultimately be cleared.

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FareCompare introduces When-to-Fly airfare alerts for iPhone

Airline ticket comparison shopping website FareCompare has released a new iPhone app, When-to-Fly.

The FareCompare When-to-Fly Airfare Alerts iPhone app alerts its users in real-time when prices change to destinations worldwide.

The application pushes real-time airfare deals directly to users’ iPhone in real-time, up to six times per day.

Key features:

• Real-time notifications when prices change on one’s favourite trips
• Getaway maps showing prices to US, Caribbean and European destinations
• Share deals with friends via email, Facebook and Twitter
• Deals from home airport and airfare search

FareCompare has worked with mobile travel applications specialist Mobiata, headquartered in Ann Arbor, Michigan, for this initiative.

According to a report filed by annarbor.com, the app is free, so there’s no sales revenue to be split between Mobiata and FareCompare. The company’s spokesperson described the relationship as “managed mobile development” and “mobile as a service”.

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Creating a unique personalised filter by using machine learning and leveraging semantics

IN-DEPTH: LikeCube’s co-founder Eleanor Ford talks about machine learning, a technique that can complement or even disrupt more traditional marketing communication strategies, and how the same is signalling the beginning of a new era in online travel.

By Ritesh Gupta

One of the critical steps in shaping up true one-to-one marketing communications is related to organising, analysing and segmenting the database.

Many companies make the mistake of rushing through these strategic steps in order to implement the tactical portion of their marketing plan. This is termed as a critical mistake.

A one-to one marketing communications plan is a 360-degree examination of the customer: their intent, motivations, demographics and psychographics, geography, media consumption, as well as transactions.

Desires aren’t static

A strong understanding of the target customer base and the product catalogue is certainly a must have, but it is also important to acknowledge that people’s desires aren’t static, says LikeCube’s co-founder Eleanor Ford.

Ford says they evolve and change rapidly, faster than the time it takes to do a manual analysis and segmentation of a marketing database.

“As an example, a customer may be, within the same month, looking at planning a family vacation for the summer, searching for a romantic weekend gateway, and booking a business trip all from the same website. He might also be reviewing restaurants and sharing comments about an exposition he saw while sharing his location from his mobile, which says a lot about who he is. How does your one-to-one marketing strategy accounts for this? Clearly, there is a need to become much more agile, dynamic and holistic,” pointed out Ford, who is scheduled to speak at the forthcoming two-day Online Marketing and Social Media Strategies for Travel Summit Europe 2010 (5-6, October) to be held in Prague.

“I think communication should be based on the context, the search and the journey – e. g. how one’s taste might change or evolve over time. It all comes down to finding the right stuff for that person at that moment in that place. It’s about narrow-casting communications in real-time. Database segmentation alone can’t address it any more.

New Era

Ford says the opportunity lies in the amount of user generated data, which is exploding (e. g. ratings and reviews, likes, check-ins) thanks to mobile phone and social media platforms.

“We are at the beginning of a new era in online travel, the one of machine learning, which can complement or even disrupt more traditional marketing communication strategies. LikeCube uses machine learning and leverages semantics dynamically understanding what people might like at the moment they search, creating a unique personalised filter through which they can see what’s most relevant to them,” shared Ford.

LikeCube uses two types of data:

• Meta-data (categories, attributes, tags, etc) and,
• User activity (ratings and reviews, check-ins, buying history, wish lists, searches, click-stream, etc).

The company says it can personalise a site using any combination of the above data. This means solutions like when a user searches for a type of product (e. g. romantic hotel in Paris), results in only products that LikeCube’s algorithms estimate a user will like.

Assessing the maturity level, Ford says travel personalisation is still in its infancy.

She added, “One can look at Amazon which has spent 10 years on personalised recommendations for books and products and is now certainly reaping significant benefits from it - about 30 percent of their revenues come from products recommended by their engine -, but many people still complain that it isn’t good enough at predicting all types of products. So there is plenty of room for growth.”

“However, the travel industry is an agile business sector often keen to gain advantage through new technologies and creative solutions which is why this business sector has been one of our key focuses in recent months,” said Ford.

Machine learning - algorithms that use data to infer behavioural patterns and predict things - is highly dependant on the amount and type of data available.

“We are seeing an exponential growth of data at the moment that can be used in different ways to learn about people and places, and this involves identity, location, actions and things that are yet to be even thought of. With that growth will come smarter and smarter applications, that are truly sci-fi in terms of service delivery, understanding, intuition,” Ford said.

Online Marketing and Social Media Strategies for Travel Summit Europe 2010

LikeCube’s co-founder Eleanor Ford is scheduled to speak at the forthcoming two-day Online Marketing and Social Media Strategies for Travel Summit Europe 2010 (5-6, October) to be held in Prague.

For more information, click here

Or contact:

Gina Baillie

VP Global Marketing & Events

EyeforTravel

London, UK: +44 (0)207 375 7197

gina@eyefortravel.com

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Encouraging customers to pass on details of holiday offers via social networking

A new referral marketing platform that promises to improve brand visibility and gain prospects for customer acquisition by reaching out to friends, families and followers of existing customers on different social networks has been launched.

Called rumbido, this new offering would allow hotels, airlines and OTAs to expand their reach on social media channels and convert buzz to sales, according to travel technology company RateGain.

RateGain has emphasised that rumbido allows businesses to engage and reward their customers as they emerge into brand ambassadors and open up a new and cost efficient channel of distribution.

The launch of rumbido coincides with its first client partnership with Holidaynights.

For its part, On Holiday Group, the parent company of Holidaynights, shared that it has developed a new technology called “Google Bypass”.

The group plans to use this to eliminate the “click costs” it pays to Google, as it estimates that each time it sells a holiday via Google, it receives 75% of commission costs, reported ttglive. So rather than paying Google in click costs, it wants to reward the loyalty of anyone that circulates its holidaynights.co.uk website on social networks and via email.

It has emailed a unique referrer ID to each of its existing customers, prompting them to spread the word on social networks, such as Facebook and Twitter, and emails. It will then pay individuals £25, via PayPal, each time one of their referrals leads to a booking on holidaynights.co.uk.

Steve Endacott, On Holiday Group chief executive, reportedly claimed that “Google Bypass” was the UK’s first “personal affiliate scheme”.

Endacott highlighted that the power of personal recommendation is a proven concept within the Internet.

“Who could be better advocates for your brand than your customers? Rumbido allows Holidaynights to take the money it normally pay Google for clicks and give it to customers who’s recommendation result in sales. Hence it’s a triple win solution with customers, their friends and Holidaynights all gaining something from the process, be it a great value hotel or a exciting new distribution tool,” he said.

The money will be paid to customers via PayPal. OHG said it had carried out user group research and found the scheme to be the preferred method of payment.

Trend

The travel industry believes that social media has a lot of untapped potential in planning and travel booking. Social media has radically changed the landscape to the benefit of consumers and the industry has at times found it difficult to keep pace and understand how best to use it.

New initiatives are being taken to bank on the potential of social media. Recently, Delta Air Lines and Minneapolis, Minnesota-based Alvenda “officially launched the travel industry’s first ecommerce capability on Facebook”. Facebook users will now be able to book flights with their friends directly on Facebook.

At this juncture, it is being felt that the power of social media and the capabilities of the traditional online travel booking and planning channels will co-exist. As consumers move through the travel cycle to be inspired, shop, book, travel and share, they use a variety of sites to meet their travel needs. Social media is one of the many tools consumers use to make their travel decisions, so it is not expected it to take the place of traditional online travel channels. However, when used correctly, it is a good compliment to the success of existing channels.

In a recent interview with EyeforTravel’s Ritesh Gupta, Doug Miller, Global VP, Media Solutions, Expedia, said, “I don’t believe that social media will “nudge ahead” of travel booking and planning channels. Rather, search, social and commerce channels will become more and more complementary, and new partnerships will form, as intention signals accelerate to fuel online media and commerce. The signals of “here’s the travel I want” and “here are the people I know” will find new ways of working together to improve travel planning and booking. Travellers get more relevant offers and travel marketers will discover new opportunities. These models are coming around the corner.”

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VisitOrlando.com opts for Travelocity booking engine

Online travel company Travelocity and the Orlando/Orange County Convention & Visitors Bureau, Inc. (Orlando/Orange County CVB) have formed a strategic partnership.

Orlando/Orange County CVB stated that by adding Travelocity booking engine brand to its site, the organisation is now allowing consumers to utilise VisitOrlando.com to research, plan and book their trip all within a “trusted” one-stop shopping online environment.

The agreement follows an extensive review process of a variety of online booking options.

According to Travelocity, the focus of this partnership with the Orlando/Orange County CVB is to ensure that Orlando travellers continue to find “great values” and help them in optimising their budgets.

The booking engine will launch in early 2011 as part of a complete VisitOrlando.com website relaunch effort.

The new site aims to reinvent the VisitOrlando.com online experience, with more user functionality and trip planning information and services, along with numerous other enhanced features.

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