February 2011 Archives

This is a guest blog post written by Martin Child, managing director of Webloyalty UK who reviews the prospects for 2011 on the back of the firm's Travel Trends research .

It has been estimated that British holidaymakers were set back £741 million by last year's volcanic ash cloud, not to mention the travel plans eschewed as a result of the icy winter , and the upcoming strikes planned by BA cabin crew.

All of this mixed with the after effects of the recession no doubt meant 2010 was a difficult year for online travel retailers, which means the pressure is on to start luring back their customers, who have since shied away from what was once seen as a necessary purchase - a holiday.

Budget airlines: an example for online travel retailers

The Webloyalty Travel Trends Survey by TNS Research International re-affirms what budget airlines already know - the majority of people are influenced by the cheapest ticket when choosing which airline to fly with.

Flying from the closest airport is the next most important factor, but the factor of least concern is loyalty. Less than 3% of travellers will choose an airline based on the fact it is who they usually fly with. Consumers are less brand-driven when choosing a holiday airline than when choosing a shampoo.

This is not just a challenge for budget airlines, but applies to the online travel retail industry as a whole. Travellers are likely to book with the cheapest provider, regardless of brand, and with such a narrow margin between the best deals - online travel retailers need their websites to be more effective in transforming browsers into buyers.

2011 - Year of DIY travel

Online shoppers can quickly and easily compare prices, research options and find the best value for their purchase. When it comes to organising travel, online is fast becoming the preferred way to purchase tickets and book ahead, with package holiday providers and travel agents no longer a necessity for many. 

The Webloyalty Travel Trends Survey showed that 39% are less likely to organise travel through a package holiday company, as a result of the collapse of many throughout 2010 due to the global financial crisis.

This may mean many consumers will be venturing online to book and organise travel for themselves for the first time in 2011 - and in such a competitive travel market, competing on price alone is no longer enough.

The challenge for online travel retailers

This poses an interesting challenge for travel retailers who need to drive repeat online sales and maximise online revenue, especially when fewer travel customers are influenced by brand.

So what could encourage travellers to book with one travel retailer over the other? In the case of budget airlines, the Webloyalty Travel Trends Survey reported that a more generous baggage allowance proves a compelling incentive for the majority, closely followed by a guaranteed seat, or accommodation if there is a severe delay.

Both these options require significant investment by airlines, and are not in line with the budget airline business model, which is why the next best incentive may prove the most effective: offering a discount voucher on the next flight booked would entice 36% of travellers to book with one budget airline over another.

Why cash back incentives and rewards programmes work for online retailers

The online travel customer is bombarded by internet marketing and advertising, so online travel retailers need to focus their efforts in 2011 on the 71% of Britons who intend to travel this year.

Something online retailers, especially those in the online travel sector, will benefit from is increasing the appeal of their websites by offering deals and vouchers. This is something budget airlines are already mastering, with Ryanair an example of how to make your value proposition central to all direct marketing and online communication.

By consistently achieving media attention for yet another way to save operating costs, they reiterate the same message that they only care about saving money.

Whether it is in the form of a cash back offer, a voucher for use on the next purchase or a discount at a third party online retailer - online travel customers, new and experienced, will want something that offers additional value to their purchase.

And online travel retailers will need to be more creative than ever in 2011 not only to position themselves ahead of the competition in terms of value, but to entice customers back to their site over and over again - encouraging loyalty on the back of a different and worthwhile value proposition.

Loyalty to come back from the dead in 2011?

Despite a tough 2010, online travel retailers should not lose sight of the importance of customer loyalty. Harder than ever to achieve online, consistency and a commitment to understand the customer is key to a lifelong relationship.

The research shows that low prices are the main reason for repeat customers. As mentioned previously, this alone is not going to be enough for the online travel sector in 2011, which is why other factors involved in the path to purchase should be considered to encourage repeat business:

Customer service: For the travel sector, this always comes under great scrutiny when things don't go to plan. Volcanoes, snow, delays and disasters cannot be predicted - so it is essential online travel retailers have capacity to deliver customer service to their online customers when they need it most. Multichannel customer service is essential for online travel retailers in 2011.

Keep it simple: Your online navigation should be logical, and user friendly, even for first time visitors. If consumers can't make their booking or buy their ticket easily, it doesn't matter how cheap your offer is - they want to get to the online checkout quickly.

Keep it relevant: Suggesting additional items for purchase along the way is a great way of increasing basket size and enhances the shopping experience. As an increasing number of travellers will organise DIY holidays in 2011, purchases will not be made in isolation: transport, accommodation and leisure activity purchases available online will inevitably converge as people want the best deal.

Online retailers that offer a wider choice of travel products (on a single site or via third party retailers) will find offering value, deals and encouraging loyalty much easier than those with a single proposition.

After a strong Christmas period, online sales overall look like growing steadily in 2011. For the travel sector, however, it is a case of re-building trust and loyalty to maximise online sales and reassure customers that online DIY travel booking can offer some of the best value, service and convenience.

Google may be one of the most controversial companies online today. The search leader has been accused of harvesting immense amounts of user data, breaking into unsecured wireless networks and simply being a monopoly.

It is also the largest and most recognised search engine on earth. That means that love it or hate it, Google is impossible to ignore.

This was the subject of one of the presentations at Travel Technology Europe. Dan Robb, Google's Senior Industry Head of Travel, took on Steve Endacott, Chief Executive Officer for On Holiday Group.  

The two focused on whether Google is a monopoly and if working with the search Giant is worth the investment. Endacott argued that Google was monopolising web search by buying up competition and using its dominant position to force advertisers to use its increasingly expensive service. 

The idea behind this argument is that, while there are other search engines out there, Google controls so much of the traffic that companies are forced to make it their default aria of focus. Robb countered, saying that Google's large market share was not a monopoly, but rather a product of being the best. He said Google offered the best search experience and that favoured it in any free market like the web.

Robb added that Google's Prices had, by and large, fallen and that the company was not overcharging advertisers for its service. While the two men argued over some of Google's practices Endacott admitted that Google had taken a very clever position. He said the reason they are a monopoly is that they are the best solution out there. 

This presents a very interesting situation for any company. While they may not like it, Google will be a part of every businesses marketing and advertising strategy for the foreseeable future.

Screengrabs from SEO blogger Leo Ludwig suggest Google has begun testing Boost in the UK.

The Google Boost service, now available in all major US cities following trials in late 2010, allows businesses with a Google Places account to set up a "set it and forget it" advertising campaign, running their Places listing as an ad on relevant Google searches and on Google Maps.

Boost ads show up under sponsored ads with a blue pin next to them, and include the company address and phone number. Users who click the ads will be taken to the business's location on Google Maps.

To set up the service, business owners simply choose their business categories, provide ad copy and set a budget. Basic ad performance metrics will be available on the Google Places dashboard.

Used alongside Google Tags, Boost could give location-specific travel and leisure businesses such as hotels the ability to advertise to a very targeted group, offer users deals and engage with potential customers searching in their area.

Writing on the Google LatLong blog, Google product manager Kiley McEvoy said: "We hope Boost provides busy local business owners with a quick and easy way to share information about themselves with the people who look for them online."

Google Boost also appears on both Android and iOS operating systems.

Most people with some extra cash and a borderline obsession with technology are looking forward to the launch of the new iPad.

The most devoted Apple fans will undoubtedly be camping out in front of Mac stores in order to be the first to poses what some consider the holy grail of gadgets.

While some will spend the night on the pavement, HotelsCombined.com has an alternative.

They have compiled a list of hotels closest to Apple stores, to help gadget fans avoid an overnight stay on the sidewalk [I'm from the US, so you'll forgive my choice of word here].

The list is broken up into three categories, Around the corner, Luxury, Budget and Trendy. Here is the full list for anyone interested in booking.

New York - Fifth Avenue
The iconic Fifth Avenue Apple store with its glass cube exterior and underground lair is a tourist attraction in itself. I heart Apple!
Around the corner + Luxury: Plaza Hotel
Budget: Flatotel Hotel
Trendy: Stay Hotel

San Francisco - Union Square
Once used as a rally point during the civil war, Union Square will once again bring the masses together on launch day.
Around the corner + Budget: Herbert Hotel
Trendy: Diva Hotel
Luxury: Four Seasons

Beijing - Sanlitun
Mainland China's first Apple store in the Chaoyang District, Beijing is located amongst some of the trendiest shopping, clubs and dining in the city - a perfect place to show off your new iPad!
Luxury: Ascott Raffles City Hotel
Trendy: Hotel G
Budget: Dongdan Hotel

Sydney - George Street
The George Street Apple Store in Sydney is the second biggest Apple Store in the world. The three floors of pure Apple goodness are enough to make even the most stoic fans shed a single tear of joy.
Around the corner: The Grace Hotel
Luxury: Shangri La Hotel
Trendy: The Establishment Hotel
Budget: City Lodge Hotel

Tokyo - Ginza
The Ginza store was the first to be built outside of the US and can transform into a giant fighting robot. (←That last part wasn't true)
Around the corner: Gracery Ginza Hotel
Luxury: The Peninsula Hotel
Budget: Ginza Capital Hotel

Paris - Opéra Store
At 130 years old, the Opéra store is one of the coolest, as far as we're concerned. Oops, we mean Le coolest!
Around the corner: Excelsior Opera Hotel
Luxury: Park Hyatt Paris Vendome Hotel
Budget: Hotel Prince Albert Opera

London - Regent Street
The biggest Apple store in the world and former home of Thomas Cook travel, the Regent Street Apple store has some impressive history.
Luxury: No 5 Maddox Street Hotel
Trendy: Charlotte Street Hotel
Budget: Hallam Hotel

Montreal - Sainte-Catherine
Renown for its art, music and culture, you couldn't pick a better place to get your iPad 2. Try not to spill any poutine on it, that'd be a real downer.
Around the corner + Budget: Quality Inn Downtown
Trendy: St. Paul Hotel

Frankfurt - Große Bockenheimer Straße
At not even one month old, the Apple Store in Frankfurt is seriously fresh.
Around the corner: Innside Premium Suites Eurotheum
Trendy: Goldman 25 Hours Hotel
Budget: Best Western Hotel Domicil

Zurich - Bahnhofstrasse
The Zurich store is the only Apple Store other than the 5th Avenue location to feature an underground floor.
Around the corner: Sorell Hotel Seidenhof
Trendy: Widder Hotel
Budget: Hotel Limmathof
Luxury: Dolder Grand Hotel

HotelsCombined.com said they hope this helps prevent some bleary eyes and sore backs.

Social networks are a big industry. They have billions of members, and draw more attention than nearly any other form of media.

That gets plenty of marketers and advertisers excited, but it can also pose a very real problem.

How can businesses monetise a social network? Many people have tried simple banner advertising, but that can be expensive and is more and more prone to ad blindness.

A new way of reaching an audience using social media is to incentivise customers not only to buy but to pass on deals to their friends. It is this sort of model that has seen Groupon become the fastest-growing company of all time in the US.

This is the idea behind On Holiday Group chief executive Steve Endacotts' latest venture, Share and Earn. . He presented his strategy in a debate with Google's Daniel Robb at this year's TTE. During their conversation, Endacott accused Google of monopolising the search market by buying up the competition. Robb countered that Google's dominance is due to its ability to provide superior service and that it welcomed competition.

While the two could not agree on whether Google was a monopoly, they both saw monetizing social media as a priority. For Endacott, that means proceeding with Share and Earn. He said, "We came up with the first personal affiliate scheme. What we are trying to do is incentivise our customers in a very simple low admin way to promote our offers. So we came up with Share and Earn."

The company sends out weekly travel offers to customers that can be viewed and shared via social networks.

Anyone can refer offers to a friend, and if that friend buys, the first person gets paid. This system takes advantage of personal recommendations which Endacott feels are the most influential to customers.

He said his company is not a replacement for Google [although the original name was Google Bypass until the search engine's lawyers got involved] but it does provide a way around the search giant.

"Companies have got to look at using their customers. Customer loyalty, if they rely on Google, is inherently going to be low because every time people put a company's brand into a search they get 20 other names popping up against it, unless of course you are a major brand and you can influence Google," Endacott said.

He believes people can use this social monetisation model to augment current paid search options and SEO.

The idea is to pay for successful referrals using the money that would have gone to Google. As Endacott himself conceded, this type of social monetisation is still in its infancy, but it could soon be helping companies tap in to the vast potential of social networks.

Last year at Travel Technology Europe the gadget everyone wanted to get their hands on was the Microsoft Surface, a furniture-sized piece of kit that, it was said, could revolutionise travel retailing.

However, 12 months on not a single one of these devices was on show on the exhibitors' stands - although the sort of touch technology it harnesses remains very much a key feature of much of what was on display.

Pic: Ergonomidesign (Creative Commons Attribution-Share Alike 3.0 Unported license)

Why? Because the meteoric rise of tablet computing, led by Apple's iPad, which is still not a year old, has changed the game completely for those innovative firms pushing at the bleeding edge of technology in travel.

The iPad app is now the must-have accessory for any aspiring travel technology firm and if you haven't got one of those you will at least be capable of demonstrating your latest developments on a 9.7-inch screen.

You won't meet a self-respecting travel technology executive these days who doesn't think that tablet computers will leave a lasting mark on the way travel products are marketed and sold in the future whether it's sofa surfers at home fed up of waiting for their lap tops to power up or customers already in destination planning that day's activities on the hoof, researching car hire deals ahead of an unscheduled day trip or looking for the best tapas in town.

What this technology has done has taken the coffee-table sized Microsoft Surface and placed it into the hands of your customers in a mobile format that takes the already familiar functionality of smartphones to the next level.

These devices are here to stay, the UK managing director of Traveltainment Andrew Nicholson assured delegates in a session in the Travolution seminar theatre at TTE on Tuesday. Traveltainment was among the firms to have wheeled out a shiny new iPad app at the show.

These personal devices are important because they dovetail nicely with another important trend being discussed, debated and demonstrated at the show, that of personalisation of the browsing experience.

Personalisation specialist LikeCube suggested 2011 could be 'the year of personalisation' saying most firms have had it on their road map for a good two years.

Director Emmanuel Marchal said: "Personalisation is in its early stages but it shows tremendous promise. This is the year for personalisation for travel companies wanting to stay ahead. You have to do it now because otherwise Google will become better than you at predicting what your customers do and do not like."

Another argument for personalisation came in a Travolution session presentation from Zolv's business development director Jonathan Greensted, who pointed out that while traffic is on the rise conversions are heading in the opposite direction.

This is putting ever greater pressure on firms to improve their conversion rates and reduce the waste of unproductive clicks and personalisation is seen as the way of achieving this.

Greensted was joined in the Travolution session by Tracey Cheffey, Yahoo!'s travel category director, who explained how it was working on personalised advertising designed to draw ever greater number of well-qualified potential customers to websites, the trick then is that those sites are optimised to convert those customers by displaying the product it already knows they are most likely to buy.

Interestingly, Greensted chose to demonstrate how not to do this by flashing up Travel Republic's website - hardly a firm that can be accused of underperforming in recent years as it rose to its pre-eminent position among the UK's top online travel agents.

But even it, Greensted argued, would find its performance enhanced by personalising the browsing experience on their website rather than setting it out as a we sell everything one-stop shop.

The race is on. As mobile internet, checking-in, liking and sharing is helping potential rivals to established travel industry players build up a gold mine of information on their customers can the industry grasp the opportunities that the data and content they already own to stay ahead of the game?

Following reports this week that IPv4 web addresses are running out, companies have been warned they need to ensure they are prepared for the new IPv6 system.

The transition should not affect individual computers as most new operating systems are IPv6 compatible, but it is important that every business makes sure its infrastructure is ready.

Anyone lagging behind may find their customers are not able to use their web service. That means it is important for every company to check that their email and web servers run both IPv4 and IPv6 or Dual Stack.

Secondly, businesses should discuss their IPv6 compatibility with their ISP and hosting provider. This will help smooth the transition to IPv6.

The change may seem a bit confusing but the reasons behind it are simple. Computers, smartphones, servers, websites and many other things require an IP address.

The current system of IP addressing, called IPv4, allows for about 4 billion addresses. With the web experiencing near exponential growth and a global population estimated at just under 7 billion, there simply are not enough IP addresses to go around.

That is where IPv6 comes in. It has been around since the late 80s and will provide 340 trillion, 282 billion, 366 million, 920 thousand, 938 -- followed by 24 zeroes web addresses - a nearly infinite number.

The move to this means people will continue to get fast and easy access to the web from any of their devices.  It is important that companies take steps to ensure they are compatible soon, as there are fewer than 5% of IPv4 web addresses left.

For most businesses, the change will be virtually seamless but it is important to be prepared.

Guest Blog by Peter Rowe, managing director of affilinet UK

The travel market was an early adopter of affiliate marketing and over the past decade, large aggregators in particular have played a key role in using it to drive sales and increase reach online.

As leads and sales generated for major travel businesses are traditionally heavily supported by external parties such as travel agents, affiliate marketing has naturally proved a great way to extend a brand's online reach.

As we enter the New Year, brands and their networks are continuing to invest time and resource in the ways outlined below to ensure that affiliate marketing offers value to businesses' bottom line.

Launching with a network

Choosing the right network will help to increase the reach of a travel brand, while diversifying the type of traffic the site receives.

Networks offer a more diverse set of sites that the travel brand might not have previously had access to. 

Working with third parties has been debated greatly in the travel sector, due to the small margins made on, for example, package holidays.

However, affiliate marketing challenges this theory by offering further transparency into which affiliates are driving consumers to a purchases and are then able to reward them accordingly. 

This information can be used to create more bespoke arrangements, while also optimising performance by rewarding those affiliates that are performing well.

Planning targeted deals online in the travel sector

A well thought out promotion online will help drive sales and retain customers. Leading publishers have been at the forefront of developing offers that attract real traction with consumers. 

Skyscanner, for example, offer deals of the day that are handpicked, making the affiliate more than just a comparison site, but also an additional online arena for consumers to find the best value for money.

In addition, a brand could work with some of the meta search and comparison sites to drive customers to destination specific offers based on their on-site searches - for example this could be a list of specific deals for the Caribbean that are presented to the consumer that relate to what they have already been searching for.

Call Tracking: connecting online and offline marketing

Marketing consultancies continue to urge travel brands to look closely at how they join up their online and offline marketing campaigns.

The major benefits of integrated campaigns is that they help to ensure consistency of branding for all campaigns and maximise return on campaign investment across the marketing mix.

In reality, recent research we conducted showed that less than a quarter (23%) of marketers have completely joined up online and offline campaigns.

New technologies are now however better positioning travel marketers to counter this trend in 2011 and call tracking solutions is one good example of this.

They allow affiliates to go beyond traditional online engagement and enable them to drive phone calls to brands' call centres. 

To do this for our clients, we generate unique phone numbers for individual publishers for use in their online promotional activities and on their websites.

All the numbers are trackable, so that there is visibility over which affiliate is responsible for each lead generated to the call centre.

This helps travel brands to optimise relationship with those publishers that prove the most profitable.

Planning and tailoring affiliate selection

Thinking intelligently about which publishers will provide the most sales and nurture leads best at different time is invaluable.

We have been working with Virgin Atlantic which has adopted a tailored and strategic approach to gaining as much return on investment as possible, by serving very specific and private deals for certain publishers.

By reviewing which type of promotions and publishers produce the best results in the past, the company has been able to build a clear picture of what type of publishers are able to offer the most business benefit from a particular deal.

This assists the planning process for the brand, the network and the affiliate alike to drive optimum ROI.

Brands in the travel sector, like any other industry, are continually looking at ways to improve sales online and keep the competitive advantage over competitors.

As affiliate marketing has established itself  as an important part of many travel businesses' online sales strategy, it will be those brands that can combine best practice of the basics with innovation that will continue to fly high in 2011.