Social Ads Have Good Click Thru Rates But Need Greater Inspection

Faccebook's capture of so much advertising display dollars is resonating round the advertising world. But how effective is that advertising when compared with other media?

On the face of things pretty well.

A study by appssavvy Social Media Consultancy shows this. But read the Press Release carefully. then decide if long term this is good or - perhaps not so good.

Cheers

TripAdvisor - Rational Decision or?

In February of 2010 Expedia's CEO Dara Khosrowshahi was busy denying the IPO or spin out of Trip Advisor. Oh what a difference a year makes. Announced today after the markets closed on the US East Coast Expedia Inc announced the split of the company into two entities.

it is interesting considering the parentage of Expedia as a Baby Bill spin off from Microsoft. Today Microsoft is struggling having fallen behind both Google and Apple in tech stock value. Perhaps it should split up... but I digress.

One can speculate as to what has been in mind with the future of the Expedia family - but someone needs to get value because the stock is getting its ass kicked by the smaller PCLN.

But what do the analysts say? Well the jury is out. The move has been expected for quite some time so in my view the value of Trip Advisor has already been factored in.

Quoting the first guy to come out and put out a research note on this who is Deutsche Bank's Herman Leung - he is being cautious and maintaining a short term value of $25 and says HOLD. He argues that the bears would have a 9x valuation at the low end to bulls who could go as high as 15X. Pretty broad spread but understandable. I wont steal his thunder.

In my view there is the devil you know and the devil you don't know. I concur with his analysis that TA's yields are better and therefore the multiple for the TA business should be higher than that of the residual transaction based business. It tells me that there is a certain fear that competing with PCLN on a direct basis will actually see Expedia's value drop in an apple to apple comparison. This may have been one reason why EXPE has been holding onto TA for so long.

Now that the company has done quite a few things to shore up their core business to wit:
Partnering in Asia Pac with Air Asia.
Using Cleartrip to power domestic India
Coming to terms with AA
Abandoning the pure GDS based supply model for Air

Now therefore would be a good time to give some opportunity to eke out some better equity value.

For Trip Advisor this is good. Steve and the team will now be free to ply their own wares. one thing to think about will be an Air Search engine. Will they go the me too route with Kayak with ITA or native ITA or will they be bold and go with a Vayant or an Everbread. Even develop their own directly or with a third party group.

The possibilities are broad and this can shake things up in search.

Of course one key question will be how they handle community with positive relationship with Facebook or will they try and challenge the Dentist's son's juggernaut.

Questions indeed

Cheers


With thanks to Strawberry Walrus website.

Forrester: Facebook Stumbles on Commerce

Perhaps Facebook is believing its own BS. http://blogs.forrester.com/sucharita_mulpuru/11-04-07-will_facebook_ever_drive_commerce the research firm is cautioning that Facebook doesn't get commerce.

In this blog article Forrester Analyst Sucharita Mulpuru lays out why she is bearish on Facebook making a success of its own F-Commerce. But she admits that there are many ways to skin this cat.

But Dan Rose, Facebook’s vice president of partnerships and platform marketing, discussed the appeal of its social ads at an event Wednesday in Austin, Texas.

“When I raise my hand and say, I like Einstein (Bros.) bagels, and then one of my friends sees that ad, they’re going to see my name in that ad,” Rose said. Through Facebook’s partnership with the media-research firm Nielsen, “we found that when my friend’s name is in an ad, I’m over 60% more likely to remember the ad, and I’m over four times more likely to purchase the product,” said.

“This is word of mouth. This is word of mouth at scale. This is what, as marketers, we’ve always been trying to bottle up and find a way to take advantage of, and the social web is finally allowing us to do that.”

But Forrester’s Mulpuru said she found that offering promotions in exchange for people to “like” their page were ineffective because most people “liked” companies just for a discount. I have written frequently about this Pavlovian response to offers and promotions. As I wrote yesterday - this is where you not only eat your own dog food but believe that your poop doesn't stink.

Though companies theoretically show up on the news feed of their Facebook fans, the analyst said companies are unsure how frequently or prominently their posts do show up on the feeds.

“When retailers put like buttons on their product-detail pages, are they really thinking?” she said. “Your competitors can see what products are more liked than others. Are you exposing your sales information? So why would expose this information?”

Still, Mulpuru said Facebook could help some companies, such as those that sell digital media and goods, such as video-game maker Zynga. Businesses that run on “flash sale,” or limited-time sale, model are also well suited for Facebook, she said.

In my view trying to see this as a way to determine your value as a brand on Facebook using the Fan or Like assessments is like trying to gauge your success as a parent by your kid's School scores.

Start being real people!!!

Cheers

PANDA... A Clue into the Minds Of the Googleplex

In the last month I have written two pieces on Google's PANDA algorithm "upgrade".

The first piece release shortly after the algorthm was released was from an analysis on SEOmoz. The second was an allegory of Google's behavior compared to Coke's ill fated "New Coke" launch from Webpro News.

Well folks - here is another one. iCrossing who describe their services thus:

"Travel to great lengths for your customers. Whether it’s online or offline, your customers want a great travel experience with your brand. Are you living up to the promise? Using iCrossing’s brand monitoring services and social network mapping tools, we can provide a comprehensive, up-to-date scorecard of what’s being said about your brand, and where. Then we devise a strategy to help you counter criticism and improve your image, or play up your strengths when you find customers are responding positively to an aspect of your business you hadn’t considered."

Amongst their clients in the Travel space are:

AAA
Bermuda Department of Tourism
Dollar Thrifty
Fairmont Hotels
Pleasant Holidays
Vail Resorts (including Snow.com)
Virgin Holidays

They have an interesting analysis on their website on how PANDA does actually benefit big brands. Their analysis is from two sectors - travel and banking.

Adding to the analysis WebPro News also pulled some archive video from the guy some of us like to hate Matt Cutts - who is the Googleplex's point man on search design.

My point however is to connect some of the dots. Google is position itself to be more attractive to the bigger brands for a reason. I don't believe that this is just happenstance. Smaller universe to control could be just one of the many possible reasons.

For Travel it means that the tight inventory of Web Real Estate is about to get tighter which in turn drives up costs and rates - AND revenues for the Googleplex

In my view the evolving vision gives the Googleplex everything it wants. Let's watch out - this could be a portent of things to come from Google.

Feb22 was no accident, and the favouring of big brands is a focused deliberate act.

Cheers

Are Social Media Adherents Looking for Love In All The Wrong Places?

I am beginning to think so.

A recent piece in eMarketer on Social Media entitled "What Brand Marketers Expect from Social Media Followers" tries to use some research to draw home the point that
"Brands place value on insights and loyalty, not spending"

Here is an excerpt from the article.

"How much is a brand fan worth? It’s a question some social media marketers have been asking for a while, but research suggests many are moving on from the search for a hard number.

According to a July 2010 survey of social media marketers by Millward Brown and Dynamic Logic, the most valuable aspects of social media brand fans go beyond anything with an immediate monetary value. Increased short-term and long-term spend on the brand were the bottom two results.

At the top of the list were the fan’s value as a source of insight and increased loyalty overall. Advocacy and engagement were also important to at least three-quarters of respondents"

Interesting. The conclusions drawn from the study doesn't make much sense to me. Perhaps I am too analytical. In my view this is not the smartest view. While experimentation is good and there are not good metrics in place - that is still not a good enough reason to trust things like the "Like" and "Fan" buttons.

I have said many times before that using the Fan numbers and the assessment of the "Like" button is ignoring the Pavlovian nature of the online consumer.

Time for us to grow up. As Facebook has just shown us with its privacy setting change - they can and will change the game... and frequently.

You have been warned. Look for love and reality in the real places.


Here is a 1979 Ad for Nike.

They Are Smoking Things At Sabre Central

A great post by Dennis Schaal of Tnooz today on the GDS Have vs Have Nots.

In case anyone should now doubt the airlines resolve to break down the restrictive and expensive nature of the GDS model - they can see now that AA was the one that pushed the envelope. Now it has its policy if not vindicated then at the very least validated.

So what of the other side of the argument? Sabre put on a brave face and proceeded to rubbish any idea that the AA+EXPE deal was anything but a reaffirmation of the GDS model. The Sabre Peep commented:

“GDSs already have aggregation technology — that’s what we do — aggregate content in one place,” St. Pierre says. ”We already aggregate AA’s content, along with hundreds of other airlines. As such, there is no need for a one-off direct connect.”

And this perhaps underscores the legacy GDS head in the sand approach.

Hello is anyone dealing with reality over there in South Fork (aka Southlake TX).

This is not about the single battle between AA and one GDS. It is about driving innovation in distribution and lowering the cost by reducing or better eliminating the hidden tax that the GDS fees impose on the consumer. It is about giving the consumer choice.

I find it hard to believe that Sabre doesn't get this. However I do believe they are actually harming their credibility long term by not coming to the market with pragmatic and more honest approach to providing the value to the intermediaries and the airlines.

Let's hope they try and treat the marketplace with a little more deference and give the travel distribution community some acknowledgement for having a brain.

Cheers

Migration for Magazine and Newsprint Players Not Fast Enough

This is a follow up to my piece last week...

It seems there is more evidence to support the stupid theory.

Like many things today - the explosion of online information - most of it free has changed the way we consume information. But we have yet to figure out the way to monetize this.

Well our friends over at eMarketer are not going to make you any happier with this piece. The expenditure in online consumption is not keeping pace with the loss of traditional media forms revenue.

I don't think they are going to ever get it. The stupid is that the publishers are trying to restrict the way we consume media on these new digital devices. In my view the lazy way is one use one device vs my preferred choice - and that of most people which is one use one user.

Consider this if you will. I have a portable form of a copyright material. I can play my CD or my DVD on any machine I choose (provided that it has the right play system on it!!!). Ditto for the prior issue of cassettes and vinyl. Today's media products are far more portable but some stupid publishers are trying to restrict how we consume.

Guys get with the program. You can do a better job than this. Don't kill the fatted calf.

Just my advice. Its free - you may now go about your daily chores.

Cheers

Hello Remember Me?

Yes this is about ME!

With thanks to the Baby Boomer Network for the image!

So this is not about you this is all about me today. Marketers in the rush to own the next gen of Digikids have been avoiding the Boomer Generation that has powered the growth for well nigh on 30 years. As we (yes I am one) start to leave the active market we are being replaced by a bunch of ADD scatty kids. Don't get me wrong - I love them.

However we do need people to remember us old timers. We still have a lot of clout and cash to spend. And we are willing to spend it (No matter what our kids and grandkids are thinking). That old story about he with the most toys wins, nope we are now into experiences. Travel we are going to keep on doing that till we just physically cant.

Cheers

Have You QR'd Today?

Almost everywhere I turn I see QR codes.

Seems I am not imagining things.

This remarkable piece of low tech is rapidly gaining traction. One of the key drivers is the Arrline 2D barcode application.

I believe we will see many other forms. With Apple's iTravel patent application trying to stifle market for Non Apple based technologies - this lovely piece of low tech is going to provide a wealth of opportunity to the general public. The adoption of smart phones and the growth of the print or physical presence of the QR code makes for a happy marriage.

Still Google is trying to get into the act by co-opting the standard. Don't put up with it. Just make sure that your applications can be read easily. The adoption will be fast and broad based. Check out this story in eMarketer.

Cheers

Boeing Sends A Chilling Message To Suppliers

In an headline article in today's Seattle Times Business Section a Boeing Exec is profiled. She comes from a storied family. Nicole Piasecki comes from one of the pioneers of Helicopters.

Today she sits in quite a powerful position at Boeing where she is a senior member of the team evaluating what to do next with the 737. Boeing has long since given up trying to convince everyone that the 737 just needs another tweak. I doubt we will ever see a Boeing 737-1000. But the new aircraft will likely be 797, the large diameter of the next gen engines has precluded anything along those lines. At the moment Boeing is trying a whole range of things out on the public. The most radical is that a little twin aisle fat albert replacement aka 787 lite is the one they are trying out on us.

Please read the article. There is a chilling statement/threat in the article despite the nice smiling face of the lady who was the subject of the article.

'Piasecki said Boeing will strive for a more exclusive relationship with future partners, suggesting that those who also do work for rivals like Airbus may lose favor.

"Some of our very close suppliers are spending a lot of time developing stuff for other competitors. They are spending resources on others, not on us," she said. "We'd prefer that they work with us, and ... share and invest in technology for our advantage."'

Clearly a message for anyone. It was not just aimed at Airbus but also at the Canadians (Bombardier), The Brazilians (Embraer), The Chinese (AVIC, the Russians (Sukhoi and others) and the Japanese (Mitsubishi).

The one moment of tension in the article was over the decision to sell Boeing Witchita. A series of questions she sidestepped neatly. The article goes "... she briskly moved on, saying she won't "second-guess decisions that have already been made."

Given her high position inside the Boeing hierachy the question of the next site for Boeing and the unstated issue of the S Carolina facility the article carries on "...
Piasecki said Boeing is studying the possibility of a high-volume aircraft production "supersite," where supplier fabrication plants making airplane sections would cluster near a Boeing final-assembly facility.

She said if Boeing chooses that route, it may set up more than one such supersite to mitigate the risk of having such a key complex subject to disruption by a natural disaster or a labor strike." A clear shot across the bows of the Washington State government and legislature not to mention the unions.

Given that Boeing has sold much of the land around the Renton plant - the chances that Renton will be the site of the assembly of the next 737 is about the same as American balancing the budget. Boeing will go the same route it went through with the 787 and probably string it out a lot. (Lot's of free lunches for Ms Piasecki and her team). Remember that Boeing got to do this twice. Once for the Everett Assembly and then for the "2nd line" in S. Carolina.

"Hello, Boeing, yes Ms Piasecki please ... this is the state of Alabama calling...."

Cheers

Did You Get Spammed Today?

Like many people - I am probably on about a squillion mail lists. So today the revenge of the mail list.

Epsilon who provides email list server services to the whole world was hacked. Congrats to Tivo for being first to act. The others have been not so swift. So I am getting the mails coming in at a rate of knots.

for more on this topic go here.

So now you know!

For my readers outside the USA - let this be a lesson to you. Maintain your own email list.

Cheers

Low Cost is Killing Bus Traffic In Brazil

Gol which is the largest Low Cost airline in Brazil and together with TAM carries the vast majority of the Country's domestic traffic came from humble beginnings. It was the idea of the son of one of the largest coach providers in the country.

As you can see from the diagram - the airline traffic overtook bus in mid 2008.


For the actual detailed chart please look here for the Portuguese language based version.

This is a classic example of how the world can benefit from air transport. However in my view the growth of the airline space will not come necessarily at the expense of the bus traffic. Our estimates are that the bus traffic will smooth out after a while and that will form the bedrock of the long distance coach traffic. Already we see the market evolving. However the achaic reservations systems and the complexity of booking online and fulfilling is significantly adding to the woes of the long haul operators. They need to rapidly change with new reservations systems and modern distribution attributes.

Without them - this chart will look a lot worse in just a few years.

Cheers

OTAs Could Suffer Further. With Ancillaries Airlines Start Rethink of OTA Partnerships

The key assumption that most consumers have is that the OTA of choice has full content. But we are beginning to see that this is not the case.

The much publicized battle between Orbitz and American Airlines and then Expedia and American Airlines has seen more examples join them.

We have Delta pulling out of several OTAs.

In the USA and other international markets the reach of the OTA is actually not as broad as most people think.

Let's take into consideration Southwest that doesn't participate in any OTAs. Then we have RyanAir who doesn't participate in anything.

So the actual reach of say Expedia and Orbitz in terms of product for Air is now less than 70% of available flights.

Subtly too not every airline participates fully in either the GDS nor the OTA. As we can see there have been a number of situations where the GDS provided content is not the complete content available to the GDS. Hidden Classes and restricted content further erodes the element of choice for a consumer in an OTA;s product line.

Most of this has been blind to the user with these product issues somewhat hidden both by the brand might of say an Expedia. But now there is a further impact as we see other vendors applying their muscle and rolling back participation in the OTA. The latest to do this is Enterprise Rentacar and their brands such as Alamo and National. Note that Enterprise is the world's largest car rental company.

In the past there have been some very public battles that were short lived. EG British Airways was not in Expedia when the OTA launched. That was eventually rectified. Holiday Inns was out of Expedia for quite some time - till it too joined in the fun.

It is interesting to note that both Orbitz for Business and Egencia can still access American Airlines product. The same is also true of OWW's CheapTickets brand.

However now the fall out of the lack of full participation is sending those who have signed white label contracts with the big OTAs scurrying to their lawyers to examine the contracts.

Case in point. Alaska Airlines who outsourced its Car, Hotel to a joint arrangement between iSeatz and Orbitz. As can be seen in this screen shot below. The image is a little small but click on it to see the full size and notice the Orbitz statement.

This comes from EasyBiz - Alaska Airlines business product.



Alaska must be wondering what it can do next. And many other white label customers who thought that outsourcing their product content to companies such as OWW (Orbitz) and Expedia was the easy answer.

Interestingly this started as a battle of convenience. The tech companies would give you a software solution and full service provision came from a partner such as a travel agent. OR you chose an OTA who did all the heavy lifting plus had better commissions (in theory) and it was a linked connection. With Ancillary Revenues now a high priority for the airlines, and indeed other vendors this is a hot topic.

Over time those commissions have lowered. Now with product coverage falling - this is a new order. Hmmm time to rethink that strategy.

Cheers

Congress Votes Down Baggage Amendment

Last night March 31st, Congress voted on the various amendments to the FAA Re authorization Bill. Formally HR 658. This was the final vestige of what the GDSs and the Open Allies had tried to get into the current round of legislation.

You can actually watch the whole event on Streaming video or just the summary.

Charlie Leocha who has a good pedigree of consumer advocacy was "incensed" Here is what he wrote today.

Consumer Traveler
Airline misrepresentation on Capitol Hill — for airlines telling the truth hurts
by Charlie Leocha on April 1, 2011
This is an email that I sent to staffers of members of the House of Representatives with whom I have met over the past months regarding the FAA bill and airline price transparency. I received a copy of the airline talking points for their House lobbying offensive. Needless to say, I was incensed. Then again, it is said that advocacy in DC is a full-contact sport.

You can find the full link here.

From the Congressional Record here is the formal results: (Hint - you have to read it from the bottom upwards). Here is the formal record

7:06 P.M. -
On agreeing to the Capuano amendment Failed by recorded vote: 187 - 235 (Roll no. 211).
6:26 P.M. -
UNFINIHSED BUSINESS - The Chair announced that the unfinished business was the question on adoption of amendments which had been debated earlier and on which further proceedings had been postponed.
6:17 P.M. -
POSTPONED PROCEEDINGS - At the conclusion of debate on the Capuano amendment, the Chair put the question on adoption of the amendment and by voice vote, announced that the noes had prevailed. Mr. Capuano demanded a recorded vote and the Chair postponed further proceedings on the question of adoption of the amendment until a time to be announced.
6:12 P.M. -
DEBATE - Pursuant to the provisions of H.Res. 189, the Committee of the Whole proceeded with 10 minutes of debate on the Capuano amendment no. 17.
6:11 P.M. -
Amendment offered by Mr. Capuano.
An amendment numbered 17 printed in House Report 112-46 to require greater disclosure of a passenger's baggage fees when a fare is quoted to an airline passenger and require refunds for baggage that is lost, damaged, or delayed. The Secretary of Transportation would prescribe any requirements necessary to implement the baggage fee disclosures by ensuring that necessary information is shared between carriers and ticket agents that have an already existing agency appointment or contract.

The bill is still in Congress and has to go to several places.

For my view of the proposition - go look at what I posted a few days ago.


Cheers

PS - the GWB image is nothing except a subtle dig at the previous Administration because they ducked this issue effectively.

Microsoft vs. Google: Valid Points Or Bitchiness

The noise against Google is starting to rise. The Professor has been pointing out some of the inequities inside the Googleplex that we who are outside it have been subjected to. That is disturbing.

Now it would appear that there is much more substance to these issues. We already have several US States - and probably the Feds too who are looking at Google's behaviour. But in my view one of the most succinct statements to come out has come from that darling of Governments - Microsoft.

The electrodes are out but I understand the strictures of what can and cannot be done inside a company that is under official investigation. For companies the sizes of Google and Microsoft this is a tough job to ensure compliance for everyone concerned.

Microsoft's arguments however are logical and specific.

I highly recommend that you read Brad Smith (admittedly not a tech head but a legal guy) on this blog entry.

It should give you cause to pause. There is no possible way that in pursuing the big mission: “Google’s mission is to organize the world‘s information and make it universally accessible and useful.” that you are not going to step on some toes. However coupled with "do no evil" this to me is just another one of a long list of failed promises.

Put into context the way Google is behaving has become - Organizing the World's information our way so we can make a boat load of money and screw everyone else. And Do no evil? well that translates to - we will avoid doing evil unless it gets in the way of our commercial goals in which case this is more important.

When I worked in Redmond - some people used to pillory the MS corporate credo about putting a PC on every desktop, itself a hark back to a chicken in every pot. Now we seem to have "a Google hand in every pocket."

What options do we have? Regulatory oversight is clearly one but not terribly effective. There is a better answer. Split the company up. Something that Microsoft should have done also a long time ago.

Cheers