Digital Street Smarts

Optimizing Digital Presence for Restaurants

2012-03-26T10:49:00.002-04:00

Today we will look at suggested frameworks for optimizing ratings and reviews for restaurants. These thoughts build from a previous post that you can find here. As always, I would like to start with suggested objectives for restaurants. Some of these are universal, and others particular to the industry:

Increase visibility
Increase quantity of reservations and walk-ins
Increase quantity of delivery or take-out orders (basically this is e-commerce with brick-and-mortar delivery – a concept worthy of its own post)
Increase per-guest spend
Grow loyalist audience
Meet needs of non-consumers (such current/potential franchisees and employees)

While the previous post described the important role that reviews play when making restaurant selections --a review optimization program can increase visibility and improve conversion rates-- reviews obviously are not the only factor in the decision-making process. Here are other fundamental decision points that can factor in:

Distance
Franchise or local restaurant
Guest is a local or a visitor
Price
Standard restaurant characteristics such as cuisine and atmosphere

Optimization efforts should assume that patrons often need more than just a good review and that these other factors can sometimes play an even more important role. For example, let’s look at the relevance of reviews for local restaurants vs. franchise restaurants:

This framework tells us that…

Patrons rely on reviews less for franchise restaurants (because there is a higher likelihood of the patron experiencing the restaurant previously, even in a different locale).
Patrons will rely on reviews and ratings more for non-franchise restaurants, however, because less is known about them.
Optimization: For non-franchise restaurants, a review optimization program is particularly important. Franchise restaurants should not ignore reviews, however. While the cuisine, atmosphere, and price points are well-defined by the brand, reviews can help individual franchise restaurants to differentiate themselves in categories like service.

DMW have defined a full collection of frameworks for restaurants, but let’s look at just one more for today’s post:

This chart describes the waning influence of reviews for restaurants that are increasingly farther from the patron. This concept is hardly a breakthrough in its own right, but how do we optimize for it? Answer: Ensure that your venue is optimized for local listings in Google places/maps -- for both traditional and mobile web. Addresses should be as consistent as possible in all online mentions of your venue so that Google and other search engines to display your venue consistently and accurately to patrons.

The big picture with restaurants is that there are several important opportunities for optimization, and most of it is in mobile + reviews and ratings. In a later post, we will zoom in on how social media can work to support restaurants’ objectives.

A Universal Index for Measuring Social Engagement

2012-02-24T16:10:00.000-05:00

When talking about social media, the conversation usually focuses around two broad strategies. The first is to work in the medium as a pure social channel, where engagement metrics define success. The second is to treat Facebook, for example, like a traditional broadcast medium, where the focus is really on the size of the fan base and brand-sourced content.

While I believe that many brands preach the former but practice the latter, even the most well intentioned organizations face an uphill battle when trying to determine the success and value of their efforts in social. Social ROI, for example, is too often judged by direct conversions, and I’m not sure this is the right metric (especially as Facebook commerce struggles as a whole). At the very least, attribution reporting, which tracks how various points of contact contribute to a final conversion in any channel, must figure into the picture of social ROI (See the “Assisted Conversion” report in Google Analytics for an example). Either way, it is an important discussion that deserves a deeper dive in a later blog post. For today, let’s set it aside and focus instead on the concept of metrics for social engagement.

There exists a common core flaw in the metrics that are generally used to measure engagement. The flaw is that nearly all reporting I see is based on raw counts of engagement interactions. Examples include the quantity of Likes, Shares, Retweets, etc. These metrics would all be fine if we consistently worked with the same quantity of followers, but we don’t; as adoption of social channels and mobile devices continues to climb, it is a safe bet that even the most dysfunctional brands will continue to attract more followers. In other words, even brands that hardly try will see their fan bases increase and, as a result, their raw engagement counts grow.

Here are two specific challenges inherent in using raw counts for social engagement:

Inaccurate performance comparisons between two time periods like year-over-year or month-over-month
Relative inability to compare brands or competitors of differently sized fan bases

In a nutshell, what we need is a universal metric that would give an apples-to-apples comparison for engagement performance, regardless of the size of the fan base.

The good news: I’ve got one that works especially well for Facebook. DMW calls it the Facebook Engagement Index (FEI). It is a simple but powerful metric that allows regional amusement parks to compare themselves to Walt Disney World, for example, and for brands to measure their engagement efforts vs. the same time last year. The concept is to measure engagement by “per fan metrics” instead of raw counts. That is, divide the raw engagement counts by the quantity of followers. What you wind up with is a consistent range of percentages that universally defines social success (or failure) in Facebook.

We have been using FEI with our clients for about two years now, and have recently begun monitoring other brands as well. I usually find that an FEI index of 2% to 4% counts as “average”, with an index of 6% to 10% counting as “very good”. I occasionally see brands reaching an FEI above 10%, but this is uncommon and almost always temporary.

So what can we learn by using the Engagement Index? For starters let’s compare Engagement Index over time against quantity of fans. In the past two years, DMW has learned that nearly all brands will form an “X” chart here, where engagement starts high and fan count low. Unfortunately, the common pattern is that these trends then switch places over time, with engagement diminishing in converse relationship to growth in fanbase. Although it’s something to avoid, here’s a common chart:

The goal is to try and keep that Engagement Index trend nice and level as your fan base goes up. That is, maintain the quality while increasing the quantity. One of our clients, Center Parcs UK, is superb in this category. Here’s a sample chart from them:

See that level blue dotted line? It means that they have grown a fan base that remains consistently engaged despite its size. They have gained Quantity without sacrificing Quality. It should be the goal of all brands to have an Engagement Index chart that looks like this one.

Next, for a brand-to-brand comparison, let’s look at three sneaker brands over the course of the past four weeks....

Notice that Converse (in green) is, by a long shot, the most popular of the three brands with over 2 million fans. But look at the dotted green line, their Engagement Index trend. Floating in the range of 1.5% to 3%, they are just barely getting into the realm of “average”. Summary: Converse has a built broadcast channel and probably has a good one million followers who couldn't care less about the brand.

As a point of comparison, let’s have a look at Adidas (the blue lines). This brand has a healthy but comparatively modest fan base of just half a million, but in terms of engagement they are punching far above their weight. Even discounting for their temporary meteoric rise into the double digits, they are usually around 5% or 6%. In terms of engagement, they are running circles around the other two brands. Great job!

So I ask you: Who is doing better in social? The brand with a huge quantity of disinterested followers or the brand with a modest quantity of engaged fans? There is plenty of room for debate, but my money is on the latter. I believe it easier to grow engaged fan bases over time than to prune dead weight away from an already grown community. What’s your opinion?

If you'd like to learn more about DMW's Facebook Engagement Index, please get in touch via the links on the right or via the comments.

New Faces but Old Games for Major Hotel Websites

2012-02-07T06:58:00.000-05:00

Waldorf-Astoria, Four Seasons, and Marriott’s AutographCollection have all seen website updates in the past few weeks. All three of them have done a relatively good job in optimizing for tablet users, but some have done better at addressing the thornier issues of integrating social sharing and reviews. Let’s take a closer look and learn more…

(Note: I am limiting today's review to traditional websites only; a similar review of mobile sites will come soon.)

1. Waldorf Astoria

This site wisely maximizes the impact of its enormous panoramic photographs with hideaway menus for booking (up top) and other details (along the bottom). This cosmetic change is good for tablet users, but the website appears to be completely devoid of reviews or other guest-generated content. The same appears to hold true for the property-specific websites that link from here. While it would be ideal to see reviews in a variety of locations on the site, one good suggestion would be to include reviews and ratings for the "Experience" venues: golf courses and spas. Hilton would actually be able to take a leadership position with such a move by expanding the review game into specific outlets and amenities. Doing so would provide utility to shoppers, therefore increasing traffic and conversion.

Regarding sharing features, the controls are all tucked away on the property sites and don’t seem to exist on the brand site itself. Browsing guests are hardly encouraged to share. More attention is needed here to drive awareness.

Bottom line: Potential guests require third-party reviews to help validate that the actual experience matches those alluring photos. There is a lot of quality here, and some good thinking, but I cannot imagine this website performing to expectations without review content. Overall, it seems like a great facelift but unresponsive to the significant changes in shopping behavior that have developed in the past few years.

2. Four Seasons

Like Waldorf Astoria, this site does a great job with big-impact photos and unobtrusive design. This site goes a step further than Waldorf-Astoria, however, by including “Reviews at a Glance”, right beneath the fold on the property sites. This widget also includes Facebook and Twitter content and links to those assets. The TripAdvisor content is more like “mini testimonials” than actual “reviews” (there is no score, for example), and there is nothing to indicate that these testimonials are not cherry-picked. Still, it's a step in the right direction. The integration with the site, versus a generic plugin, works well visually.

Within the property pages, sharing functionality is a step up, too. Share buttons are less tucked away and for the Accommodations page, at least, the share allows you to select a thumbnail of your choice. This functionality seems, oddly, to be absent from the Photos & Videos page, however (at least for Denver).

A few areas of concern I would have here: The wholesale handoff of traffic from the Reviews widget to the TripAdvisor, Facebook, and Twitter pages seems ill advised. I think this is particularly true given the very limited review information that the widget provides. I do not think that shoppers’ needs for third party reviews will necessarily be met by this widget and that they will therefore still leave the site. I’d also suggest that bringing in reviews from platforms in addition to TripAdvisor would be advisable.

Here's a a nice-to-have: Wouldn't it be great (ie: "useful") to see a “By User Review” tab on the “Find a Hotel or Resort” page?

Bottom Line: A good looking website with good sharing functionality and some of the review info that shoppers need, but not necessarily enough to keep them onsite. In the future, they might find that they can meet shoppers' needs and their own needs (converting traffic to reservations) by using plugins to more completely integrate reviews and social content into the site itself.

3. Autograph Collection from Marriott

What a great looking website. The presentation layer, including its video content, is nearly perfect for high-bandwidth tablet use. This site has a “personalized view” function that should, in time, encourage sharing and enable first steps towards social CRM (SCRM) via Facebook sign in. Individual property pages have “Love” and “Share” buttons at the very bottom of the page, and some properties seem to have a call to action for shoppers to add their photos to the hotel’s Flickr account.

While the Personalized View feature is a good one, the call to action for sharing on property pages seems only adequate. A better choice would be to have a share button right near the big photos at the top of each page. But on the flip side, all property pages seem to have a Google maps local listing, which will boost optimization in Google search results.

Bottom Line: Sadly, this site also appears to be lacking reviews. Shoppers will go to another site to validate the promises made by the brand, and a certain percentage of them will book other hotels or through an OTA channel.

And the winner is…

Unfortunately, I’m not prepared to give any of these new sites a “winner” label. They are all physically beautiful, but are lacking in best practices for the new era. A truly winning website in this space should have, at least, the following features:

Ratings and reviews from multiple platforms (not just TripAdvisor) located within the site
A comprehensive sharing strategy that extends deeply into the website and that includes Google +1
If the brand believes its social content to be influential to shoppers, that should be embedded within the site as well.

And I would give bonus points for...

Including ratings and reviews in the booking engine pages (the hotel equivalent of the shopping cart), not just the presentation layer
Experimenting with validated reviews, as Starwood have done
Any use of the game mechanics that are used by Booking.com to such excellent effect.

To be fair, it is hard to innovate for such big ships. In fact, I increasingly suspect that Marriott, Hilton, and others ponied up to participate in Roomkey.com specifically so that they would have the opportunity to innovate in an environment free of the excessive baggage of their technology and operations platforms. But, until we see evidence of any of these brands breaking out of this rut, the OTAs and review sites will continue to out-innovate and out-maneuver the brands that they are selling -- great new photography notwithstanding.

Google's "Comeback" in 2012

2012-01-11T11:57:00.002-05:00

Only in a technological landscape moving as quickly as ours could Google be considered an underdog. But, for the better part of the last two years, it has often seemed that way. Common signals of doubt included questions like these: Would Google be boxed out by Facebook? Would the popularity of the iPhone and Apple's semi-closed ecosystem limit Google's ability to grow? Would Google be able to learn from its own failures and bring viable services to social and mobile?

My opinion: 2012 will be the year when Google stops chasing its tail, so to speak, and begins to lay down a solid foundation that will lead to a renewed emergence as a primary social, marketing, commerce, and mobile player. I believe the impact of this resurgence will be particularly strong in the world of hotels and restaurants.

The Big Picture
The headline is that Google is pruning their broad set of services and bringing a new concentrated focus towards integration with +1, Google+, YouTube, Maps, and Gmail. The result is that consumers are beginning to recognize Google as something that operates more as a unified personalized service.

We generally tend to consider a specific website (like www.facebook.com) to be the logical home for such various services. Google is increasingly going beyond that concept however, and instead using devices as the assumed point of coalescence. Android phones are a one-stop shop for Google services. We don't necessarily need a particular website or any one specific mobile app. Instead, we ask (via voice or type) for something and the phone selects the correct website or app to support the desired action (gain information, navigate, review, talk with friends, comparison shop, etc). We can see the same concept being applied (with somewhat less market acceptance) via Google's Chromebooks, and (with different objectives) via Apple's Siri. The end result, on Android, however, is that everything goes through Google and the value that consumes get from them is increasing. More so than any advancement within a specific service, it is this coalescence of Google's services that will yield success this year.

What is interesting to me is that this significant uptick in utility is being driven to both consumers and brands. As Google rolls out more social and commerce services, they are able to bring those data points into their Analytics offering. For the first time, this will enable brands to see closed loop reporting on social media activities, for example (via Google+), and beginning to make informed estimates on social media ROI. While Facebook began with people and then followed with brands, I predict that Google+ will generally lead with the brands (who have much to gain via single-source 360 degree reporting) and the people/consumers will follow them. More so than any other platform, I believe that Google will be responsible for accelerating the shift of marketing spend from traditional areas to social, mobile, and other emerging areas -- simply because it will be the first to enable activity and measurement in these various channels.

How does this affect Hotels and Restaurants?
Google made a very shrewd move in 2011 when it decided to no longer include reviews from other platforms in its Maps/Places listings. At first, it seemed to many of us that Google was diminishing its utility by excluding reviews from TripAdvisor and Yelp, for example. Instead, we realized that Google Places has "enough" native reviews to make the platform a good point of reference regardless. This "good enough" has enabled a launching pad for Google where those reviews are used (and written) by the fastest growing mobile audience in America. Driving reviews on Google will become an important new strategic objective in 2012. More: When we also consider Google's beta Hotel Finder product and their acquisition of ITA in 2011, I don't believe it to be an overstatement that for the Hospitality Industry, 2012 will be the year of Google.

Strategy Considerations
Android is quickly becoming the dominant mobile platform in America at a time when overall smartphone adoption continues to grow. While some significant studies suggest that mobile use (and commerce) is incremental beyond traditional web, our first-hand data suggests otherwise. At least in hospitality, where 75% of mobile reservations are same-day or next-day, mobile is absolutely cannibalizing traditional web.

Related to mobile adoption, DMW believes that we might be seeing the first signs of decay in the traditional value of SEO, because it... 1) relies on traditional web pages (don't render well on mobile), 2) can be undermined by Google's increasing shift towards personalized search results, 3) is often superseded by Places results, and 4) can simply be bypassed by seeking recommendations via one's social network.

Recommendation: In order to hedge against these changes, brands should continue a shift towards reviews, local presence, and other elements of the Google suite. Brands should experiment with Google Pages and consider developing best practices for YouTube. Along with Reviews and Local Presence, understanding these activities will position brands to gain a strategic advantage as the Google platform begins to assert its dominance in hospitality and restaurants in 2012.

The Yelp Factor and Independent Businesses

2011-10-31T22:20:00.004-04:00

I recently read a good study at the Harvard Business School site entitled “The Yelp Factor” (ok, I actually just read the summary of the study, here). The research is asking a simple question that has enormous potential in the world of ecommerce and, increasingly, brick and mortar commerce: Do online reviews influence business? And, if “yes” by what margin? Since they first have come into play, I think that most marketplace participants have a gut “yes” on this. Michael Luca has brought in real data points via Yelp, however, to help quantify what we assume to be true.

One significant observation that the study yielded was that local businesses are most affected by reviews while chain venues (think Burger King) are the least affected. This means that if they provide good quality and establish some sort of review optimization effort, independents can gain ground against the big guys. This is a strong insight, but why is it occurring? McDonalds (and all those who followed) became such an enormous success because consumers came to learn that a McD's cheeseburger in Ithaca, NY will taste exactly the same as in Tuscaloosa, AL. While some people really love McDonalds for what it is, most people go to McDonalds because they know what to expect. They have enough information on McDonalds to enable a decision. With Yelp and all other online reviews, nearly that same level of information is available for local (ie: “unknown”) venues, too. End result: small guys can compete with big guys b/c they are known quantities now.

This "tilting of the scales" towards independent venues also aligns well with a significant cultural shift in America that has been trending towards "connoisseurism". That is, our shift towards treating everything like people have traditionally done wine. Think micro-brew beers, OXO utensils, specific types of cow for steak, narrowcast popular music… You know, long tail stuff making it a little more big-time. The connoisseurism trend shows a growing native preference for unique services of high quality, and online reviews are enabling this via a virtuous cycle that also yields more reviews.

While these reviews are certainly opening up opportunity for independent venues, Mr. Luca seemed challenged by the fact that the reviews might not necessarily represent actual quality. That is, there can be a gap between actual quality and described quality (via reviews). Where Mr. Luca sees fog, however, I see opportunity: It means that operators have the opportunity to control described quality (to a certain extent) or otherwise become victim to it. It makes a very strong case, again, for Review Optimization and largely puts the power in the hands of those who run quality operations.

Beyond these major points, the study confirms a lot of what we know and preach already at DSS: Review Optimization is a must. More reviews are better. Ratings affect revenue. Have a look at the study; if you see other thoughts in there (perhaps regarding Yelp’s rounding rules?), let’s discuss!

Starwood's Reviews, Part 2: Publish Reviews, Don't Host Them

2011-10-25T23:03:00.000-04:00

In yesterday's post, I declared that "Starwood has made what will prove to be a seminal move in the hospitality space". When making this statement, I was focused mainly on Starwood's decision to publish reviews within their website, as opposed to their decision to host their own reviews. I talked with Jack a little today and we both realized that I had glossed over this important distinction. Let's define the two strategies right away, so that we can then get to analyzing pros/cons of each...

Reviews Posted to Brand.com: This strategy uses a product like Revinate's Buzz or even standard products from TripAdvisor to publish 3rd party reviews on a property's website. Shoppers go to the hotel's site to read reviews and can continue to shop from there.
Hosted Reviews: This strategy involves a solution like Customer-Alliance or BazaarVoice to generate proprietary reviews that live on a brand's website and nowhere else (or at least on no other third party review sites).

So which is the better strategy? Well, regardless of which one hoteliers might be considering, the objectives for Review Optimization fall along these major points:

Let's start with the basics: Hoteliers must bring reviews to their own websites. See yesterday's post for more detail.
At all costs, hoteliers must promote and ensure authenticity and unbiased publication of reviews. This holds true for "hosted reviews" as well as "third party reviews on brand.com"
To the greatest extent possible, hoteliers and 3rd parties must offer greater utility in filtering and searching reviews vs the review sites. (Again, see yesterday's post for more.)
Enabling social sharing of reviews is a good idea and worthy of testing and learning. I very much applaud Starwood for their features in this area. In my opinion however, it is not a strategy that will yield significant results at this time. It will in the future, but there are more immediate goals to reach first, like...
Reviews must be leveraged for optimization in TPIs/OTAs and search engines. Even if these channels are not necessarily preferred, they cannot be ignored.
Above all else, hotels must optimize for Google maps/places. They must do it now. This includes driving reviews to Google. The Android mobile platform is growing too quickly and Google Hotels will be a viable player in this space within 24 months. This advice is most urgent for limited service and urban hotels that are most likely to be booked last minute, but is still valid for vacation destinations as well. Of course this is tied deeply to natural/paid Google search too.

Defining the objectives for review optimization helps us to define a best-possible review solution and to rank existing options. With the above points in mind, my thoughts on these strategies are...

I strongly support "reviews posted to brand.com": it enables all optimization strategies while still drawing traffic to your own site. While this strategy lacks social sharing functionality, the opportunities for optimization in third parties and Google are simply too big to ignore at this time. Yes, it's true that readers can still be tugged away to TripAdvisor by navigating deeply into the reviews, but I think it is a current fair tradeoff for having the reviews on brand.com to begin with.
I am less enthusiastic regarding "hosted reviews". While this strategy does have the current advantages of social sharing and better "review browsing" features, I think the cost is too dear in terms of lost optimization in the third party world. Plus, I cannot vouch for this first-hand, but I have to assume some onerous business process work for matching up reviews with actual reservations.

In the near future, we will see products evolve to meet the overall set of best-practice features and functionality. I think there is a place for hosted reviews, particularly in their ability to replace current guest-sat surveys. They simply cannot be deployed at the full expense of 3rd party reviews. At least not yet... Anyone have a patent on the idea of a reverse TripAdvisor yet? It aggregates all "hosted reviews" into a single public site...

Starwood's Seminal Decision to Include Reviews on Their Websites

2011-10-24T17:06:00.001-04:00

Starwood Hotels announced on Friday that they will now begin including user reviews on their websites. I very much support this strategy and congratulate Starwood on being first to market with what will prove to be a seminal move in the hospitality space. Here’s why…

In a few short years, user-generated reviews have become an immutable third element of the hotel shopper’s experience, along with the traditional “price” and “location”. It is important, however, to view the development of user reviews within the larger context of online shopping for hotels. Consider that, from roughly 1997 through 2005 (or possibly later), TPIs/OTAs thoroughly ate hotel brands’ collective lunch by realizing and leveraging the power of online reservations. Hotel brands eventually caught on and have since been involved in a carefully orchestrated turf war with Travelocity et al. While TPIs/OTAs certainly form an important channel, hoteliers have lured shoppers to their own sites in the past seven years by offering “best rate guarantees” a more robust shopping experience (hopefully including rich photo and video content), and more.

As a category, however, TPIs/OTAs continue to evolve and innovate much faster than hotel brands. This is particularly true with mobile (and tablet) web and apps and especially true with reviews. Even as they otherwise optimize their websites for best-possible experiences that will draw traffic from the OTAs, hotel brands have been losing out on brand.com revenue because reviews --that must have information for nearly all hotel shoppers-- are not available on hotel brand websites! The end result is that even brand loyalists are forced to browse reviews on TripAdvisor or any other review site of their choice before attempting to book at the brand site. And of course, a good many of them are lured into the bookings paths of these others sites instead... Whether the reviews or good or bad, shoppers are going to read them. Hoteliers should do like Starwood has done and bring those reviews to their own sites, where they are more likely to convert shoppers in a direct channel and to gain ancillary data points (like time spent reading reviews, etc) to boot.

So while we can congratulate Starwood on bringing reviews to their site, we must ask ourselves the next question: How will they change the habits of a market that has been taught for the past 15 years to read reviews on independent and objective sites like TripAdvisor? Including user reviews on a website is an important first step, but not enough to change market behavior. There has to be something else that will draw users to the site for one-stop reviewing+booking. The trick to changing this engrained user behavior is to evolve the review experience and make it more useful to guests than it is today. If --and only if-- they succeed on this front, will shoppers use this new functionality on Starwood’s website in any meaningful quantity.

To Starwood’s credit, this is where their new solution shows great potential. They include new filters for reviews like Loyalty Members (or not), Purpose of Travel, and Frequency of Travel. While l would like to see additional filters (average review score by authors or "travelling with children", for example), this is a great start and will certainly evolve in time to help people see scores that correspond with their general tastegraphs.

Overall, I think that Starwood have done a great job in anticipating challenges and by simply being brave enough to be the first to dive into the pool. The rest of us can watch carefully for market signals regarding willingness to believe the authenticity of reviews that are hosted by the brand. I’ll be looking, too, for any signs of operational strain that could be caused by having to vet reviews and validate that the authors actually stayed. We should also be on the lookout for evidence of new search strategies that might be deployed: Will Starwood always link to the homepage or booking engine? Or would review pages make for a more appropriate first stop in some cases?

How about you? Are you willing to trust Starwood reviews?

Edit: Despite my enthusiasm in this post, Starwood's solution is not perfect. See next post for more thoughts...

Google Hotel Finder: First Impressions

2011-08-04T16:12:00.001-04:00

It is very telling that Google has labeled their Hotel Finder project as “experiment”. It suggests that this service is rough but that Google wants to continue to pursue this market agressively. Despite the label, I found the new service to be responsive and useful; I’ve already used it to book my next business trip.

Like many of Google’s best products, Hotel Finder is an exercise in simplicity. It strips down the hotel shopping experience to five familiar elements: Location, Dates, Price, Class, and –significantly- User Rating. The page is bare, and there is none of the usual advertising and other “stuff” that we have become used to with other sites. To be fair, this is because Hotel Finder does not necessarily have to generate revenue in its own right.

So far, I like Hotel Finder. The service has new clever features, includng “draw a shape” so that you can specify exactly your preferred geographic areas (I can see this feature evolving nicely for touch devices), and a pricing feature that compares posted prices to “Hotel’s Typical Price” (possibly fueled by Google’s ITA acquisition?). For me, however, the killer element of this new service is speed. Even sites that I otherwise love, like Kayak, seem to take a modern eternity when trolling for search results. Hotel Finder, however, is very fast. For some searches, I’d even describe it as Instant. This is true for the original searches, and espeically true for follow-up activity like looking at photos or reading reviews. The combination of a bare-bones UI and very fast load times will be a major advantage when this service is optimized for mobile web and mobile app (Note: I checked – as of now the service is traditional web only).

In the near future, I can see this product graduating to the “beta” stage and becoming integrated with organic searches, in much the same way that Places/Maps has evolved. In fact, I could see this service replacing Places/Maps results if a search happens to be for a hotel. Due to its speed and simplicity, I can see this product becoming a standard element of the shopping and buying experience.

So what are the key takeaways? As usual, it’s all about reviews, reviews, and reviews…

The release of Hotel Finder and the recent news that Google Places/Maps no longer includes reviews from third parties underscores the importance of treating Google as another review platform that, like TripAdvisor, must be monitored, managed, and optimized. I cannot overstate the importance of this. Google will overtake TripAdvisor as the de facto review platform because it is a gateway to the overall internet – both traditional and mobile. It’s just a question of how soon this will occur.
Reviews, again, feature very prominently in this new service. After an area is selected, the results can be sorted by Hotel Class, User Rating, and then by two price categories. “User Rating” is the second column, a telling detail when trying to divine Google’s strategies in this space. When a hotel is selected for closer inspection, reviews again display very prominently beneath the photgraphs, along with a notable call to action to leave a review if the user has visited the location.
Optimize your Google Places Listings: Several good reasons already exist for doing this, and Hotel Finder has just become one more. DMW research shows a direct correlation between SERP ranking for Maps/Places and optimized Places listings.

As time goes by, and as Google collects feedback, I suspect that we will begin to see this service tilt towards "impulse" and "same day" reservations vs. the more formal vacations and events that usually have a longer research cycle. I could also see potential incorporation with flash deal sites (see Google's acquisition of Dealmap, and its own Google Offers, for example). What are your thoughts? Have you used Hotel Finder yet? Is it better than Kayak?

Solid Review Optimization Strategies and Changes at Google Places/Maps

2011-07-26T09:45:00.001-04:00

News came out yesterday that Google has removed from Places and Maps all third party reviews, including (especially) those for hotels and restaurants. In my world, the world of social media/reviews/mobile/ for hospitality, this is very big news. I've got two immediate guesses as to why Google is doing this: 1) Proactive effort to head off ongoing legal challenges from players like TripAdvisor, buoyed by the fact that (through Android) Places/Maps are getting close to achieving critical review mass, or 2) This is a first step in creation of a B2C travel offering from Google where it wouldn't be appropriate or legal to include 3rd party content. If you’ve got thoughts on this, please share them in the comments.

I will admit that, upon reading the headline alone, I was concerned that the cornerstones of some of our fundamental strategies at DMW had just been pulled out. But, then we began to do what we do best at DMW: we rationally went through the meaning and effects of this change and highlighted what this does and does not mean for hoteliers, in particular, who are focused on developing a review optimization strategy. DMW’s analysis begins below. We currently have a few open questions and a few hypotheses, but we also have a good set of facts and best practices that we believe still hold true, regardless of the source of reviews that Google displays on Maps and Places results. We believe that many of our recommended strategies and best practices remain solid because we focus on thinking about context, not specific platform. Yesterday’s news served as a very important example of why this is so important.

So, let’s have a closer look. The comments from Google stated clearly that review snippets, ratings, and review counts from 3rd parties will "no longer appear" on Google Places and Maps. The article makes no mention of whether that data will still influence the rank of venues in Places/Maps or in organic search results, however. For me, this is the primary open question at this time. I see two possible general outcomes…

Outcome 1: While reviews are no longer visible, review data (quantity of reviews and average star rating) still influence rank results in Maps and Places. Here’s an example: Data from TripAdvisor reviews contributes to the ranking of a given hotel on Places, but consumers do not see those reviews. This would be similar to a given webpage being ranked first by virtue of inbound links to it (the core of Google’s algorithms), even though we are not shown the inbound links themselves. If non-Google review data still influences Maps/Places results without being visible, review optimization strategies are still 100% viable.

Outcome 2: Reviews do not influence Maps and Places but do continue to influence organic results. In my mind, this is all but a certainty. Inbound links to reviews will still push hotels up through Google’s organic results. End result: Your hotel’s top organic listing could possibly be on TripAdvisor (instead of a best-case scenario of being your own branded website). However, that’s still better than your competition’s hotel taking the top listing. Again, review optimization matters.

In both cases, it is important to remember that Review Optimization is still a valid strategy because it optimizes listings within each platform that contains reviews for a given hotel. DMW has conducted analysis that proves most hoteliers’ instinct: there is a direct correlation between better (and more) hotel reviews and ROI from the channel that hosts those reviews. Now that Google is becoming a review platform in its own right (versus just a review aggregator) a full Review Optimization strategy should actively focus on monitoring and responding to Google reviews, too.

So, the takeaway for today is that the players and services have shifted some, but the context and best practices remain very valid:

Customers will still be looking for reviews and shopping via Google.
Google will still display reviews (albeit only their own, for now), and
Review/OTA websites like TripAdvisor, Orbitz, and Priceline will remain with their reviews and business models, too.

With a “what’s-not-changed” list like that, pursuing a Review Optimization Strategy absolutely remains a safe bet.

The Google+ Project Will be Google's First Social Media Effort to Achieve Critical Mass

2011-06-29T17:25:00.004-04:00

~~I don't have my invite yet, but~~ I got my invite yesterday evening, and I've been playing/reading/watching up on the new Google+ Project offering from Google. From what I've seen so far, I think it might hit the mark. One big win is that service does integrate directly with current Gmail and Android contacts. This is crucial: I've written in the past that other Google social media efforts (Hotpot, +1, Latitude) were destined to fail b/c they were platforms that didn't allow me to bring "my network" (my email contacts) into the mix.

I've been of the opinion lately that the mobile app, GroupMe, is all of the Facebook I would ever need. It allows me to start group chats, identify my geographic location, start phonecalls, share pictures, and more. Best of all, GroupMe allows me to do this on a per-group basis: No all-or-nothing approach as with Facebook. One of the most compelling features of Google+ is this same breakout of friends, each with its own settings. Google knows this and plays heavily into that when promoting their "Circles" feature.

So, does Google finally have a social media winner? I see a lot of press focused on whether this offering can unseat Facebook, but I'm not sure if that is the right question. I'm more interested in the potential for Google+ to achieve critical mass, that is sizable and sustainable adoption -- regardless of comparisons to Facebook. If "yes" Google will have demonstrated that social media platforms are not one size fits all. I think this is where the space is going, and I can see this as an important learning for the marketplace.

The precedent is already here: today, we have an easy split between Facebook (for personal social and commerce use) and LinkedIn (for business). Longer term, I could easily see some fragmentation (with Facebook remaining strongly dominant), along with the rise of "social media aggregator services" that bring together streams from various sources. Again, the precedent exists: see TweetDeck and Hootsuite's ability to bring in LinkedIn, Twitter, Facebook, Buzz, and more. And, we also have products like Trillian and Adium that aggregate multiple instant message platforms.

So to pose the question a different way: Will Google+ achieve critical mass? I think, yes, that this time they might have it right. They've got a great-looking new platform with the right control settings and the right connections in place -- with Gmail, Google +1, and more. To further help drive adoption, Google will benefit from the Android OS and (soon) the Chrome OS. In the long run, Google will have an inherent competitive advantage b/c it will be able to directly bake-in to the OSes - basically becoming an ever-present service to support other activities.

It seems silly counting Google as an underdog here, but if Google +1 became a persistent, if smaller, player in this space, I would consider that a big victory for them and for the marketplace, too.

Dispersed TripAdvisor Viewership Reveals Changing Market Behaviors from Which Hotels can Benefit

2011-06-03T21:37:00.000-04:00

Viewership of TripAdvisor reviews is three times greater onsites other than the 50 million views that TripAdvisor.com sees itself in an average month. The general reaction that I’ve seen to this news is that TripAdvisor is even more important than previously realized and that Hoteliers and brands should redouble (or perhaps re-triple) their efforts to drive review traffic to the review platform. No doubt this is how TripAdvisor will use these findings!

I’d like to offer a different interpretation.

The fact that the significant majority of eyeballs are coming into contact with TA’s review content outside of the website itself suggets an important shift in marketplace behavior that Hoteliers can use to their advantage. The specific behavior is that guests are becoming trained to find reviews by Search instead of by landing page. While some brands still enjoy leadership positions in “landing page content” (think NY Times, CNN.com, and ESPN) the inherent user-generated nature of TA’s content suggests that it’s dominance as a landing page destination for reviews is more the result of TA’s superb SEO work, marketing savvy, and iniital positioning during the early days of eCommerce than any brand loyalty to or special utility of TripAdvisor itself. For example, I have not seen any study that suggests that the public believes that reviews (or reviewers) are of better quality / more accurate / more trustworthy on TripAdvisor than on any other site like, say, Orbitz. (If you have seen something like this, please pass it along…)

Given the above, I see an opportunity for hotels to disperse their review traffic to multiple review platforms and to syndicate the reviews from those multiple platforms on their own digital assets (eg: brand.com websites). Driving guests to leave reviews on multiple sites provides the following benefits:

Improved search engine results
Opportunities to improve sales from multiple platforms by virtue of improved ranking on multiple review sites.
Opportunity to exploit differences in the sign-in process between review platforms to find best-possible “Review Conversion” (the ratio of guests presented with a CTA (call to action) to leave a review divided by actual reviews posted).
Counter-balance to TripAdvisor’s current overwhelming dominance in the review space.

There is a big trend at play here: Traditional websites will continue to lose mass as content disperses to multiple social and mobile platforms. Organizations can begin to prepare for managing, monitoring, and harnessing content in this new era by understanding the well-defined and (relatively) easily managed world of reviews within this context.

TripAdvisor is Preventing Hotels from Improving the Review Ecosystem

2011-05-31T14:47:00.001-04:00

One of our clients recently starting receiving disturbing emails from TripAdvisor. For those in the business, this experience is all too familiar: The emails are vague on the actual transgressions that may have occurred, but chillingly explicit regarding the consequences of continuing with the unspecified behavior. Honest hoteliers (among them, our clients) certainly want to play by the rules and avoid suspension of their accounts, but they have no one (other than a sales rep) to talk to about what, specifically, has gone wrong. And even then, the feedback is almost never actionable. The hotel is left with fear that its strategies might possibly (but not definitely) are somehow at odds with the policies of TripAdvisor.

It is a shame that hoteliers are left so vulnerable in a system that serves guests so well.

Increasing quantities of players in the hospitality space understand the fundamental importance that reviews now play in a potential guest’s decision-making process. They apply best practices like encourages happy guests to leave reviews, and they purchase products like Revinate or ReviewPro to monitor their efforts. While there will always be bad seeds, most hotels do not prevent bad reviews from being posted, they simply expend less effort in encouraging unhappy guests to post a review than happy ones. This is actually good for hotels, guests, and TripAdvisor. More opinions are being brought into the mix, and those that are negative will stand out more.

In my case, we take a hotel that has enjoyed an exceptionally loyal following for decades. Until recently, the hotel never monitored nor encouraged reviews. But, with our guidance, the hotel is now doing both and seeing a floodgate of positive reviews come in. Truth: we see bad reviews come in, too, and I’m happy to see them. They provide actionable feedback to management, demonstrate the authenticity of the reviews to other readers, and allows management to demonstrate (again, to other readers) that they care and will attempt to correct any negative experiences.

These positive reviews have somehow tripped an algorithm within TripAdvisor and we are now trying to explain what has occurred to someone, anyone, within TripAdvisor so that we can clear the hotel’s reputation. We can show how the TripAdvisor scores match with decades of internal survey scores, for example.

While the quantity of reviews being posted and read for hotels continues to skyrocket, they quantity of review platforms (TripAdvisor, Orbitz, Google Places) continues to grow too. Hoteliers increasingly have a choice regarding to where they would like to encourage reviews. The primary factor will, of course, continue to be distribution (TripAdvisor remains the 800 pound gorilla in this space), but other factors like dispute resolution, and review conversion rate could soon influence hoteliers. My prediction: the ultimate winner in this space will be the platform that can best enable interactions between guests and hotels, not just guests and guests AND develop the best algorithm and resolution process for detecting fraud. At present, I don’t see TripAdvisor rating that set of objective very highly…

The Social Media Conversation Needs a Refresh

2011-03-10T00:28:00.002-05:00

I attended Eye for Travel’s excellent “Social Media Strategies for Travel” (#smtravel11) last week in San Francisco. What a great event! @Susantravels was a deeply knowledgeable moderator, the speakers were great, and the networking events were at just the right level. I’m very happy that I was able to attend. After listening to (and participating in) so many informative/creative/ inspiring discussions, I’m coming away with a revelation: Social Media is hitting its first point of maturity, and, with that, the dialog of practicing social media is starting to get stale.

I know: We don’t usually see the phrase “social media” and “stale” in the same sentence, but I’ve gone and said it anyway. Here’s why: For the past two to four years, practitioners of social media have operated as a sort of cognoscenti society where the attendees “get it” and they have to figure out how to do their good work in organizations that, by and large, “don’t get it.” Based on my experiences, this “us and them” context seems to have three general effects on the Social Media Community:

The underlying context of many social media discussions assumes limited budgets, confused or uninterested management, and immediate needs to prove ROI.

The social media community, while vibrant in its own right, often has its blinders on with regards to interactions with other, non-marketing or customer service teams in their organizations.

This relatively insular community has been swept up in shiny object syndrome. This is understandable: it's hard work keeping pace with the innovations, creativity, and new platforms that are cropping up on a weekly basis. And don’t forget the unprecedented adoption rates of social media at large.

Despite the excellent and even passionate exchange of ideas at #smtravel11, I believe that these old patterns were as alive and pervasive as ever. The patterns persist, however, despite the fact that there are increasingly fewer executives who outright reject social media platforms. It has happened quickly, but the majority of executives today understand (to some degree) the general roles social media now plays in the marketplace, and there is no shortage of evidence that social media spending is on the rise. (Any recent survey from Marketing Sherpa, for example, will back these claims.)

So, if the executives are now also drinking the social media kool-aid, the conversation needs to evolve. Today, practitioners of Social Media need a broader skill set and a higher vantage point if they are to mature and incorporate their work into larger organizational efforts. In essence, it’s becoming time to leave the kids table and sit with the grown-ups. In support of this “new conversation” here’s where I believe the conversation needs to grow in the next 12 months:

Back-to-basics focus on objectives: A focus on “engagement” is simply insufficient. Are we seeking to diminish phonecalls? Grow lifetime value? Increase sales through evangelists? A sobering look at objectives brings relevance to the larger organization and identifies the right metrics. It also puts the following bullets in context…

Interdepartmental use of social media: This concept was originally championed in The Groundswell and The Cluetrain Manifesto (among others), but still has been embraced by only the most forward-thinking of organizations. Social Media should inform R&D, HR, crowd-sourced customer support, organizational improvement, and more. The focus does not always have to be on customer-facing commerce.

A broader understanding of how social media can work in concert with “traditional” channels: The marketplace is rife with examples of social media efforts cannibalizing the traffic of traditional channels that (currently) have far more opportunities for conversion. As stated above, social media must break out of the silo and work in more informed partnership with other channels.

A new focus on the process of social media: We see so many great social media ideas at these events, but they leave a lot of open questions for me: Are these campaigns scalable or repeatable? How many FTE’s does it take to support these efforts today? How many would it take a year from now? These are just some of the questions that need to be addressed in a more formal manner, along with better recommendations for roles & responsibilities descriptions and business workflow definition…

I am not suggesting that these topics should replace our typical conversations regarding the latest and greatest features and campaigns. We will always need and enjoy those discussions – in fact we will enjoy them much more than discussions about business workflows! But, even if my points are notably less shiny than talking about, say, Hipmunk, they are critical for any serious discussion of social media’s future. Social Media is a rapidly expanding field. Those practitioners who are successful in switching gears and addressing these points will be the ones who best serve their organizations, as well as their own careers. So let’s get the conversation started!

How Does Google Build a Social Network?

2011-01-23T15:28:00.003-05:00

Google recently rolled out their Places app for iPhone – it’s about time! The Places app has been on Android for nearly six months and will surely pick up many users on the iPhone platform. With geo-aware suggestions, ratings, and built in directions for walking and driving, “Places” is one of the most-used apps on my phone. Along with announcing the Places app, Google drew some attention to its related Hotpot service, which, according to their website, allows you to “connect with your friends and find out the right place to go near you.” Sounds like another attempt by Google to gain some footing in the Social space, but my take on this is that Google is again coming up short in this category. For me, the bottom line is this: If Google wants to get social right, it has to start doing social.

Here’s an example: The service, it turns out, is not baked into the standard Places app on my Android phone, so I took this opportunity to sign up and learn more. When signing up for Hotpot, I was surprised to see that Google is asking me to invite specific friends on an almost one-by-one basis. Seems like a slow way to build my social network, especially when you consider that Google could probably discern my network (that is, recommend friends) based on my email patterns through Gmail and with some basic geo location knowledge. In fact, I question why I have to explicitly sign up for Hotpot at all. As an Android user who already has Places, why put me through a special process and app to connect with friends? I’m wary of Hotpot becoming yet another abandoned service on the Google highway, in particular like Latitude.

Facebook has no problem in recommending friends when I’m on their site. In the same vein, I think that Google has to start speaking Social in the active voice if it wants to be successful here. They have no shortage of information that could be used to connect me to my friends and start weighting Places reviews, for example. If they were to take one or two bold moves to gain critical mass in terms of social data, I don’t doubt that Google would quickly become a recommendation engine in a way that I suspect that Facebook never could be. Facebook (and Foursquare and Gowalla) make what I would term “soft recommendations” by virtue of letting me know where my friends have been – in itself a tacit seal of approval of some sort. Google, however, has the opportunity to bridge the gap to the more formal recommendations that we see in Yelp, for example, along with star ratings. While I still have believe that the best recommendation platforms should be based on taste graph instead of social graph, there is utility in the latter and Google could get to the top of the geosocial checkin game very quickly if it only made the decision to behave like a social platform.

Today’s post has a specifically focused look at Hotpot as related to Google’s social media efforts. The picture for Google is much bigger and more complicated, of course -- in particular when you consider significant potential backlash fueled by privacy concerns and their failed attempt to woo Yelp, for example. Nonetheless, I think it is time for Google to set up a firm center of gravity for social media in an effort to counterweight its traditional tentacle-like grips on the web at large. What do you think? Are you using Hotpot? Is it better/worse than Yelp's great mobile app, for example? Please share below!

Where Did my Tastegraph Check In Tonight?

2010-11-19T00:25:00.000-05:00

I need less help in navigating communications with my friends than I do in discovering excellent brands and products. Example: I’m in the market for a new subwoofer. I’m a minor-league audiophile and read up on these things now and then. There is no shortage of product reviews out there, but I find that the reviews might not be sufficient because I don’t know anything about the reviewer. I began to talk about this in my previous post regarding restaurant reviews, and I would like to take it further here. When I read subwoofer reviews, I’d like to know if the reviewer’s standards unreasonably low or high. Does he buy things just for the label? Or just to be trendy? Is he a penny pincher or someone who spends too freely?

As a result of my previous post, I was introduced to Bizzy and LikeCube – who describe themselves as providing “recommendations based on similarity of product and similarity of user”. Services like these promise to provide me with the recommendations for me, not generic recommendations that are supposed to apply to everyone. We see this today, to a certain extent, with product recommendations on Amazon and other websites, but recommendation engines in their current still don’t offer the nuance that most end-users would like to see.

As the state of the art progresses, the best in class recommendation engines will be able to take inputs from services like Get Glue, Facebook Likes, a variety of geo-check in services, and more. Check-ins, in particular, looked poised to grow exponentially as mobile payment services begin to hit the mainstream via players like Isis, PayPal, Google, and (we assume) Apple. As they do, checkin during payment will simply become another option, and those details will add to individuals’ profiles and broadcast across social networks.

While the benefits of all of this are generally well-understood for consumers, brands, too, will have much to gain. As the data becomes available, such information will help brands to identify potential new partnerships, find local-influencers, and provide real-time special offers based on a combination of taste graph and location. To take advantage of this data will require evolving skill sets, but the best practices will remain the same: start small, fail fast, measure everything, analyze & repeat.

I’m not abandoning the concept of socialgraphing or physical checkins via FourSquare, for example. There’s value in knowing who checked into which bar. But what I’d really like to know? What beer they are drinking once they get there…

Reviews, Ratings, and Opinions

2010-11-01T00:40:00.000-04:00

With the recent news that Orbitz now allows anyone to review a hotel on their site, it seems like a good time to share thoughts regarding Ratings, Reviews, and Opinions.

It's an interesting turn of events: as an entire industry called “Social Media Monitoring” is being built to help organizations add structure and meaning to the influx of customer feedback that now comes at them, the Orbitz move seems to indicate a reverse trend for the Hospitality vertical: a deconstruction of its relatively long-standing public feedback mechanisms. Think about it: for nearly a decade, internet users have been able to read and share hotel feedback based on a universally accepted system of 5 stars across general service categories. It’s this kind of structure that gives the word "rating" meaning, and has, up until recently, enabled savvy hoteliers to adequately manage public feedback. To help think through the changes that the Orbitz decision will foment, let’s first define a few terms…

Review = A description of a direct experience with product or service
Ratings = A review that is quantified via formal structures
Opinion = A thought regarding a product or service, regardless of level of experience with the product, which could be none

Thanks largely to TripAdvisor, the Hospitality industry has a level of comfort and experience with public Ratings and Reviews for some time now. At large, I believe the industry could do much better in encouraging and leveraging reviews, but at least a sound tradition is established. The move from Orbitz, however, is shifting that platform slightly away from “reviews” and closer towards "opinions". It's the particular distinction of “opinions”, especially when being shared in a forum like TripAdvisor who advertises “over 40 million reviews and opinions”, that is causing concern. Which of those 1 star ratings are “Reviews”? Which of them are “Opinions”? The combination of a weakened economic climate and the increasing influence of reviews in the hotel decision path has caused hoteliers to care a great deal about who exactly is sharing these experiences.

There are different ways to work through these industry changes, however: Those who are aligning themselves with potential litigation against TripAdvisor may or may not win a small battle, but certainly not the public opinion war. While valid issues (like timely removal of patently false reviews) are certainly valid, an undercurrent of this seems to be that hoteliers cannot determine if negative reviews are from actual guests or not. Specifically there is concern that hotels will be the victims of...

Unfair/inaccurate/false characterizations that are the opinions of people who have never actually been to the property, and
Similar statements made with malicious intent by competing hotels or community members who hold some other sort of grudge with the hotel or staff/owners of it

Hmmm. Sounds like a good 50/50 mix of FUD to me. It is realistic to expect unfair or malicious characterizations from time to time. Reviews and Social Media are, after all, a quantification of human nature – some people just have an axe to grind. But, these few outliers should not be able to bring your hotel’s reputation to its knees if you are managing your online reputation by encouraging guests to post reviews. The few unfair reviews and opinions will be washed away in the stream of legitimate feedback -- the best defense, in this case, is a good offense.

And even as services like Blippy and Swipely (and Google Checkout and something like an Apple iStore) could conceivably form the basis of a platform that allows us to tie public reviews to actual purchases, is that where organizations want to put their resources? I don’t think so: promoting positive reviews is a far less expensive proposition with notably larger returns vs hunting down opinions posing as reviews and attempting to remove them from public view. In general, the prevailing opinion among informed thinkers is the right one: modern internet users have the ability to read through reviews (real, fake, or otherwise) and distill the true broad qualities of a service. Hoteliers can and should rely on this assumption and do everything in their power to promote legitimate feedback via public channels.

Orbitz will not be the last review platform / OTA to enable “unverified reviews”. It’s good business to open up the review process to as many people as possible; Orbitz has done the right thing by enabling more people to interact with and read from its platform. This means that hotel reviews will continue to shift, in theory at least, from “review” towards “opinion” because these platforms will not be able to verify customer stays. In reality, however, Hospitality will still maintain the most structured, most universal, most quantifiable public feedback mechanism out there. Instead of looking to lawyers, Hoteliers should consider opinions more as “soft reviews” which can serve as a stepping stone to strategies that incorporate pure social media feedback (like via Facebook) into operational KPIs -- which, of course, is for another post…

Are You Prepared to Cannibalize Yourself?

2010-10-18T12:20:00.000-04:00

It’s 2010 and we’re at an inflection point in technology disruption. Some call it the "post-PC" era. Is this a business opportunity or threat? This question really depends on your perspective, but in any case, it's the wrong question. The Wall Street Journal ran a few interesting articles recently. TPG sees the digital opportunity and has invested in CAA. The media industry is in great flux and there will be winners and losers depending on how each embraces the digital reality. Disney is re-organizing (again) it’s digital business to create a separate business unit that is a profit-center instead of a cost-center as it has been for the last 15 years. The News Corp (Fox) - Cablevision blackout currently affecting 3 million NY area households has digital disruption at it's core. In fact, there is news every day that shows the affects of the technology wave we’re experiencing. The companies affected are run by really smart people. They don’t lack intelligence, scale, brand equity, processes, resources or capital. They have it all. So why are they failing to leverage the opportunity ahead?

The 80’s was defined by the PC revolution, the 90’s by the emergence of the Internet, the 2000’s by electronic commerce. This decade will be defined by the dawn of ubiquitous computing enabled by the convergence of significant technology trends. This paradigm change is defined by cloud-computing, pervasive and higher bandwidth, component deflation, smartphone adoption, natural user interfaces and social media. Technology adoption is being driven from the consumer into the corporation, not the other way around which has driven the last few tech waves and benefited the WinTel alliance.

Incumbents generally treat technology disruption as a threat since they face the “innovators dilemma” (Clayton Christensen). They cannot divorce themselves from their business model, org structure and comforts of business to embrace the opportunities that technology disruption afford. One of the issues is timing and public market pressures. How can a public market leader take a short term hit to profits while they retool to gain a long term share of the larger opportunity? Another issue is the profit unknown and the anxiety this creates. To fully understand opportunity, many leaders need to know where the value is created and this round of technology disruption yields murky views of value creation. The consumer is claiming most of the value through free (low CPM ad supported content), improved entertainment value, greater convenience and productivity, etc. There are business models to be had, however, and some good examples of value-claiming from this round of innovation including Apple’s iTunes, NetFlix, PayPal, Amazon’s Kindle, Google, Facebook, etc.

The hospitality industry has its own flavor of this dilemma. Most clients are treating this wave of technology disruption as a challenge or threat. Few are embracing to create marketing advantage. They ask “is mobile traffic incremental or cannibalizing our existing website traffic”. A decade ago, clients asked me similar questions about online versus offline shopping. My reaction then is the same is it is now, “I would rather cannibalize myself with forward-thinking marketing than be cannibalized by my competition”.

Can User Reviews Account for Personal Definitions of "A Good Restaurant"?

2010-10-06T00:09:00.001-04:00

I love to eat. When I travel, I’m always looking for the best –whatever it might be—a given town, city, or culture has to offer. For most of my life, I’ve done this by asking people what they recommend. Like most of us, however, I increasingly rely on services like Yelp and Google Places. This is particularly easy to do on my Droid phone: when searching for food via the “Places” app, it even lets me sort the results by either distance or rating.

What I’m finding, though, is that places with great reviews or high average ratings can turn out to be disappointing if the overall playing field is weak to begin with (ie: is not in NYC). Example: What passes for “great pizza” in New Berlin, NY might be hard to stomach if you’ve been eating at places like Lombardi’s for the past decade. Even in Hoboken, my new home that’s 10 minutes from Manhattan, I’m finding that the majority of the restaurants with “great” reviews really aren’t that great at all.

What's going on here? User generated reviews are supposed to be the holy grail of objectivity. So why are these review platforms leading me to restaurants that I don't think are all that great?

Let’s start by setting realistic expectations for user generated reviews: The concepts of “good” and “bad”, especially with restaurants, are very relative. So the idea that I (or anyone, for that matter) should allow my dining decisions to be influenced by the unvetted opinions of the masses can become somewhat of a stretch. These platforms might bubble up “the best,” but not in any universal sense of the word, and certainly not by my own tastes (for better or worse). And I’m also starting to see that user reviews can tend to champion venues with broad appeal but little depth – kind of like what network TV has been serving up for generations.

The thing is, I’m not looking for the culinary version of “Two and a Half Men.” I want “Mad Men”. I want reviews that can calibrate against my tastes, standards, and expectations. What I want for dinner is a piece of the long tail. When I’m out of my comfort zone --when I try something new-- I would like to have at least some reliable guidance that a restaurant really is the best that Wichita has to offer. Instead, what I get from Yelp and Google Places are a lot of recommendations from people whose only point of reference is Wichita.

I don’t expect every town I visit to have world-class dining. This is not what today’s post is about. I’m simply looking for a way to tailor reviews to my personal standards so that I get more value out of them. If Papa John’s happens to be a best a town can offer, then so be it. As long as I know that I’m not missing out on something better, I’ll enjoy it. On the flip side, if I don't know anything about a local specialty (like frogs legs, for example), I'll be more than happy to rely on local opinion to guide me to the best.

I see the current state of reviews as a blunt tool. The content is there, but the value is limited because I can't put that content in the context of the reviewers themselves. In the near future, I hope to see features that filter or weight reviews so that users can get more value from them. In broad strokes, here’s where I believe the state of the art is heading:

Give weight to reviews from people in my extended social network who I (or others in my network) have defined as restaurant / food savvy, or who “like restaurants that I like”.
Give weight to reviews from people out of my social network but who “like restaurants that I like” or who like restaurants similar to what I like. Such people can be identified via reviews, Facebook Like buttons, FourSquare comments, GetGlue checkins (for food related content - but not actual restaurants), and more. (Ex tempore thought: GetGlue should enable check-ins for what you're cooking in your own kitchen)
Give weight to acknowledged micro experts. These are the kinds of people whose reviews you can subscribe to via Yelp. They may or may not be professional reviewers/cooks/restaurateurs. They may or may not have a blog. Regardless, these “brands of one” have demonstrated a passion and an articulate set of opinions that resonate with me. We can see early instances of this with Google’s algorithms for weighting social media posts from Twitter and Facebook. I’d like to see something similar with the reviews in their Places pages.

The company that can solve the first two challenges will have won a big trophy, indeed. While I see the beginning of this sort of effort with TripAdvisor and Facebook’s “Cities I’ve Visited” app, I really believe it is Google who can take this one home. If they can get their GoogleMe concept out of the starting gate and then combine it with the structured (star-based) reviews they host and aggregate on their Places pages, we might have a winner.

What are your thoughts? Are you finding consistent value in reviews for restaurants? How about for hotels and services? Are reviews more or less helpful when you're away from home?

The Internet Gets Ready to Enter The Living Room (finally)

2010-09-22T10:35:00.000-04:00

Each day it becomes more apparent that we are entering a new era of multiple connected Internet devices. As the gates to the living room fall, there will be great opportunities for smart marketers...and great disruption for incumbent agencies, marketing service organizations and marketing executives.

Remember WebTV? In 1998, after graduating business school, I was oozing with passion for the potential of Internet and wanted to introduce this to my father. So I set him up with WebTV. I remember hooking it up, selecting the proper dial in number, testing it and showing him how to use that clunky keyboard to navigate the screen. Boy, we've come a long way since in the last 12 years. Here are a few recent announcements that illustrate the fundamental change we are all about to experience.

Tablets - Apple launched iPad in April and there are at least 7 tablets due to launch between now and Q1 2011. Users are fascinated with the iPad for both personal and business use. They have innovated around the iPad. For example, some use Velcro to attach the iPad to walls and objects everywhere - creating their own connected screen experience. As the market has voted, Tablets are great media consumption devices. Tablets and their well designed apps will also function as remote controls for connected TVs in the near future.
Apple and Google TV - The latest version of AppleTV, due out later this year, now integrates with NetFlix, streams pay per episode TV shows with Disney and Fox among other upgrades for $99, down from $299. Rumors are strong that Google is working on an Internet TV service. We should expect this to be a bit more open than Apple, run on a version of Android and provide access to Android apps.
TV OEMs - Connected TV offerings are hitting the market in time for the holidays. Expect to see offerings from all major players including Samsung, LG and Sony.

There have been many challenges to bringing a good Net experience to the TV. I remember discussing some of these during my interviews with Microsoft's Digital TV group in 1997. I lack of standards, bandwidth as well as a well-funded battle for the user interface between hardware, software, cable and satellite companies. We had a bunch of closed platforms seeing big dollar signs if they could be into the living room on a large scale. Today, thanks to a convergence of enabling technologies, new gaming platforms and Steve Jobs, we will see a robust Net experience on existing TVs as well as new connected screens. Here are some of the reasons we will see the Net enter the living room on a large scale in the next 18-36 months:

Bandwidth - ever increasing, we now have ample bandwidth to stream TV, movies, live sports, etc. I really enjoyed watching multiple March Madness NCAA games on my iPhone and TV.
Cloud Computing - technology, security, storage, bandwidth and other factors have come together to enable large scale Cloud computing. We don't need to store our media (DVDs, PCs, servers, etc.) in our homes any longer - there is ample space in the Cloud. From our TVs, we'll also be able to access all media we've created (photos, videos, etc.) from cloud-based websites and applications.
Wii - gesture-based natural user interface for TV was introduced. This educated many consumers about what was possible beyond the remote, keyboard and mouse.
Apple - with iTunes, Apple cracked the music business model question. With iTouch and iPhone, they've delivered a more intuitive experience. With Apps, they've developed a new (closed) eco-system that they are sure to leverage accross all device types from iPod Nano to wide screens in your home (iScreen).
Social Networking - Social now has the reach of mainstream media and enables shared media experiences. Verizon FIOS has integrated social feeds into their interactive TV offering.
Media Business Models - the networks and content producers are figuring out how to make money on the Internet. Steve Jobs has showed them the way, and, albeit slowly, they are all coming to the party.
Demographics - the habits of the younger demos diverge significantly from the Baby Boomer and Gen X generations. They will welcome a new, connected TV experience.

What are the marketing implications of the arrival of the Net in our living rooms? Here are a few thoughts, but I am sure there are many more and I welcome all comments below.

Marketing Competitive Advantage Up For Grabs - for marketers, the proliferation of multiple connected devices including in the living room and home is both a threat and opportunity. Marketing competitive advantage will be up for grabs. Each device platform becomes a new demand channel. Those marketers that invest in optimizing the user experience on all devices as well as the digital media/advertising for all devices will reap the rewards.
Agencies Have to Change - it remains to be seen if large agencies will be able to free themselves from their existing business models and comfort levels and build effective competencies around this new paradigm.
Brand Advertising Finally Moves to Net - There will be great opportunity to move brand advertising dollars to the Net. Imagine the impact of rich, interactive digital ad units on your TV. iAd for Apple TV? Who will profit from this?

Do you see it as I do? All thoughts are welcome and appreciated. Please comment below.

Mobile + Social = GeoSocial Strategies for Hotels

2010-08-31T16:00:00.000-04:00

With Facebook’s recent release of its Places features and the growing enthusiasm of Foursquare in particular, mobile enabled Social Media, or GeoSocial, is coming into the mainstream. I’ve seen great articles lately regarding the power of mobile marketing vs traditional web, and I’d like to add to the discussion with a particular focus on hotels. In general, I see two broad GeoSocial strategies for hotels: Internal Strategies are most ideal for large resorts that have a variety of amenities and services onsite. External Strategies are more suitable for limited service hotels, especially those that belong to a brand with multiple sites.

Internal Strategies focus on being sure that the major GeoSocial platforms (Facebook Places, Foursquare…) have listed all of the possible locations where guests might congregate at your hotel or resort. This includes all restaurants, bars, golf, spa, rooftop areas, and more. Because many venues/places are user generated, you’ll usually find that most of your venues are already covered. An important first step is to claim each of these venues/places. And be sure to check for misspellings or other rogue venues that reference your hotel, but might not be “official” and therefore create unfocused traffic. As the GeoSocial services themselves become more sophisticated, you will be able to engage in dialog with your guests on more focused topics, like golf for example. At the same time, your guests (and their friends) will be better able to share, provide feedback, and more.

Connecting with your guests on these various fronts should drive social acquisition, which supports a variety of objectives (see here for a few ideas). First efforts in this area do not require a specific mobile application or website updates. However, as hotels evolve to more sophisticated strategies, mobile applications and websites will become a necessity.

External Strategies for GeoSocial seek to leverage a hotel’s role as a defined destination and an ambassador to a particular neighborhood, town, or city. For example, your guests will still need/want restaurants, bars, and business services, even if your hotel does not offer them itself. Your external strategy should seek to extend the concierge concept for guests who need help. The challenge here is that this strategy seeks to insert itself between the guest and the existing GeoSocial platforms and Review platforms like Yelp, Google, and others. This means that a mobile website or mobile app is almost certainly a necessity, which creates a higher barrier to entry for smaller or individual hotels. The payoff, especially for chains, however, is that guests will have a ubiquitous application to help them navigate from city to city, using the hotels as a base of operations – perfect for business travelers and road trips.

When thinking through mobile application development, consider functionality that will be most useful for the guest (hint: it’s probably not creating another reservation). Think through, too, how the application can leverage existing platforms – it is unlikely that anyone will get value out of a brand-specific platform for rating restaurants, for example – let the existing services like Yelp handle that for you. For a great example, see the WehoKey mobile app put out by the West Hollywood Visitors Bureau.

Also, note that internal and external strategies are not mutually exclusive. As an example, a resort can ensure that all of its onsite bars, restaurants, and services are represented while also including (perhaps for a price) local tour operators or other specialty service providers who don’t compete with the hotel directly. In fact, enabling local business to advertise on your mobile application could become a new revenue stream. And, as platforms continue to evolve, coupon options enabled by mobile could support per-person tracking of traffic driven from a hotel to local restaurants.

If that last example seems too far-out for you, consider where we were two years ago in regards to Facebook and mobile adoption. The pace of user adoption of these technologies, and the pace of the technological evolution itself, continues to quicken. It is essential to begin thinking now about these new opportunities if hotels are going to have any hope of gaining a competitive edge in the near future.

The iPad Impact

2010-06-17T15:03:00.003-04:00

"What is unique about the iPad is they are truly the most tactile device, with a larger screen where you are actually moving the content with your hands, not a mouse or keyboard," she said. "This is a more immersive experience than the lean back of TV or the lean forward of the PC. You are part of the content."

Great quote from Catherine Spurway, Pointroll VP Advertising and Marketing. I've been using an iPad for about a month now and my expectations and early hypotheses have been shattered. When Apple announced the iPad I felt it would be mostly a media consumption device - a large iTouch. I believed it would be hard to use for productivity based work apps. I under valued this revolutionary product and the great opportunity for touch interfaces.

The iPad experience is so superior to the PC or Mac model. I now refuse to travel with my Sony notebook (which is quite small). I am typing this blog from my iPad while the person sitting next to me on this AA flight watches a movie on hers. I brought my notebook on this business trip but haven't booted it up - just thinking about that makes me queasy! For now on, the Sony will stay in its dock in my office. I feel so liberated and know my travel life will be better, easier, more productive and more entertaining. A wise colleague has a great blog called "Death of the Mouse". Through my recent iPad experience, I now understand the paradigm change to touch interfaces. As the mouse dies, so will the hardware and software that work with mice and support the PC paradigm.

This is possible due to the beautiful Apple design and user experience plus cloud computing, easy low-cost apps, and improved and pervasive mobile broadband. This iPad experience will only get better as more apps are released and integration between apps, device and cloud services improves. There are a slew of new business productivity iPad apps hitting the market including apps for viewing, editing and saving Microsoft office files. The NY Times reviewed a couple of these new apps today.

The Puppy Effect
Many of us have experienced the magnet effect of walking a puppy in NYC (free tip for singles out there). Well, my new puppy is my iPad. Everyone wants to see it, touch it, play with it. I am having more conversations with strangers (do I really want/need that)? And once someone tries it, they must have one. I have seen this with a few friends already with their wives contacting me with questions so they can order the iPad for Fathers Day.

Naturally, being the digital marketing consultant and competitive freak that I am, I need to make a bunch of predictions about the winners and losers from the new iPad paradigm so here goes.

The Winners

Apple, naturally – the stock broke 270 today…all time high.
Smart advertisers (and agencies) who will test this platform before it reaches scale – test, measure, refine…
iPad app developers – the smart ones will develop “universal applications" (iPad, iPhone, etc.)
iPad accessory makers – the iPad needs a lot of accessories to connect to devices, to enjoy media, etc.
Desktop makers – much cheaper than laptops. More will ask “do a really need a laptop and iPad?”.
Cloud services – as local storage goes away, demand for the cloud increases.
Digital Content producers – the iPad is the best digital content device ever.

The Losers

Apple, again - do we really need both iPad and iPhone? There are better phones and networks. Plus, there's little app synergy yet. Time will tell...
Notebook makers – see above.
Software incumbents – see above.

So, what do you think? Please comment below.

The Social Media ROI Framework- a Model for "I"

2010-06-04T14:13:00.001-04:00

Challenge: Especially in times of lean budgets, many organizations are reacting to the emergence of Social Media by tacking responsibilities onto resources that are already fully utilized. The results aren’t surprising; these under-resourced social media efforts do not yield desirable outcomes in terms of awareness, revenue, or operational efficiencies.

Solution: Use today’s post to specify core use cases and to build a spreadsheet that provides empirical labor estimates. I recommend that you revisit this exercise periodically to fine tune current and forecasted resource needs, which in turn play a substantial role in defining the "I" of your social media ROI calculations.

Use Case 1- Read Content

If you haven’t yet invested in a social media monitoring tool, start with Google.
Count up the quantity of brand mentions that appear in a week. Break this out by major channels/categories like Facebook, Twitter, Blogs, YouTube, Flickr, news, and channels specific to your business model (Amazon product reviews, for example).
Make a “feels right” estimate for how much time will be needed to read a mention. Hint: It’s somewhere between 15 seconds and three minutes.
Multiply the time per mention by quantity of mentions.

Use Case 2- Respond to Content

On average, about what percent of mentions will your brand respond to? Again, try to break out by channel/category. For example, response rates to Flickr photos will be far lower than posts on your Facebook wall.
Multiply your percentage by the total quantity of mentions estimated in the prior use case to establish an estimated quantity of replies per week.
Like you did with “Read Content,” estimate time per response and multiply by total estimated responses.

Use Case 3- Create and Publish Reports

Estimate how much time per week will be needed to record mention and response metrics for your brand in a spreadsheet.
Another hint: Social media monitoring tools require no time to generate reporting, whereas the operational cost of “free” tools can begin to look daunting once the building spreadsheet reports is considered.

Use Case 4- Analyze Data

Allocate enough time per week to allow analysis. Analysis should be conducted by resources beyond those who participate in the first three use cases. Think along the lines of a 15 – 30 minute review per week by Marketing, Customer Service, and Sales executives, for example.

Use Case 5- Create and Publish Planned Content

“Planned Content” tends to skew more towards marketing and awareness than the responsive content mentioned above. This includes executing contests, content that ties in with other channels, and more.

Use Case 6- Manage Fans and Profiles

Clicking “yes” to allow friends and fans to follow your brand doesn’t take that much time per week, but record it nonetheless to complete the picture. Over time, these small activities add up.
Bigger brands might need an hour per week. Smaller businesses should expect something more like 15 minutes a week.

Use Case 7- General Monitoring

It’s important to earmark time per week for pure browsing of mentions across different channels. Without allocating this time, organizations tend to gain tunnel vision around primary sources of content at the risk of missing out on emerging new blogs, for example, or the long tail of mentions across the internet at large.

Next Steps: After you’ve completed this exercise, you’ll have a first stake in the ground for how many hours per week your brand will need to support core social media efforts. To estimate labor cost, multiply by an estimated hourly rate. If appropriate, different hourly rates can be applied for specific use cases like Analyze Data.

Keep this data relevant: By necessity, most of the inputs (and therefore outputs) of this exercise are estimates. As time goes by, however, you’ll have real data coming in. On a regular basis, fine-tune the numbers for both volume and for time spent per use case. These refinements will bring more clarity to your current state and can support more accurate forecasting, too: Use trends to estimate when fans/followers/mentions will increase by 25%, 50%, and beyond and note how turning these dials affects overall resource demands. Along with other data inputs, your spreadsheet will become a budgeting and resourcing blueprint that justifies shifting resource costs from traditional areas like call centers and Marketing/PR to where the customers are: Social Media.

Are Your Facebook Like Buttons for Sale?

2010-04-29T11:40:00.000-04:00

It’s been about a week since the F8 conference, and Facebook’s new Social Plugins, including their Like button, remain the biggest news in social media. One of the most important benefits of the Like button is that it enables brands to grow their fanbases without cannibalizing “traditional” website metrics, especially e-commerce revenue. And Facebook is happy, obviously, to dramatically increase their web presence and their level of profile data per user.

But I see already that the Like button could be doing something more. Here’s an example: I go to TripAdvisor.com and select The London NYC (disclosure: they are a client). I click the “Like” button there, and here’s what appears on my Facebook wall:

“Aaron likes The London NYC on TripAdvisor.”

So what happened? TripAdvisor just got two links back to their website by piggybacking on the brand equity of The London NYC, one to TripAdvisor’s page for this hotel and the other to TripAdvisor.com. Yes, the hotel gets measurable value in directing people to its TripAdvisor page, but that traffic is substantially less valuable than traffic to the hotel’s own site.

And therein lies the opportunity: The Like button could create a new B2B market where Fans are the currency. In addition to driving traffic and/or revenue, could sites like TripAdvisor charge for driving Fans, aka: Likers? Look at your own website, could your Facebook Like buttons be for sale? Help me if I’ve missed this, but I don’t see anything in Facebook’s Terms of Service that forbids it.

We can ask this question across a spectrum of business models/relationships; below are three general categories, to help get the conversation started:

Keep the target of the Like button at its source: If implemented, would/should Like buttons on Amazon.com point to the Amazon product pages or to the manufacturers’ pages? I would imagine that many manufacturers would prefer Amazon because of the heavy revenue-generating benefits.
Point the Like button to a third party site: The existing Like buttons on IMDB.com could point to that movie on Netflix, for example, to help drive revenue. Studios might prefer this for movies like “Up in the Air,” which just sort of come and go. For franchises like Star Wars, however, the studios might prefer the long-term value of the fan and potential merchandising opportunities that can be realized by directing to their own website.
Point the Like button to the manufacturer/provider’s page: This is the TripAdvisor example. I could see many hotels at least considering paying to have that Like button point to their own websites. See below for what they would gain by doing so...

To further highlight the opportunities and threats of the Like button, let’s continue with the TripAdvisor / London NYC example: Replacing TripAdvisor's Facebook “Share This” buttons with the Facebook “Like” buttons might seem like an incremental shift, but it’s not. It’s a power grab; it’s a first (and commendably early) move in a fight for fans and for eyeballs that drive ad revenue. The hotel misses out in at least three ways:

Missed long-term benefits of having the potential guest in its social graph. When I click that Like button, I have NOT become a fan of the hotel. I am not in that hotel’s social graph, and their marketers are not really any closer to me than if I clicked nothing at all. (Side note: we’ll have to discuss “fan fragmentation” in another post – pretty soon I’ll have many different flavors of becoming a fan of the same hotel, for example, via different review sites)
Less potential traffic to its own site (bad for a variety of reasons, including diminished upsell opportunities)
An arguably diminished share of potential revenue

Would hotels be willing to pay to regain these opportunities if TripAdvisor were to point their Like buttons to the hotel sites? Would TripAdvisor be willing/able to price and maintain this service in a way that makes up for their opportunities related to more site traffic?

The possibilities here are big. The big Social Media prize for 2010 is to determine the value per Facebook Fan for a given brand (and Twitter fan, FourSquare fan, etc). The toolset is not fully evolved here, but WebTrends is getting close with Facebook and others are soon to follow. In the meantime, some focused spreadsheet-building and a holistic metrics approach can yield at least an estimated FB fan value. As that number becomes more clearly defined, Fans could become a new B2B currency of the web. The review and reseller sites would have to include in their pricing the overhead cost of maintaining hundreds or thousands of Like button destinations, but the potential is certainly there.

Yet despite the opportunities, I don’t see this transition happening overnight. Here's three reasons why: 1) Depending on the brand, value per fan metrics are fuzzy to non-existent; 2) supporting this market could require large-scale technical and sales efforts; and 3) no turnkey e-commerce model for this like with Google’s AdWords.

Look for small sites –probably bloggers- to take this on first, most likely as an ad-hoc revenue model along with AdWords and banner ads. These small sites can skirt around the above challenges with spreadsheets and a manageable volume of Like buttons.

I focused on hotels today, but keep in mind that this discussion can apply to a large swath of websites – pretty much any site that reviews or enables ecommerce. Where do you think this opportunity will be realized first?

A New Decade Finds Google Under Assault

2010-04-26T18:55:00.001-04:00

In an earlier post, I referred to the prior decade as the "Google Decade". For digital marketers, the big story last decade was paid search and organic SEO. Google grew search market share every quarter and expanded their AdWords program to many sites and countries. They also established a culture of innovation that resulted in numerous new products such as Content (display ads), Earth, Print, TV, Gmail, Analytics, Apps, etc. Despite this new product rollout, Google still derives the vast majority of their revenue from AdWords, leaving them vulnerable to changing user behaviors and other advertising options. After dominating the last decade and proving a great ability to innovate and execute, Google finds itself being attacked from all sides. The recent news and announcements from Apple, Facebook and Microsoft tell the story.

Apple:

iPhone - despite their closed approach, single carrier strategy and Google's aggressive Android push, the iPhone continues to gobble up smartphone market share. For the quarter ending March 28, Apple sold 8.75 million iPhones, representing 131% unit growth year over year. Users don't search as much on their iPhones as they do on their desktop or laptop PCs. iPhone customers, instead, depend on Apps to find and enjoy digital information and content. Apple's App ecosystem and superior user experience are key to the success of the iPhone.
iPad - 500,000 units have shipped in the first week or so. This new device type, which runs on the mobile, iPhone OS, is changing the game in terms of how we consume and interact with digital media.
iAd - introduced on April 8, this program greatly benefits developers, publishers and advertisers. All iAds will be hosted and served by Apple. More about this can be found here and here.
iTravel - on April 21, Apple filed a patent for iTravel - their travel-centric App for the iPhone and iPad. Apple is getting into the travel transaction (full user experience) business according to the filing. This is consistent with their iAd strategy to allow advertisers to reach iPhone and iPad users without making them leave the App to respond to or buy from the iAd.
Implication for Google: For the first time, Apple is now in the digital advertising business and they have the mobile OS and platform to grow their advertising market share at Google's expense.

Facebook:

400 million active users - also, it was announced on March 19 that Facebook eclipsed Google and became the largest website in terms of page views.
Social Plug-ins - last week, Facebook announced their new distributed "Like" program which will significantly grow their rich user data and provide earned media value for commercial websites of all types. This valuable profile data will yield greater advertising value (ROI) and quickly grow Facebook into a digital advertising powerhouse.
New Graph API and platform - this simpler platform is designed to add value for developers, users and commercial websites. This should result in more "social graph" data for advertisers to target.
Implication for Google: Facebook is innovating quickly and solidifying itself as an extremely large and valuable advertising platform where precise targeting can occur - sounds similar to how we described Google 5 or 6 years ago.

Microsoft:

Yahoo Search Partnership - this deal will allow the #2 and #3 player to join forces to battle Google.
Bing launch and share growth - for the first time in memory, a search engine besides Google gained search market share. Microsoft has shown a great ability to innovate with Bing.
Facebook Partnership - last week, Facebook and Microsoft announced their social collaboration through the Docs.com launch. This site, which leverages Office, cloud computing and Facebook, enables users to create and share Microsoft office documents with their Facebook friends.
Implication for Google: Microsoft has a war chest of cash and is spending it to gain market share in Search and cloud-based Apps - two strategic markets for Google.

Google is firing back:

Android mobile OS and Nexus One phone - launched on multiple carriers with numerous headset models including Google's Nexus One phone. Early results suggest these phones are selling and allowing Google to gain smartphone market share, at the expense of RIM and Palm. Android phones make "searching" the web a lot easier than iPhones.
Bazaarvoice partnership - Last week, an interesting partnership between Google and Bazaarvoice was announced. Bazaarvoice provides private label user review technology to many major manufacturers and online retailers. Google will index these reviews and aggregate user scores and include them in search results and sponsored search ads. This exciting integration of earned media with paid media and search results will be interesting to watch.
ITA acquisition - just a rumor, but the strategic thinking behind this potential travel acquisition shows that Google is now willing to risk their AdWords revenue and compete with some of their largest advertisers (Expedia, Orbitz, etc.) in order to dis-intermediate the travel supply chain and bring more efficiency to the travel market.

What's your take on my analysis? Will Google withstand this attack and continue to grow at the levels we've all become accustomed to? Please comment below and keep the conversation going.

Apple's iAds - Further Analysis and Predictions

2010-04-19T19:09:00.001-04:00

After I wrote my last blog post about Apple's iAd mobile advertising program, I came across a link to Steve Jobs' 10 minute iAd introduction. I have to admit, I was blown away with the presentation and, while it confirmed many of my thoughts expressed in my last post, it also helped me crystallize the following implications and predictions for app developers/publishers, brand marketers and direct-response, transaction-based advertisers.

iAd Value for App Developers & Content Publishers

New revenue stream for existing their apps through the 60/40 ad media revenue share with Apple.
New source of business for developers through a new iAd development service.
A better advertising channel to market their own Apps.
Development tools that are "very easy" to use, according to Mr. Jobs.
Simple & easy process - Apple sells and serves all iAds.

iAd Value for Brand Marketers

Superior digital creative - iAds offer more interactivity than TV ads & more emotion than Display ads.
Better user experience - according to the presentation, navigating an iAd is "very simple".
Innovation value - brands can ride the "cool" and "innovative" halo from Apple.

iAd Value for Direct Response & E-commerce Advertisers

This lies with Apple's growing option value. I predict Apple will launch iStore which connects to merchant and travel back-ends via APIs and allow the user to transact via iTunes, just as they do currently with songs, movies, books and apps. Jobs mentioned a "shopping list" for Target - what does he mean? Is this a new form of shopping cart that Apple is working on?
When will Apple launch iWord - a DR ad solution tied to App Store inquiry targeting?

Net, net...the winners: Apple, developers and publishers, brand marketers. And, the losers: Google, Microsoft, Adobe.

Do you agree? Please share your comments.