What Comes Around, Goes Around

Call Center Is No Longer A Cost Center

A couple of weeks ago, I was at a client dinner with a major online travel partner. After introductions, the gentleman sitting next to me asked "have your clients changed their view of the call center recently?" Funny you should ask....

I'm lucky. I've been involved with digital marketing and e-commerce since 1998 and during the last 17 years, I have seen a lot change and a lot stay the same. For example, one thing that will not change is that inquiry based marketing (search box) will always be the best way to target users and drive measurable marketing ROI. What has changed is the role of the call center...

From 1998 to 2009, one goal of e-commerce was to reduce the call volumes and cost of the voice channel. Give the user the information they seek so they won't need to call your business. The cost of an e-commerce booking was dramatically lower than call-center booking, etc. Then, in 2009, Steve Jobs introduced the iPhone and, from that point forward, the role of the call center was never the same. It's a mini super-computer - yes.  But, it's a phone and when users experience any friction or when driving their cars, they will default to calling.  Even true for the those tech-savvy millennials.

Call Center As Mobile Sales Engine

As a consultant, I get to see a lot. I attend and speak at business reviews, board meetings, conferences, client annual meetings, etc.  Each quarter, I produce a Key Trends presentation. Since 2012, like a broken record, I've been talking about M&M = Mobile and Meta. DMW realized early that mobile conversion rates will never approach desktop conversion rates. In fact, 3 years later, we still see mobile conversion rates that average 10-40% of desktop conversion. Motel6's (DMW Client) new responsive site has the highest conversion index at 40%. We were early to identify the need for a call-tracking solution to attribute call revenue from digital media and roll into the e-commerce results. In Sept 2012, I spoke on an Eye For Travel Panel at Caesars Palace in Las Vegas. I made crazy proclamations like "Voice is the new sales center".  "Call center conversion rates are 30x higher than mobile". "TV advertising is in trouble". I was, and continue to be, passionate about the need to track and measure call revenue from mobile media.  

3 years later, unfortunately, very few clients are doing this. Why? There are technical solutions that aren't cost prohibitive. But, some clients haven't even tested them yet. As frustrating as this is to me, my experience has yielded insight to help explain this. It's due to organizational bias. The E-commerce teams get zero credit for call center revenue and therefore are not motivated to figure this out. The solution is to break down the barriers between departments and reward teams based on overall business results (for example, gains in market share and profitability).

The next day, during our meeting, the major online travel partner shared some interesting data with me and my client. Their mobile ad placement drove 100,000 calls to their call center over the last few months! And, they used call duration to estimate that yielded about $2 million in additional revenue, thereby doubling the media ROI. As we move to programmatic mobile marketplaces, we will all be under-bidding until we figure how the break down these silos and attribute voice revenue alongside e-commerce revenue.  

Please share any comments below.

The Cobbler's Children Go Unshod

Introducing The New DMW Website

We certainly do "stick to thy last" as the expression goes.  Yet, against all odds, last week, we were able launch our new website. It's taken us about 5 years to get around to this as we've been extremely busy with our clients' new websites, user experience platforms and digital media campaigns. Hence, the title for this blog.  

Joking aside, we're very proud of our new site.  A lot has happened since 2010, the most significant being the rapid adoption of mobile phones as our primary computing device. So, we've practiced what we preach and made the site fully responsive so it renders perfectly on any device.  It's clean and simple and the pages load extremely fast. It's easy to navigate. 

Client sites we are equally proud of for the same reasons (and more) include the following.  All have seen dramatic increases in conversion rates on mobile, tablet and desktop.

Take a look around these sites and let us know what you think.  With mobile traffic representing half of all website traffic, it's imperative to have a fully responsive, mobile-friendly website that offers the optimal user experience.

Contact us or leave a comment if you would like to discuss.

Comprehensive Mobile Strategy Drives Competitive Advantage

Since the release of the first iPhone and App store in 2008, there has been an ongoing debate about the Open vs. Closed Web and which will ultimately win out.  Almost four years ago (August 2010) Wired published a view that “The Web is Dead”. Those in the Search marketing space joined with Google in taking the other side that the Open Web will prevail.  

We don’t view this in terms of binary winners, however, but rather a debate about the direction of user behavior and the resulting marketing and competitive implications.  The way we see it, the last four years have shown us that while the Open Web and Search continue to drive trial and customer acquisition (which is incredibly important), the Closed Web, and mobile apps specifically, is key to user dialogue, frequency and loyalty.  The winners will be the first to master both the Open and Closed Web. We see this already in Travel, where Online Travel Agents have demonstrated the keen ability to marry both sides of this mobile world for competitive advantage and to grow their share of e-commerce bookings.

In this post, we will examine both sides of the argument, but then show how they are really two sides of the same coin.

Apps Offer a Superlative User Experience

The following chart shows users prefer Apps. Apps offer a faster, simpler and personalized UX.  This utility increases for logged in users due to easy form filling, more relevant content and access to user data. 

The fantastic UX that apps can offer through convenience and reduction of service friction has launched a new category of App-based businesses: “On-demand mobile services”. When their apps are superlative, some of these new brands have become successful very quickly. Uber and HotelTonight are leading examples – so successful, in fact, that they can upend traditional Search for specific needs. This point of view is shared by Cathy Boyle, a senior mobile analyst at eMarketer, who says “Search engines are not necessarily the first place smartphone and tablet users turn. The explosion of mobile app development and usage means mobile users have more – and more specialized – alternatives for finding information.”  

At DMW, we believe that app design, technology, marketing, and data are becoming an important combined factor in certain M&A activities, including last week’s announcement that Priceline is buying OpenTable and last year's acquisition of Kayak.

Mobile Browsers Drive Convenience & Discoverability

Despite the better UX of apps and users’ preference for them, we see from this chart that mobile web traffic out-paces mobile app traffic 3:1.  

Mobile browser traffic vs. app traffic for top 50 mobile sites

Given what we know about the superiority of apps’ UX and users’ preference for this experience, this is surprising. What’s going on? Despite the better experience, users still have to search for, download, and go through first-use steps with apps. In many scenarios these initial hurdles are outweighed by the need for a more immediate experience or an experience that invests less in a given brand. 

This is all relatively common knowledge, of course, but is usually used to play one side of the Open vs. Closed argument or the other. DMW’s point of view, however, is that this is not a mutually exclusive (nor permanent) decision for users. We believe this 3:1 ratio to be a very clear demonstration of a typical agnostic / loyalist customer mix. The 3:1 traffic ratio implies an average 33% retention rate, which is reasonable. Our takeaway: Businesses most adept at leveraging both the open AND closed web will win.

Indexed Travel App Ratings

To help further understand opportunities for travel brands, DMW studied customer ratings of apps (in Google Play and Apple Store) and indexed OTAs (7), Metasearch sites (5) and Suppliers (9) against the entire group.  Our findings have further informed our “open + closed” strategy. The headline is that OTAs and Metas index at 105 and 104, while Suppliers index at 92.

OTAs' and Metas' mobile apps have much higher ratings than Suppliers' apps

Highlights - OTAs and Metas:
  • The Rating range for OTA and Meta is quite small indicating 1) inherent value through scope/choice and 2) e-commerce businesses: they get it (strategy, management, culture, resource allocation, etc.)
  • Scale Advantage -- In the travel vertical, users find much more utility with OTAs and Meta apps due to the scope of services offered versus hotel or flight only apps.  Not surprisingly, TripAdvisor, offering the most choice, content and reviews, is the download king with an estimated 100 million downloads
  • DMW Takeaway: How you market the App will also determine how quickly you can scale downloads.  There are organic (free) and paid (sponsored) methods that are emerging be best practices. 
  • DMW Takeaway #2: We expect PCLN to leverage the OPENTABLE app downloads with Kayak, Priceline and Booking apps to gain further scale advantages.  It will be interesting to watch this potential synergy unfold over the next few years.

Highlights - Suppliers:
  • Among the supplier brands, the range in index scores, from 77 to 109, is much greater than the OTAs and Metas.
Avg. user ratings vary widely within the Supplier set
  • Kudos to Starwood SPG for their 109 Index (4.3 stars) and the booby prize goes to Hyatt (77 Index, 3 stars).  
  • DMW Takeaway: The enormous variance in app ratings for hotel brands is due neither to the strength nor size of their loyalty programs. Example: Marriott ranks towards the bottom but has the largest loyalty program.  What drives better ratings is a combination of better strategy and resource allocation, along with the expertise to design, build and market a superior app experience.

Advice for Suppliers: Strategize for the Virtuous Cycle

Suppliers who are looking to get ahead must factor in the CPA of bookings made through apps vs through third parties: Bookings made through apps are akin to bookings from direct website visits in terms of margins – the CPA is very low (need to factor in install and app marketing costs, subject of future post).  Aggressive brands will understand that ROI calculations for an improved app experience must include these higher margins as guests channel shift (in reasonable numbers) from intermediaries to the direct channel.

In turn, the combination of great UX, scope, and scale is a power play that creates a virtuous cycle of more downloads, usage, and profits -- which fuels greater investment in the app platform and marketing.  This virtuous cycle quickly becomes a competitive advantage: you will find more frequent updates and improved UX with app winners such as Booking.com and TripAdvisor.

What to Expect?

We expect this intermediary app advantage to enable further indirect e-commerce share gains over direct e-commerce.  OTAs and Metas will leverage these advantages to grow more traveler wallet share -- which will drive greater reach, downloads, investment in better updates and less hotel brand loyalty.   Unless the fragmented hotel industry (brands, owners, franchisees) starts allocating much more capital to this important area, they will continue to lose online revenue share.

Google has begun building a massive database of app pages and this will be very important going forward.  It will enable app marketers to leverage “pull marketing” through Google Search and “push marketing” through Google Now, Google Maps, and other Google apps.  The major OTAs and Metas are seeing their percent of traffic and bookings from Google decrease as a result.  The intermediaries’ traffic level from Google is down to 10-12% versus the hotel Brands with Google contributions over 20%.

What do you think about Mobile and App marketing?  Are we on the verge on of a new marketing frontier? DMW would love to hear your comments below.

By Jack Feuer -- Founder & President, Digital Marketing Works

How to Avoid Being Commoditized By Empowered Consumers

Consumers’ passion for and rapid adoption of technology presents both opportunities and risks for all businesses. As the time we spend with various screens reaches new highs (over 5.3 hours per day, eMarketer July 2013), the imperative to re-evaluate your marketing strategy and resource allocation intensifies. The largest risk is a drastic uptick in commoditization, especially if you are targeting or catering to the millennial generation. The opportunities include a social and mobile led retention strategy.

Even before the millennial generation, the winds of change, disruption, and consumer empowerment were underway.  Let’s take a look at the hospitality vertical and how empowered all consumers have become over the last 20 years.  Before 1996 (the year I started business school, referred to as BBS, before business school), planning a trip could include reading magazine, travel books, using your landline phone to dial a travel agent or call a travel provider directly (if you could find the number in the phone book). We had to book by using the travel agent, calling hotel directly or calling HRN (predecessor to Hotels.com).  Since we had no idea if the price being quoted as the lowest, we tried to negotiate (some baby boomers still try to do this). We would use paper maps and stop frequently to ask directions. Word of mouth was in person – not very viral.

Around 1995, everything changed when the Internet was born. Netscape went public. Bezos drove cross-county and founded Amazon.  In 1996, Expedia (then part of Microsoft), Booking.com and Travelocity were founded. Hotels.com launched a website to complement their 800# service. This was the beginning of empowerment. Consumers could log on to one site and view rates from my hotels in a market, view photos and book online. E-commerce was born.

Google started the year I graduated business school, 1998 – let’s call it ABS (after business school). This period is marked by the fast adoption of search and, later, comparison-shopping. This intent based, pull marketing changed marketing forever. Businesses who adopted search marketing gained a competitive advantage. Marketing accountability was born and I started DMW (Jan 2003). Consumers loved the immediate access to information and answers to their questions. Google quickly became a verb. TripAdvisor was founded in 2000 but really hit its stride during the next phase of empowerment. Compare the ABS to the BBS period – wow, what a difference. We could make better travel decisions while saving ourselves a ton of time.

The real period of empowerment began between 2004 when Facebook was founded and 2007 when Apple released the first iPhone.  Apple delighted consumers with an unbelievable user experience and ego-expressive design. TripAdvisor user reviews started to drive the choice of hotels along with rates and location. DMW began our user review optimization practice. Consumers became passionate about their smartphone – finally, an all-in-one device that was fast and really worked. The app community continued to fuel this passion by releasing great apps. Consumers were now in the driver seat. Twitter was founded in 2006. Next came the iPad in 2010. Mobile and social where building on themselves and consumers were more empowered than ever to make great travel decisions. By themselves. With their smartphone. They can share their experiences and opinions with friends and strangers. Meta-search on Kayak and recently TripAdvisor and Google further empowered users to compare hotels with real-time rates, availability, reviews, maps, etc.

Other important changes that lead to further empowerment included the growth of auctions for consumers and media buyers (Google, etc.), best rate guarantees, rate parity (or not), etc. With one click, consumers can sort results by price. All of this technology and change tilted the hotel buying process toward price, thus fueling commoditization. Disruption was all around with OTAs stealing share from each other and suppliers. Mobile apps and an intense focus on UX increased the scope (choice) advantages of the OTAs.

An important result of all this change is that Mobile app usage has become the new loyalty paradigm. Google is terrified of this as consumers can search their iWhatever and bring up their favorite app – bypassing Google search all together. When Google is under assault, so too is the competitive advantage that many of us established with search marketing. The "open" world of Google, browsers, and most websites (including mobile web) remain very relevant. Marketing winners, however, must continue to adapt. They must learn how to navigate the "closed" digital world, too: all iOS and Google Play Apps, as well as much of the social world (including Facebook). Understanding this “closed” universe and it’s relationship to the “open” Web is key to your next marketing strategy.

Millennials are defined as those born between 1980 and 2000, today 13 to 33 years old.  Their behaviors and needs are very different from the prior generations due, at least partly, to the new paradigms of mobile and social. They have grown up with technology and are extremely comfortable with it. Recent studies suggest they are open to learning, experimentation and are great sources of innovation. According to The New York Times, “Social media permeate the personal, academic, political and professional lives of millennials, helping to foster the type of environment where innovation flourishes. So when compared with older generations, millennials learn quickly — and that’s the most important driver of innovation.” These consumers are more transparent in their communication with peers (social media) and businesses (user reviews). This is very different behavior than baby-boomers, many of which are uncomfortable with change. In fact, compared with GenX and Baby Boomers, Millennials are open to personalization through data analysis and targeting.  Here are the results of an interesting study:

Unfortunately, due to these factors, Millennials also tend to be less loyal. But, they are open to trial and are a great acquisition opportunity.  Just make sure your user experience is optimized - both on property and via mobile devices.

Here are the key implications for marketers.
  • Understand your target audience. Whom do you need to reach and cater to achieve your business objectives.  Does your target include Millennials?  If so, adjust your market resource allocations appropriately.
  • Actively listen to your current customers and optimize their ratings and reviews.  This is foundational and will create marketing option value.
  • Increasingly move resources from offline to online. Rapid device proliferation and the empowered consumer dictate.
  • The Open and Closed web should be central to you marketing strategy. How do you win in a Web that is increasingly divided by open sites and closed app and networks?
  • Don't underestimate Social media.  How does social media feed your retention strategy? Acquisition strategy?  Mobile strategy? 
  • Be willing to cannibalize yourself....before you're cannibalized by a competitor or distributor.
  • Understand that customer experience is key to loyalty. Break down silos and collaborate with your peers in operations.
  • Really understand your metrics.  What’s your customer acquisition cost?  What’s your cost to retain a customer?  How do you drive increased frequency?  What’s your lifetime value of different user segments?
  • Use media and device attribution to measure and/or estimate return value (versus last-click measurement).  Ironically, digital marketing has become harder to finitely measure.  Learn to be comfortable with this and follow your customers.
Gotta wrap it up.  We are happy, however, to continue this conversation with you. Please comment below or contact DMW.

By Jack Feuer -- Founder & President, Digital Marketing Works

Reviews Are the Brass Ring on Google's Carousel

Since early 2010, we have been advising our clients that improved online review scores drive demand for hotels, and that reviews can drive both visibility and demand within hotel review sites like TripAdvisor. Our own client-side research was bolstered by Chris Anderson's landmark research paper in November 2012, which demonstrated a direct relationship between review scores and the actual performance of hotels.

Until now, however, the industry has not been able to determine what effect, if any, review scores have on the visibility of hotels in Google's organic search results. With Google's release of Carousel in June, however, it seemed like a good time to try and tackle this question.

What drives the placement of hotels from left to right in Google Carousel?

A deeper dive into Carousel also helps to round out DMW's recommendation for a Holistic Google Optimization Approach. For historical reasons, most brands (including hotel brands) have silos that manage Paid, Owned, and Earned media (POEM). Google increasingly considers all three of these areas as a whole, however, and brands must follow suit if they are to be successful. It is hard to overstate the importance of this; see our June blog post for more detail.

Holistic Google Optimization requires a coordinated POEM approach across all Google assets.

The Question: What level of influence, if any, do online reviews have upon a hotel’s Carousel ranking? To answer this question, we designed our study to focus on reviews and to set aside the many other complex factors that inform Google search results (like semantic, visual, personal, and price factors). While this creates a very simplified view of Search, it has enabled us to paint a clear picture and come to conclusions that we believe to be directionally correct and relevant.

Our summary finding: In a validation of predictions made in our initial Carousel blog post, the research showed a very strong correlation between Carousel rank and average review rating and quantity. Across all market tiers and search terms, the correlational coefficient of those data sets was -0.76 (out of a best-possible -1.0). Translation: Earned media (online guest reviews) is now a major component of Google's search results for hotels.

DMW primary research shows a strong correlation of Google review data with Carousel rank

DMW Primary Research: Details Snapshot
The findings and conclusions in this post are driven entirely from our own primary research. Here's a quick overview of the scope of the effort.
  • DMW ran approximately 4,500 desktop Google searches for hotels in 47 markets in The United States. 
  • Each of these searches returned SERPs in the new Carousel format.
  • For the top 10 hotels of each search, we collected the hotel’s name, rating, quantity of reviews, and rank (as displayed in Carousel). We also recorded the travel time and distance from each hotel to Google's definition of the given city. 
  • The markets themselves were selected from primary, secondary, and tertiary destination tiers. The majority (60%) of the markets in our study are primary markets.
  • We used in equal measure the following popular hotel search terms: 
    • hotels in [city]
    • best hotels in [city]
    • downtown [city] hotels
    • cheap hotels in [city]
  • Our research yielded approximately 42,000 data points, including data on approximately 1,900 distinct hotels.

How We Used the Data
Our study looks for correlations between a hotel’s rank in a search result with each of the following: 1) Google review rating (out of five stars), 2) quantity of Google reviews, 3) travel time from the hotel to the searched city, and 4) driving distance from the hotel to the searched city. We can look for these correlations within all combinations of query type (like "best hotels in...") and market tier. For example, we were not surprised to see a strong correlation between rank and travel time/distance: closer hotels ranked higher. 

Time and distance from a specific hotel to Atlanta, as defined by Google

Finding #1: Carousel rank correlates highly with Google review ratings. Our most important finding is encapsulated in the chart below. The relationship is impossible to miss. Our study also showed an equally strong correlation for a hotel's quantity of Google reviews. In both cases, these scores are on par with the correlation of time/distance and Carousel rank, suggesting that Google places a very high value on reviews indeed.

Google Carousel search results correlate very strongly with the quantity of online reviews and average rating.

  • Recommendation: Improve your hotel’s visibility via a Review Optimization Program focused on more Google reviews. While most hotel brands remain focused on TripAdvisor, seize a new advantage by optimizing for Google reviews. In addition to improved visibility, online ratings also improve demand (via increased click through rates that lead back to brand-owned booking pages). The best way to measure your progress is with compset indices of review quality, quantity, and recency. 
  • Extra Note: In our research,  90% of all hotels had 150 or fewer Google reviews. If you're looking for an arbitrary measure of success, breaking through the 150 threshold would be a great start.

Finding #2: 50% of all 1,900 hotels in our study are within two miles of the searched destination. 75% are within 13 minutes of travel time. When we couple this discovery with the fact that Google is ranking hotels in increments of (at most) 0.1 miles, it suggests that a hotel that is literally down the block could conceivably get a small boost in Carousel ranking (because it is slightly closer to Google's abstract concept of that city).

    50% of all hotels are within two miles of the searched city

  • Recommendation: Promote what you're near. Attempt to educate guests into searching for specific landmarks and neighborhoods instead of the whole city. Hotels that are not lucky enough to be right next to Google's specific latitude / longitude for a city must educate their market. Attempt to influence guests to search for the specific landmarks and neighborhoods that you are close to. Use paid, owned, and earned media to get the message out.

Finding #3: Google is improving its ability to understand the nuance of our searches. Google appears to alter the weight of hotel factors depending on the nature of the search. Here is what the data revealed...

The correlation of review and distance data with rank varies by search term, suggesting that Google applies different weights to best respond to the nuances of our searches

    • The generic “hotels in [city]” query is relatively balanced between Reviews (at about -0.55) and time/distance (at about +0.62). Both of these scores are significant, but not exceptionally strong.
    • When searching with the query “best hotels in [city]”, Google understands the user’s emphasis on quality and responds accordingly: it dials up review rating and quantity and dials down time/distance.
    • If searching for “downtown [city] hotels”, however, Google determines that the user’s intent is more focused on location and provides different results. The correlation with time/distance goes up to a strong value and review data diminishes (but still remains significant).
    • When searching for “cheap hotels in [city]”, we see no strong correlation with review data or time/distance. We assume this is because substantial weight is being given to what Google knows about the prices of hotels instead (not measured in this study). 
  • Recommendation: Pursue a coordinated Holistic Google Optimization effort across POEM because the sum is greater than the parts. Examples: We clearly see that SERPs for "best hotels in..." rely on reviews, but we know that good content factors in as well. The results of "Hotels in..." and "Hotels near..." searches are completely dependent on what the user has been educated to search for (landmarks instead of whole cities, we hope). "Cheap" searches will benefit from an optimized Google HPA program, of course, but should perform best with good review scores.

Finding #4: Our findings hold true across primary, secondary, and tertiary markets. While we see some variance per market tier, our overall findings hold true regardless of the size of the city. 

    The findings of our research hold true across all three market tiers.

  • Recommendation: No hotel is too small to consider online reviews. Because we see a strong correlation of search rank and reviews for all three market tiers, even the smallest hotels should now consider a review optimization program. “We’re a small roadside motel” is no longer an excuse – especially in an era where those truck drivers have mobile phones and are asking Google for “the nearest motel”.
Final Thoughts -- For Now
Many of us have learned that “correlation is not causation”. In this case, however, we should assume a degree of causation because all findings are the results of Google’s explicitly engineered algorithms. In June, DMW predicted that the new Carousel SERP page would further drive a Google-centric POEM environment, and this research has empirically demonstrated just that: earned media (online guest reviews) is now a major component of Google's search results (via Carousel) for hotels.

The new Google Maps app for Android highlights an optimized hotel search experience (with rates) and the benefits of "reviews from trusted friends and experts"

We also predicted that rates, informed by Google HPA, would begin to show up in Carousel. As of Sunday, this is now an official feature in the Google Maps app for Android. We are sure that Carousel will be soon to follow. When it does, we will provide findings on the correlation between price and rank -- especially for the popular "cheap hotels in..." search query. We also predict, however, that any brand that views HPA as a siloed exercise in Paid media will see suboptimal results. Google HPA must be considered in the context of Review optimization --and of all POEM media-- as well.

When taken all together, our findings are a good-news story for hotels. Suppliers have a big opportunity to win share back from the OTAs by grabbing the brass ring on Google's Carousel -- no OTAs are allowed on this ride!

What's Next? 
We believe this research to be an industry first, and we will re-run our research on a periodic basis to track changes that may result from future Google updates. We are happy to respond to questions. Please ask in Comments, below.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

A Gnome is Not a Core Competency - Intermediary Consolidation Continues

The Expedia and Travelocity partnership announced last week has many implications for the hotel industry. This blog will explore the many questions about this deal.  Why would two arch rivals and founders of the OTA merchant and packaging models hook up?  DMW has a unique perspective on this due to our diverse client base of hotel owners, brands and managers including branded, independent, economy, limited service, full service and luxury hotels.

The bottom line is that market forces brought this deal to fruition.  OTA margins are under increased pressure, technology capital requirements are increasing, the meta-search channel continues to grow, a proliferation of tech startups is trying to disrupt the channel, money is cheap and equity is fully valued. The consolidation wave has already begun with PCLN buying Booking.com and Kayak and EXPE buying Trivago.

The rationale for Expedia is easy to grasp:

  • Market share and reach growth.  According to Brian Nowak at Susquehanna International Group, LLP (SIG), "Travelocity is the 5th most visited OTA in the U.S., with ~7.2mn unique visitors (See Fig 1). Travelocity and Expedia's user bases do not have much overlap, as 45% of people that go to Travelocity.com don't visit Expedia.com."

  • SIG further estimates that Expedia's total traveler reach will increase by 19% through the deal (See Fig 2). They believe that over the long-term, traffic trends and reaching travelers will matter in market share battles (such as Expedia and Travelocity's battle against Booking.com in the U.S.) and this will be a positive for Expedia's reach.  DMW agrees.
  • While gaining this reach and market share, EXPE is severely weakening a competitor.  How does TVLY compete with no sustainable competitive advantage?  How do you spin "marketing" as core competency when you are shedding the technology side where much of the UX innovation lies.
  • EXPE will gain increased technology scale which can fuel greater tech investment and help EXPE compete with PCLN.
  • EXPE should gain leverage with suppliers by aggregating more demand and offering a single direct connect option.
  • Meta-search road block?  One can envision a future where EXPE coordinates meta and PPC bids between Expedia, Hotels.com and Travelocity and occupy the top 3-4 positions for a overall higher ROI (or lower initial loss depending on how you look at it).  You can see a scenario where user is offered the same rate from Expedia.com, Hotels.com and Travelocity - all powered by the same database of inventory and prices.

The rationale for Travelocity, however, is harder to see despite the spin you read in the press.
  • Cost and capital savings - yes, this deal will reduce TVLY operating expenses and capital requirements.  There are rumors of an impending Sabre IPO so this may have forced this move. As a purely financial maneuver, this deal may work for TVLY shareholders.
  • The "merchant-model" is dead.  Perhaps TVLY wasn't prepared to make the investment to move to a guest pay at check-out model versus pay upfront model.  Certainly, this has higher conversion but lower cash flow for the OTA.  Expedia is currently rolling this out as the "Expedia Traveler Preference" or ETP program.
  • TVLY margins on each hotel booking will be 30-50% less due to revenue share with EXPE. Perhaps TVLY keeps 65% of 19% commission (example) = 12% - not a lot to work with to find ROAS through online advertising.  Perhaps EXPE will help out with more sophisticated, algorithmic bidding strategies between TVLY and EXPE brands.
  • With rate parity under attack, in the near future we expect hoteliers and OTAs to begin leveraging their closed database of users and off special hotel deals below BAR.  The OTAs, however, will need to fund this discount via their commission, which is a problem here since the commission is 30-50% less than it is today.
  • Longer term, I see only risk from a lack of sustainable competitive advantage.  I can't see how you separate technology from marketing for an e-commerce business.  Who will handle the front end UX (TVLY websites, apps, etc.)?  Where will the handoff to EXPE's backend tech occur? Aren't we seeing great innovation in this area right now where the back-end data such as rates, personalization signals, etc are fueling the front end content and engagement?
  • Sorry, but a Gnome is not a core competency.  

What are the implications for hoteliers? Overall, this deal is not great news for suppliers.  
  • Beyond 2014, negotiations may become a bit harder with Expedia. 
  • Our costs to direct connect, however, with OTAs may decrease giving us more funds to connect with Google HPA, TripAdvisor, Kayak, etc.
  • As the battle for market share between PCLN and EXPE heats up, expect ROAS from Paid Search and Meta Search to decrease.  
  • Expect more consolidation.  What's the future for Orbitz?  They could be more valuable in someone else's hand than as a public company ($1B Mkt Cap today).
  • Consider Review Aggregation on your direct website.  Kayak just announced this (as we predicted in Nov) and we may see it from EXPE/TVLY deal in future.
  • Get ready for a world in which hoteliers can break rate parity to our closed guest lists and start working on your new promotion calendar.  
  • Continue to take a holistic view to online distribution and marketing.  Understand that users will visit many travel websites before making a booking.  We need to be on all shelves, measure attribution and innovate on our direct web channel so guests choose to book directly with us. This innovation can only work when marketing and technology work together.
We would love to hear your comments on this blog.   Please share.

By Jack Feuer -- Founder & President, Digital Marketing Works

Google Chromecast and The Fourth Screen

Google's new Chromecast device is a $35 dongle that plugs into the HDMI port of an existing TV. Once plugged in, it turns your TV into a Chrome-enabled device that can instantly display streaming video and web content. It works by displaying the content of any other device, including Apple products, Windows products, laptops, phones, and tablets. To learn more about the user experience, here's a solid product review.

For $35, it's hard to go wrong with this purchase...

The content that can be displayed is "limited" to anything that can be see via the Chrome web browser and Chromecast-enabled apps (including Netflix and soon many others) running on another device. A minor benefit to this configuration (for users) is that costs and the form factor of the device are minor (no remote is needed, for example). The major benefit is for Google, however: you, the user, are already logged in with your gmail account via the other device. No additional steps are necessary for Google to have a complete understanding of your view history.

A fully-functional digital experience in the TV room is now in the visible near future (good for users). And, at such a low price, I see Chromecast as a Trojan Horse that will give Google access to the family TV -- the big prize in the merging battles for video content, advertising, and marketing (good for Google).

Because they have similar functionality, here's a few points of comparison with Apple TV:

  • Chromecast requires a device (almost any other device) to be the native host of the content that will be displayed on the TV, whereas iTunes runs on its own with a remote or app.
  • Chromecast enables anything that you can see through Chrome, notably the entire World Wide Web. Apple is primarily designed for displaying the content that you have purchased through iTunes.
  • When seeking video content, both enable “tv” and “movie” content via different methods. Apple has iTunes and Chromecast has a more fractured setup of Netflix, Google Play, and (soon) many other sources via its public API
  • Your Chromecast usage will eventually influence your overall Google experience (custom search results and shopping recommendations, for example). Use of iTunes and Apple TV does not currently influence your overall digital experience.

Three Screens or Four?
An influential research paper published by Google in the second half of 2012 gave momentum to the concept of "Three Screens". This concept describes how purchasing funnels and content consumption for any given customer now traverse three screens: PC/Laptop, Tablet, and Smartphone. Winning brands must 1) Optimize their user experience for multiple devices, and 2) Track customers across devices and provide seamless experiences across them.

In hindsight, however, this same research paper had dropped big hints regarding where Google might want to go regarding TV. If 2013 has been the year of "three screens", it is easy to surmise that Google hopes to usher in the era of "four screens" as soon as possible. Chromecast is fundamental to this strategy.

Google: "The New Multiscreen World". August 2012

Why is Chromecast significant? What will Google do with its new Trojan Horse? 
As with nearly all non-search services and products from Google, Chromecast is a means to an end. Google is not intending to drive meaningful profit from selling $35 devices. Instead, they hope to enable much bigger opportunities by getting these small devices into millions of TV rooms. My take on those opportunities...

  1. New User Data Points: Google will understand and eventually monetize how users interact with their “digital” experiences (smartphone, tablet, and laptops) and their “broadcast” experiences -- which refers to tv shows and movies with broadcast-level production values.
  2. AdWords: Enhanced Campaigns could be seen as a reactionary move for enabling better cross-device management of campaigns. It is also a pre-emptive move to handle an expanding set of device-types (Think: “voice on smartphones” and perhaps “Google Glass”). Google will learn how to include AdWords on the big screen, disrupting a massive industry and unlocking enormous opportunities for brands with true ROI reporting
  3. Google Video Ads: Advertising with Google goes beyond AdWords. Enabling "TrueView" video ads just become substantially more meaningful b/c low-cost video just became enabled for the big home screen.
  4. Google Play just became a real contender in the content distribution game, expanding their potential for big disruption beyond advertising and into "TV" and "movie" content itself. Also, the modest growth occurring with YouTube's Original Channels (see here for history), is about to get much bigger.
DMW Take for Brands:
Brands that still might be in the mindset of the text-based internet must shake off the dust and get into the video content game. Video is now inexpensive, fun, easily repurposed across multiple channels, and with trackable ROI (through assisted conversions). Specific recommendations include:

  1. Bring video into your POEM framework of Paid, Owned, and Earned media. Develop good habits around frequent creation of short video content. Best practices include incorporation of this video content into overall content calendar (that includes text and photo), and your full set of content channels.
  2. Responsive Web Design: As the home TV begins to solidify itself in the position of "The Fourth Screen", it will be yet one more reason to ensure that your primary websites are structured by responsive web design (the Boston Globe is still my favorite example). 
  3. If you haven't already, buy a Chromecast! For $35, it’s hard to go wrong. Play in this space and begin to understand the user experience. In this case, the experience is not about Chromecast, per se, but rather the broader four-screen paradigm. 

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Google Carousel and Holistic Google Optimization

Google is again shifting the ground under Hospitality's feet with its release of “Carousel”. This new version of its search engine results page brings a highly visual and review-focused band of results that hovers at the top of the "traditional" search results page. The Carousel replaces and enhances the previous "7-Pack" of local results that we have become accustomed to in the past couple of years.

Carousel results replace and enhance upon the 7-Pack

Hovering above any image in the Carousel highlights that venue in the Map. And, clicking an image results in a "Google Instant" refresh of search results. The name of the venue is added to the actual text of your search query, and the results page updates accordingly. 

Updated search query by clicking a Carousel image

Most of what I've been reading (here and here, for example) are focusing on strategies that are important but which DMW has considered for some time to be basic to organic search -- regardless of the visual format and algorithmic updates. In summary, if you want a ride on the Carousel, you need:
  1. Great reviews -- both quality and quantity. We have written about this topic many times, but notably in November and December 2012)
  2. Photographs that are, at least, good. This is another long-running topic for us. See October 2012 and earlier this month.
  3. Absolutely correct and consistent contact and address info. DMW makes this recommendation directly to our clients and recommends third parties who can support in this effort.
There is nothing wrong with this advice, per se; it will help you to optimize relatively far through the conversion funnel. There is certainly more to the story, however. The big picture is that Carousel is also creating threats and opportunities in organic search, generic paid search, and branded paid search.

Our headline advice related to Carousel is that brands must now adopt a "Holistic Google Optimization" approach. "Google Optimization" suggests that winning brands must focus on optimizing themselves in all aspects of Google, including:
  1. Not just reviews, but Google reviews
  2. Google Hotel Finder
  3. Google Paid Search
  4. Organic Search

1. Optimize for Google Reviews
Take a closer look at the screen captures above. The first presence of a non-Google review is third in organic search results -- and that's after 1) the Carousel, 2) paid ads (which we'll review in a moment), and 3) the Map. Although many non-Google review sites come up in organic search results after clicking an image in the Carousel (the second screen cap), one could argue that it's almost too late at that point for those reviews to be influential. (Also see how far down TripAdvisor has been pushed in the screen cap under #2, below) Takeaway: Google has made yet another end-run on the review sites like Yelp and TripAdvisor. If you haven't started yet, start optimizing for Google reviews right away. 

2. Optimize for Google Hotel Finder / HPA
Let's start with a look at a hotel query...

Optimize for HPA

We see the Carousel, the Map, traditional paid ads on the right, and the relatively recent "HPA Commercial Unit" (the box that lists the hotels and their rates) under paid ads. Although their algorithms are not known to us, we can be sure that Google has tested the location of this box carefully and that it is primed for maximum conversion. Takeaway: It is safe to assume that Carousel has upped the ante on HPA (Hotel Price Ads) and that brands should take notice by optimizing for this service. Also assume that HPA prices will soon work their way directly into the Carousel -- the cost category for restaurants is already there, and I'm sure that hotels will follow soon.

3. Optimize for Paid Search
In the same image above, it is not surprising to see a big OTA like Booking.com with the top paid spot for generic search terms. Click on an image, however...

...and we that Starwood have done their homework (like most good hospitality brands) and bid highest for the branded keyword search. Let's sum up what just happened from the consumer's perspective:
  1. He typed in a generic search term like "atlanta hotels"
  2. He was presented with an appealing and informative user experience that shows relevant hotels that appear to be sorted by reviews. 
  3. Our consumer selects a hotel that has a combination of good reviews and an appealing image.
  4. The moment he clicks that image, Google transforms his brand-agnostic search query into a loyalist search query by adding in the brand name and displaying corresponding search results.
  5. And that brand's paid ad is displayed almost as prominently as the Google+ Local box on the right.
Takeaway: Many more agnostic searchers are about to be presented with your branded ads in Google. Expect impressions for branded keywords to go up, and plan accordingly.

Regarding paid search for agnostic keywords, we should assume lower click-through rates as traffic is (intentionally, it seems) directed to the Carousel and then converted to a branded search when users click on the images. Assume diminishing quality scores and increasing costs.

4. Optimize for Organic Search
This might seem counter-intuitive at first, but we believe that Carousel will create opportunities in organic search optimization. After all, there is the simple fact that Carousel opens up additional space at the bottom of first SERP page by moving the old 7-pack up. While the value of being on "page one" could conceivably diminish in the face of Carousel, there is still no doubt that you want your brand on that page. Takeaway: Don't quit on your traditional websites and other digital assets! Focus on fast load times, relevant content, and all other forms of content optimization.

Closing Thoughts
Google's game plan with Carousel seems to be: 1) Take agnostic intent, 2) Attempt to engage it, and 3) Turn it to a branded query. In this effort, Google continues to turn the screws in Search towards its ultimate advantage. In many cases this means drawing together the typically distinct silos of organic search, paid search, reviews, social, and more. Most analysis on this latest development will focus on one silo or the another. The real winners, however, will understand the broad impact this has on your Google presence as a whole (organic, Google+ Local, AdWords, and more) and will take action appropriately by creating a "Holistic Google Optimization" strategy.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Selling Experiences in the Post-text Internet

The General Manager at one of our client hotels is interested in setting up a “social dashboard”. He wants to better understand how his compset is using social media and to develop his own best practices.  While talking through it, the inevitable “Social ROI” question came up. I explained that even the very best have to work very hard to define the right objectives and measure the results of Social.

At DMW, we have put significant effort into understanding how Social can help clients to achieve their objectives. Especially when measuring short-term (ie: "annual" or "quarterly") monetary return, an essential metric is “Assisted Conversions” via Google Analytics. The Assisted Conversion metrics give credit to all of the assets that a customer visited before booking a reservation, including social channels like Facebook. By relying on such metrics, DMW understands that social channels usually make great soccer midfielders (that is, they assist in many conversions) but not particularly strong strikers (social is not usually the actual point of conversion nor the point prior).

Sports metaphors like this are used all the time when trying to understand where to give credit for conversions in a fragmented digital world.  DMW has held the long view, however, that social channels are very young and that measuring short-term financial return is not the only objective worth pursuing.

I think that a more apt metaphor is driving a car. When we learn to drive, we don’t do it for some short-term gain like picking up milk at the grocery. We learn to drive so that can get to work, explore new places, visit with friends, and generally be more effective in our world.

Learning to drive does more than help us with mundane and immediate tasks; it opens up a whole new world of opportunities for us. 

And so it is, I believe, with what we currently call “social media”. Short-term return is meaningful, and we must measure our efforts. But, the real prize is learning how to navigate this space so that we can make the most of Social as it matures. "Navigating this space" goes far beyond awareness of the latest social channels, it includes the development of a strategic framework that enables you to assess new channels and an operational commitment to creating the appropriate content, conversing with your community, and drawing in other team members as needed. 

I'm sure that most of our readers have read/heard/seen similar soapbox statements regarding Social in the past three years. Of course hotels and restaurants have to prepare themselves. But when? And at what cost? And how far should they commit before the returns, however we might measure them, begin to diminish? 

Jack and I have been seeing macro-level signals lately, that I believe will put “social” and its value into perspective.

Let’s start by connecting these few dots:
  • Facebook acquires Instagram in April 2012
  • Yahoo’s recent acquisition of Tumblr
  • The Global President of iProspect announces his new position as President of relative unknown Skyword.
  • The recent beta release of Vine
  • The growing ascendancy of Buuteeq in the hospitality industry

So what do these various points have in common? They are all leading indicators of the emerging “Post-text Internet”. I use this phrase to describe the shift away from a primarily text-based experience to an era where people are communicating with each other with rapid-fire photos and short video clips.  In this new era, text --when used at all-- is used to support photo and video content. This is in direct contrast to the first two eras of web design (originally informed by newspapers and magazines), where many words were supported by some photo and video content. I won't dwell on this much further, but this shift from text to image is being driven primarily by the fact that --for the first time since cave art-- images are now as easy and inexpensive to create as text.

This shift is vitally important for hotels and restaurants. Photo and video are quickly becoming the primary model of communication between people who are sharing experiences. In particular for leisure travel and dining, experience, is at the very core of what is being marketed. Websites with static textual content will simply be ignored in the face of dynamic image-driven digital assets. If you have doubts on this trend, I encourage you to quiz teenagers regarding the social usage of their phones – it’s all about Instagram and supporting apps. For more empirical feedback, DMW consistently sees substantially higher conversion rates on clients' iPad-optimized sites (with a focus on big quality images) vs. their traditional desktop sites.

Along with a shift from text to image, the Post-text Internet is also noteworthy for dynamism of content. Stale content does not sell to consumers, and it does not sell to Google’s search algorithms either. I’ve discussed the concept of Content Optimization and how this can be deployed at hotels. If you’re selling an experience, dynamic image content will grow in importance for some time to come. 

The market events that I mentioned above are all part of the macro trend that is the emergence of the Post-text Internet, and I interpret these moves as big signals that this shift will be upon us sooner rather than later. As we enter this new era, we will slowly lose the distinction between “content” and “social content”. “Social Media” will simply be “media” and guests of all types will expect you to sell your experience with dynamic image-driven content across a variety of channels. In particular, they will expect such an experience on your owned digital assets (like your website). Our current internet construct of “social” occurring in one place and “static” occurring in another will simply go away. 

For good leading examples see: AirBnB, the Parc 55 Wyndham, and The Standard, and what ascendant mobile app HotelTonight is doing to bring more image content to its platform.

So now let’s come back to our GM’s question: What's the return on "social"?

The real value in engaging in “social” today is that it leads to best practices and a mindset that are very applicable to tomorrow’s marketing and eCommerce landscape. Even in situations where, say, Facebook is not moving the needle financially or even in terms of Guest Sat, developing operations and “mental fitness” in this area will absolutely pay off in the near future. 

In light of these trends, our advice is to take operational steps now. 
  1. Set up a content optimization assessment that helps to determine what kind of content would be most meaningful coming from your hotel. Hint: Resorts do better with inside-facing content (photos of fun at the beach, pool, ski slopes), while urban and limited service hotels do better with content related to the overall area (notes about special sporting events, seasonal local events, etc).
  2. For destinations: Contract with someone to rove the property and take candid photos and videos that can be posted on your various channels (traditional and social). For other hotels, find a resource who can put in small amounts of regular time to publish content based on your region.
  3. Begin to investigate website solutions that enable frequent updates of bright photos and video. Your winning solution should enable single-source publishing to desktop, tablet, and smartphone
  4. Focus on the big picture. In addition to looking for ROI metrics focus on competency and expertise. Look for signals that you and your team are beginning to internalize the difference between old content and new "Post-text Internet" content. If you get this right, the page visits, conversion rates, and revenue will follow.
By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Facebook Home and Local Intent

Facebook turned a clever trick this week with the release of Facebook Home, which places an all-Facebook skin on top of the Android smartphone operating system. Supporters of the move highlighted that Facebook have released the essential equivalent of a “Facebook Phone” while piggybacking on Google’s software and their partners’ hardware.

If you live in a Facebook world, the user benefits are immediately obvious. As usual, I will not spend too much space on a per-feature description. If you need to get up to speed, Facebook themselves can give you a good overview.

Facebook Home has some useful new features, but its real purpose is to give Facebook a platform that will help them to monetize mobile. Home will support this goal in two ways:
  1. A homescreen presence will give Facebook the opportunity to drive greater geo-related activity, specifically check-ins.  This will give Facebook greater visibility into user behavior and provide yet another set of data points that can be leveraged for effective marketing.
  2.  The homescreen presence will also create a much larger canvas for serving ads. Combined with more specific geo-data, the opportunity enabled by Facebook Home is to serve big, attractive ads that are relevant in real time. Capitalizing on this opportunity will open the door to the Walk-in Economy for Facebook-- much like Google Offers and Google Now is doing for their competitor.

Google currently holds the pole position for what is
sure to be mobile's grand race:
Enabling monetization of the Walk-in Economy

I’ve described before that even a small percentage of America’s Walk-in Economy would be a crown jewel for any of the major consumer tech players. Facebook is under pressure to monetize its mobile presence, and these changes could be paving the road to get there. There are notable challenges to overcome, however.

1. Users will have to accept ads on their home screens.
I assume that one strategy at Facebook will be to fully subsidize phones in exchange for home screen ads. The precedents are there: broadcast radio and TV, for example. In order to drive that acceptance, however, Facebook's Home ads will have to achieve either Apple-like perfection in design OR Google-like perfection in utility.  Facebook is a remarkable team with many smart people, but these are high marks to hit. 

2. Facebook will have to fight an uphill battle to maintain active users of Home
Be on the lookout for impressive numbers regarding the quantity of downloads of Facebook Home. These numbers will be true, but the rubber will hit the road three months later when we attempt to learn the quantity of active users of Home. I predict a significant decline as users realize that their other favorite apps don’t function as desired in Home. Such apps might include book-readers, cab-hailers, diet-trackers, and more. If they cannot send notifications or set up “Home” widgets, Facebook Home might not go the distance.

3. Facebook will have to stay ahead in the “useful features” game
Home definitely has some great features. Those features will almost certainly be co-opted by Google and perhaps even Samsung (perhaps in the same way that Home seems to have been influenced by the Windows Phone home screen). As that happens, Facebook will have to continue to out innovate in the smartphone experience if this strategy is to pay off. While Home is a great outside-the-box concept, Facebook has not had a great track record so far in terms of smartphone app design. If they can turn that trend around, it will increase their likelihood of success.

Facebook Home has a different look, 
but clearly took some tips from Windows Phone

4. “People Ahead of Apps.” Legitimate Strategy?
Zuckerberg had that great tag line for the release of Home, but I challenge the concept that all smartphone users want people ahead of apps and data. In many scenarios, our friend networks are simply not robust enough to respond to our questions and needs. Overall, I still don’t think the case has been made for the utility of friend-sourced data. My proof is the weak performance of Facebook Ads (driven by the data in Facebook profiles) vs. Facebook Ad exchange, which is based on placing cookies from outside-Facebook browsing and then retargeting inside of Facebook.

Facebook Home: A Means to an End? 
Whether Facebook wins or loses with Home, it is clear that they now understand the need to prioritize mobile ahead of desktop. If they really want Home to stick, they need to bring Graph Search to the forefront and really get into the Intent Search game. In a worst-case scenario, Facebook Home will be remain a clever hack that supports lukewarm marketing opportunities to teenagers (until they abandon the social giant for the next big thing). 

The good news for Facebook, however, is that Home has bought them time. Occupation of such prime real estate in the Android ecosystem will help them collect new data that should, in time, help inform their next move. However they achieve it, that next move will be aimed at an optimized ad experience and monetization of the Walk-in Economy. Both efforts will rely on a next-gen Graph Search service and heavy use of geo data.

If Facebook get it right, users will accept the presence
of beautiful ads on their phones' home screens
Summary Thoughts for Agencies and Brands
In the next six months, expect the concept of "Graph Search Rank" to enter the lexicon of digital marketers. The best choice for hotels right now is to prepare for that change by "feeding the graph". There are two simple actions that hotels can take right now. Both are inexpensive calls to action and will have your hotel primed for a higher ranking as Graph Search gains a full head of steam at Facebook.
  1. We predict that the value of a Like will be increasing as Graph Search goes mainstream. Contrary to advice we have given in the past, the size of your Facebook fan-base may soon matter as much as the quality of it. Take actions now to acquire more Likes (capital "L", previously known as fans).
  2. Create simple marketing efforts designed to get guests to check-in to and rate your hotel via Facebook. As Facebook shifts its weight to mobile, it will give higher value to checkins and related geo-activities like, perhaps, venue ratings and reviews.
Combined, the above two actions are a simple but effective response to Facebook Home. As always, keep focused on best practices that apply across all platforms (including the ascendant Google+ platform), including user generated content and employee generated content. Such best practices will always serve the social networks, search engines, and your guests equally well.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Facebook Graph Search and Local Intent

It seems that Facebook’s new Graph Search could be poised to be a true threat to Google, Yelp, and Foursquare. By providing search functionality that will let you find friends who have been to (and enjoyed) relevant restaurants, hotels, and other destinations, it is likely that many consumers will prefer to rely on Social Graph information instead of the more anonymous user generated content that comes from other platforms like Google+ Local. 

A typical interaction with the new Graph Search will go something like this: I will be travelling to San Francisco and will want restaurant recommendations. Facebook will provide search results for restaurants that friends (and friends of friends) have been to. The results will include standard details (like hours), plus basic review and map functions. I might see a few photos of friends at the restaurants and read quick bits of feedback like "Love the lasagna here!". If you're looking for specifics on Graph Search (with an angle on hospitality) here's a good summary.

A key takeaway is that Facebook's new search functionality will enable intent-based searches. It is intent-based search that has made Google its fortunes, and I expect that Facebook will see significant revenues from this new feature, too. Intent-based search is especially important for Facebook because it gives them a revenue-generating path for mobile, which until now has been a notable weakness of the social giant. Graph Search data could also enable an opportunity for Facebook (and digital marketers) where advertisers would be allowed to add Graph Search data to their own cookie data to hyper-retarget users and achieve (presumably) great returns.

While the intent-based searches that Graph Search will enable are vitally important to Facebook, I think it is only half of the equation. The other half of the equation is "Actionable Data". Actionable Data includes...
  • Structured search results that can be filtered
  • Formal ratings (eg: four out of five stars)
  • Immediate link to map locations and supporting functions like navigation from current location. 
  • A What's Near Me functionality (related to maps)
  • Commerce and Coupon solutions

My immediate concern is that the results from Facebook's Graph Search will be fun and engaging, but still too mushy to help complete a given task or directly inform a decision. Not all interactions have a specific task, of course. Simply browsing and connecting with friends and brands is a valid user activity. But, Google (especially via Google Now) is now increasingly focused on "task completion" and therefore making itself increasingly (almost intuitively) useful.  Foursquare has made big strides in this area, too, and Yelp has always done very well in this category.

Until Facebook figures out the second half of this equation, I believe that the potential of Graph Search to serve dining and hospitality verticals (along with most of the rest of the Walk-in Economy) will not be realized. Specifically, Facebook must compliment their Graph Search with robust map, review, and commerce functionality -- all of which is (in my opinion) in its infancy at this point. More challenging still, Facebook will have to provide these services with a user experience that is so good that users will prefer to load the Facebook app instead of using similar functionality that is native to mobile operating systems (ie: Apple Maps and Android Maps and Search functions). In my mind, that's a high bar.

I'm also interested in how/if Facebook will pursue anything related to professional or formal reviews. I think Google has been savvy on this front, by balancing their growing UGC with formal content from Zagat and Frommers. Not only is that content sticky (and good for seeding further good UG content), it can also offer a potential “grownup voice” in a space where lots of UGC can sometimes seem chaotic.

As a final point, we should remember that our social graphs are not necessarily a straight shot for representing our own consumer preferences. This is especially true in Facebook, I think, because it is hard to categorize various friends and tell Facebook that the "family" group does not represent my tastes as well as the "tight friends" group. Google, again, seems to be countering this by enabling a new "people like you" feature that recently started showing up on the Android platform.

What This Means for Brands

Until the service is out in the wild, details will remain fuzzy. We can be sure of at least this much, however:
  • Graph Search will absolutely improve the potential for Facebook to drive awareness and traffic to your digital assets
  • Brands will want to further leverage strategies that we have outlined here for driving User Generated Content and Employee Generated Content. These strategies will "feed the graph" and improve your exposure through Graph Search
  • Brands should continue to define best practices for measuring assisted conversions and other actionable metrics for social channels
  • Agencies should be recommending greater experimentation within the Facebook Exchange and native Facebook ads

To sum up my initial thoughts on Graph Search, I believe it is an important step forward for Facebook and its huge user base. Graph Search will enable Facebook to become a superb resource of photos, video, and other content. Whether access to this content can be conveyed and leveraged into actionable data remains to be seen. Facebook has the basics covered and certainly has the ability (and resources) to improve, but let's not confuse yesterday's announcement with a fully realized platform that might still be a few years in the making.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Google Maps iOS App Heightens Need For "Google Optimization" Strategies

When Apple replaced the aging Google Maps app with its own Maps app (and massive supporting geo-data platform) this October, it was big news indeed. Some of the big questions focused on how many users Google would lose, what Apple would stand to gain, and how Google would counter. At the time, I suggested that Apple's move was really about positioning for dominance in what I call "The Walk-in Economy", estimated at $7 trillion dollars annually in the United States.

Google announced that it would counter quickly with a new Maps app for iOS, and I predicted that it would be another blockbuster, just like their YouTube app was a few months earlier. Well, the new app came out yesterday and guess what?  It turns out to be pretty great. There are many great posts that talk about the new functionality, so I'll be brief on such points and then move on to what this means to brands...

"Design" vs "Utility"

The latest iOS Maps apps from Apple and Google are a perfect crystallization of the current strengths and weaknesses of these companies. Google has traditionally been much weaker than Apple (and others) in the "design" and "experience" departments. They are, after all, engineers and not designers. But I am finding that Google are closing this design gap and have arrived at a point that is a notch above "good enough". Google will never design beautiful things in the same way that Apple does, but I think that's ok. Where they seem to be substantially ahead is in the Utility department.

My experience has been that Google does a much better job in supporting your daily life. Apple, I would contend, currently does a better job in entertaining users, but I think that's a much lower bar from a technical and utility point of view. A phone can entertain, but it is also a tool that should support and enhance our daily lives. Google's network of services is much better connected and, to take a phrase from Apple, "just work" when you have an underlying Google (aka "gmail") account. Although they are not mutually exclusive factors, Google's new Maps app is a perfect example of how their utility can trump Apple's design.

Google Maps and the Need for "Google Optimization"

At the time, The New York Times had estimated that about 25% of all Google Maps users were on iOS. Although that enormous user base was at risk back in October, Google is about to reclaim a healthy quantity of them with an app that is better than ever: Google Maps is sitting at the top of the Free Downloads list in Apple's App Store. Given this warm reception by iPhone users, it's time to again consider how much effort your brand will put into Google Optimization this year. 

Notice that I didn't mention "organic search optimization" or "search engine optimization". Although the tactics are changing (see here too), optimization for organic search still matters significantly. The challenge is that organic search now represents just one branch of what a brand needs to do in order to maintain visibility in the digital realm. 2013 will be the year of broad "Google Optimization" for brands, especially hotels, restaurants, and other walk-in businesses. 

Consider the local search functionality of Google Maps. Also known as "search nearby" and "what's around me" functionality, local search works exceptionally well in the new iOS app from Google. Auto fill is great, for example. If it works well enough to really delight iPhone users, they will begin to prefer to open Google Maps and conduct searches from there, vs. asking Siri. Because Google Maps is monetized via local search, they will see significant return. Brands who participate have the opportunity to see significant return, too. It's yet another area that is ripe for testing and learning. 

If you're not pursuing this already, your brand must pursue a Review Optimization Strategy that drives the quantity and quality of reviews in Google+ Local. Your brand must be sure that it has 100% accurate listings and keyword-rich descriptions, there too. Consider testing the turnkey Google Offers program -- all of these activities will influence your rank in the Google Maps world.

What's Next?

In addition to what I mention above, here are additional quick predictions on how this game will evolve...
  1. Apple Maps will continue to improve
  2. Apple will work very hard to integrate their Maps features to the core iOS functionality in an effort to box out Google from daily interactions
  3. I cannot predict a timeline yet, but Apple will eventually produce an "Offers" app of some sort that ties into maps functionality so that they can get a foothold in the enormous Walk-in Economy. Again, this is the big opportunity being chased here.
As always, please share your thoughts (and experiences with the new app) in the comments below!

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Best Practices for Optimizing Online Reputation and Reviews

In my previous post, we dug into the details of Chris K Anderson's watershed study proving the relationship between online reputation and hotel performance. The study does a great job in demonstrating why a hotel needs to optimize its online reputation, but does not (understandably) focus on how to do it.

That's where DMW's Review Optimization Program comes into play. Based on our hands-on experience with a variety of hotel types, this playbook drives more reviews of better quality and describes what to do with them. I won't be sharing everything, but today we will look at some of the fundamentals of this program.  I'll focus on the following...
  1. Ask
  2. Respond
  3. Publish
  4. Measure
  5. What's Next?


This should not come as a surprise, but we have found that the best way to obtain more reviews is to simply ask for them. Quantitative studies with our clients show that one of the most effective ways to generate reviews is to arm employees with business cards that ask guests to "share your review". This method generates more reviews than posters, table tents, stickers, buttons, and almost everything else that we tested combined.

The cards should be handed out judiciously, without any pressure being placed on the guest. From an operational point of view, be careful to ensure that a single guest isn't being bombarded by multiple employees with review requests. Depending on your clientele, also consider adding a QR code to the card so that it is easier for mobile users to write a review.


There are no shortage of articles in the hospitality space regarding best practices for responding to reviews, but most of it boils down to this: respond to all of the negative ones, a few of the positive ones, and none of the average ones. But how does this behavior affect our Review KPIs, and especially the quantity of new reviews being written?

In another data-driven study we conducted, our analysis revealed these very actionable findings: Responding an "appropriate" percentage of the time can lift the quantity of incoming reviews by up to 35%. We also learned, however, that responding too often can have a noticeably less beneficial effect.

Why is this? Can hotels really over-respond to reviews? We don't tend to think of it in these terms, but the review page for a given property on, say TripAdvisor, is a social space in its own way, an asynchronous meeting room, of sorts. If the host of the party (the hotel) is crowding out the conversation with a lot of jabber, it appears to turn people off from participating in the conversation, with the end result of guests writing fewer reviews. Note: Our tests were conducted with North American hotels. Cultural preferences might influence best practices elsewhere.


As Professor Anderson demonstrated, reviews matter! In fact, they matter so much that guests will leave your website for TripAdvisor or an OTA if they can't read objectives reviews there. Will those guests return to your site to book a reservation? For a variety of reasons, some will and some won't. This is one reason why it is so important to have third party reviews on your own website. The other is related to cost per acquisition.

It is important to understand that the performance benefits described by Professor Anderson do not account for the share of revenue that will be taken by the review sites and OTAs where guests are reading reviews and often booking their reservations. The best strategy is to publish those same third party reviews on your site with tools like Revinate's Social Buzz. This practice helps keep potential guests on your site, with the results of driving up conversion rates, paying much smaller acquisition fees, gaining additional newsletter signups, and more.

Some hoteliers who already engage in this practice make the mistake of cherry picking only the best reviews for their site. DMW advises that hotels enable an almost unfiltered stream of reviews -including the good, bad and ugly, to be published onsite for the following reasons:
  1. Remember that bad reviews legitimize the good ones. Especially important when you consider that brands are among the least credible sources of information in consumers' eyes. 
  2. Operationally, it requires much less manpower to enable an unfiltered stream of reviews vs. seeking out good ones to publish manually. An unfiltered stream also keeps the content fresh.
  3. The knowledge that negative reviews could appear on its own website is a great motivator for improving an organization's operations and guest satisfaction in general. 


I mentioned this in the previous post: The only metrics that matter for reviews are compset index scores. Use them for measuring the Quality, Quantity, and Recency of reviews. It is important to use a compset index because it puts your scores in perspective of the hotels down the block. Example: Did you gain a lot of new reviews this week because a big football playoff game was in town? That's good news, but your competition probably did too, thereby negating much of the positive optimization effects you would otherwise have gained.

Improving these metrics vs your compset are the collective key to optimizing your hotel for organic search in Google and for any OTA or review site where your hotel is listed.

What's Next?

Today's post should offer some great tactical advice for hoteliers (and agencies) in hospitality. These same strategies, by the way, can be applied to a variety of other verticals and business types, including restaurants and nearly any other business with walk-in traffic. The space continues to change quickly, however. Here's where I predict things are headed:
  • Hosted Reviews: Despite all of the benefits of positive reputation on TripAdvisor and the OTAs, all of these reviews point to the OTA sites and compete with your own website for favorable rankings in organic search results. Hosted reviews, like those offered by Customer Alliance, live on your servers and drive SEO value back to your website. Strategies are evolving to incorporate a mix of hosted reviews (which drive best organic SEO) and 3rd party reviews (which have a larger audience and lend greater impartiality and authenticity). 
  • Per-venue reviews: As discussed in the previous post, resorts have an opportunity to offer more utility to their guests and to achieve higher levels of organic search optimization by establishing review optimization programs for each venue / activity / area on their campuses. Akin to Google's new concept of Indoor Maps, expect this sublevel of detail to begin to appear in various resorts, amusement parks, college campuses, and more.
  • Personalized Reviews: Third party reviews are a great way to help determine the quality of a service or product, but, sometimes, quality is in the eye of the beholder. Example: A top-tier steakhouse that gets five stars from David, a 50 year old Sales Exec, would probably not rank nearly so high with Emily, a 20 year old vegan undergrad. On the horizon are personalized reviews that allow us to find feedback written by people “like us”. When this does go mainstream, brands will be further challenged to be sure that their messaging (and reputation scores) lines up with each of these known audiences. The reward, however, will be higher conversion rates for the audiences they get right.
Whatever may come next, taking time now to develop best practices will pay long-term benefits. Regardless of the platform, device, or audience, understanding how to drive an abundance of high quality reviews will always serve you well.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Guest Review Optimization Drives Hotel Market Share

A new research paper from The Center for Hospitality Research has been getting a lot of attention for proving, with hard numbers, the positive impact of online reviews upon hotel performance. The paper, by Chris K. Anderson, is full of important metrics that we will highlight in a moment, but I’d like to start with this quote:
“In terms of the hotel choice process… the tipping point [for the relevance of reviews] came in 2010… At this point, the guest experience mentioned in customer reviews became the dominant factor in hotel selection.”
At DMW, we have been “review evangelists” since about that time, in early 2010, when we first identified this trend and began to explore it aggressively with our clients. We have conducted client-side studies with data sets of up to 700 limited service hotels and have had significant hands-on experience with high-end resorts and urban hotels as well. I also do an annual tour of the review monitoring tools that are available to hotels in North America and Europe.

Internal Presentation to DMW Clients from Q2 2010.

To say the least, we are excited that a study like this, which requires many disparate data points, has finally come together. Here’s a few highlights for those who haven’t read the paper:
  • The percentage of consumers consulting reviews at TripAdvisor prior to booking via a hotel's website has increased from 28% in 2008 to 36% in 2010. The quantity of reviews they are reading has gone up, too.
  • An increase in review scores by 1 point on a 5-point scale allow a hotel to increase its rate by 11.2% while maintaining the same occupancy or market share
  • A 1% increase in a mid-scale hotel’s online reputation score leads up to a 0.89% increase in ADR, an occupancy increase of up to 0.54%, and up to a 1.42% increase in RevPAR
  • This effect is greatest for economy and limited services hotels and least for luxury properties
Mr. Anderson's findings are very consistent with what we've known and intuited for some time, but how do we act upon these findings? And, how do things change when we step out of the professor's office and into the GM's office? Today, I'll take a look at three key takeaways from the paper and share the DMW point of view.

1. Reviews Matter More for Limited Services Hotels vs. Luxury (If You Don't Count On-site Spend)

Some reactions to this paper sum it up with the finding that the impact of online reputation upon performance increases as hotels move down from the "luxury" class. Here's a chart from the study:

"GRI Elasticity", by Chris K. Anderson of The Center for Hospitality Research

Although not in the table above, Mr. Anderson shared with us via email that the trend is even stronger still for limited service and economy hotels. (He excluded this data because his sample size for the study was too small to include.)

DMW's Point of View: While this is a very significant finding (especially for limited service hotels), luxury hoteliers should not walk away with the conclusion that "reviews matter less" for them. On the contrary, we simply need to consider reviews in a different context, one that considers the behavior of checked-in guests and their overall spend while at the resort.

Ratings and reviews have significant potential to increase the onsite-spend of luxury hotel guests. Positive reviews for individual amenities (bars, restaurants, spas, golf, etc) drive guest usage and, therefore, overall per-guest revenue. Just as 2010 was the tipping point for hotel-level reviews, we will soon reach a similar tipping point for individual activities, beaches, pools, and more. Along with hotel-level reviews, luxury hoteliers should focus here if they want to stay ahead of the curve.

2. TripAdvisor is Still the Review King (But Watch Out For Google)

With good reason, Mr. Anderson's study focused on TripAdvisor reviews and Travelocity. Although studies from PhoCusWright show that TripAdvisor has lost market share to other review platforms, it still easily reigns supreme in this space. As a result, many hoteliers could make the reasonable assumption that they should put all of their review eggs in one TripAdvisor basket. TripAdvisor feeds this by providing their branded badges, widgets, and business cards to hotels -- all of which drive more reviews to TripAdvisor.

DMW Point of View: We have talked a lot lately about the big changes to Google's search algorithms and the race to win what we have dubbed "The Walk-in Economy" via local search. Google places an increasing amount of emphasis on reviews for its organic search algorithms and within its HotelFinder product, which has just recently jumped from "experiment" status to a global multi-language service that will become a major factor in online distribution.

Our actionable advice: Savvy hoteliers who encourage guests to leave reviews on Google will kill two birds with one stone: 1) Achieving all of the performance benefits described by Mr. Anderson, and 2) Improving Google organic and HotelFinder search rank.

Thoughts for economy and limited service hotels: A good review presence in Google is important for hotels in this class because such models usually include a large mix of walk-in business. Walk-in business is substantially driven by mobile. If you want to be found on phones, especially via Google, then you must have good reviews, and lots of them. If not, Google's algorithm will demote you off the first page.

Thoughts for luxury hotels: Google is the perfect home for the activity-level reviews that I described in point #1, above. The rapid adoption of mobile usage drives behavior to "search nearby" and to check in to (and review) increasingly small/obscure places (like specific beach cabanas or a specific swimming pool). Driving reviews of these activities provides utility to your guests and provides a second level of search optimization for your hotel.

3. Increasing Your Review Scores by "X" Results in "Y" (If You're The Only Hotel in Town)

The study correlated improved reputation scores with the ability to raise rates while maintaining market share: 
"If a hotel increases its review scores by 1 point on a 5-point scale (e.g., from 3.3 to 4.3), the hotel can increase its price by 11.2 percent and still maintain the same occupancy or market share."
DMW Point of View: In a static academic study, this is completely valid, but in a live business environment, this gain must be achieved versus the competition, who (we should assume) have also been reading up on reviews and are also trying to improve their scores! The "versus the competition" element can make this task substantially more challenging. 

For hotels to have a real shot at achieving this goal, they must focus on the right metric. ReviewPro’s GRI score (a key data point in much of this study) is good, but inadequate because it looks at a hotel’s score in isolation. The best score is a Compset Index. A Compset Index compares your hotel’s scores (say, a rating of 4.5 out of 5 stars) to your competition (usually as defined in your STR reports). Example: 4.5 seems like a good score, but if your local competition has an average score of 4.6, then you’re at the bottom of the pile.

Note: Portions of Mr. Anderson's study do rely on index scores, specifically those related to ADR, RevPAR, and occupancy. In either case, hoteliers must understand that it is the compset index score that matters, not the raw scores of their hotels in isolation.

Our Actionable Advice: Some review monitoring tools, including Revinate, have a compset score. Use it to focus on the quality of scores (ie: 1 - 5 stars), the quantity of reviews (how many reviews total), and the frequency of reviews (reviews per week). In all cases, these should be compset metrics that compare you to the hotels down the block. Improving these metrics are the collective key to optimizing your hotel for organic search in Google and any OTA or review site where your hotel is listed.

What's Next?

Stand by for a "part-two" post that will share a peek into DMW's Review Optimization Program, a strategy that describes how to obtain more and better reviews and what do to with them. It includes a focus on operations, integration with owned media assets, and the near future of reviews.

As always, please share your thoughts in the comments below and share this post with others.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

PCLN Gobbles Up KYAK

Priceline (PCLN) buying Kayak (KYAK) makes a lot of sense and has broad implications for the travel eco-system.

Kayak was able to exit an increasingly competitive marketplace and gain a healthy premium of $40/share, a 29% over yesterday’s close.  $39 is the IPO open price so insiders made out fine by collecting some cash and trading Kayak stock for Priceline stock – good move (take a look at GRPN today).

For Priceline, the only risk is that they over-paid and will suffer some near term value disruption.  PCLN is very experienced with integrating travel acquisitions, which is not an easy feat.  Booking.com and Agoda come to mind.  Kayak being located miles away will only help.

 PCLN gains or enhances many strategic advantages with this deal:
Diversification – PCLN now plays in travel search, agency and opaque channels, all with complementary business models.
Scale – PCLN gains even greater scale, which offers various advantages including technology investment.
Review Aggregation – PCLN has a great opportunity to aggregate their proprietary user reviews from Priceline.com, Booking.com, Kayak.com (to come).  This will improve site conversion rates, assist with SEO thru fresh content while hurting TripAdvsior and Google.
Mobile Development – PCLN gains great, local mobile user interface and development talent.  Kayak has the most popular iPhone travel app.  Both companies are based in Norwalk, CT.
SEO Authority – PCLN sites are all popular and adding Kayak.com to this linking eco-system will only strengthen each sites Google SEO authority.  This will drive more traffic from organic search and, perhaps, reduce reliance on paid search.
Paid Search Hedge – PCLN spends 24% of Net Revenue on Online Advertising – the lion share of this on Google AdWords.  This is projected to grow 21% per year thru 2016 compared to a Net Revenue CAGR of 14.5%.  Despite Jeff Boyd's comments on CNBC today, the synergies of this deal (highlighted above), over the long term, could reduce this strong reliance on paid search.
International Growth – PCLN has a lot of international experience and great presence in Europe and Asia.  They will be able to grow the Kayak brand in these markets.
Hurts Competition – this deal could be a blow to Travelocity who powers Kayak’s white label business.  This deal will also adversely affects TripAdvisor, Google and Expedia, among other travel upstarts.

For travel suppliers, this is another sign that the online third-party intermediary market is here to stay.  Trends include increased consolidation, technology and digital marketing investment and improved user experiences with these sites and apps.  Suppliers need to leverage these TPI sites appropriately, (i.e. differently) depending on their core competencies and sustainable advantages.  Treat them as “friend and foe” and focus on your business objectives.

Please comment below and share this post with others.

Google Authorship and Employee Generated Content

I've written previously about the benefits of Employee Generated Content (EGC) and how it is an especially great match for hotels. The value of EGC has gone to a whole new level, however, with the formal release of Google Authorship

What is Google Authorship? Why Does it Matter?

Commonly known as "AuthorRank", this new feature from Google associates your picture and Google+ profile with content (usually blog content) written by you. If you want a deeper dive, there is a lot of good reading on this topic. But here's the key takeaway: until now, Google's search results have been ranked by the value of content on a given page. With Authorship, Google is now ranking you, the author, along with the content itself. Google will attempt to determine if a given author is a dependable creator of frequent, relevant content that engages and shares at a high level.

The implications are significant and put my concept of Employee Generated Content front and center. Not only is employee generated content great for customer service and retention. It is increasingly serving the very fundamental need of organic search optimization.

Example: A given page will be higher in organic search results if the author of that content is valued by Google. Understanding this can give you an important advantage over your compset. In the world of hotels and restaurants, it can be particularly powerful for independents who are trying to get their share of visibility vs. the big brands.

Tactical Advice

What I like about Authorship is that getting it right is largely consistent with general best practices and DMW's specific strategies for organic search and social optimization. Specific steps include:
  • Learn more about EGC and follow up on those action items. Most important: Identify the real person, the real team member, who is going to represent your brand. Identifying two such people would be even better.
  • Work with your agency (or similar) to establish a G+ profile for your team member and to associate it with your blog.
  • If you don't yet have a blog, now is the time to start! With the release of Authorship, blogs have never mattered more. A simple Content Optimization Program will generate a good list of topics. Contact me to learn more. Ask your team and agency for topic ideas, too.
  • Once you are publishing content on a regular basis, get the most bang for your buck by distributing that content across all of your social channels. Post condensed versions of blog posts Facebook. Link to your blog posts from Twitter...
  • Important: Remember that this plan works only as well as the content being generated by your author. Best practices that service Google's Penguin/ Panda/ Freshness updates apply here. Publish frequent content that is relevant and engaging. Include photos. Include video. Cover topics other than yourself.

Beyond the Basics

As you begin to cover the fundamentals, consider these additional steps to ensure that you are getting the most juice from Authorship. 
  • Advanced Tip #1: Contributing content to others' assets (like guest blog posts) works in your favor when you include Google's "Authorship Markup" in the byline. It's easy. Here's a great how-to. Your agency can help.
  • Advanced Tip #2: In a subtle but powerful move to gain more traction in Social, Google also gives weight to authors based on their social activity in Google+. This means that your author (and your brand) should have Google+ pages and be active in that space. Invite guests to follow you there. "+1" interesting articles on local events or thematically relevant topics like golf and family vacation tips.

Remind me: Why Are We Doing This?

The end result of these activities is two-fold:
  • 1) As with other social channels, you are improving your engagement and support channels. This is a primary goal of social. It improves the guest experience. It helps drive awareness and visibility.
  • 2) You are directly contributing to improved organic search results. In turn, this drives demand.
Optimizing for Authorship is important for all brands, but especially for smaller ones. Independent hotels that have real boots on the ground will have an inherent advantage in writing content that is locally and experientially relevant. Some big brands might have a deeper labor pool for this activity, but it is harder for them to get the right content associated with a specific property. If you are an independent, play to this strength and press your advantage in this area.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Square Wallet: A Payment Method Doubles as Customer Retention Tool

Here is what I posted on Google+ recently after using Square's new payment app for the first time. 
“Just bought my first items with Square's new payment app. I know it's just technology, but I'm lovestruck. Absolutely nothing passed between me and the person at the counter. Just an introduction, conversation, and somehow I had paid for my meal. No card, no cash, no ID. It's really an amazing product...” 
It’s obviously an emotional reaction, especially so considering that all I had really done was to buy a mediocre cup of coffee.

I was excited to experiment, however, because we are on the cusp of notable fragmentation in the transaction services industry. In a field disrupted and then dominated for decades by credit cards, PayPal is now relatively known and established. On the up-and-coming list, we can add Google Wallet, Apple Passbook, ISIS, LevelUP, and Square.

Square is in for tough competition, but I think that they are going to go the distance. I predict this because I believe that fragmentation in this space will lead to payment methods becoming a point of individual and brand expression. In much the same way that Google+, Facebook, and LinkedIn are preferred in different scenarios, we will come to prefer specific payment methods for different scenarios and lifestyles. 

For example: Filling up at a random gas station on the road? Google Wallet will be just fine, thanks. Buying a cappuccino from my local coffee shop for the 8th time this week? That’s when I want Square.

If you’re new to the product, Square is created by Twitter co-founder Jack Dorsey, and he has populated his team with many ex-Apple employees. The goal (very well documented in this interview) is a purposefully fundamental change in the way that transactions are conducted. Square achieves this when your phone signals to the person at the register that you are in the store. When you're ready to check out, that employee then physically recognizes you based on your profile picture before completing the transaction.

That one moment when the employee looks at you to confirm your face and name (not your credit card#, not your driver’s license…) creates a notably personal dynamic.

The hospitality industry has customer service in its DNA, and, as such, I believe that Square will be a big hit with high-end resorts and urban hotels. The same will go for personal service providers such as physical therapists, stylists, local businesses, and boutiques. Any business that has a high proportion of repeat customers should consider looking into Square.

Letting your clientele know that they can pay with Square sends the message that you are that kind of business. The type of business that really knows and values its customers as individuals, that puts the customer first, that takes pride in its services and its reputation.

Consumers will send a similar message when they pay with Square: "I want to be treated like a regular." "I want to have a dialog with you." "I’m here as much for your product as I am for the quality of the staff who provide it." What business owner would not want to attract that kind of customer?

While I am a big fan of the current suite of Google / Android services, I don’t believe that Google Wallet or ISIS will ever be a service like this. The other services will be great for high volume businesses and for acquisition business. But, once you have them on the hook, Square will be an excellent retention tool.

Have you had the chance to use the Square App yet? What are your thoughts on how it will (or will not) affect the business/customer relationship? 

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Mobile, Maps, and the Walk-in Economy

One of the key thoughts in my previous post on the maps tussle between Apple and Google was that the struggle is not about immediate revenue. Instead, I suggested that ownership of geo-behavioral data and overall strategic positioning are at stake. I also predicted that Apple will eventually bring to market an "Offers" like program along the lines of Google's existing service. Overall, the future of Apple Maps could tie in offers, iAd, Passbook, and other elements for a comprehensive service that is on par (and in some ways assuredly better than) Google's current suite of Map/Local/Nav/Offers/Check-in services.

But if Apple and Google are only jockeying for position now, with little discernible revenue to be gained, the longer-term opportunity has to be significant, right? So, how big of an opportunity are we really looking at? I think I can begin to give some shape to what the answer might be.

First, a few assumptions...
  1. We should assume a consumer base that has +90% smartphone adoption. It's only a few years away...
  2. We should assume steep adoption of maps services in parallel with this smartphone adoption. 
  3. We should assume that a geo-aware coupon or "offer" model like Google's will eventually become a persistent characteristic of the mobile commerce landscape. Also assume that it also will grow in parallel with smartphone adoption. (Note: such a service should not be confused with substantially less useful services like Groupon.)
Beginning with these assumptions, I believe that the market opportunity being chased by Google and Apple is a big piece of all local brick-and-mortar B2C business. I call this The Walk-in Economy, and it includes everything within retail and services, from individually-owned shops to the physical stores for national brands like Best Buy, Home Depot, and Burger King.  Based on data from the US Census Bureau, I estimate the Walk-in Economy to be worth approximately $7 trillion dollars annually in The United States. 

If Apple, Google, and other mobile players are able to use their offers platforms to monetize just 0.5% of this market for themselves, it represents an opportunity worth $35 billion annually, which is approximately equal to Google's entire annual revenues. Assuming the eventual ubiquity of the smartphone and its proven ability to change consumer behavior, this is a realistic end game within mobile.

One thing to consider is that a certain amount of this new opportunity will be cannibalizing Google's traditional AdWords revenue, which is fundamentally at risk as more of us use the web via mobile and bypass the traditional Google.com entirely (because of Maps or Siri, for example). Nonetheless, I think the playbooks are not merely defensive in this case. The mid-term and long-term opportunities are simply too enormous to think otherwise, and it's important to note how smart companies always cannibalize themselves versus risking that competitors will cannibalize them. With mobile disruption and changing user behavior, this has never been more true...

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Apple, Google, Maps, and Mobile

Apple's new Maps app has made for great parlor take in the past few days. Culminating with an apology from Apple CEO Tim Cook (instead of a response like this, as Jobs would have done), it has provided great theater: to catch a glimpse of the closed-door dialogs between two epoch-defining titans is a special treat, one that provides good insight into the near-future of mobile, search, and more.

On a more prosaic level, I think Apple's misstep has highlighted for many of us how hard it is to provide quality mobile services like Maps and how well Google really has done. This realization is apparently driving some iPhone stalwarts to consider an Android phone for the first time. 

Despite all the news and analysis, something has been missing from the dialog, however. We’ve noticed very little talk regarding how Apple’s Maps affects Google’s bottom line. Why is that? As an example, The New York Times had a solid article on this topic that suggested that 25% of Google Maps users are on iOS, but was vague when describing actual revenues.

The reason for this is that Google Maps on iOS was more or less closed and likely contributed very little to Google’s revenues. The legacy app can find a specific address or category of business (like “pizza”) for you and give contact details and directions, but nothing more. While Google Maps on the iPhone was revolutionary only a few years ago, it now seems very limited on that platform: no photos, no special offers, no “from the business” summaries, no check-ins, no reading (or writing) reviews, and no advertising.

The optimized version of Google Maps on the Android platform does have all of these extra features (and more), but I believe that it also contributes very little revenue to Google. The most common use cases involving Maps from a phone very rarely lead back to Google’s primary money maker: paid search. Maps, regardless of the platform, tend to be closed systems. While users might begin with traditional search and then be led to a maps application, once there, users very rarely need to leave maps to complete their task.

So, if it’s not revenue, then what is at stake here?

This maps-clash is much more about strategic positioning than it is about immediate revenue. A big driver for the Apple/Google Maps split was ownership of behavioral data. Without its own maps app, Apple has had a diminished command of geo-behavioral data.

Replacing Google Maps with their own app will bring Apple data that informs its mobile strategy and (my prediction) will lead to Apple “innovating” a local-business “Offers” program that is similar to what Google has today on Android. Expect such a platform to include location-based targeting to be married to iAd and perhaps integration with a sexy payment platform like Square (which is largely designed by ex-Apple employees), and Apple’s Passbook service. The challenge, of course, is that Google has an enormous head start in this area.

At the end of the day, here's our take on what has transpired and what we can expect from this event...

  1. Apple is the short-term loser here: The weak user experience with a vital application diminishes user trust and nudges some users closer to the Google / Android ecosystem. 
  2. But, Apple's Map will improve quickly: We should note that Maps is not inherently "terrible". A more fair description is "it's got good bones and simply needs more time to develop". Remember it is very hard to provide this kind of service at Google's level of quality. It will take time.
  3. Regardless, Google will counter quickly: Google has already revealed they are working on a dedicated app. Using Google’s new YouTube app for iOS as an example, we can expect that their new Google Maps app for iOS will also be a huge improvement and another chart topper in terms of downloads for iOS
  4. (More) Fragmentation: Eventually, brands (especially hotels and restaurants) will need to optimize for Apple Maps -- just like they do in Google. And, just like with Google, expect lots of pain on the brand side, including weak B2B customer support from Apple, and general challenges in getting your listings right. Important Note: The importance of optimizing in Apple Maps will be in parallel to the amount of walk-in or direct-call business of a given hotel or restaurant. 
  5. Yelp is the big short term winner here. As the source of all of the local business content (reviews, photos, etc.) + outgoing links back to its own site, Yelp is going to win big for now. Hotels and restaurants should place increased strategic value in optimizing for Yelp, and also for OpenTable (reservations) and even Facebook (check-ins). That 25% of Google Maps users has to go somewhere, and Apple will further tie functionality between its Maps and these third parties. I predict a big uptick in check-ins overall. 
The closing thoughts for today's blog post are yours. Do these changes have you thinking twice about Android phones? As a brand or business, are you concerned that further fragmentation is on the way? Please share in the comments.

By Aaron Zwas -- Director of Emerging Technologies at Digital Marketing Works

Google's Acquisition of Wildfire Apps

Official news came out recently that Wildfire Apps is now part of the Google family.  This is one of those acquisitions where I see wins across the board, including...
  • Good for Google: The Wildfire platform should enable Google to extend its PPC revenue stream into social and regain access to the significant amount of traffic that social platforms have syphoned away from traditional search in the past few years.
  • Good for Marketers: Single-source control of traditional PPC and social channels will enable a holistic set of data points and the enhanced ability to measure Social ROI. At a time when the ROAS of traditional PPC is leveling off, this could be a big win for agencies. I'm also expecting more accurate tracking of assisted conversions (that pass through social) from within Google Analytics.
  • Good for Brands: The Wildfire acquisition will help Google to break down our current walls between social activity and search activity. This in turn helps brands to become more relevant at appropriate times. In cooperation with their agencies, brands will have a unique opportunity to be present at the right time and right place in a consumer's digital experience. 
  • Good for Consumers: I predict tight integration between Wildfire Apps and Google Offers. From a consumer POV, I really like the no-money-down approach to Google Offers (especially vs. the Groupon model), and Wildfire will help to bring that into social channels. Figure in Google/Android's awareness of location, context, and personal interests and I think consumers might soon enjoy consistently meaningful offers -- like we do from Amazon-- but for the real world that we walk and drive through each day.
In addition to these points, this acquisition could become an important tipping point in Google's current social foray. For starters, Wildfire Apps has an enormous presence in Facebook, and it could become something of a trojan horse between the two platforms by providing Google with many of the Facebook insights that it has been denied in the past few years.  More important, however, are the synergies that I see between Google+ pages, Google Offers, Google Wallet, and Wildfire Apps. I think that Google is on the brink of assembling all of the ingredients for true "social commerce". I'll share that vision in my next post. 

Where do you see the threats and opportunities of Google and Wildfire Apps? Please share in the comments below.