Wednesday, 22 June 2011

Developing an International Search Marketing Strategy

The international search marketing landscape is evolving at a rapid pace. The rules of engagement change weekly or even daily and the number of players in the market is on the increase. From the international giants: Google and Bing to the “smaller” country-specific search engines: Baidu (China), Yandex (Russia), and Naver (South Korea) – to mention just a few, search engine marketing is rapidly becoming very complicated. When you add social media platforms such as Facebook, Twitter, and YouTube to the advertising equation the complexities reach a new level. So how does one develop a strategy that can cope with the complexity?

First off, a search engine marketing strategy should be based on your target audiences and how those groups are likely to search for your product or service. Then of course there are a whole slew of other variables that are linked to your business like your brand name, your business model and your general marketing approach. If you are marketing online to an international marketplace in addition to considering the above, you will need to add in the complexities of your customer’s geography as this affects their search behaviour such as words used to search, seasonality, not to mention actual language differences. Putting these components together therefore requires a much more fine-tuned approach to segmentation and marketing differentiation. So when you have accounted for the above, how does one choose advertising platform(s) to ensure that you reach your customer target group(s)?

As you might expect, Google dominates the online advertising space with over 80% of the global market share. In the UK alone, 90% of businesses spend some of their advertising budget on its advertising platform (Ad Words) – making Google a must-use platform for any business planning to compete in the UK marketplace.

That said, Google is not the only search engine out there and in many markets Google is one of many. There are plenty of other advertising platforms that will generate new customers and revenue streams for your business. Depending on who you are marketing to, what you are marketing, and how much advertising money you have to spend, you can choose from a number of platforms both search marketing or display advertising. For most businesses the most prudent approach would be to select a few and then expand incrementally. This approach is especially useful when your marketing budget is more restrictive – the key being to get as much bang for your buck as possible – but is a good approach for any business wishing to spend only what they can generate.

There are other aspects to consider as well when reviewing your choice of advertising platforms. Two such metrics are cost per click and conversion rates. Take a case in point from our customer base. We advertise one of our customers on Google in the US (among other countries) and on Yahoo! As is expected competition on the Google’s paid advertising platform is intense and as a result the CPC (cost-per-click) is higher compared with Yahoo! So is one better than the other? Well, the answer is both yes and no depending on your viewpoint. The customer will get more business overall from Google, but their cost per conversion are much lower on Yahoo! Arguably, they need to be present on both (budgets permitting) in order to attract the maximum number of customers at the right price.

So, you may get more exposure from an international search engine, but you will also get more people coming to your site without the intention of staying, connecting or buying. Therefore, when you make your search engine priorities the expected return on investment for each channel should be included in this process. Your decision to advertise with the one or the other (or indeed several) would then be driven by your ability to generate a return in addition to the market reach it offers.

Getting the balance right will often require a bit of trial and error initially in order to find the engine(s) that work “best” in each market. But, by starting off small on a few platforms, you will already begin to gather information about how your campaigns convert visitors into buyers and how much each conversion costs on average.

If you depend on one search engine alone, and for most markets the “default” would be Google, you may be losing out on business opportunities. By simply increasing the number of “eggs” in your search engine basket you can maximise your exposure and be able to reach a wider audience with less.

Of course search engines are not the only players in the online advertising arena. The rise of social media offers unprecedented opportunities to businesses as an additional marketing and distribution channel.

One such channel is Facebook who over the last few years have gotten far ahead of the game in this regard with its display advertising revenue expected to reach over $4 billion in 2011 (according to eMarketer). Alongside the launch of Facebook Places, Facebook Deals, and Facebook Credit, their open API Facebook opens new gateways for businesses globally. With its 600 million users Facebook has certainly become a strategic platform to include in any digital media plan.

Twitter reached 200 million users this year and continues to grow. The advertising platform includes Promoted Tweets and Promoted Accounts and it offers opportunities to reach new audiences 160 characters at a time. As a highly interactive media tool, Twitter’s effectiveness as a marketing channels is potentially more short-term than other channels as it requires more continuous attention, marketing creativity, not-to-mention a very dedicated and engaged user-base. All this, however, can be managed with the right performance indicators and goals.

YouTube is the second biggest “search engine” in the world with almost 2 billion daily searches. The viral marketing effects of video are combined with the power of word-of-mouth allows YouTube to offer unique opportunities to advertisers who seek to broadcast a message to a wider audience. Depending on your target audience and markets; YouTube can become an important marketing platform for your business. Video traffic is on the increase and according to Cisco; video traffic will represent 50% of all internet traffic by 2012 –up from 40%.

In addition to the abovementioned benefits; the reach and the ability to listen to and engage with potential customers in real-time, makes social media an increasingly an important part of the search optimisation process. Today the signals and referrals of social media networks are taken very seriously by search engines in their ranking algorithms – thereby offering businesses that actively use the social media twice the marketing effectiveness.

Recently, during a keynote interview at the “All Things Digital Conference”, Google’s ex-CEO Eric Schmidt admitted that his biggest failure and disappointment was missing the social media trend. The wider implications of social media as an advertising platform are huge and it will clearly play a bigger role in the future. Even today, a million businesses are using Facebook as part of their marketing and communications and this will only increase over time.

Search is continuously evolving and so are people’s search behaviours. From a marketing point of view you have to think beyond Google to take a broader perspective. You need to view your business in a more global context. In doing so, it will not only give you access to a larger audience and new markets, but it will allow you to reach these at different stages of the search and buying cycles enabling you to be an alternative at every junction. Additionally, by investing incrementally in a variety of platforms you alleviate some of your investment risk in time and money and with the collection of data you are able to make more informed decisions in the future.

International Search Marketing is not a one-time decision as much as a continuous business activity. In order to succeed you need to be agile and evolve along with the ever-changing marketplace. In the future, developing and maintaining a flexible search marketing strategy and will be intrinsic to a business’ survival.

At e-HotelServices, we are always keeping a close eye on the developments in the digital landscape to convert such offerings to opportunities for our customers. The developments are exciting and require real-time adjustments and on-the-go management. In a world with such intense competition and transformation; the only way to remain ahead of the game by embracing change and continue to add value to your customers - new and old. If you want more information on how you can take advantage of the international search marketing world, please contact us for more information!

Thursday, 7 April 2011

Where Search is Heading in 2011 and Beyond?

2010 was a very busy year from a search point of view. Google, Bing and Yahoo have implemented many changes to their algorithms and ranking structures. One of the most obvious developments was the social media integration with real-time search. With the increase in the popularity of user-generated-content, search engines led by Google and Bing have increased their social signals contributions and started displaying more social elements in their search results.

What that means is that search and social media becomes inextricably linked with the rise of Facebook, Twitter, Trip Advisor, YouTube and other social networks. Search engines are paying closer attention to the changes in consumer search behaviors and have started giving them more value in their algorithms. Search engines are looking for the pure organic signal which is what makes the social media more prominent.

According to several research findings, people trust online reviews more than the brands' messages -even comments from people they do not know or have never met before. This provides important insight for search engines. At the end of the day the purpose of all search engines is to provide up-to-date, relevant and quality search results for the users. Since consumers do value peer-to-peer communication and user-generated content more, search engines are taking the advantage of this trend and harnessing it within their search results to increase the quality and provide more interactive and relevant results. Simultaneously, they must keep visitors on the site for longer in order to increase loyalty.

Google has very recently announced (see the below video)that it will increase their emphasis on social media results according to users' search histories, interest and contribution within the social landscape. When you log in to Google, you will see in the results of your social media channels where you are active, receive notifications at the bottom of the page and get updates accordingly. We have witnessed that Bing has been trying this approach for a while. More bold action from Google will only increase the popularity and usage of the social elements in the other search engines and elsewhere.

As a business you must keep an eye on these changes to make sure your search strategy has a social media core thereby benefitting from these shifts. If you are not active in the social media, now is the time to re-think and re-structure your online marketing strategy to include it - before you are left behind.

Real-Time Search

The second trend is as a result of social media -the Real-Time Search. Last year Google launched "Caffeine" and then "Instant" updates to accelerate this trend and provide more instant, up-to-date search results. Also Google, Yahoo and Bing have partnered with Facebook, Twitter and other social channels to provide the most up-to-date search results.

In 2010 two important incidents proved the importance of real-time search and helped accelerate the trends.

  • The first one was when the Icelandic volcano erupted and air-space across Europe closed down. Millions of passengers were trapped in airports, airlines' websites went down, no-phone lines worked and it was impossible to find someone from the airlines to give an update about the situation. Search engines failed to provide the instant information that the users were looking for and real-time social sites like Twitter have become more important as people found more last minute news on these channels. A short while later Google launched the "Google Caffeine" update and partnered with Twitter and Facebook to provide results that visitors are looking for.

  • The second real life incident occurred in December 2010 when snow chaos affected thousands of flights and hundreds of thousands of passengers across the UK and Europe. People felt stranded and again found it almost impossible to reach anyone from the airlines or airports representatives further signaling the importance and necessity of real-time search. This time Google and Bing were more prepared and they offered real-time search with the social sites.

Smart Phones & Tablets

In addition to social media and real time search the mobile phone has become a very important tool especially when instant, on-the-go news required. People can easily access the internet and search via their smart-phones from everywhere. With the launch of iPad and other tablets, usage has further increased. Mobile internet search is expected to exceed desktop browsing by 2013-14. Also mobile access to social media sites has boomed with over 200 million users accessing their Facebook accounts via mobile phones. Today social media sites receive millions of visits via mobile phones from all over the world.

The rise of geo-location sites like Foursquare, Gowalla and the latest Facebook Places has accelerated the development and popularity of geo-tagging. People can check-in to a place and receive promos and offers from close retailers with a personalized touch. This will no doubt play an important role in future marketing disciplines. It is the best way to reach people on-the-go, offer them your products and services according to their preferences and to increase demand for your products and services. You can read my previous article on geo-location marketing where you will find more detailed information.

What should You do?

It is obvious that search is evolving alongside consumers' search behaviors. Today as a marketer you must keep an eye on social media and align your search marketing strategy accordingly. The web itself is a social space and social media is an extension to that. If you want to remain competitive, retain and defend (if required) your reputation and benefit from the optimisation processes then you must put the social media at the heart of your marketing mix. As an extension to that you must create a consistent search experience among all channels.

Developments in technology have opened the doors to new forms of marketing such as geo-location and the likes. As mentioned earlier, by 2013 it is expected that mobile search will overtake desktop internet browsing. To ride this wave, you need to have "a mobile plan" that fits within your organizational structure. As Eric Schmidt the ex-Google CEO said "mobile is the single most important strategy for Google in 2011" makes it very clear.

The way we are moving is towards the mobile web combining social media and real-time search. You must integrate these three elements in the heart of your search planning in 2011. Your customers are already there, and expecting that you deliver the same experience and consistency among all touch points.

Can you afford not be where your customers are? If your answer is no, you need to consider the above mentioned points and start developing a well structured, 3-pronged strategy immediately. Not sure where to start, please get in touch with us.

To download or print a PDF of the article, please click here.

Tuesday, 22 March 2011

Have you developed your hotel's distribution strategy for 2011 and beyond?

In my article last month we provided an overview of the changes in the travel landscape and the recent conflict between airlines, OTAs (online travel agents) and GDS (global distribution system). This month we have investigated the subject further and included an overview of how the changes will affect your distribution strategy for 2011 and beyond. In this article I covered:

  • The effects of the changes in the travel landscape on hotel distribution

  • Distribution strategies that you need to consider in 2011

  • Developing a "Direct" distribution strategy

The effects of the changes in the travel landscape on hotel distribution

Distribution is one of the pivotal channels to any hotel, airline, car rental or any other travel or any hospitality businesses. GDS and OTAs are the two most important players in this landscape in addition to the direct-distribution channel -your website. When planning your distribution model or choosing your partners, it is especially important that you consider the short-to-mid and long term impact on your business. Your primary focus should be shifted to a direct-strategy by making the initial adjustments to your website, e-CRM, online booking engine, pricing structure etc.

Over the last couple of years; the changes in the technology and its effects on the consumer search behaviors have shifted the spotlight to a more direct-to-consumer approach. Hoteliers should concentrate and invest in their websites more as the greatest growth area and profit is in developing a strong direct strategy. They cannot rely on the OTAs and third parties to bring them bookings with continually increasing costs. Like airlines, hotels should be looking on the most cost-effective strategy to build sustainable revenue growth. We recommend that you read our article on the changes in the travel landscape for a broad overview to help you anticipate the impacts of these developments on your business. Hopefully you will also learn some lessons to help you plan your distribution strategy for the coming years.

Distribution strategies that you must consider in 2011

When Google purchased ITA, the flight information software company, some of the travel industry players opposed the action and tried to block the acquisition. Especially third party intermediaries amongst others are worried about the potential entrance of Google to the market. A website called Fair Search has been established by leading OTAs in direct opposition to Google's ITA purchase. According to the website, Google is becoming a dominant player and has started threatening the online competition, innovation and economic growth. In contrast Google claims that their intention is to increase the consumers' choice and provide the most accurate and up-to-date search results. We shall wait and see the further developments on this landscape. We know that Google has been experimenting with pricing variations by adding prices to Google maps and Google Places for hotels and soon we can expect that pricing to be displayed on the search result pages. It is likely Google will continue along this path for the airlines and other travel sectors. What this signals to is that Google is looking to play a more active role in the travel sector. Google attempts to play a more active role in the travel sector are discussed in an article on HotelNewsNow highlights this issue. We recommend you are read this article for more details on how Google may or may not affect your distribution strategy and whether or not are you ready to make bold changes and embrace the upcoming trends.

The impact is clear - whether you are a hotel, car rental, resort, restaurant or other travel or hospitality company you should now consider Google as a distribution channel to remain visible and competitive in this landscape.

Developing a Direct Distribution Strategy

The travel industry is evolving; today almost 80-90% of travel search starts online. To remain competitive and decrease dependency on other channels such as GDS, OTAs and other intermediaries a direct-strategy is pivotal. This does not mean that you need to put all your focus on your website on the contrary, you must also be cautious when selecting your partners and distribution channels to make sure they provide the greatest value and best fit for your business structure.

A direct strategy will not only increase profitability by decreasing cost and increasing revenue it will also give you the opportunity to up-sell, cross-sell and remain competitive.

As mentioned in last month's article; the travel landscape is evolving at a fast pace. All these changes hint to a necessary change in the distribution models. Direct Strategy is here to stay and to ensure you are producing sustainable growth. Your website is the most viable channel that will require investment.

Not sure where and how to start your planning. Contact us! Our experienced team will help with this and other subjects that will facilitate long term sustainable revenue growth for your business.

Monday, 24 January 2011


Over the last couple months interesting developments have occurred in the travel arena especially between airlines, OTAs and GDSs. Much of the speculation started when Google purchased ITA, the leading flight information software in July 2010 and we still have not seen any clear strategy on what Google will do with their purchase of ITA. The official reason behind the move was to make the flight search easier and more compelling to the travelers in order to increase online purchases. The question is what really lead Google to make this purchase?

As almost 90% of travel planning starts online all airlines, hotels, car rentals, cruise-lines and other travel and hospitality businesses have been forced to set a strategy to drive bookings direct. Given this shift in the marketplace Google might have seen the ITA purchase as a game-changing opportunity. This complements Google’s constant work on improving the search result pages and adding more advanced and user-friendly interfaces - and more changes are on the way.

Another recent development was American Airlines’ announcement of their Direct-Connect-Strategy and their pulling out their flights from Orbitz and other affiliates sites. Expedia announced that they will not sell American Airlines tickets anymore. Sabre Travel Network announced that they are planning to terminate their contract with American Airlines from the GDS (global distribution system) in August this year – further increasing the tension.

Competition between American Airlines, OTAs and GDSs is increasing. Other airlines have not yet reacted as they seem to prefer to observe the developments from a distance. However, in the US we have seen low-cost airlines such as Southwest successfully implement a direct-to-consumer strategy and proven that is can work well. Today it is estimated that 80% of flight tickets are sold via the GDSs and OTAs. Perhaps that is the reason why other airlines are reluctant to follow the AA suit.

Since the cost of a booking via the GDS to the airline is considerably high and represents a big chunk of revenue “loss” for the airlines, a direct strategy becomes a tempting changeover. The increase in the online search and the implementation of direct-to-consumer strategy could save a substantial amount of money for the airlines. Especially considering huge revenue losses the airline industry has faced over the last two years ( and many others have gone bankrupt) due to the economic environment, the increase in the fuel and other operational costs, saving money is critical to survival. The only viable way to decrease costs and increase profitability is by reducing the dependency on other channels and third parties including the GDSs and focusing on a more proactive direct-sales strategy and that is what lies behind the AA plan.

The other advantage of a direct-strategy is that the airline will be able to cross- and up-sell its products and services and create more opportunities for additional revenues. However, this is not without risk and may lead to further decrease in the ticket sales and ultimately end in further revenue loss for the airlines.

As mentioned the majority of flight sales currently comes from the GDS especially over TMCs (Travel Management Companies) and the around 600,000 partnered travel agents who are using the system to make bookings daily – most of which is business travel. This may be the central reason why American Airlines have partnered with Kevin Spacey pouring money on TV advertising over the recent months. (This was, primarily to promote their business class and attract the business segment.) This they have done to compensate any potential loss of bookings from the GDS and other channels. Thereby American Airlines have created a base on which to build their direct-business-segment in conjunction with its direct-connect strategy. We assume that American Airlines have studied other low-cost airlines’ strategies and developed a plan that would fit with their organizational structure.

All these developments point to a necessary change in the airlines’, GDSs’ and OTAs’ business models – and we will see more changes and developments in the coming weeks and months. Like airlines; hotels and other travel and hospitality businesses have already embraced a direct-to-consumer approach but they are still lagging behind the airlines. Once these industry segments catch-up with the airlines, it will accelerate the speed at which these changes take place – changing the whole business model as we know it.

From a hospitality point of view the hotel chains have managed to increase their direct revenue by restricting the OTAs and GDSs and by selling best available rates on their own websites. They have also managed their channel strategy carefully by connecting all channels and implementing a consistent pricing strategy in order not to cannibalize their direct approach or lead to confusion from a pricing point of view. Revenue management practices have evolved over the last decade and it has become an important discipline in managing the distribution channels including their own websites. This and other developments will lead to further changes in the distribution strategies for the airlines, hotels, car rentals and other business.

It is time to set a clear direct-strategy and be ready for any outcome in this competitive landscape. Today OTAs and other third parties charge a substantial amount of commission for a booking and most travel and hospitality businesses rely on those channels. The economic downturn and the developments in the technology and consumer consumption behaviours suggest that more radical changes are on their way. The only viable option is to have a plan B, strengthen the direct approach and your website, be consistent among all channels from a pricing point of view, and be ready to take risks, change and innovate.

If you would like to learn more on how the changes may affect your business please get in touch with us.

by Velit Dundar

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