This is only the warm up act

Cast your thoughts back two years, would you really have thought that we would have so many ‘smart’ devices or applications being used by so many people. Many people tend to think about technology advances when the word ‘convergence’ is used but I tend to also think about the potential impact of more social division and the imbalance this creates in the digital world and of course lets not forget the opportunity.

Let’s start by trying to define what ‘convergence’ actually means. Well ok lets not, far too difficult, the term encompasses integrating technologies, services, applications, market changes the list goes on. Better to start by looking at some numbers.

1 billion people are now online across the globe.
180 million global subscribers to broadband.
54 million VOIP (Skype) users in 24 months
1.3 trillion SMS messages sent across the globe
1.8 billion blogs live and doubling every five months
54 million mobiles in the UK with around 90% internet ready
150,000 wireless hotspots worldwide
80 million+ paypal accounts

I could go on – the list is rather endless – but the key point is it’s not just all about a PC and a website; you have to think about more than that if you are going to embrace convergence. It does not take a genius to establish what’s driving this paradigm, it’s a number of events: technology, convenience, experience, social interaction and fundamentally a consumer driven appetite.

Currently there is much talk about Internet 2.0 [a recent conference in San Francisco and Travolution’s own blog] and more recently I have seen articles that talk about the look of Internet 3.0, a good indication of the pace of change. Brands like Amazon, Napster and Ebay have fundamentally changed the way commercial businesses work by adopting what’s commonly being named The Long Tail. if you haven’t read Chris Andersons article, you should.

Putting all this aside, this ‘New Media’ is still young: only 4% of total retail sales were made online in 2005 across Europe, with the UK doing marginally better at 7%. The good news is travel performs particularly well, with an estimated €41 billion in 2006 coming from leisure and unmanaged sales online.

With all of these new experiences online, offline has to up its game, as consumers are rather well informed nowadays. Online offers more information on products and services, more fulfilment options and better control of the experience; however offline still wins hands down on service.

Can you get the best of both? The US have seen some great results in testing this, such as kiosks in store (DIY in particular), un-manned check in desks and mobile shopping buddies. All are being embraced enthusiastically as they add value and enhance the offline experience – but is this just another step in ‘convergence’.

I recently purchased a new HD (high definition) LCD TV and created a wireless environment in the front room. Suddenly the PC has moved from the office into the living area and we constantly move between the TV and the internet using Microsoft Media Centre. But it’s worth pointing out the pitfalls as my five year old has suddenly discovered he can buy PSP games on Ebay.co.uk!

One theme that cuts through all the best innovations – they are all consumer driven. I believe the last ten years of the internet were nothing more than the warm up act for what we are about to see. Consumer driven innovation and convergence is happening, the question is who will have the most valuable customer base as the transition happens and who will have it when it ends.

My advice is embrace, test, learn, involve your customers then deploy. Not everything will work, but if it did then what would be the fun in that.

Graham Donoghue, head of new media at TUI UK

Open my inbox...delete, delete, delete

I have a problem… I am filled with wanderlust. All day, whilst apparently working, I am in fact planning and working out exactly which part of the world I would like to see and explore next.

Every year I spend a small fortune on far flung travel. Yet every time I get an e-mail from a travel company, all it does is throw as many offers per square inch as possible at me.

Now I, as a marketer, know that unfortunately the old ploy of throwing enough of a certain substance at people will ensure that some of it sticks – particularly when it costs so little to throw out e-mails.

The thing is that really the cost is huge. Maybe not in broadcasting, but in people getting bored! After looking through yet another list of offers that I know I am not going to take up today, I stop bothering and stop even opening the e-mails.

Yes, when I am in the market, I might reach for the offer laden e-mail, but the travel company that is going to get my real long-term travel business is the one that engages me. I want to read about where I am going.

After I have booked I would like e-mails sent through every now and again to get me excited about my upcoming trip. I want recommendations on the type of music, food or entertainment I can expect.

Give me links to Amazon CDs and books on the place, give me pictures of the bizarre sights I will see or the golden beaches, at least acknowledge you know where I am going and when! In fact give me anything but another load of special offers, just like those released from every other online travel agent at the same time every week!!

Gavin Sinden, director of digital marketing specialists Incepta Online.

What's fuelling the appeal of Google Earth?

A few weeks ago, I noticed that searches for 'google earth' had spiked up and that the term was amongst the highest volume search terms in the UK. Today, I noticed that the term had continued to climb, with 'google earth' ranking eigth based on share of UK internet searches in the past four weeks. I played extensively with Google Earth over the summer and we [Hitwise] did a news release on Google Earth and Google Maps several months ago. Google Earth seemed like old news to me - but it seems I was wrong.

The share of UK internet searches for 'google earth' were 23 times higher than searches for 'paris hilton' last week. I often use Paris Hilton as my benchmark - as she is consistently one of the most searched for celebrities on the internet. (In case you think that Paris Hilton is a bit dated, the chart below compares searches for 'google earth' to both 'paris hilton' and 'george galloway'.)

UK searches for 'google earth' were so high last week that they even outstripped other mainstays at the top of the search term rankings, including 'ryanair', 'tesco' and 'bbc'. In fact, the share of UK internet searches for 'google earth' was higher than searches for 'google'!

Hitwise tracks visits to websites and so tracks visits to earth.google.com not to the downloaded software. Hitwise is therefore reporting on visits to the website, where people can download the software, rather than usage of the satellite image software that is downloaded to desktops. Visits to the site are way up and so we can assume that downloads are also up. Market share of visits to earth.google.com increased 24% last week compared with the week previous and three times higher than they were 12 weeks ago.

But why?

I looked at Hitwise data to try to understand the reasons for the growth in searches and visits. It seems the growth is viral - driven by people talking up the service. Google Earth receives 58% of its visits from Google (combined UK and .com properties) and the term 'google earth' accounts for more than 60% of visits from search.

Google Earth also seems to appeal to an interesting and somewhat surprising demographic: Silver Surfers. Nearly one quarter (24.34%) of visits to Google Earth are from those aged 55+. Google Earth attracts 70% more visits from the 55+ age category than average for the internet.

I asked some colleagues if they had any ideas to explain Google Earth's recent growth. It seems that everyone has a story about an aunt, uncle, parent or grandparent using Google Earth. Uncles who collect atlases, mothers who want to see (the roof of) their daughter's new flat, fathers who want to tinker with a cool toy. Stories abound, all with one theme - all were about relatives aged 55+.

I also looked at Hitwise Lifestyle data to see which Mosaic Types are visiting Google Earth. The groups that were most highly indexed versus the online population on Google Earth were: Golden Empty Nesters, Conservative Values, Provincial Priviledge, and High Spending Elders. I won't go into a detailed description of these, but suffice it to say that these are older, wealthy segments.

If you have other thoughts on the reason for the continuing rise of Google Earth, please share your thoughts in the comments.

Heather Hopkins, director of research at online analysts, Hitwise

Read more from Heather here

The murky world of affiliates

Can my affiliates drive volume over and above what my search campaign is doing already?

The relationship between affiliates and search is a hot topic at present, especially in the travel arena. Look into the top affiliates on any program, and nine times out of ten you will find that they are using pay per click advertising on the likes of Google and Overture to drive clicks that they hope will ultimately convert into sales or leads on the clients website.

So if the affiliates are using search – are we just be cannibalising volumes we would have received anyway with our own search campaign?

The answer is probably no. Here’s why:

1 – Affiliates can do lots of things that you cannot do as a mainstream advertiser. Bidding on competitor brand names is a great example – it’s not that ethical but you can’t be held responsible for the keywords your affiliates bid on. Affiliates from rival advertisers will be doing it to you; you need to make sure you re-dress this balance.

2 – Affiliates often position themselves as being on the consumer’s side, and are often used as a price comparison guide. Most markets are not straightforward though, and the ‘best’ price in market is often somewhat subjective. If you can build a good relationship with your affiliates they will make sure your brand / products are portrayed in the best possible light. With this endorsement from a ‘neutral’ site, you’ll get more sales or leads than before.

3 – Even better than this… in some sectors (typically finance), the trading currency is leads rather than sales. In this instance, the top affiliates will gather the lead on their own website. This is usually their name, address and details of the product they are looking for. No links are used, and there is no obvious association between the affiliate and your site. These sites can position themselves as an ‘advisory service’. They say they will send the applicants details to the most relevant company. The customer does not have to be aware that they will always be referred to your client. This boosts conversions – as customers feel they’ve already found the best deal.

4 – Because there is no obvious link between the affiliate site and your client, you can have many different affiliates appearing in the search results. To the customer they look like lots of different sites. In reality, your client will receive the lead from whichever site the customer chooses to use. In some instances a client can effectively own the entire front page of a search engine.

5 – When gathering leads, your affiliates will offer a sense check for any lead that comes through. It’s amazing how many forms Micky Mouse and Homer Simpson fill out. A sensible affiliate will not pass these leads on, so the quality of leads coming through will be higher.

6 – Good affiliates optimise their site constantly, and can be clever with their landing pages and the wording used on their site. If a customer uses a keyword such as ‘computer’, they will be taken through to a page that talks about computers. If however they come through a keyword such as ‘PC’ then the landing page will talk about PC’s instead. This means the customer thinks they have found a site that is highly relevant to them.

7 – When gathering leads, you often receive a high drop off rate when the customer reaches the application page. Smart affiliates will ask for contact details first, so when a customer only half fills in the form – the affiliate can get in contact to give assistance in filling out the form. This lets you reach customers that you would previously have not.

8 – Affiliates can bid aggressively on generic keywords. They can do this because they will find a route of converting any customer that arrives. Take the keyword ‘loan’. Customers could be looking for unsecured loans, secured loans, car loans etc etc. Not many clients will offer all of these services, but an affiliate can gather leads for any of these products and then sell them on to a client. This means their conversion rates are very high – and allows your client to have a presence high in the search rankings which they might not otherwise be able to achieve.

These are just some of the ways affiliates can deliver extra value for you. It is still however important to regulate your affiliates. On a practical level this is ensuring they do not cause inflation to the bids on your own keywords, and from a user perspective it is important they deliver the brand experience you desire – so you may look to maintain controls on the logos, copy and offer information contained on their site.

The rules you place on your affiliates will depend on your client and the particular sector they are working in. Some clients are subject to strict industry regulations, so in these instances you should impose similar rules on your affiliates. Some clients feel there is a brand benefit from being placed at number 1 in the search listings for certain keywords. If this is the case you need to ensure your affiliates do not outbid you – even if they convert at a better CPA.

With these checks in place, affiliates offer lots of benefits that a client using search alone cannot possibly receive. Affiliate marketing is one of the fastest media growing channels, and these are just some of the reasons why.

Aidan Mark, senior planner at digital media planning and buying agency, Quantum

Every Little Helps at Tesco

So supermarket giant Tesco is taking the next stage in its quest for consumer domination and diving headfirst into the world of telecommunications.

This is not just some half-baked foray into mobile phones or landline services – the UK’s biggest grocery chain has announced [read BBC report here] it will tap into online telephony via high-speed broadband services.

Tesco will probably base its own system on the Skype model, which enables computer users to chat online and tickled the fancy of online auction house Ebay so much last year that it splashed out £1.4bn on buying the company.

The supermarket’s latest move into the Voiceover IP arena (better known as the catchy phrase Voip) is an interesting one.

Travolution, in its launch edition in November 2005, suggested Tesco and other supermarkets, which are all dipping poking their fingers in many other pies, were relatively lukewarm about branching out into travel services [read “Time to check in or check out” here].

But there is no guarantee that the supermarkets will stay away from travel for ever.

There is a definite stretching of the boundaries between what an online travel company does for a living – Lastminute.com’s casino or diet pages, for example – and how other online businesses operate.

Some heavyweight industry figures have suggested privately that it is only a matter of time before successful and well resourced online companies in other areas – like Tesco – take another, serious look at travel.

Maybe it’s time to re-open the market size debate once more?

Kevin May, editor, Travolution

Internet 2.0 - myth or reality?

This is not a money-making exercise but I am going to put £1 in a tin every time between now and Easter when the conversation turns to “Internet 2.0”.

A charity of my choice may actually do quite well because the already rather hackneyed phrase is the source of much mirth/excitement/concern [please delete as appropriate] among leading figures in the online travel arena.

For those at the top of so-called web-savvy pyramid, in terms of what they as businesses already offer to those yearning for the latest in technology and functionality, the expression is usually accompanied with a wry smile.

“Internet 2.0?” they chuckle, before launching into their latest developments or ideas for cost per click advertising, community-based interaction with users, podcasting, highly targeted digital marketing or video downloads to mobiles.

Others, who would probably place themselves among those “excited” by the prospect of a raft of new developments in the online world, say they are chatting to their back room people about where to go next.

“We have the desire to do great things with the online end of our business,” someone said to me recently, “but just as when we first started this internet malarkey, I still need to convince others that investment now may not see an instant return, but it’ll put us up there.”

Wherever “there” is, nobody is really sure. But it is somewhere where most online travel companies need to be thinking about, if you listen to some of the forward-thinking, techy types in the industry.

But what of those worried what the next phase of the online world’s speedy rise will bring? Perhaps privately they are still getting over the last five years and the supreme effort it has taken to get where they are now as businesses.

Perhaps the speed of change is just too much, too soon.

Either way there is no escaping the dreaded “Internet 2.0”. Social advancement, as a piece in the Guardian [here] recently suggested, is the next stage.

And nobody wants to be a social outcast, do they?

Kevin May, editor, Travolution