Hotel Electronic Distribution Industry Forecasts Technology Trends

Customer needs remain paramount as industry looks at its future and its history

22 May 2007

Dublin, Ireland – The Hotel Distribution Industry is embarking on a new stage of its evolution as technologies drive new interactions between vendors and customers. Blogs, mobile phone technologies and the rapid pace of tech trends are all reshaping this important sector of the hospitality industry, according to speakers at the 2007 Hotel Electronic Distribution Network Association (HEDNA) Conference being held 21-22 May 2007 at the Burlington Hotel in Dublin, Ireland.

Dr. Mark Warner, director of graduate programs at New York University, detailed the history of the Hotel Distribution Industry from its start when most marketing was done through travel agents and toll-free phone numbers. With the advent of the Internet and better computing systems, the industry experienced a developmental stage that ran from 1991 (the year HEDNA was founded) and lasting until 2001. Over the last six years, the industry has seen volumes rising as customers became more sophisticated about using technology tools, according to Warner.

What’s ahead? Warner says the industry is changing so quickly and dynamically, that it’s only possible to look ahead over the next three years. He forecasts that the Hotel Distribution Industry will be embracing a number of technologies such as mobile distribution, the convergence of iPods, phones and PDAs, and WiMAX. Reaching out to customers by using blogs and Web content that’s multi-lingual will enable the industry to reach a wider audience. Further, security advances will help customers feel safe in providing personal and transactional data.

Hotel distribution marketing in the digital age rises to the challenge

With customers suffering from advertising overload syndrome and customer trust at an all-time low, the Hotel Distribution Industry must strive to connect with its customers with offerings that are specific to their needs and tastes, notes Geoff Ramsey, co-founder and CEO of eMarketer. More than one-half of all global marketing will be driven by brand marketing, says Ramsey, with video ads becoming a major new medium. Word-of-mouth, or viral marketing, will continue to be an important marketing tool. To keep word-of-mouth recommendations positive, the industry must strive to provide a superior product.

The important communication tool, the telephone is transforming into a digital medium as well with mobile phones capable of offering enhanced marketing opportunities, says Gerald Samuels, founder and executive director of Mobile Travel Technologies Ltd. Geared to the corporate traveler, promotions on mobile phones and PDAs will spur new ways to reach these customers. “Mobile is all about seek and book” rather than browsing for deals, says Samuels. A corporate traveler who’s just had a late night plane flight canceled will be looking to find an available hotel room and booking it on the mobile phone or PDA. This kind of scenario will need targeted search engine optimization for mobile band, fast searches.

What does this mean for the existing Global Distribution System (GDS), composed of Sabre Travel Network, Galileo International, AMADEUS Global Travel Distribution S.A. and WorldSpan. A panel representing those companies found that GDS must reinvent itself to serve the changing marketplace including new booking tools, reaching customers via mobile devices, OTA XML-compliant software and updated functionality.

The 2007 HEDNA Conference concludes on 22 May 2007 with a number of presentations including an analysis of the impact of the Millennial Generation on the Hospitality Industry given by Dr. Lalia Rach, associate dean of the New York University’s Tisch Center.

After years of talk, marketers are finally jumping into mobile advertising in full force. According to MarketingSherpa data, 49.2% of consumer marketers are tracking it as a potential tactic, and 13.8% will definitely conduct a full mobile campaign or test this year.

Interested but not sure where to begin? We talked to an expert who has conducted mobile efforts for Procter & Gamble, Coca-Cola and General Motors. Includes benefits of advertising vs marketing, mobile application differences and coupon tips.

Mobile advertising is an emerging channel for most marketers, but it’s old hat for John Hadl. He has been in the mobile ad business since 2001, developing branding campaigns and promotions for Procter & Gamble and, most recently, founding Brand in Hand, a mobile marketing advisory that handles efforts for huge brands, including Coca-Cola and General Motors.

As Handl’s client list indicates, the opportunities of the mobile channel are becoming clear to marketers of all kinds, thanks to the growth of mobile as a consumer technology. “We’re getting to that turning point, given the engagement levels with consumers and the kind of people doing mobile Web. There is targeted value here, and it’s growing every day.”

Unfortunately, mobile marketing is still new enough that there are no obvious rules of thumb to help marketers who jump into the channel for the first time. So, we spoke with Hadl to get his top tactics for planning and executing a mobile marketing campaign:

-> Tactic #1. Determine goal: audience reach or customer engagement?

Hadl breaks down mobile campaigns into two categories: mobile advertising and mobile marketing:

- Mobile advertising is about reach -- using the mobile channel to gain access to an audience with a branding awareness campaign.
- Mobile marketing is about building engagement or customer activation by getting them to join a mobile alert/mobile messaging program, such as daily sports scores, or giving away mobile products (ring tones and wallpapers) or other promotional campaigns (sweepstakes).

The good news, Hadl says, is that marketers can blend these two goals into the same campaign. For example, Coca-Cola’s MyCoke Rewards programs uses mobile messaging to drive consumers to a Wireless Access Protocol website where they can enter a code from their mobile phone to see if they’ve won an award. But that action creates a longer-term engagement with participating consumers who continue to collect Coke reward points.

-> Tactic #2. Match brands with the right audience

Success in mobile marketing has less to do with your particular industry or product type and more to do with connecting certain brands to the right audience. “This is not a scale approach; it’s a very targeted approach.”

Marketers planning mobile campaigns should make sure their brand matches important characteristics of the mobile audience, such as:

- Early adopters. Active mobile users are technology early adopters, so the most successful ads placed in front of them will be for brands or products with a similar innovative appeal. For example, a car maker might choose to promote a sports car on the mobile channel, not a minivan.
- Age. The sweet spot in mobile marketing is the 18-34 demographic, so brands that appeal to this audience can find the right target. By contrast, Hadl says marketers are typically not going to find a big audience over age 55 or under age 13.

Indeed, in a January 2007 survey of 1,323 consumers, MarketingSherpa found that 30% of consumers ages 18-35 send/receive text messages on a daily basis compared to 6% for those over 55.

-> Tactic #3. Mobile application differences

There are many platforms for mobile advertising, including text, mobile Web and mobile video. Because the audience size for each varies, you’ll need to choose the best approach for your mobile marketing campaign:

- Mobile text is the largest market, with 39.6% of US mobile subscribers using text messaging, according to M:Metrics. The research firm found that 7% of US subscribers have sent text messages in response to offline ads.
- Mobile Web is less established than text messaging, with 9.6% of mobile users saying they browse for news and information, but it has good engagement levels for early adopters, according to Hadl, which provides opportunities for marketers place ads on top WAP (wireless application protocol) sites or drive traffic to their own WAP site.
- Mobile video remains a small market, with percentage of users still in the low single digits, but is attracting attention from a few innovative marketers, says Hadl.

-> Tactic #4. Match campaigns to available infrastructure and inventory

Before you design a mobile marketing campaign, make sure you have the right mobile infrastructure in place to support it. For example, a mobile Web advertising campaign needs a destination, such as your own WAP website, or other WAP sites on which to promote your mobile banners.

The good news is that there’s currently more supply than demand for advertising on the mobile Web, but pricing must still be negotiated between the marketer and the destination.

Web ad pricing models include:
o Cost-per-impression
o Cost-per-click
o Cost-per-action, such as a purchase or conversion into a mobile message club

Marketers tend to buy ads on a mix of those models, says Hadl, based on the specifics of their campaign (text, graphics, mobile, etc.) and the advertising partner.

-> Tactic #5. Capitalize on mobile’s peer-to-peer communication abilities

Mobile devices are, above all, about person-to-person communication, so smart marketers can design campaigns that take advantage of that capability and feature a peer-to-peer messaging aspect.

For example, Procter & Gamble ran a Valentine’s Day campaign for Scope mouthwash that let people either log on to the Internet to send ecards or use their mobile phones to send a wallpaper to their loved ones. In some cases, the mobile phone wallpaper performed better than the online cards, Hadl says.

-> Tactic #6. Integrate mobile with online and offline marketing

“Unless you’re advertising the mobile channel, you’re not going to get a lot of response,” says Hadl. This means marketers must use other online or offline channels to drive users to participate in their mobile campaigns.

Online advertising, print ads, billboards, radio and television commercials can all be used to alert mobile consumers of a particular promotion, or invite them to join a mobile alert or messaging program, or join a mobile sweepstakes. But Hadl has seen the best response from television ads that invite users to participate in a mobile campaign.

-> Tactic #7. Allocate enough set-up time

Don’t try to launch a mobile campaign at the last minute, because the channel has several exceptions to its rules. For example, a ring tone or other content giveaway might not work on all handsets and mobile networks. “People will be frustrated if they hear about a mobile campaign and then realize they can’t participate.”

Hadl has seen big brands plan campaigns six months in advance, but says marketers can be safe with six to eight weeks for a text messaging or mobile Web campaign.

-> Tactic #8. Varying ad sizes for each phone

With so many phones on the market, screen size, supported formats, etc., are all different, according to the Mobile Marketing Association. Therefore, multiple creatives may be needed. For color images, typically JPG, GIF and BMP formats are supported.

The MMA offers the following handset guidelines and recommended image sizes:


Source: Mobile Marketing Association

-> Tactic #9. Don’t do mobile just because you can

Some marketers may be tempted to develop a mobile campaign just because it can be a small line item in an otherwise big marketing budget. Big mistake, Hadl says. “If you don’t pay a lot of attention to mobile, it doesn’t do too well.”

So, don’t treat a mobile campaign as an afterthought, especially given the need to integrate it with other online and offline advertising. Also, think critically about whether a particular campaign is really the best use of the mobile medium.

Take, for example, mobile couponing. Hadl says there’s a wrong way and a right way to do it.

- WRONG: Mobile coupons that require a user to take his or her phone into a store and have a code scanned by a cashier to receive a product discount. Sounds great, but in reality, there are problems. Supermarket coupon users tend to collect and use several coupons at once, and the idea of scrolling through a mobile phone menu of several product coupons creates chances for technical glitches and a long checkout process that’s likely to turn off shoppers.
- RIGHT: Mobile coupons intended to drive foot traffic by encouraging people to come to specific sale or take part in a special event. For example, a restaurant near a college campus could send text messages to students promoting half-price meals or free pitchers of beer to customers who come on a Tuesday night.

-> Tactic #10. More guidelines from the Mobile Marketing Association

1. Ads may not be misleading or deceptive to the recipient in any way.
2. Ads promoting illegal products and services are not allowed.
3. The sponsor of any advertising message should be clearly identified either on the ad itself or on the resulting first-level jump page.
4. Special categories of products must comply with existing voluntary industry guidelines. This includes but is not limited to: alcohol, tobacco, sweepstakes/promotions and ads targeting children.
5. Any ad for regulated products must comply with existing guidelines for such advertising. (Example: pharmaceutical ads must comply with FDA guidelines.)
6. Ads should be age appropriate. (Example: if ads can be targeted by age, then alcohol ads can be shown to mobile users who are of legal drinking age.)
7. Potentially controversial ads should primarily be avoided but may be reviewed on a case-by-case basis by publishers and wireless carriers. (Examples: political organizations, adult or sexually explicit content, issues/causes, religion, etc.)
8. All claims made in an ad must be substantiated before the ad is scheduled to appear. Advertising that includes warranties, guarantees or other types of assurances to the user must comply with all applicable laws, regulations or guidelines regarding such assurances, including but not limited to those set forth by the Federal Trade Commission.
9. Ads cannot promote or glorify violence, crime, obscenity, the use of weapons or provides instructions on how to "get away" with crimes or unlawful activity.
10. Language that is offensive, or disturbing, or which is likely to cause outrage, general disapproval or negative opinion within the community is not allowed.
11. Any customer information provided is limited to the current campaign only. Further interaction with the customer requires an additional opt-in.


Useful links related to this article

Sherpa article - Mobile Marketing: Quick Overview of Options: http://www.marketingsherpa.com/article.php?ident=28540

Mobile Advertising Guidelines:
http://www.mmaglobal.com/mobileadvertising.pdf

Mobile Marketing Association:
http://www.mmaglobal.com/

M:Metrics Inc.:
http://www.mmetrics.com/

Brand in Hand:
http://www.brandinhand.com/

Podcast User Demographics

The broad picture of a niche medium.

It would be a mistake to think that the average podcast user is a 23-year-old male with a college education and a really big comic book collection. Podcast users are not a homogeneous group, and downloads range from music to religious broadcasts to museum tours.

That said, overall podcasting user demographics give a broad perspective on the medium.

iTunes accounts for 75% of all podcast downloads, according to Podtrac, so comScore's October 2006 study of iTunes podcast downloaders captured most users.

On the whole, podcast downloaders tended to be male, young and educated. Notably, people between the ages of 35 and 54 represented about half of the podcasting audience.

Nick Tabbal of comScore said, "While the conventional wisdom says that only young, tech-savvy consumers are downloading and listening to podcasts, there is also a sizable market among 35-to-54-year-olds, indicating that the audience is broader than previously thought.

"Since many of the top podcasts are in the educational and business genres, it's not surprising that podcasts today appeal to the more educated and higher-income consumer segments."

Time online is also a determining factor in podcast usage, according to a Pew Internet & American Life Project study conducted from February to April 2006. Internet users who had been online for six or more years were twice as likely to have downloaded a podcast as someone online for three years or less (13% vs. 6%, respectively).

It is important for potential podcast sponsors and other marketers to avoid thinking of podcast users as a single composite entity.

eMarketer Senior Analyst James Belcher says, "One of the medium's strengths is that regular followers are hugely interested in the topic of a given podcast, be it comics or cash management, allowing for a deeper host-listener (and therefore brand) relationship than is possible with a general audience — or a composite picture of one."

Learn about the range of marketing opportunities in this growing medium. Read the eMarketer Podcast Advertising report.

Luxury travellers seek holiday enlightenment

A Small Luxury Hotels of the World survey has found 64% of people have significantly different criteria when choosing a hotel for business versus for leisure purposes.


The survey questioned 3,500 members of SLH’s The Club loyalty programme, with the US (40%) the most represented country of residence ahead of the UK/Ireland (26%).

It found that hotels chosen for business tended to be more ‘practical’ and ‘price driven’, while those selected for leisure were more ‘luxurious’ with price ‘much less of an issue’.

Respondents were also asked what kind of experience they sought while travelling, and to rate the importance of cultural activities versus culinary experiences, spa-related activities and outdoor/adventure pursuits. Club members ranked all four as being equally important, but ‘overwhelmingly expressed interest’ in a variety of spa experiences and adventurous activities.

SLH said the survey highlighted guests’ desire to have access to ‘behind the scenes tours, private areas and places only locals might visit or shop’. Some also wanted unique culinary experiences, both in terms of location and cuisine, together with ‘interactive opportunities’ such as cooking lessons.

Overall, 66% of respondents classed experiences on holiday as ‘very important’.

Other survey findings included 86% of respondents said quality was the most important factor when choosing a hotel, ahead of location and price; and that 60% tended to book a room only compared with 21% who booked a package.

Online Travel and Demographics
MAY 16, 2007
The 55-and-older crowd isn't about to spend retirement tending the garden.

A February 2007 Hitwise study found that slightly more women than men visit online travel sites, and that nearly a quarter of visitors are ages 55 and older.

The age distribution is worth noting because lifestyle trends are altering the types of trips people take and the way they plan and book travel. Those 55 and older will increase substantially as a percentage of the population during the next 10 years. Yet Web-based resources tailored specifically for that group have been lacking.

Don Birch of Abacus International said in the June 2006 EyeforTravel newsletter that "we're seeing the emergence of a new generation of older travelers who are healthy, active, street-wise and have unprecedented spending power. This is a lucrative segment but one which has specific needs."

Another online travel study conducted in February 2007 by Nielsen//NetRatings also tracked about a quarter of visits as coming from those ages 55 and older. Nearly half of visitors were ages 45 and older, pointing toward even more growth in the 55-and-older group during the next 10 years.

Youth travelers ages 16 to 24 are another large but underserved market. They now represent more than 20% of all international visitors, according to a study by the United Nations World Tourism Organization (UNWTO) and the World Youth & Student Educational Travel Confederation (WYSETC).

The study, cited in March 2007 by TravelMole, stated that "compared with average tourists, adventurous young backpackers stay longer, spend more, seek out alternative destinations and enjoy a wider mix of travel experiences."

Over $700 billion was spent on travel in the US in 2006, according to the Travel Industry Association of America (TIA). Travel spending is expected to rise through 2009, but at decreasing annual rates. The TIA said the slowdown will come from the stabilization of travel prices, softer demand and a general slowdown in consumer spending.

Make sure you're ready for the summer travel season. Read the eMarketer US Online Travel: The Threat of Commoditization report.

The Occasional Internet

MAY 8, 2007

Just because someone owns tech doesn't make him a techie.

A solid majority of Americans own PCs and mobile phones, but the gadgets play a minimal role in the lives of almost half of US adults, according to the Pew Internet & American Life Project's "A Typology of Information and Communication Technology Users" study.

Nearly three-fourths of US adults surveyed had a mobile phone, and 68% had a desktop computer.

US Internet users engage in a healthy range of activities online, such as instant messaging or downloading digital content for a price. But the number of people who do these things regularly (as indicated by having done the activity "yesterday") is surprisingly low across the board. Only 4% of Internet users had downloaded paid music the day before the survey, for instance.

Pew's data on that point are in line with a Solutions Research Group study, in which nearly one in four US Internet users had paid to download music in June 2006, up from only 8% the year before.

Even digital music buyers do not get a new album every day. But the Pew study also revealed a larger issue.

Besides just tallying overall device ownership and Internet user activity, the study segmented technology usage among the entire US adult populace.

The result?

John Horrigan of Pew noted that "49% of Americans only occasionally use modern gadgetry and many others bristle at electronic connectivity."

The segmentation uncovered some feelings about technology which mere device ownership and occasional usage did not. As an example, some of the infrequent users did not like how gadgets made them more available to others, and they did not think those gadgets made them more productive.

This is a good argument for using multiple media in a campaign. Just because adults are online does not necessarily mean that the Internet is the best tool for reaching them.

German Online Travel Gains on UK

MAY 10, 2007 - eMarketer

Old travel brands shine online.

Germans booked 35.1 million vacations online last year, according to BITKOM.

That's nearly one vacation booked online for every two Germans. The country's total population was 82.4 million in July 2006, according to the US Census Bureau. Germans average 35 vacation days per year, compared with 13 in the US, according to the World Tourism Organization.

The number of leisure trips that Germans reserve online has been rising steadily since 2003.

eMarketer Senior Analyst Jeffrey Grau said, "German leisure travelers are booking vacations online at strong rates that are allowing this market to close in on second place, behind the UK, in European online travel sales."

Germany's share of Europe's online travel sales has been increasing since 2003, according to PhoCusWright.

Traditional travel agencies and tour operators have done well online in the UK. In Germany and France, however, travelers tend to go straight to online travel suppliers, according to Euromonitor International.

Mr. Grau said that agencies trail in Germany and France because suppliers have "longer established brands such as the airlines and hotels that allow customers to make reservations on their Web sites."

Find out how the world uses the World Wide Web for travel. Read the eMarketer Online Travel Worldwide: A Mosaic of Separate Markets report.

White Papers vs Webcasts: What Prospects Prefer - New Data

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SUMMARY: Stop right now. If you use white papers and newsletter articles to entice and educate prospects, we have new data that will surprise you about what they truly want.

In part two of a survey MarketingSherpa conducted with content syndicator KnowledgeStorm, we asked B-to-B marketers and end users about features that encourage registration. We're giving you an exclusive peek at four new data charts and key findings before the full report's release later this month.

Creating the right content products to support a marketing strategy is the first step in reaching out to potential customers online. The next step is just as important: deciding where to distribute that content, how to get users to engage with it and determining what information to collect from them in exchange.

“If you’re using content for a marketing goal, you want to make sure that users are finding it and that when they’re asked to register for it, they’re finding the experience is a good one,” says Matt Lohman, Director, Business Development for content syndicator KnowledgeStorm.

Those challenges were the focus of a survey conducted in April 2007 by MarketingSherpa and KnowledgeStorm. We asked 427 marketers and 2,394 content users registered in KnowledgeStorm’s database questions about how they distribute and access content online, as well as what factors influence their decision to register to get it. It’s the second part of a three-stage study into online content creation, distribution and performance measurement. (See the hotlink below for our take on the results from the first part of the survey.)

The complete survey results will be available at KnowledgeStorm’s website in two weeks. But here’s an early look at three insights into vendors’ and end users’ opinions on key issues related to the online content registration process:


Table: What Content Is Worthy of Registration?

Copyright 2007: KnowledgeStorm Inc. All rights reserved

When most vendors think of content with a marketing potential, they think of white papers, webcasts and webinars and case studies. That’s a safe bet, as users mostly agree with the assessment and are willing to register to get those materials.

But as the table above shows, nearly half of the end users are willing to register to receive product literature, such as product terminology, capabilities and pricing information. Yet, when vendors were asked what was worthy of requiring registration, product literature didn’t crack the top five. In fact, only 19% of vendors said they thought it should be put behind a registration barrier.

Most vendors probably have this information somewhere on their websites. But if you’re not putting it in a portable format, such as a PDF, you could be missing an opportunity to gather more registrations from customers and prospects. The trick is to make sure it’s thorough and well organized, so its quality is on par with the other marketing-related content you produce.

On the other hand, end users weren’t as keen on webcasts as marketers. Only 31% of users (rank: #7) said they were typically willing to register for a webcast, even though registration is almost always mandatory for such events.

There could be two reasons for this discrepancy. First, the term webcast can mean different things to different people, and survey respondents may have been thinking primarily of live, online events rather than on-demand, recorded webinars.

Second, Lohman says the KnowledgeStorm audience is used to searching the site for content they can access immediately and use in a portable format. Even though KnowledgeStorm’s network supports registration for live Web events, response from users is typically lower for those events than the response to white papers or other products.

Archived or on-demand webinars do better than live events in the KnowledgeStorm network, but still don’t generate as much interest as, say, a white paper or case study. So, if you’re a marketer trying to syndicate a webcast or webinar, one approach that could capture more registrations is to create an event transcript after the fact that users can download and read on their own time.


Chart: Will a Detailed Summary Encourage Registration?

Copyright 2007: KnowledgeStorm Inc. All rights reserved

Here’s another case in which end users and vendors have different expectations. We asked both groups what factors are most important when deciding to register for a piece of content. Choices included factors such as the source of the material, the type of content and the length of the content.

What’s most telling was the discrepancy between the two groups’ opinions on importance of having a detailed summary of the material they had receive. Nearly three-quarters of end users said having that was a ‘major factor’ in their decision to register vs only 34% of vendors.

Users are very selective about the content they will register for, so it shouldn’t be surprising that providing enough detail to make an informed decision is important. But it appears that vendors don't pay as much attention to this factor as they should. Take a look at the summary information you’re providing for your content and ask yourself if it will satisfy users’ need to know what they’re getting.


Chart: How Often Do You Provide Valid Registration Information?

Copyright 2007: KnowledgeStorm Inc. All rights reserved


Chart: Use of Business Email Address vs Personal Email Address When Registering for Content

Copyright 2007: KnowledgeStorm Inc. All rights reserved

The first of these two charts should comfort vendors who use a content marketing strategy: 72% of users said they always provide a valid name when registering for content, and 68% said they always give a valid email address.

But look at the types of email address being submitted: 44% said they use a personal email account, such as Gmail, Yahoo! or Hotmail. Vendors often view such addresses as less qualified when analyzing responses to their content registrations, yet a business exec may want to use a personal account for several reasons, such as the desire to reduce clutter in their business inbox.

Since more than two-thirds of users said they always give a valid email address, don’t automatically discount those Hotmail or Yahoo! accounts.