Mobile Adoption Changes the Revenue Model of TVs in Hotels and Resorts

Today’s post looks at a major effect that mobile adoption has had within hotels and resorts....

• The Trend: Communication and content-serving technologies are on the brink of total ubiquity and portability. We’ve covered this several times in this blog -- basically everyone will have a smartphone within five years and everyone who would want a laptop already has one. (See this report if you require convincing of this point.)
   
• The Effect: Hotels have been cut out as middlemen that provide access to content and communication. Such services are now provided directly to customers via wi-fi internet (for now) and mobile.
   
• The Result: Hotels can no longer expect meaningful revenue streams from delivering or providing access to content and communication. Not even for internet access.

Here’s a real-life example: Several resorts will need to replace their ageing in-room televisions within the next 24 months. Unlike in the past, however, the new TVs will have almost no ROI if traditional models are pursued. Why? Because the bottom has fallen out of video on demand revenues. Nobody watches video on demand anymore, not even pornography, because everything that the guests want is already available for “free” via internet or DVDs that guests bring along and access via laptops.

The natural progression from dwindling VOD (video on demand) revenues was to deploy and charge for internet access. Customers demanded this service, and it certainly made sense from a long-term revenue perspective, but mobile is already siphoning off this stream, too. The current generation of mobile phones operate as internet access devices in their own right and enable tethering for laptop internet access, too. As with land-line telephones and TV content, hotels are about to be cut out of the “wi-fi as revenue stream," too.

But all is not lost. Here’s the opportunity: Hotels must define new ways to curate and access content for the specific hotel/resort experience. Specifically, TVs and their programming need to be rethought from the ground up to act as tools that enhance guests’ exploration and sharing of the resort (here are a few ideas from a mobile point of view). TVs will remain very valuable to guests (for now) because they improve the viewing experience from guests’ phones and laptops. That is, they improve guests' ability to view their own content, along with anything of interest via the internet or created for exploring the resort. Special thought should be given to helping guests to connect their devices to TVs and to how guests will be interacting with content. The days of simply viewing content are coming to an end, and resort-specific programming should be proactive on this front.

In the end, TVs will still generate revenue but via different services like facilitating service orders, offering games, and promoting the hotel through social media, as opposed to watching first run movies and some content that just isn't appropriate for home or office.

Search Fragmentation is Coming - Be Prepared to Capitalize.

This week, a Google representative declared "in three years time, desktops will be irrelevant".  In December, Morgan Stanley stated "more users will likely connect to the Internet via mobile devices than desktop PCs within five years".   According to Compete.com Facebook now has more users than Yahoo.  This rapid increase in mobile and social screen time is changing user behavior and creating new types of searches - apps, friends,  music, photos, etc.  These changes will fragment new search queries away from Google and other universal search engines.  Google will continue to dominate desktop-based searching, but new smartphone and social searching will fragment to a host of players including Apple, Google and new companies.  These new entrants, including Twitter, have an opportunity to adopt Google-like PPC ad model to complement search behavior on their services. Some will simply copy Google and design an even better mouse-trap and APIs for ad/bid mgmt. Digital marketers need to follow these trends, begin testing and measuring new models and start gaining insights, revenue, profit and, most importantly, a marketing competitive advantage.

On this blog, I've labeled the last decade "The Google Decade".  Despite predictions of vertical search and resultant search fragmentation, it never materialized. In 2005, I remember search pundits predicting huge growth for vertical travel search. We have seen the emergence of meta-search sites like Kayak, but have also seen failures such as Yahoo's Farechase.  Vertical search never came to pass as Google added incremental features to their popular search service and creating Universal Search - local, images, blogs, maps, real-time Tweets (recently), etc.  For practical matters, Google's ground-breaking business, AdWords, only faced one competitor during the decade - Yahoo's Overture.  It's nice to be a fast-follower.  But, Google really focused on user experience and having the best search experience before they even added a revenue model through AdWords.  This is precisely the strategy of Facebook, Twitter and others.


Google and Apple are in an epic battle for smartphone market share that will continue through this decade.  Google hasn't faced competition like this since the early days with Overture.  Based on this chart, both Android (Google mobile OS) and Apple are gaining smartphone market share and, most probably, will win.  As I spoke about in my January post, Apple is focused on a new user experience and Internet navigation model that is not centered around Google search. Also, Google's launch into Social through Buzz has been challenging and could contribute to a loss of trust and Google's looming privacy bubble this decade.  So, will these trends and new user behaviors lead to the search fragmentation others have been predicting years ago?

Let's look at some predictions of things to come, how this will affect the way we search for things and how advertisers can capitalize on these changes.  

• Apple iWords - In a recent blog post, I wrote about the proliferation of mobile Apps.  I posited that on Apple smartphones, we are being trained to navigate the web through apps and Apple's App Store.  In fact, the screen area dedicated to search in a fraction of what you see on a typical PC browser.  Just like Google trained us to use Search to navigate the Net through a PC, Apple is training us to use their storefronts. Apple's PPC solution will tie relevant search ads to app searches. I am sure their are plenty of App developers and businesses that would love to reach this highly targeted user base.
• Twitter Search - Rumors abound that Twitter is about to launch a PPC model to compliment an improved Twitter search experience. This could work and provide a revenue model that doesn't interfere with the micro-blogging experience.
• Facebook Advertising - Facebook has already launched a Google-like self-service, auction-based advertising service.  While the user feedback has been bumpy, the hyper-targeting opportunity remains.  Facebook has wisely exposed their API allowing bid-mgmt and attribution tools to add Facebook to their systems.  It is not a stretch to see Facebook improving their on-site search experience and adding these targeted ads alongside the search results.
• Digital media mgmt technology will add new PPC platforms and optimize accordingly using holistic attribution tracking, measurement and optimization.

How should digital marketers prepare for these changes to come?  Let's look at a few recommendations. 

• Ramp up your knowledge about mobile, social, apps, etc.  Talk to experts, immerse yourself, read blogs.
• Launch Social strategy.  Target social search PPC at your target social profile based monitoring, listening as well as technographic and socialgraphic research.
• Launch Mobile strategy. How will users find your company from their mobile device?  What will the experience be like?
• Utilize a 3-pronged media management approach for Owned, Earned and Purchased media. Use media attribution and optimization.
• Test, measure and learn from everything.

What do you think about this blog?  Do you agree with my take on how this will upfold?  I don't have a crystal ball - just enough experience to have a point of view.  This is a process of collective learning where we all benefit through dialogue and debate.  Please add your comments below.  Thank you.

Industry Analysis: Hotel Review Sites and Social Media

On behalf of hospitality clients, I’ve been digging into how well social monitoring tools cover hotel review sites, including Expedia, Travelocity, Orbitz, Priceline, Kayak/Travelpost, Hotwire, TripAdvisor, Hotels.com, and a few others. These sites are important channels by which hoteliers can sell their inventory. They also, of course, are a source of guest reviews and ratings that are very valuable to guests and hoteliers alike – it’s the kind of consumer feedback that other industries must work hard to find or cultivate. Needless to say, review site content is must-have for hotels when we talk about social media. Plus, the potential for groundswell transformations within hospitality is significant because of the industry’s native focus on consumer feedback.

Nearly all of the review sites (also known as “TPIs” and “OTAs” in hospitality parlance) make it very challenging for monitoring tools to pick up their content. The result is that, for hotels and resorts, “social media” remains sadly fragmented between the reviews and ratings on these important sites and the other 95% of the internet. I’ve talked recently with over a dozen social monitoring providers: Small and midsized monitoring platforms simply don’t have this content, and enterprise class platforms have to deploy a roomful of humans to keep the content flowing. Even the few industry specialists who seem to have cracked this nut still silo “reviews” from “social media” from the user-interface level on down. In fact, the industry does not yet seem to be considering the review sites as social networking platforms, and I think that’s part of the problem.

Sadly, this current state inhibits the development of social media best practices at hotels and resorts, but it is just as damaging to the review sites as well. So today’s post is an open message to the hotel review/TPI/OTA sites…

For your own sake, open your content up to social monitoring tools now. You have little to lose and much to gain.

1: The market needs independent third-party review platforms. Reviews on a hotel website will always be held with a certain amount of suspicion by the public. TPIs provide a valuable service to consumers because the content is crowdsourced, passive, and unbiased.  And, the ability to compare the reviews of multiple hotels (from different brands) at a single site provides a lot of value to guests. Even as an increasing quantity of guests book their reservations property-direct, these two benefits remain firm.

2: Current business models are not compromised by monitoring tools. Remember that monitoring tools are for the hotels and brands, not the guests. Even the most bare-bones monitoring services are about $99/property/month – and they provide no real value to guests. Guests will continue to arrive at review websites for reading, commenting, booking, and clicking on banner ads.

3: Monitoring tools make review data more useful to hotels and, in turn, guests: Because ratings/reviews are fragmented across many review sites (including local/niche sites), it’s a challenge for hoteliers to find and react to users’ comments in a timely manner. Monitoring tools would enable all reviews, regardless of source, to be processed in a single place. The resultant increased response rate from hoteliers would add vitality and relevance to a given review site, resulting in greater end-user traffic.

4: You can’t hold onto user-generated content forever: There are significant trends at play that guarantee that reviews and ratings will be sprung from the review sights sooner rather than later. Consider Google Profiles, Disqus (and other comment communities), and the new Facebook APIs. Consider, too, the ever-growing sources of organic feedback – the real “social media” stuff that most other markets have to deal with. Review sites/TPIs/OTAs can act now to establish positive relationships within the community and to influence the future of “review portability.” Or, they can lose their current head start in the social media revolution and become victims.

In the near future, savvy hotel brands will be willing to entertain syndication deals that bring review sites’ unbiased content to the branded hotel sites, perhaps along with greater reporting insights. Holding onto the old models will only hurt review sites in the long run. The winner will be the first to make its content universally available to hoteliers via social monitoring toolkits, including third-party authoring tools like HootSuite, so that hoteliers gain greater reporting insights and can more easily interact with the reviews.

Am I missing something in today’s post? Is there an angle of the business model that I’m not giving enough weight? Comment. Contact me. Let’s discuss. This is an important issue for the industry as a whole…