Advertising

Advertising at a Crossroads

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 http://powerconsultants.axses.net/free-marketing-reports/

2015 Update - MediaPost call it an irrelevant argument -
See how Advertising Gets #Unbundled

Why The Biggest Debate In Advertising Is Irrelevant at MediaPost
Brands the say  ""We now care little about the record label and less about the singer or band"
I add add "and less about the brand, none of these are ny any means less vital, In fact consumption is up and all sectors gain, it just gets #UNBUNDLED (see link at end of article)

2013 update...
Its been a while since we forecast these changes and more.. So its rewarding to see this slideshow of the history of advertising. We were right on track in 2008 and today we are seeing search moving more into integrated marketing pushing search drops small hotels off of search results.

The Evolution of Advertising: How Consumers Won the War for Their Attention from HubSpot All-in-one Marketing Software

ORIGINAL ARTICLE.
 

 At AXSES, we have been musing about the internet advertising business, wonder how it will evolve. With Google loosing ground to other choices, such as social networking, meta search, bookings and interactive services, it will not be long before they morph their business to give travelers what they want. Google decided not go the bookings route, and did not offer to buy Expedia. It has opted to move more into social networking see Google Travel Plans. MSN in contrast is moving to interactive shopping, with its purchase of Farecast.

In our view the days of static ads and list that link to websites are limited. We expect to see this change even on the search engines. Travelers need to be able to compare options and get fully costed holiday at a click.

Hitwise, the Internet statistics company recently noted a significant shift in searchers favouring Branded searches. “I looked at the top 300 search terms sending visits to Travel websites and found that more than three-quarters - 77% - of visits from these queries were from branded search terms such as “Hilton hotels” or “Expedia” in the four weeks ending April 26, 2008”, Heather Hopkins, VP Research, Hitwise UK.

Simple put, the Hitwise findings, mean searchers are now looking more for names they know and not relying as much on generic terms. If the trend continues, it will mean that we can’t rely on the search engines to help people discover our hotels for the first time. We can’t rely on a middleman to market us!. Marketing ourselves is something we can’t avoid.

In light of the trends to buy direct, it is interesting that Expedia is a top of mind search term. Yet Expedia reports, unofficially, that 70% of visitors to the their site use their list to find resort matching a budget, and then go directly to the resort website to make a contact and book. 95% of Expedia visitors do not buy from Expedia. Aware of this trend Expedia introduced a Cost Per Click (CPC) advertising option, similar to Google. Interesting indeed! Has Expedia seen the writing on the wall?. Perhaps they got the idea that they were the new search engine for travel. So now instead of paying 25-30% in commission advertisers are paying 30-40% and don’t have any control on their brand.

The Cost Per Click (CPC), is the cost to deliver a single customer to a website as a result of a paid listing or advertisement on a medium such as Google or Barbados.org.

In a recent study of advertising costs, AXSES revealed that the Cost Per Click on Barbados.org is now less than 1/5 of costs on sites such as Google.

But they are all static ads that link travelers to the advertisers website. In addition we do free listing for every resort in the destination.
All of them, not just advertisers.

Our next release will make these ads interactive and link directly to dynamic quotation, reserve and book options. Of course all direct to the advertisers. What this means is that Barbados.org advertisers will have interactive advertisements that allow travelers to get an immediate quote and to reserve or book a holiday package, including air, online, on almost every advertisement and listing on Barbados.org. Travelers will now be able to click a button on the advertisement itself and make a booking directly with the hotel right there and then,. and this is right across all media, even on Google maps. Pretty powerful when u consider that Barbados.org maps are on the Google website ((http://maps.google.com/maps?f=q&hl=en&geocode=&q=http:%2F%2Fwww.barbadosbymap.com%2Fgeorss.php) )as well as on Barbados.org map pages (and http://barbadosbymap.com)

Couple low CPC advertising with bookable ads and the supplier centered technologies now in place with  axses travel platform and other supplier solution, and you get a powerful direct marketing solution: Enhancing suppliers brand and delivering commission free business directly to the tourism operator. Giving control back to the supplier. For AXSES Power Marketing Free Resources and Marketing Tips go to http://powerconsultants.axses.net/free-marketing-resources/

We look forward to hearing from. Do you agree, do you have a point of view?. Please let us know what you know!

Oh - Do read the MediaPost Article its very on target on how advertising is unbundled

GDS History

GDS, CRS and channel management
The GDS have long been the primary source of travel agents bookings in the world. Today they do much more and supply content rates and hotel inventory to thousands of On-line Travel website.
The GDS systems are a huge network of thousands of computers set up originally by companies like Sabre, WorldSapn. Amedeus, Galileo and Pegasus. They provided Computer Based Reservations (CRS) services to all travel agents long before the Internet. These system are still in place and are used by more that 480,000 agents worldwide.
When you visit a Travel Agent you will see them at the CRS to find and book flights and resorts.
It has traditionally been an expensive distribution system requiring setup fees in the thousands of dollars as well as booking fees, transaction fees and agents commissions. As a result many smaller hotels are not represented in the GDS and GDS have not been too interested in this sector as they problem of coordinating inventory has been too great (a small hotel just does not have a sufficient supply of rooms to justify the effort of cost them up).

With the advent of new technology this has changed. Now there are GDS agent companies who specialise in supplying content to the GDS computers. The Internet also makes it easier to get the information and distribute it. This has made GDS widely available to hotels of all size. An inovator in opening up the Market was Tom Egan of reserv, who single handedly changed the face of distribution by offering an easy to use system with no setup fees and no minimum charges. His system worked on next Generation technology meaning that the entire process of setting up a hotel was done on-line, no manual entry. Alas Tom sold out and his ideas hot the dust.
2 way integration
New e-commerce systems (such as arcRes http://Bookings-Expert.com, http://axses-innkeeper.com and http://arcRes-CRS.com) are integrated with the GDS system to make it even easier and more affordable for hotels to market throught GDS. The two way integration makes it easier to setup and to manage rates and inventory in multiple channels. It essentially means that a hotel can use their own web booking engine or front desk software (that is GDS integrated) to see and process GDS reservation and to update allocation and rates. This is a great advantage as it means less to learn and to manage.
see also GDS Next Generation Seamless
A major problem facing the industry now is the proliferation of vendors. Whereas before we had a few key Tour Operators, now there are numerous Internet companies, like Expedia, Travelocity, Hotel.com, Priceline.com and many others that have vastly more exposure that the traditional Tour Operators. Getting products onto these system and maintaining rates, content and inventory requires full time management and is not feasible for many small resorts.

Fortunatly new hotel tools like arcRes Website Bookings Engine (Bookings-Expert) now provide a single system to maintain. It also makes rates management easier by allow suppliers to specify any rate in any channel as a % of another rates or a markup on costs. Other companies like AXSES are working on building tools that will change the face of distribution giving suppliers (hotels and tourism operators) control over the supply chain. The new model emerging is supplier centered, supply chain management.

In the new business model the hotel and tourism operator tools (field tools) are fully integrated at the operator level and with downstream distribution. For example the web bookings engine is integrated with property management, housekeeping and inventory. All this is integrated with the GDS system and destination portals like http://BookingsStlucia.com as well as with the GDS, and retail sites like http://travelocity.com feeding from the central database updated by arcRes.

Very Long Ago.
The history of the development of GDS is a great story. One of the best accounts I have seen is available at http://www.innadvance.com/index5.htm
In breif, it follows the development of a reservation systems spearheaded by American Airlines. The startup of ThisCo the switch that connected hotels to the airlines and travel agents systems and all the steps leading up to that.


© Ian Clayton, AXSES SCI 2007.
see arcRes solutions for tourism, AXSES web Solution