Circos Brand Karma

Last week was a great week for us as we were able to connect with most of our customers and partners in Asia Pacific at Web in Travel, ITB Asia, and our 1st half-day workshop, Brand Karma Day.  We shared our thoughts on the social media phenomenon and how businesses can best leverage it to turn it into a strategic asset for their brands.  Below is a recap of the top 10 ideas that we recommend for brands in the travel industry who want to venture into social media.

1. Understand your true differentiators.  Sometimes what you’ve identified as differentiators don’t mirror what customers think.  It’s important to monitor what is being said about you and reconcile your customers’ opinions with your story so that the brand message is consistent and credible.
2. Maintain operational excellence around your differentiators.  Your brand differentiators can’t be temporary.  Unlike ads, social media has permanence.  Since what’s expressed about your brand is permanently searchable, changing the differentiators constantly will confuse your audience.
3. Set up your social network hub where your customers are.  We recommend minimally a presence on Facebook because it is the largest social network with over 300M users and is one of the top-trafficked site in many countries.  The volume and the intent (sharing, lifestyle) make it suitable for just about any consumer brand.
4. Use content about your differentiators as “landing lights.” Guide interested consumers to your hub with great content.  You want consumers (current and future customers) to be attracted to and stay loyal to your brand because of your differentiators.  If the content is timely, all the better.  Of course, point #2 above is of the utmost importance.
5. Make fans not friends.  Fans on Facebook and Followers on Twitter give users the power to opt-in to being associated with you, which is exactly what you want.  It’s low risk for your fans, and you can stay focused on sharing the great things about your brand.
6. Engage, not advertise.  The impression ads and click-through ads of the portal/search paradigms don’t work well in this channel.  Think of your fans as people who are already or will eventually be in your CRM — and use your hub to please them digitally.  Share things that would interest them, do things that would please them, reward their loyalty, and personalize whenever possible.
7. Link to allies.  Chances are, brands in other parts of the world tout the same differentiators.  Why not ally with them by cross-linking your hubs?  The narrower your niche, probably the easier it will be to find non-competitive allies that can cross-authenticate what your brand stands for.
8. Partner with brands that complete you.  Travel is a holistic experience involving many components.  In your hub, introduce the partners that best complete the guest experience.  Depending on the business your brand is in, points of interest, transportation options, accommodation choices, local eateries, and ticketing agencies are all possible partners to complete the experience your brand offers.
9. Respond immediately, and with empathy, to negative posts.  Brands, like people, show their true colors when they’re under attack, so complaints, though unpleasant, can be opportunities for you to shine.  Unless it’s a systemic problem, other fans will likely ignore the complaint, rise to defend you, or understand that the issue is between the complaining fan and you.  In all cases, they will appreciate that you did something, even if all you do is to request to address the issue offline with the complaining fan.  Doing nothing makes observing fans wonder what happened.
10. Develop a social media policy for your employees.  How many of the 300M Facebook users also work for you?  Chances are, quite a few.  Employees can be your biggest promoters… or unintentional detractors.  As you venture into social media, make sure that your employees are on the same page as you.

A few days ago I was at a conference in Taipei where I presented data about the major shifts in the Taiwanese market.  I compared the outbound traveler data from the first half of 2009 to the first half of 2002.  Both 2002 and 2009 were preceded by events that negatively affected the travel industry (i.e. September 11, the financial crisis, and H1N1).  As the total outbound travelers January-June was 3.7M in 2002 vs. 3.8M in 2009, it appeared that those events had a similar degree of impact on the overall market and I could compare them to see the shifts.

There were a few insights that I shared at the conference based on this analysis, including how outbound destinations shifted in this time period due to the opening of direct flights between Taiwan and Mainland China this year.  However, the most interesting insight to me was this: for all age groups, the relative % of market remained the same except for the 20-29 year-olds vs. the 50-59 year-olds.  The 20s group experienced a 15% decrease v. the 50s that had a 44% increase.

To ensure that this wasn’t an aberration for 2009 only, I also compared the first half of 2008 (a more prosperous time) with 2002.  It turns out that while the overall market grew by 19% in 2002, the 20s segment grew by only 2%.  In fact, every other age segment grew by double digits except for the 20s.  Meanwhile, the 50s grew by 53% between 2008 and 2002.

The data is counter-intuitive.  Travel is about discovery, and we associate that with something that younger people would be excited about.  But the data suggested just the opposite.  As the 20-29 year-olds are the youngest of the independent travelers (below 20 the travel activities tend to be largely as a result of family travel), they are an important bellwether segment to observe.  And the data showed bad news.  I shared this with a few Taiwanese friends and industry insiders and they were puzzled and surprised.  No one had a good explanation for what was going on even though there were quite a few plausible suggestions related to the economy.

The down trend bothered me so much that I did some more research in the last few days.  Here’s what I found.

According to government statistics, The population of 20-29 year olds in Taiwan from 2002 to 2008 decreased by about 6% whereas the population of 50-59 year olds increased by about 44%.  However, the % of 20 year-olds and the % of 50 year-olds who traveled remained relatively constant in these years (monthly, about 3% of the 20s  vs. 4% of the 50s).  Taking the additional data into account, it made sense that:

Trend of Taiwanese Population by Age, 20s v. 50s (in 000s)

• In absolute numbers, there were now many more Taiwanese in their 50s than 20s traveling to destinations outside Taiwan, whereas in 2002 the numbers were about the same

• The reason for this may not be behavioral or socio-economic, but simply due to the decrease in the overall population of 20 year-olds in Taiwan from 2002 to now versus the increase in the overall population of 50 year-olds during the same period

A 29 year-old in 2008 would have been born 1979.  I decided to look and see the birth rate of Taiwanese babies from 1979 through present day to see how that will impact future population.  What I found was alarming.

Population trend of 20-29 year-old Taiwanese based on births from 1979-2007 (in 000s)

The birth rate in Taiwan has been in sharp decline.  For example, there were more than twice as many babies born in 1979 than in 2007.  The chart on the left shows the population of 20-29 year-olds for the next 20 years.

This means that in 2027, there will be 35% fewer Taiwanese in their 20s than today.

If the percent of people who travel stay roughly the same and there is no big influx of people immigrating to Taiwan to offset the decline, then this segment of travelers will severely impact the travel industry as they grow older and move into the older (and more affluent) age categories of the 30s, 40s, and 50s.

I think the travel industry in Taiwan needs to reconsider their strategy targeting outbound Taiwanese travelers, starting with how to attract young travelers and win their loyalty.  Also, with the young population declining, Taiwanese airline and hotel operators need to have a better strategy for attracting inbound travelers.

Further, destinations like Japan and Hong Kong where a large number of Taiwanese visit should also take note.  It’s kind of downhill from here.

While on the one hand I was glad to see that young Taiwanese people are still out discovering the world, I was sad to realize that there are going to be fewer Taiwanese people in the future.

Invitations to Brand Karma Day have been sent out, and we’ve begun preparing for the event.  Given the emergence of social media as a critical component of branding, we thought it’d be a good idea to share what we’ve learned in the last 12 months with our clients, partners, and friends of the company.  Brand Karma Day will take place on Monday, October 19, the day before Web in Travel (October 20-23), which opens ITB Asia (October 21-23).

Brand Karma Day has been designed to help hoteliers turn their social media into a strategic asset.  We’ll cover 3 topics:

1. The Numbers Crunch — This session kicks off Brand Karma Day and will be a good foundation for anyone whose brands are impacted by social media.  We’ll discuss the numbers behind social media, their implications, and recent best practices.  Also for the first time, we’ll share the results of our analysis on the Asia-Pacific hospitality market.
2. Chatter Clutter — The 2nd session builds on the insights from the first session and focuses on the operational aspects of the customer experience, including both the physical attributes (or hardware), and services.  We’ll explain the “Diamond” framework that integrates guest satisfaction surveys with Brand Karma data, and show brand owners how they can use it to prioritize operational improvements.
3. Money Matters — The final session brings it all together by focusing on how hotel owners can use social media to increase RevPar.  We’ll teach brand owners about Swing Travelers and how to micro-target them.  As a part of this, we’ll show brand owners how to identify and communicate their operational differentiators versus their competitors to create more value in their rates.

I hope you can all make it! To register, go to Brand Karma Day

I was on a panel with Karthik Siva at the Asia Luxury Travel Market in Shanghai where we discussed traditional vs. “new wave” branding.  Karthik is the visionary behind Global Brand Forum.  The panel was moderated by Siew Hoon Yeoh of Web-in-Travel (aka WIT), the conference where we launched Brand Karma last year.  Though he represented traditional marketing and I represented “new wave,” I found much in common with his thinking.

One such common perspective revolves around the purpose of a brand and its importance today.  Luxury brands have long understood the need to define a unique purpose and have been fulfilling it by manifesting features to not only justify their price point, but also to retain customers.

But what about non-luxury brands?  Does price trump all?

I don’t think so.  Some of the businesses that have filed for bankruptcy actually used price as a key differentiator (e.g. Mervyns) or resorted to using price as a tool to stimulate volume (e.g. General Motors, Eddie Bauer).

Hoteliers around the world are dropping prices.  At the same time, in the eyes of travelers, hotel stay experiences have become more generic.  I hear a lot more statements like “I can’t tell the differences between these hotels,” and “the rooms are all pretty much the same.”  I also see it on the trend graphs in Brand Karma.  If customers don’t feel passion for their product, hoteliers may have to use pricing as the strategy because it typically has an immediate impact of driving volume… at least for a while.  But that’s not sustainable in the long run.  Both General Motors and Eddie Bauer created products that customers didn’t want to buy… eventually even lower prices didn’t work because both brands failed to inspire or stand for something that consumers cared to spend any money on.

Hence hoteliers, if you haven’t already done so, now might be a good time to do a quick check up on your brand purpose.  You don’t need to hire a consultant to do this.  Just answer these questions honestly:

1. Why does your brand exist?
2. How is that relevant today?
3. What are you and your staff doing to deliver on the brand promise?
4. How is what you’re doing different from what your competitors are doing?
5. Would your customers agree with your answers?

The answer to question 5 is critical, and the impact of a “no” or “I don’t know” could be devastating.  Check out AT&T’s change in its upgrade policy for the iPhone and also the site about consumer credit card rules for a sense of how things could evolve.

As a starting point, take a look at what’s been publicly expressed about your brand.  This will give you a pretty good idea, whether you agree or not, at how your guests really felt about their stay experiences.  Because their reviews are public, their words also shape potential customers’ impression of your brand when they research your brand — which has a direct impact on whether consumers book a room at your property or not.

Finally, even when not reviewing your brand, users express strong opinions about what ought to happen, echoing general consumer sentiments or raising expectations.  This may have a significant impact on the relevance of your offering.  For example, Gary Arndt recently tweeted something I’m sure many travelers think of:

• “So many places say they have ‘internet’ but do not mention if it is free or if it is just a computer in a common area”
• “I know free wifi is becoming the deal breaker for me and a lot of other people. Hotels should take note”

How influential will people like Gary Arndt be?  His tweet currently reaches over 72,000 followers.

From time to time I get asked to cite examples of a brand that does a great job of leveraging Web 2.0 to enhance its brand story.  With the ease in which anyone can post something about their brand experience, its easy for brand stories to get fragmented.  Recently the impact of social media on Domino’s pizza, as well as the instant fame that Susan Boyle from Britain’s Got Talent, are examples of how influential social media has become.  Susan Boyle’s video on YouTube has been viewed more than 51M times — which has not only established her as an overnight brand but also cemented the show (and people like Simon Cowell) as the de facto talent discoverer worldwide.

The examples above are accidental in that something extraordinary happened and the parties were accidental victims or benefactors of the ensuing buzz.  But what about a brand that has actively embraced Web 2.0 as part of its strategy?  A few months ago I saw the t-mobile commercial that featured a dance in Liverpool station in London.  That video has been viewed more than 11M times and generated a lot of buzz for the brand to make it fresh.  T-mobile just followed up on April 30th with a live singing at Trafalgar Square.

The video itself undoubtedly will be as viral as the first commercial, but its the user-generated content from the event itself that will not only further the buzz but increase the specificity through which t-mobile’s brand stories can be “narrowcasted” by the participants to achieve even further impact.  For example, when I searched for “t-mobile trafalgar” on Flickr I found over 300 results, and there are already over 150 results on YouTube.

The “Life is for Sharing” campaign is right for t-mobile because the inherent nature of what t-mobile does is to connect people together so they can share — hence the tagline isn’t a stretch.  But the campaign they’re running to leverage Web 2.0 makes the sharing real.  By creating these singing and dancing events t-mobile also created a platform for participants and passerbys to experience something extraordinary, and the very devices and services they use to tell their friends and family can all be easily linked back to what t-mobile has to provide.

In a brilliant twist of “in-the-know,” the singer Pink is also in the Trafalgar video.  Her brief “just one of the crowd” presence, in addition to the perfect product placements of participants taking pictures/videos using their cellphones while the event is going on goes to show how well t-mobile and its ad agency understand how to leverage Web 2.0 to enhance its brand story.

Similar to the participants of Trafalgar and Liverpool, hoteliers should expect their guests to share their (hopefully extraordinary) stay experience.  Some will do this in text, others will further enhance with pictures and videos.  Each new post will either contribute to or detract from the brand story.  It’s unwise to ignore what these customers are saying, as unlike guest satisfaction surveys which can be seen only by the hotel staff, these posts are publicly available to anyone.  At a minimum, all hoteliers need to be aware of what is being said.

For hoteliers who have a communicative customer base, a business strategy that incorporates Web 2.0 and social media as part of the brandstorytelling will lead the brand to have better awareness, favorability, loyalty, and ultimately, profitability.

Incidentally, I will be speaking about this topic at the China Travel Innovation Summit, an event that is sponsored by China Travel Daily in association with PhoCusWright.  Hope to see you there.

This used to be Ford’s slogan, and I think couldn’t be more appropriate to describe ad trends.  One of the panels at Ad:tech in San Francisco talked about the state of advertising and how it’s evolving.  I found a couple of things interesting.

1. Higher CPM goes to content sites that fit the advertising, not necessarily sites with the most reach.  According to Scott Symond of AKQA, “tier 1 inventory is artificially high.”
2. Search marketing can be used as a response and measurement tool for offline media campaigns, but current players are too stuck on PPC.

I couldn’t agree more.  The driving factor behind these 2 points is that ROI/conversion accountability will be key for media buyers.  Google has clearly caught on to this as they’re trying to improve the quality of their click-throughs.

Referring quality traffic to advertisers is the holy grail.  By quality traffic I mean consumers who have a high likelihood of buying once they get to the advertiser’s site.  Today, during a meeting with an ad agency, we were reminded that if the consumer is new, then that traffic is even of a higher value.

Seems like quality is on a lot of people’s minds these days!

I was part of a panel discussion moderated by Nick on the monetization topic at the SNAP Summit yesterday. Along with my fellow panelists, Ren, Eve, and Krishna Subramanian (formerly of Blue Lithium), we discussed that social apps which gave 1) quality attention time to ads AND 2) had desirable user segments (either demographic or behavioral) are going to monetize better than apps that don’t have both.

If you look at different webmail providers as a highly trafficked social app, the eCPM has to be pretty abysmal because of the lack of quality attention and user qualification. Car IQ, on the other hand, has the ability to do both. In doing so, they should be able to extract a higher eCPM because they can facilitate branded experiences with desired segments even without a lot of traffic.

But is eCPM even the right metric? Depends on what the M stands. If M were to stand for “minute,” then the revenue model could be a derivation of the broadcast model instead of the print model, in which case I’d say eCPM is absolutely the right metric. We’d be in a world where whereby advertisers pay for engaged attention from qualified individual as they participate in (related) activities.I believe that’s where social apps will find the rainbow’s end.

I’m down in San Diego today and tomorrow for the O’Reilly Graphing Social Patterns conference. We just finished the morning sessions, and the content has been impressive so far. Charlene Li’s keynote on the Future of Social Networks touched on where she sees things headed long term — think 5 years from now. She mentioned social networks will be like air, and you’ll come to expect your social graph info to follow and assist you wherever you go.

My favorite session so far has been on the Stanford class that taught Facebook App building. They estimate that collectively the class’s apps generated over $500K in revenue (and that’s the low end of their estimates). The stats are impressive.

After a busy few days at DEMO in Palm Desert last week, we’re back at home in the Bay Area and Singapore. Here’s the video of our team on stage during the general session at DEMO.

We’re already working to add new categories and cities, as well as requested features to www.circos.com. Stay tuned…

As you can imagine, we’re thrilled! DEMO is a premier conference where selected companies are invited to launch new products. We can’t wait to launch Circos there!

Of course now that the countdown has begun, we need to step up the rehearsals! <g>