Krishna Sunuwar

Imagine a single media by which you can reach half of the world within second. Think of best TV channel, most read newspaper or any radio having wide range of frequency – none of them are reachable. So, what is the right answer? The answer is internet. With 2 billion of populations, it is one fourth of earth that is much bigger than any country on earth. There are 156 million websites in internet. One of them is facebook.com and it is third by population size, after China and India. If the banner is placed in facebook, 750 million people from the globe can see it within a second. It takes one day to cross border of Nepal by car and two days to reach USA by plane. Population of Nepal is 30 million. Simply imagine the speed and coverage of internet.

Since a month, whichever website I visit, I see same banner-ad of DirectI, domain and hosting server selling company. First week, it just displayed banner with hosting and domain information. From second week, it started showing banner with discount offer. I really did not care until a friend told me about Google’s Ad Remarketing. I was surprised, when I know that google was following me since a month asking to buy service of its client. Is not it amazing that Google can follow one person among 2 billion. There are many stories in news that people has been followed by online shoe store, fashion shop and so on. For example New York Times posted stories of a woman who was being followed by online shoe store, Zappo. This is called Ad Re-targeted. In latest days, e-commerce stores, other online merchandise use this technique for push selling (a selling concept). It is the part of behavioral marketing. An Advertiser determines interest/behavior of consumers based on the website he/she visits. For example, if a consumer surf online shoe store and compare price, the advertiser understand that the visitor is interested in buying the shoe. Another way is profiling interest category. An advertiser determines the interest category and places banner-ad on websites that are related to those category. For example, banners of hotel are placed in travel related websites considering ‘travel’ is as an interest category.

Ad Re-targeting is one of the niche practices of online advertising. Online advertising is the form of promotion for delivering marketing messages to attract customers using internet. Basically, it is different delivery media of marketing. Other examples of online advertising includes contextual ads on search engine, results pages, banner ads (non-targeted), Rich Media Ads, Social network advertising, interstitial ads, online classified advertising, advertising networks and e-mail marketing. There are companies that offer technology which can deliver Ads in millions of websites. For example, Google, Yahoo, AOL can publish an Ads in hundreds of thousands websites at once. One major benefit of online advertising is the immediate publishing of information and content that is not limited by geography or time. Another benefit is the efficiency of advertiser’s investment. Online advertising allows the customization of advertisements including content and posted websites.

Google provides online adverting service called AdWords. With this service any advertiser can place banner in hundreds of websites across multiple geographic location. In AdWord Google offers Ads Re-target feature which that has been considerably effective. A case study run by Global Digital Marketers , found that retargeted Ad conversion rate is 17%, up from 1.73% non-retarget banner ad. This means 17% customers who come from Re-targeting Add buy service/product whereas 1.73% customers who come from non-retargeting add purchase product. This calculation is done based on those customers who see online banner-ad and visits advertisers’ website, but not physical store.

From 1.73% to 17% is a huge increment. Back in 2004, I ran online advertising campaign (non-retargeted banner ad), for a Nepalese travel agency. Campaign cost for a year was Rs 0.1 million, they have seen 50% growth in travel booking. Yearly revenue reached to Rs. 31 million, where Rs. 15.5 million (50% increment) was the effect of that campaign. ROI is 155x.

Internet is new medium of advertising. It has now been adopted by advertiser in an increasing rate. In 2010, MagnaGlobal estimated online advertising worth of $63 billion, where TV and Print Advertising were $159.5 and $115.1 billion respectively. This figure for 2001 was $96.6, $9.6, $143.3 for TV, Online, Print Advertising respectively. This unprecedented growth indicates changing face of media. Unlike other promotional channel, advertiser can start its campaign with as less as $1 budget. Advertiser can control its daily, monthly budget. When I run a campaign for the travel agency, I had set a daily budget of $1, monthly limit that is not exceeding $100. This is the beauty of online advertising unlike other channels (TV or Print media) where you need to risk huge amount of money. Google, leader of online advertising, covers more than 60% of market share , publish banner-ad in different websites based on semantic analysis. For example, your business provides travel service in Nepal; you have to select keyword that describe your service e.g. ‘Hotel in Nepal’. Google will publish your banner in hundreds of various websites which are travel related. Your banner will be visible to only those people who are searching ‘Hotel in Nepal’. Moreover, Google allows you to control banner so that you can target certain geographic location and certain language speakers.

With introduction of behavioral marketing, Ad re-targeting, advertiser can stay in touch with existing customers, following potential new customer. Wide reach, highly flexible control over budget, effective segmentation, and strategies manipulation based on consumer behavior and interest are key points that marketers can benefit from online advertisement.

Everything has negative aspect; online advertisement cannot be an exception. Individuals are complaining for personal privacy violation by advertisers. Advertisers place banner in web server and tracks user with help of technology called cookies. Cookies are snippet of text, automatically downloaded and saved in internet consumers’ computer. With help of such cookies, advertiser can analyze consumers’ behavior, spot their geographical location, get much more information about computer users’ and computer system. Based on this information, advertisers keep on tracking consumers. Cyber criminals are increasing their activities by sending external application in form of malware and installing in internet users’ computer. Those programs alter computer system setting, works for their indented purpose, and impossible for removal. However technology experts suggest that one can be safe from those kinds of threats. One simply has to stop accepting such cookies and external application to be installed in computer system. Almost all browsers already provide such blocking features.

Internet is the biggest place for promotional activities that have wide coverage, global accessibility, reasonable costing, and control over targeted group/person. It is no doubt, that new advertising platform, has been increasing in multiple folds year by year. Advertisers and marketers have immense opportunities on online advertisement.

Note: This is party of my EMBA work at AIM

The evolution of the social media has changed the way we live. For example, 18 percent of consumers use social networking sites before even getting out of bed. It has also changed the way people travel. There have been drastic changes in how people search, shop for and purchase travel. Today’s online travelers are content creators and collaborators, posting traveler reviews and actively sharing travel experiences through their social networks. This interactive sharing is affecting not only travel products and service but also companies that are in travel businesses.

Uses of social media have brought significant growth in online traffic to company’s website. Social media has played significant role in bringing people in the website. Website is one of the important customer touch point because it is primary entry point of potential customer. My personal blog, not travel related, receives almost 20 percent traffic through Facebook. Travel companies who use social media saw 69 percent traffic growth on their Facebook profile, and 46 percent on Twitterii. Southwest Airlines, American Airlines Company, is the leader in taking benefit of social media. As of 21st July 2011, it has 1.66 million Facebook likes and 1.15 million followers on Twitter. This means Southeast Airlines is always connected with 2.81 million people. Any new product or service the Southeast Airlines announce will be reach to 2.81 million people instantly and easily. The company can keep synchronous communication like hearing feedback, critics and responding back to them through their Facebook and Twitter.

Social media is internet-based application that allows the creation and exchange of user-generated content. User generated content can be in different forms including Internet forums, weblogs, social blogs, microblogging, wikis, podcasts, photographs or pictures, video, rating and social bookmarking. In simple term, social media is website that facilitated content creation and exchange. But social media is not just website, it includes wide range essay like chat applications and many mobile based software. According to Kaplan and Haenlein there are six different types of social media: social networking sites (e.g. Facebook), blogs and microblogs (e.g. Bloger, Twitter), collaborative projects (e.g. Wikipedia, Travelwiki), content communities (e.g. Youtube, Flickr) , virtual game worlds (e.g. Farm Ville), and virtual social worlds (e.g. Second Life). Technologies include: blogs, picture-sharing, Video Blogging, wall-postings, email, instant messaging, music-sharing, crowdsourcing, and voice over IP, to name a few. Many of these social media services can be integrated via social network aggregation platforms.

The travel industry, by nature, is slower in movement in terms of information flow. It has historically been an industry dominated by a group of “experts” (the travel agents) who controls the information that gets around. However this has been challenged by social media. Gary Arndt , travel blogger, claims that he is one man National Geographic. It is hard to deny his claim. As a fact, he has visited ninety nine countries and writes all his travelling experiences in his blog. More than 100 thousand followers in his Twitter account is a proof that many individuals and travelers relies on his information. Today, behavior of travelers has also been changed significantly. Unlike previous days, now most of travelers read reviews before deciding hotels and travel service booking. Suresh Manandhar told that he and his wife used TripAdvisor to find the hotel. He further explained, “We searched the hotel in TripAdvisor and booked one that is rated by more number of the travelers”. This is how social media is changing the way information is exchanged/shared in travel industry.

Newly entered players have been changing industry drastically. A collaborative project called Wikitravel was found in 2003 and by now it has user generated information of 50 thousand cities. The content in Wikitravel is updated every other minute and is considered to be reliable since it is edited by group of passionate travel writers. Review site called TripAdvisor has 50 million reviews for 500 thousand hotels. Those reviews are posted by individual who have stayed in the hotel. Travelers like Suresh Manandhar take help of TripAdvisor’s reviews to make decision. Among all social networking tools, Facebook has been quite dominant. According to Tripl , 72 percent of social media users access their social networking site while they are travelling. Tripl has conducted a survey among Facebook users to identify how their travel plan has been influenced by Facebook. 52 percent of user said that their friends’ photos inspired their next trip, 46% user has been invited by their friends to join their trip and 45% user said that Facebook made them visit their friends abroad. Airbnb has introduced completely new paradigm in travel industry, which allows booking short term accommodation in private house and apartments, not hotels. With Airbnb service, now travelers actually can stay in house of a local while they are travelling. In July 2011, the company had over 100 thousand listings of private homes, apartment and rooms in 16 thousand cities and 186 countries. Now Airbnb allows booking entire village, which is very innovative call.

Most of online travelers now cite traveler reviews as influential when planning their leisure trips. Knowing how travelers operate in the social web has become a prerequisite for success in the online travel space. A clear understanding of how to measure, manipulate and improve social media performance gives travel companies power to expand the business beyond conventional market. Travel companies need to understand the how the social travel sentiment and the underlying social graph increasingly impact the behavior of online travelers.

Note: This is part of EMBA work at AIM.