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Background
Web 2.0 continues to generate attention in the online travel industry. Inquiring hoteliers want to understand the status and future of search engine marketing and other Internet marketing formats in this new Web 2.0 environment. Are search engines becoming obsolete? Are Web 2.0 sites going to replace the search engines as an advertising media? Will online travel consumers abandon Google as a travel planning and research tool and shift their attention to Web 2.0 sites?
This new dynamic has caused a degree of confusion and many hoteliers are unsure about the implications of Web 2.0 on more "traditional" Internet marketing formats such as search marketing, email marketing, and display advertising. This article details the roles of Web 2.0 and search engines and their significance, as well as supporting data and case studies on how search engines remain of strategic importance long-term in online marketing and distribution.
Examining the Roles of Web 2.0 and Search Engines
Web 2.0 and CGM represent a new dynamic in communication by allowing consumers to drive the content. No one can question the important role, relevancy, and impact of such social network sites.
So what about Web 2.0 and the search engines? Are these new and old Internet media formats in synergy, or are they at war with each other? Are search engines slowly becoming obsolete as consumer-generated media increases its dominance in online behavior?
The majority of hoteliers are correct. Web 2.0 is not a threat to established search engines like Google, Yahoo, and MSN. Consider the following:
- Specialized blog engines like technorati.com, blogpulse.com, and others could not and have not gained the critical mass required to replace or even threaten established search engines like Google™ and Yahoo!®.
- Only 3% of traffic from MySpace, Facebook, and others go to travel sites, according to HitWise 2007.
- HeBS uses state-of-the-art website analytical and campaign tracking tools for its clients, and can closely monitor where websites visitors and online bookers come from, their behavior and pathing patterns:
- Consistently over 50% of visitors to a hotel website originate from the search engines.
- We have not noticed any decline in search engine contributions to traffic and bookings over the past several years.
We know search engines thrive on new content. Web 2.0 is a huge generator of new content and search engines index Web 2.0 sites with great fervor. Google, Yahoo, Windows Live all include Web 2.0 content (text, video, consumer reviews, blog entries, etc.) in their search results. In other words, Web 2.0 and the search engines are in a symbiotic relationship.
The online travel consumer research and purchasing habits clearly show the need for both media:
- Online travel consumers prefer to shop around and on average visit 3 to 4 travel related sites before making a booking. Indeed, Web 2.0 sites have increased their share in the travel planning process, but travel planning is still done predominantly on traditional travel sites--both supplier and intermediary sites, and in many cases using search engines to find the most relevant results.
- The emergence of travel meta search engines over the past several years (kayak.com) farechase.com, sidestep.com) is a confirmation of the viability of search engines in travel. To a great extent the third-party online intermediaries fulfill the role of meta search engines. For example, Expedia claims that over 40% of its visitors research travel on the site, and then end up booking on travel suppliers' sites.
Industry Research Regarding the Importance of Search in Travel and Hospitality
Search engines are an essential component of the hotel direct online distribution strategy:
- According to Forrester research, 80% of website visits begin in a search engine or a directory service. Many other surveys also show that up to 85% of Internet users rely on search engines to locate relevant information on the Web (e.g. Google, Yahoo, MSN, etc).
- PhoCusWright surveys found that three-fifths of online travel shoppers cite search engines as resources to research their vacations.
- According to a recent study by the comScore Networks, some 73% of online travel buyers conducted relevant keyword searches in the weeks prior to an online travel purchase.
According to Forrester Research, iCrossing, and other leading online behavioral research groups, the most popular online activity after checking and sending emails is the use of a search engine. They report that as much as 70% of all internet activity begins with a search engine. This is consistent for men and women and across demographics and socio-economics. Travel is no different. According to PhoCusWright, 64% of online users start with a search engine for travel related searches.
Shopping for personal travel, the following services were used in deciding what to purchase:
Search Engines: 64%
User-Generated Reviews: 47%
Special Deal or Promotional Website: 34%
Travel Search Engines: 25%
(The PhoCusWright Consumer Travel Trends Survey, Ninth Edition, 2007)
HeBS Proprietary Research: Evaluating the Impact of Search Engines on Hotel Website Traffic & Revenues
According to a recent HeBS analysis, revenues directly attributable to search-generated leads (natural and paid search) were the highest source of website traffic and revenues for the hotel – more than email, strategic linking, online banner ads, third party intermediaries, and Web 2.0 sites and other forms of advertising combined.
HeBS researchers tested whether search engines still have relevancy going into 2008 amidst increased dominance of the direct online channel and the rise of Web 2.0 applications. While our researchers anticipated that search engines would still have relevancy, it was never anticipated that it would be on such a grand level.
To measure website conversions, including those generated through search, HeBS employed state-of-the-art website analytics and campaign tracking technology.
Here are some of the findings:
- Search engines contribute in average over 50% of the hotel website traffic. In reality, this percentage varies greatly (48%-75%); based on website optimization strategies, Internet marketing proficiency, property type, customer segmentation, location, budget allocations, etc.
- Revenues generated from search engines—both organic and paid search—were identified as the single greatest source of website revenues.
- Search constituted the highest source of traffic and natural search far outweighed paid search traffic that led to conversions.
- Google and Yahoo dominate with the largest share of search engine contributions to the hotel website.
- Web 2.0 and CGM sites and initiatives have no significant contribution to website revenues at this time. In many cases such sites are not among the top 100 referrers to the hotel website.
- These findings suggest that website optimization to make the website search-friendly remains the single most important activity for the hotel to influence growth of online revenues.
Conclusion:
Search marketing continues to play a major role in driving revenues and success, and should be a chief component of any comprehensive Internet marketing strategy. Despite all the interesting and novel Web 2.0 and CGM approaches to information sharing and communicating over the web, it all starts with the fundamentals that generate the bulk of the hotel website revenues–search marketing, website re-design and optimization, email marketing, strategic linking and link popularity, online sponsorships and display ads.
Hoteliers should keep a close look at Web 2.0 and develop a strategy as discussed above. In addition, Web 2.0 and CGM initiatives should become a line item in in the overall hotel marketing budget albeit a small percentage.
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