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Investigating strategy in a digital SME - Masters project conducted during an online marketing placement in Barcelona (Summer 2012)

Investigating strategy in a digital SME - Masters project conducted during an online marketing placement in Barcelona (Summer 2012)

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    Online Travel Marketing for Web 2.0 | MA project Online Travel Marketing for Web 2.0 | MA project Document Transcript

    • CENTRE FOR CULTURAL POLICY STUDIESOnline Travel Marketing for Web 2.0:Investigating strategy in a digital SME MA Global Media & Communication | Major Project Student: 1160350 Supervised by Dr. Jonathan Vickery Submitted: October 2012 (extension granted) 12,158 words 1
    • Table of ContentsAcknowledgements....................................................................................................................................... 41 Introduction .......................................................................................................................................... 5 Background ............................................................................................................................................... 5 Online marketing and the travel industry ............................................................................................. 5 Web 2.0 ................................................................................................................................................. 6 Open House Group ................................................................................................................................... 6 Research questions ................................................................................................................................... 72 Literature Review .................................................................................................................................. 8 Introduction .............................................................................................................................................. 8 The early Internet: optimism and pessimism ....................................................................................... 8 Web 2.0 and ‘Travel 2.0’ ..................................................................................................................... 11 Conclusion ........................................................................................................................................... 143. Methodology ........................................................................................................................................... 16 Research approach, challenges and limitations...................................................................................... 164. Online Marketing at Open House Group ............................................................................................... 19 A Strategic Shift ....................................................................................................................................... 19 Traditional search engine strategy ..................................................................................................... 19 “SEO 2.0” ............................................................................................................................................. 20 Inbound & Content Marketing (ICM) ...................................................................................................... 21 Social Media ............................................................................................................................................ 23 Social networking sites........................................................................................................................ 24 Blogger relations ................................................................................................................................. 255. How should OH meet the challenges of Web 2.0? ............................................................................. 27 Adding commercial value........................................................................................................................ 27 ICM strategy ........................................................................................................................................ 27 Social media ........................................................................................................................................ 28 Boosting engagement and interaction ................................................................................................... 29 User-generated content (UGC) ........................................................................................................... 29 Community-building ........................................................................................................................... 30 2
    • Expanding global horizons ...................................................................................................................... 31 Content creation and targeting .......................................................................................................... 31 Going beyond Europe ......................................................................................................................... 326. Conclusion ............................................................................................................................................... 34Bibliography ................................................................................................................................................ 36Appendix ..................................................................................................................................................... 42 3
    • ACKNOWLEDGEMENTSI would like to acknowledge and extend my thanks to the following people, whose input hasbeen crucial in bringing this project to fruition.My supervisor Dr. Jonathan Vickery, who has provided precious constructive criticism and academicinsight throughout.Paul Anderson and the other members of the marketing team at Open House Group SL, who not onlyparticipated as interviewees in the research process, but also provided support and encouragementduring the progress of the project.Nathalie Laurent, Marketing Projects Manager at Open House Group SL, for offering me the jobopportunity that inspired this investigation.Dr Eleonora Belfiore and Dr Christopher Bilton for their initial assistance in working out the logistics ofconducting a project, and submitting it on time, while working full-time overseas.And finally, my family and friends for their continued support during my studies at the excellentUniversity of Warwick. 4
    • 1 INTRODUCTIONThe internet is well-established as a marketing medium (Shankar 2009). However, its changing naturepresents many challenges and opportunities to businesses using it as such. One major recent change isthe emergence of the so-called Web 2.0, a term widely used to denote a shift in internet culture markedby high interactivity, social networking, user-generated content and information transparency (O’Reilly2005), all of which are increasingly global in scope. But has Web 2.0 really affected online marketing oris it just a social phenomenon? As the internet’s second-largest industry (Kilion 2009), travel is an idealsector to study for the effects of this online trend.This project takes the opportunity to look in depth at whether and how the new Web 2.0 environmentaffects the marketing strategy of one travel SME (small to medium enterprise). Open House Group (OH)is a valuable subject for a number of reasons. The company is typical of a new wave of travel businessesmade possible by the rise of online marketing (Buhalis 2007), offering a service somewhere betweenthat of a simple listings site and an online travel agency. It relies almost exclusively on the Internet tocommunicate with potential clients and attract business. Therefore the company is forced to react andadapt its online marketing strategy to changes and developments as they occur, providing plenty ofscope for analysis. Finally, studies show that accommodation, OH’s product, is one of the major topics ofonline investigation by travel consumers (Conrady 2007; Gretzel 2008). Gaining an understanding ofhow the business markets online in the Web 2.0 environment will not only contribute empiricalevidence on evolving new media marketing techniques; it will also give rise to Web 2.0 marketingstrategy recommendations for the business and others like it. Furthermore, it can provide a basis forfuture research on how travel providers are responding to the current online environment.BackgroundOnline marketing and the travel industryOnline marketing, which means using the Internet to promote goods and services, has expanded rapidlyduring the last ten to fifteen years. (Shankar 2009) Initially limited to websites and email, the onlinemarketing sector has grown with the emergence of new internet technologies including social mediaplatforms and mobile applications (Winer 2009). By the end of 2012, the online media spending of USbusinesses is expected to exceed $60 billion: 18% of all money spent on advertising (Advertising Age2007). 5
    • In the travel industry, the Internet had a disruptive impact on traditional intermediary travel agencies,increasing competition and enabling consumers to go direct to suppliers (Barnett 2001). Now, travelorganisations from private accommodation providers (Hudson 2002; Leong 2001) to national touristboards (Burgess 2002; Kozak 2006) are increasingly focusing on online marketing. The nature of theInternet is well-suited to the sector’s needs, as it provides a platform to easily and cheaply attractvisitors from different geographical locations. OH is just one of many holiday accommodation companiestaking advantage of this; a recent study showed that internet bookings make up 21% of the Europeanvacation rental market, while online sales have grown to represent over 24% of the European travelmarket as a whole (Cowen 2008). These trends suggest that travel companies can gain a significantadvantage by developing effective online marketing strategy.Web 2.0Since the mid-2000s, researchers and commentators have observed a change in the culture andtechnology of the Internet, associated with the rise of social networks like MySpace, and user-generatedinformation libraries like Wikipedia (Madden 2006). The nature of the web is now believed to be moreinteractive, social and transparent than in its earlier days, with greater global interconnectivity. The term‘Web 2.0’ was coined early on to refer to this phenomenon (O’Reilly 2005). In the online travel domain,there are indications that it has had a significant effect, fuelling the emergence of travel forums, blogsand review sites uniting potential travel consumers from across the globe (Conrady 2007). Exploring theimplications of this cultural shift for online travel marketing forms an integral part of this investigation.Open House GroupOpen House Group SL (hereafter known as OH) is a vacation rental management company based inSpain, which manages holiday accommodation in ten major European cities. These are Barcelona,Dublin, London, Paris, Berlin, Vienna, Prague, Venice, Florence and Rome. These destinations representkey tourist attractions, each receiving millions of international visitors annually (Bremner 2007). Since itsfounding in 1997, the company has used the Internet as the primary platform for its evolving marketingand communications strategy. Currently, the following activities are conducted online: E-commerce: Properties are featured and bookings are processed. After-sales communication: Confirmation and the discount package. 6
    •  Search Engine Optimisation (SEO): Driving traffic towards the e-commerce sites by aiming to understand Google’s ranking algorithms and to gain an advantage through them. Inbound/Content marketing (ICM): Creating online content (written, photographic and video) designed to attract the target audience. Social media: Connecting directly with audiences via social media (Facebook, Twitter, bloggers). Online Reputation Management (ORM): Largely consists of monitoring forums and blogs to identify and deal with negative reviews and comments.Research questionsThe project sets out to critically explore the online marketing strategy at OH, to gain insight into how theshifts in internet culture and behaviour are affecting it, and to evaluate to what extent it meets thedemands and challenges of the interactive web, or Web 2.0. Finally, the aim is to makerecommendations about how the company could improve its strategy. With these objectives in mind,the following research questions have been formulated:1. How has the increasingly interactive and social web – the so-called Web 2.0 – affected the online travel domain?2. What is Open House Group’s current online marketing strategy?3. What challenges and opportunities face a medium-sized travel enterprise like Open House Group trying to market in the Web 2.0 environment?4. How should an internet travel enterprise like Open House Group adapt its online marketing strategy to meet these challenges and opportunities?These research questions will be answered by conducting primary research in the form of employeeinterviews and analysis of company strategy, as well as through secondary sources on online marketingand the travel industry. The literature review will first consider the background data relevant to thetopic, and is followed by a detailed description of the research methodology applied.The final research question is perhaps the most important, as it aims to set out how OH can progress inthe evolving Web 2.0 environment. Although this company will be the main focus of any conclusionsdrawn, it is expected that ideas and recommendations will be applicable to similar travel organisationsusing the internet as a marketing communications medium. 7
    • 2 LITERATURE REVIEWIntroductionAs discussed previously, the arrival of the internet had major implications for the traditional functioningof the tourist industry (Buhalis 2007), and so naturally gave rise to a significant body of industryresearch. This literature review investigates existing research into the relationship between thedevelopment of the internet, and the marketing approaches of travel organisations. Although there hasbeen a great deal of study in the field of online travel marketing, the studies are overwhelmingly generalin scope and so there has been no choice but to review papers which deal with a broad range of travelorganisations. The few papers identified that do focus on accommodation providers are generally asimple resume of the activities of a hotel or a group of hotels. Leong’s (2001) review of Internetmarketing practices among hotels in Singapore being a classic example.Much of the research identified focuses on the effects of the Internet on travel businesses, rather thanon the actual Internet marketing strategies applied by them. It makes sense to review the literaturechronologically, as the research mirrors the development of the Internet itself. The evolution towards aninteractive web is a key theme, particularly in the later literature. (Conrady 2007; Kilion 2009) During theearly Internet stage (approximately mid-1990s – 2005), the medium was new, and information storageand access were its major functions. The second phase (Web 2.0) saw the development of the web as aninteractive medium, the rise of user-generated content (UGC) and the breaking down of communicationbarriers between the traditional supplier and consumer (Wilson 2012). A number of useful sourcesdiscussing the implications of Web 2.0 for travel marketing have been included for review.The early Internet: optimism and pessimismEarly discussions of the implications of the web on the travel industry tend to focus on its implicationsfor the established structure of the sector. Barnett (2001) represents a recurring concern in theliterature of this period when he writes: “The characteristics of traditional travel agencies are not yetaligned with the demands of the new travel economy.” The paper recognises that the internet couldalter the market structure, touching on the “disintermediation of retail agencies...and the emergence ofnew virtual intermediaries.” However, the general argument is still situated within the traditionalunderstanding of the travel industry as a three-way game between supplier, consumer and intermediary 8
    • (travel agency). Thus Barnett’s main discourse is about the technological possibilities of the Internet fortraditional travel agencies. There is little discussion of its promotional opportunities beyond therecommendation that travel organisations be ‘more creative with their marketing.’By focusing on the workings of the industry rather than its communication with consumers, Barnettmissed a point that emerges in two region-specific studies reviewed. Both Hudson (2001) and Doolin(2002) take a far more audience-centred focus, revealing a growing understanding that one of theInternet’s key effects has been to shift the balance of power from the supplier to the consumer. Doolin’sNew Zealand case study of online tourism marketing echoes Barnett (above) in recognising that ‘theInternet, which offers global reach and multimedia capability, is an increasingly important means ofpromoting and distributing tourism services.’ However, it goes a step further by highlighting a vital seachange: Moving from simply broadcasting information to letting consumers interact with the Website content allows the tourism organisation to engage consumers’ interest and participation (increasing the likelihood that they will return to the site), to capture information about their preferences, and to use that information to provide personalised communication and services. (Doolin 2007; 557)This highlighting of ‘consumer’s interest and participation’ foreshadows the future Web 2.0developments of the online travel domain, and represents a move away from the more technicaldiscussions of online marketing in other contemporary studies, which tend to focus chiefly on issues offunctionality and e-commerce features for travel providers). Burgess and Cooper’s (2000) extendedmodel of Internet Commerce Adoption (eMICA) similarly recommended ‘medium to high interactivity’ asan important aspect of online business. However, it defines this as increased communication from thebusiness to the customer (e.g. in the form of updates or newsletters), with little discussion of theconsumer-sourced input that we begin to see as we move towards the Web 2.0 era.The other regional case study mentioned also reflects an understanding of the centrality of consumer.Hudson (2001) examines the online marketing of the tourism sector in Banff, a rural resort in Canada.Like the other studies already discussed, it observes an increasing pace in online bookings but, crucially,notes that the local holiday accommodation providers were responding to this by spending more andmore of their advertising budgets online. The study thus clearly draws the link between the Internet- 9
    • triggered changes in consumer behaviour, and the adjustments the travel industry was making as aresult. In this it escapes the simplicity of research like Barnett’s, for example, which highlights newfeatures provided by travel organisations using Internet technology, but fails to explain the link betweenthese and the changes in online behaviour.This consumer-Internet-industry link is even clearer when we consider the information factor, so centralto both the Internet and tourism. As noted by the World Tourism Organisation Business Council (1999),travel and tourism consumers thirst for information, in the absence of any tangible experience of theproduct prior to purchase. Hudson found that potential visitors to Banff were increasingly exploiting theInternet’s ability to fulfil this need by searching for information on the same destination from differentonline sources prior to making bookings. While traditionally the sources of information had beencommercially-interested parties such as travel agents and accommodation providers, consumers werenow turning to online destination guides, which were unaffiliated with any commercial booking sites orlocal businesses. While dispensing with the necessity for the distribution ‘middle man’ (the travel agent)by availing themselves of direct online bookings, it was apparent that consumers were beginning to seekan ‘information middle man,’ presumably considered to be neutral, to help inform bookings and choices.This effect, to become more pronounced with the advent of Web 2.0, was also noted by Buhalis andZoge (2007), whose literature review revealed that customers researching travel ‘would check anaverage of five sites before booking.’ In Banff, the response of local service providers was to place paidlinks – online advertising – on these hitherto unaffiliated information pages. The industry was forced tofind new ways to market itself in the face of increasing consumer self-sufficiency, brought on by theInternet.Xiang (2008) agrees that power in the form of information provision is being taken away from theindustry, but it proposes that the new wielder of power is not necessarily the consumer, but instead theonline search engine. These portals, Google in particular (Xiang 2009) are the means by which mostInternet users access travel sites when looking for information. As early as 2005, 64% of Americans wereplanning their travel using online search engines. Xiang questions the ability of these intermediaries toaccurately or fairly represent the online tourism domain, citing the fact that while millions of results aretheoretically found, most users will not look beyond the third page (Spink 2004), resulting in lowvisibility ratios. The concern is not misplaced. The rise of search engine optimisation (SEO) as aprofessional sub-specialty of its own within online marketing (SEMPO 2012), proves that ranking on 10
    • search engine result pages (SERPs) is of high importance to businesses operating online. However, thevery thorough investigation of numerical results in this paper comes at the expense of deeper,potentially more valuable data about how and why Google and the other search engines choose to rankinformation. It is asserted that ‘a huge amount of potentially useful information has been filtered out,’of search results, but without a closer look at the unpresented results, or at search engine strategies, itis difficult for the paper to make any conclusions about online marketing strategy that travel companiesshould adopt in order to improve visibility and avoid being filtered out.Web 2.0 and ‘Travel 2.0’The second generation of Internet development (c. 2005 –), known as Web 2.0, refers to the widelynoted shift towards consumer interactivity, the proliferation of user-generated content (UGC) and thetrend towards personalisation of online information and services. (O’Reilly 2005) Information isincreasingly sought from non-traditional sources; the rise of user-edited data libraries like Wikipedia andYahoo! Answers exemplifies this trend. Unlike during the pre- and early Internet days of marketing,interactivity is no longer simply from business to consumer, but inexorably from consumer-to-consumer(Kozak 2006) as the popularity of online consumer blogs and forums such as NetMums.com shows.These consumer interactions are increasingly international, unlimited by geographical boundaries. Nolonger able to control the conversation, businesses must now instead trying to find ways to influence it,which presents a new set of challenges, as shall be seen.Another integral feature of Web 2.0 is the rise of the social network (Li 2008). Although onlinechatrooms and instant messenger services were present during the early days of the web, only in thelast 5 or 6 years has the Internet become a major platform for social interaction, information-sharingand identity-building. The largest of the numerous social networks, Facebook and Twitter, count inexcess of 900 million and 200 million users respectively (Hachman 2012; Dugan 2012). Unsurprisingly,social media is now an area of intense focus for marketing activity, attracting $3.4 billion of investmentglobally in 2010 (Shah 2011), up from $2 billion in 2008 (eMarketer 2009).The term, ‘Travel 2.0’ refers to the application and effects of the Web 2.0 phenomenon within the traveland tourism industry. Conrady’s 2007 study identifies ‘web services that let people collaborate andshare information online’ as a central component. This paper is one of the most significant and 11
    • comprehensive analyses of Travel 2.0, incorporating research from major industry organisationsincluding PhocusWright and the International Tourism Exchange. The authors establish a clear departurefrom the ‘Travel 1.0’ online environment, which was industry-led and commodity-focused, to a moreuser-led, experience-focused one. They highlight four key features of Travel 2.0: transparency,community, personalisation and experience. As a largely consumer-focused sector with a significantonline stake (Kilion 2009), the industry has been directly affected by the rise of travel blogs, onlinereviews, consumer forums and social networks. The effects of these and the possibilities they presentfor online travel marketing is the subject of a substantial body of research literature.The Internet makes vast amounts of information available to travel consumers with just a few clicks of amouse. Previously, it was noted how search engines act as a key mediator in the investigation andselection of travel options online, as researched by Xiang (2008). Conrady (2007) argues that Travel 2.0has added a new dimension to this, pointing to a wave of aggregators, comparison sites and metasearchengines. These platforms, examples being Kayak.co.uk, Tazzoo (now www.Sprice.fr) andTripAdvisor.com, do more than simply return results for travel-related search terms. They offeradditional information, often including both positive and negative reviews by other travellers.Photographs of accommodation and destinations are often freely available. The significance lies in thefact that a large body of information travel consumers use to inform their decisions comes from sourcesoutside the providers’ control. This user-generated content promises more transparency than couldtraditionally be expected from an official source such as an online travel agent. The raison d’etre of thenew collaborative platforms is the free sharing of information, rather than the promotion of a particularbusiness or destination. This is certainly recognised by consumers; studies consistently show that theyregard such data as far more credible than that provided by marketers (Precourt 2009; Li 2009). It is alsoapparent that marketers themselves are being forced to adapt their approach in response to theincreased transparency of information, by incorporating user reviews into their websites, for example.Conrady’s (2007) study identifies luxury hotel brand Sheraton as one of the earliest providers to do this.As a broad overview, Conrady’s study is a valuable source of information, but the scope of the project –covering all aspects of online technology from search to social networks to rich media, places limitationson its capacity to provide real insight into the effects of greater transparency, and indeed to what extentthe wider information sharing is beneficial or genuine. For example, online forums and consumer sitesare often open to abuse by unethical individuals or companies; a problem that goes hand in hand with 12
    • the freedom and anonymity offered by these platforms (Savolainen 2007). It would have been useful totemper the study’s enthusiasm for Web 2.0 with a look at some of these negative issues, which actuallycompromise transparency and reliability of information.Like Conrady (2007), Gretzel (2008) also emphasises the impact of greater information availability on theonline travel arena. This paper focuses on online travel reviews as part of online community, a keyfeature of Travel 2.0 as identified by Conrady. However, Gretzel’s narrower scope of study allows a moredetailed analysis. She cites many figures underlining the widespread practice among travel buyers ofreferring to consumer opinion online, including the following: Compete, Inc (2006) found that nearly 50% of travel purchasers visited a message board, forum, or online community for their online travel purchasing and one in three of these buyers said that consumer reviews helped with their purchase decision. Compete (2006) in Gretzel (2008)The same study also found that 25% of the buyers then shared their opinions on a consumer review siteafter making their purchase, suggesting a reciprocal cycle of information gathering and sharing withinthe virtual community. This feature of the Internet has been widely commented on. The capacity tointeract with users of similar interests has fuelled the emergence of diverse online communities whoshare opinions and advice on a range of topics, from gaming, to current affairs, to travel (Li 2008; Wilson2012). Gretzel argues that the influence of word of mouth (WOM), already considered a powerful forcein traditional marketing, (Li 2009) has been not only replicated but expanded, in the world of onlinecommunities. The differences highlighted are that ‘electronic word of mouth’ (eWOM) involves thesharing of opinions between people without social ties, and on a much larger volume. Both of these areaccounted for by the nature of the Internet itself, which connects users regardless of geographicaldistance, and being a non-physical forum, has the capacity to include many more actors than atraditional social circle. The study investigated the role of eWOM sources, especially travel reviews, intravel planning and decisions. Although the sample was restricted to users of TripAdvisor, this limitationis offset somewhat by the universality of the platform; TripAdvisor is the most popular travel forum andhad 24 million visitors and 5 million registered users at the time the research was undertaken. It wasdiscovered that among a range of questions including where to eat and which attractions to visit, 13
    • readers of online travel reviews relied most heavily on them when it came to choosing holidayaccommodation: 78% of respondents rated it as ‘very or extremely important.’Xiang and Gretzel’s 2010 study went still further by honing in on social networks, a specific breed ofonline community. While sharing similarities to Gretzel’s (2008) review sites – particularly the volume ofparticipants which she emphasised as central to eWOM – the key difference is that social networks likeFacebook are more likely to include contacts who are known to the user. This reduces the anonymityfeature that Gretzel’s 2008 paper makes much of. Referrals and recommendations often come fromknown people, and so the concept of eWOM loses some of its distinction in this context; it becomesmore or less the same basic phenomenon already known to marketers – word of mouth. On one keypoint, however, both papers agree: holiday accommodation is an overwhelmingly important topic inonline travel information search, returning many results from virtual community sites and reviewplatforms. The 2010 study found that that users looking for travel-related terms like ‘hotel’ will bepresented with many social network and user-generated results, an important point missed by Xiang’s(2008) investigation into search engines’ representation of the travel domain. Once again it indicates therising influence of consumer-generated information in Travel 2.0.ConclusionThis review of literature has shown that there is a substantial body of research into the effects of theInternet on the travel industry. Studies show that the arrival of the Internet had a marked change on thebehaviour of consumers in the travel industry. They began to seek information from sources other thanthe traditional providers, using the new medium to consult less interested parties including otherconsumers. This only expanded as the Web 2.0 phenomenon emerged. Travel consumers are nowroutinely using the internet to interact with each other, get recommendations and make decisions aboutpurchasing. Research has established that the online community is both vociferous and influential,having a direct impact on sales in the travel industry (Compete 2006; Wilson 2012). One of the mostsalient features of this new phase is its globality; information and opinion sharing takes place acrossinternational boundaries.What the research currently lacks, however, is real insight into how businesses in the travel industry areresponding to the new challenges and opportunities presented by Web 2.0, specifically in the field ofmarketing. Studies overwhelmingly focus on the numbers of consumers referring to the Internet 14
    • (Compete 2006), the popularity of online reviews (Gretzel 2008) or the importance of social networks(Xiang 2010). While it is clear that the marketing environment has changed, it is far less clear how theindustry is responding: how marketing is affected, what tactics and strategies are employed, and howthese work in practice.With these questions in mind, this project undertakes an investigation of Open House Group (OH), aninternet-reliant small to medium enterprise (SME) in the travel industry. With the advantage of havingspent four months working in the company, I have set out to evaluate to what extent the new webculture has affected OH’s online marketing strategy, and what developments should be made in order tomarket more successfully in the interactive and international Web 2.0 environment. 15
    • 3. METHODOLOGYWorking as an online marketing intern at Open House Group’s (OH) Barcelona headquarters from Aprilto August 2012, I was actively involved with the spectrum of activities it conducts in this area. Throughtaking an active role in ICM, social media, ORM and progression of the e-commerce sites, I began toappreciate the strategies and tactics employed by the company in its efforts to market the product –vacation rentals in ten European cities – and the brand online. It seemed that the business was adaptingits approach in order to keep up with the interactive web, or Web 2.0. Traditionally, the focus of theonline presence had been on the e-commerce sites, through which sales were processed. Now,however, there was increasing focus on developing brand personality and consumer interaction viasocial media platforms, building online reputation by collaborating with travel bloggers, relaunching thee-commerce sites and creating high quality content for the online destination guides.It was fascinating to be part of the team during this apparent evolution in strategy, as it became clearthat there were many factors at play, often beyond the organisation’s control. One example is thequestion of increased information transparency, highlighted in the previous chapter. As a provider ofholiday accommodation, OH occasionally finds itself the subject of negative reviews posted by users ofpopular online forums such as TripAdvisor. Developing effective ways to monitor and deal with thesevery public customer service complaints without alienating the users of travel forums (a key market) isjust one of the many challenges faced by the marketing team. OH also has numerous competitors, alloffering short-stay rental accommodation and using the internet to market to consumers. AirBnB.com,Casamundo.com, Wimdu.com and Rentalia.com are just a few examples. This means that a study of thecompany’s marketing activities and factors affecting it will be relevant not only to business itself, butalso within the wider context of how the new online environment and technologies are affectingmarketing for travel accommodation providers.Research approach, challenges and limitationsInformation-finding was conducted as a combination of primary and secondary research. The Internethas been an indispensable resource not only for the background literature on online marketing strategy,but also for accessing the company’s online marketing output, including webpages, social mediainteraction and forum comments. Industry-specific peer-reviewed journals such as The Journal ofInteractive Marketing and Information and Communication Technologies in Tourism were a major source 16
    • of information. I used theoretical sources for analysis on the trends and changing online landscapeassociated with Web 2.0, how the travel sector globally is responding to these, and how its onlinemarketing has been affected. This contextual background is complemented by specific first-handresearch into how one typical online travel business is approaching the shifting marketing environment.A look at the literature in this area revealed that there is an established tradition of researchers in traveland tourism conducting in-depth interviews to investigate qualitative factors and ideas. In order to gaina fuller understanding of online marketing at OH, I have taken an approach very similar to that of Buhalisand Zoge (2007). Their study, ‘The Strategic Impact on the Tourism Industry’ is one of the few projectsidentified that conducted interviews with industry professionals, as opposed to surveying industryconsumers. Their goal was to assess how the Internet had affected distribution and competition withinthe travel sector, and they undertook ‘standardised in-depth semi-structured interviews’ as part of this: Non probability, purposeful judgmental sampling was employed and a small number of experts of the travel industry were targeted for in-depth interviews. The sampling criteria were the respondents’ experience of online travel, their responsibilities and knowledge with regards to their company’s operations on the Internet as well as their overall understanding of the industry. Buhalis and Zoge (2007); p486In this present study, each of the five members of staff I selected for interview (See Appendix table 1)represents a key function of the marketing department, and their status as marketing professionalsincreases the likelihood of eliciting valuable information and well-informed discussion; they can beregarded as experts both on the company and on the industry. The structure of the interviews wasroughly standardised (see Appendix Table 2), while still allowing flexibility to facilitate unplanned topicsof discussion relevant to the research. The insight from theoretical research, combined with observationand first-hand experience of the company, were keys that helped to guide the interview questioning. Anopen approach was vital as a major aim of the interviews was to discover issues and factors experiencedby the marketing team that were unknown to the researcher. In the words of Buhalis and Zoge (2007),“Interviewees were prompted for further information when they raised interesting issues.”Many topics and strands of investigation were uncovered, and these have been fully integrated into thecase study and analysis. But while the aforementioned authors chose to group their data under themesemerging from content analysis, I take a more department-based approach, first considering the 17
    • findings under the different sub-divisions of online marketing team, before identifying the key themesand challenges that emerge across the board.A number of limitations affected the conducting of the project. Issues of confidentiality mean that thestaff may well have been less open to sharing all information possible. Concerns were expressed,particularly with regards to future strategy. Although the interviewing was very fruitful, we cannotdiscount the possibility that there may have been concerns about conveying the right impression of thecompany, restricting the frankness of discussion. This is particularly probable with respect toshortcomings and uncertainties; many of the negative issues explored emerged from my ownobservations, rather than from the interviews.In a similar vein, there was quite limited access to quantitative data – I was told that the competitivenature of the industry makes the company guarded about revealing such things, to avoid the possibilityof its getting into the wrong hands. Thus the study is unable to assess effectiveness of strategy in termsof sales figures, for example. It would have been interesting to look at correlations between activitiesand web traffic/sales conversions, but in the absence of such data, the focus is restricted to qualitativeevaluations of performance. Levels of interaction on social media sites are one such barometer.Another challenge, although small, was the issue of time. When conducting primary research in thework environment, the daily functions of the business environment naturally take precedence overinvestigative activities. Interviews often had to be postponed to accommodate staff schedules. Overall,however, these factors only had the effect of adding a slight delay. The advantages of being anemployee within the organisation being studied were considerable. Aside from ease of access to staff,spending months working with the marketing team helped to build a rich understanding of thestrategies employed and the challenges faced. These will be explored in the following chapters. 18
    • 4. ONLINE MARKETING AT OPEN HOUSE GROUPMarketing at Open House Group (OH) consists more or less exclusively of online activities. The businesswas established in 1997, and has evolved its online marketing approach as the Internet itself hasevolved. The company has an in-house marketing team dedicated to creating and implementingstrategies that will work in the ever more interactive and information-rich internet environment. Thischapter will consider these strategies in detail, examining the rationale behind them and analysing howthey work in practice, with particular focus on the challenges and opportunities presented by Web 2.0.The company’s various online platforms are listed in Table 3 of the Appendix.A Strategic ShiftTraditionally, the overreaching aim of all online marketing activity at OH is to enhance the brand’ssearch engine rankings. In effect, this means ensuring that the various websites (one for eachdestination) where apartments can be browsed and booked, are discovered by potential customerssearching for accommodation using Google, the largest search engine (Xiang 2009). As noted in theresearch reviewed, search engine optimisation (SEO) is a major consideration for online businesses inthe travel industry as searches typically return thousands of results, with users rarely looking beyond thefirst three pages (Spink 2004). The strategies employed by the department to achieve high rankings havealways been subject to change. In order to rank websites, Google uses algorithms that are constantlybeing altered, sometimes on a weekly basis. Basic factors affecting a site’s rank include its age, quantityof visitors and number of external links. (Google Webmaster Guidelines 2012) Over time, thesophistication of these algorithms has increased, with more and different factors being taken intoaccount when assigning ranking value. The technical intricacies of the system are beyond the scope ofthis project, and in any case are not completely at the command of even SEO professionals, due toGoogle’s secrecy about its methods (Evans 2007). However, this uncertainty does not preventcompanies like OH, dependent as they are on internet traffic, from devoting considerable time andresources to activities designed to raise their rankings. There is evidence of a shift, however, in thestrategies used, which reflects the already-mentioned shift in the character of the Internet.Traditional search engine strategyInitially, two of the major SEO activities undertaken by the company were link-building and creatingkeyword-rich content. Through buying or exchanging hyperlinks with well-ranked pages, the company’sown pages received a boost – known as ‘link juice’ – in the Google rankings. These links were often 19
    • placed in travel directories – lists of sites – or in lists on travel-related websites and blogs. They alsoappear in text and posts supplied to such websites for link building purposes. The use of keywords hasbeen for a long time the golden rule of SEO; companies identifying popular search terms andincorporating them into their own content for their own sites, and hyperlinked content to be seeded onother sites. (Appleton 2010) OH is no exception to this trend; terms like ‘holiday apartment rental’ and‘apartment in Berlin’ appear repeatedly in its content. The rationale behind keyword use (knownpejoratively as ‘keyword stuffing’ when regarded as excessive) is that Google traditionally judged awebsite’s area of relevance based partly on its use of such terms (Evans 2007). Therefore if Oh-Berlin.com used the term ‘holiday apartment in Berlin’ several times, it would be judged as highlyrelevant to a search for accommodation there, and be highly ranked in the results seen by the Internetuser, increasing the flow of traffic and ultimately of possible conversions. Of course, keywords werenever the only factor Google considered, and their importance has diminished as the system of assigningranking has become increasingly complex (Google 2010).“SEO 2.0”Both link-building and keyword placement continue to be part of the company’s SEO strategy. However,over the past 3 years, there has been a new focus on developing online content around the company’sdestinations, in the form of articles and increasingly video content as well. The launch of social mediaactivity on Facebook, Twitter and other platforms has also taken place. I believe these developmentsreflect attempts to take the brand in a more interactive and informative direction, reacting to theevolution of the internet from a commercial and technical platform into a more interactive and socialone (Conrady 2007; Kilion 2009). However, the move does not reflect a reduced focus on SEO; thebusiness is as dependent as ever on being discovered through searches. Instead, it reflects the fact thatWeb 2.0 is not merely a cultural trend, but now a commercial reality. Google’s recent algorithm updates,particularly ‘PANDA’ and ‘PENGUIN,’ magnified the importance of the quality of content provided, anduser experience in the factors affecting ranking (Kumar 2012). There are also increasing indications thatthe level of social network activity associated with a brand also affects its position in the search engineresults pages (SERPs) (SEOMoz 2011; Dyer 2012). Presence in directories and lists of links havediminished in Google ranking value, probably reflecting their falling popularity, while heavy keyword useis now penalised in rankings (Google Webmaster Guidelines 2012). OH has adjusted its link-buildingstrategy to exclude directories, and more recently abandoned keyword-rich hyperlinks like ‘Pragueapartments’ for branded ones like ‘Oh-Prague.com.’ Conrady’s (2007) values of transparency, 20
    • experience and community can be seen at play, as rankings are increasingly based on the quality of userexperience provided by websites, and the amount of ‘social buzz’ they generate with the onlinecommunity. It is clear that OH has had to adapt its strategy to reflect the values of Web 2.0. In additionto the rise of content marketing and social networking by OH, the nature of its online reputationmanagement (ORM) has also changed, in response to the rise in information transparency, another keyfeature of the new online environment.Inbound & Content Marketing (ICM)One major aspect of OH’s developing Web 2.0 strategy is the growing emphasis on content. In additionto the browse-and-book e-commerce sites (for example, www.oh-barcelona.com), the company hasinvested considerable resources over the past two years in creating an extensive online destinationguide for Barcelona (www.oh-barcelona.com/en/blog/), which features hundreds of articles about thecity’s cultural attractions and activities. More recently, new city guides for Berlin and Rome werelaunched. Interviews with staff revealed that the purpose behind these guides is linked to a relativelynew phenomenon: inbound marketing.Inbound marketing is currently something of a ‘buzzword’ in the online marketing industry (Basu 2011).Although coined as early as 2005 (Halligan 2009), it has only begun to take off recently as a newapproach to attracting customers via the internet, and is closely linked to the user-centric Web 2.0ethos. Digital marketing company HubSpot, widely credited with originating the trend, defines it simply:‘Inbound marketing is marketing focused on getting found by customers.’ (Burnes/Hubspot 2008) It isoften contrasted with ‘outbound’ marketing, which is sometimes used to describe traditional marketingtechniques: Inbound Marketers flip outbound marketing on its head. Instead of interrupting people with television ads, they create videos that potential customers want to see. Instead of buying display ads in print publications, they create their own business blog that people subscribe to and look forward to reading. Instead of cold calling, they create useful content and tools so that prospects contact them looking for more information. (Burnes/Hubspot 2008)In essence, the goal of ICM is to create content, whether in the form of articles, or multimedia, that willattract interest from potential customers. The belief is that marketing to a small, interested andinvested group is more profitable than spreading a wide net in the hope of converting a proportion of 21
    • those reached (Halligan 2009). This ‘build it and they will come’ approach is behind OH’s strategy ofproviding detailed city guides. The articles, photographs and videos used are all produced by thecompany’s employees, in the cities. This approach enables brand-building in line with the organisation’sslogan: ‘Your Trusted Host in the City.’ In that respect, the content strategy is beneficial, as it positionsthe company as not only an accommodation provider, but also as a ‘local expert’ and source of travelinformation.It is unclear, however, how much this added value benefits the company from a commercial point ofview. The problem with providing useful information for free is that it does not necessarily lead to sales.In fact, more than one member of staff interviewed admitted that there was no appreciable level oftraffic driven to the e-commerce sites from the city guides. This is despite the inclusion of links to theapartment booking pages within the articles. The guides also fail to provide significant SEO benefit, notimproving ranking values according to insight from the company’s head of search marketing.Other issues affecting the effectiveness of the ICM strategy are linked to the company’s internationaldimension. While the original city guide articles are written in English by a professional copywriter orjournalist, they are sent to external translators to be translated for the five other European languagesites the company operates. Questions of quality are frequently raised by native speakers within theteam, and it is almost certain that the brand-building value is not recreated across the various languageplatforms. In addition to this, there was no evidence of research or targeting of content according toaudience interest, a point I develop further in chapter 5.While the basis of an inbound, content-focused strategy is in place at OH, there is plenty of scope forrefining and improving the approach. The premise of building quality content around the destinations iscleverly targeted to exploit the considerable appetite for online travel information (Kozak 2006; Kilion2009), while the company’s emphasis on local sources and – more recently – established travel writersgives it an edge over competitor sites adopting the same approach (Apartment Barcelona 2012).However, more work needs to be done to ensure the content provides a sustainable commercialadvantage. In the next chapter, recommendations for a more effective inbound marketing strategy willbe made. 22
    • Social MediaIn 2010, OH launched the first Oh-Barcelona Facebook page (www.facebook.com/oh_barcelona). Thecompany now has a presence on five social networking sites (Facebook, Twitter, Google+, WAYN andPinterest), using these to communicate directly with online audiences. The other, linked, facet of itssocial media strategy is the blogger relations; identifying and building relationships with online travelwriters, in hopes of creating positive exposure and reputation.The previous chapter touched on the rise of social networking online. From circa 2005 onwards, therehas been a consistent growth in the use and influence of the so-called social media platforms, whichnow claim billions of users worldwide (Hachman 2012; Dugan 2012). Kaplan and Haenlein define thesemodern platforms as: A group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content. Kaplan (2010)These ‘ideological’ Web 2.0 foundations on which social media are built are those of personalexperience and user-based creation. Once again there is clear evidence of the move away from ‘official’sources of information and the rise in collaborative, community and identity-building activity. The‘applications’ range from personal profile platforms like Facebook, to professional networks such asLinkedIn. They also include the wide range of travel-related forums such as TripAdvisor, whereconsumers discuss purchasing options and make decisions based on feedback from their peers (Gretzel2008). Blogs, regularly updated sites often sharing personal experiences, have also proliferated. It isestimated that in 2011, there were over 181 million blogs online, compared with just 36 million in 2006(NielsenWire 2012).Travel is one of the most popular blogging topics, with hundreds of thousands of sites devoted to thissubject. These are social media platforms because they began as a form of personal expression, and arebuilt to encourage commenting and user feedback. Research has found them to be highly influentialwith travel purchasers (Pan 2007; Schmallegger 2008). This is beginning to be exploited commercially byboth bloggers and travel organisations, including OH. 23
    • Social networking sitesThe aims of the company’s social media activity were described to me as both brand-building andselling. The primary approach seems to be establishing a relationship and dialogue with onlineaudiences, and this is in line with existing social media theory, which generally holds that the socialnature of these platforms makes them unsuitable for overtly commercial language or activity (Webber2012; Akalp 2012). From this emerges one of the key challenges faced by OH in its social media strategy.Using a destination-focused approach, as for ICM, the company’s social media platforms are updated ona daily basis with eye-catching images and interesting facts aimed at creating positive associations, andpositioning the brand as a travel expert. Based on the increasing levels of interaction (in the form ofcomments, approvals and shares from the community) and the growing size of the fan base, thereseems to be success in this brand-building drive. The more problematic question is how to convert thesocial goodwill and interaction into business. While it was clear that the activity on OH’s social platformsgenerated responses and engagement, it was far from clear how these platforms contributed to the e-commerce side of the business. OH is not alone in this predicament; it has often been said that thebenefits of social media marketing are qualitative rather than quantitative, particularly in the short-term. However, this non-quantifiability is beginning to be challenged by experts (Pouros 2012). Like theindustry in general, the social media team seems convinced that users would not tolerate a ‘pushy’marketing approach, and steers well clear, only mentioning rental apartments – the product – veryoccasionally. Again, however, there are indications that a certain degree of commercial interaction onsocial media is not only tolerated but appreciated, particularly by younger users (Webtrends 2009). Inthe next chapter, I will look at ways in which OH’s encouraging social media response could be leveragedto give measurable results for the company.To implement a social media strategy can place considerable demand on time and resources (Wasing2012). With a total of 13 social media sites to update and monitor on Facebook, Twitter, Google+,Pinterest and WAYN, OH’s social presence is more fragmented and cumbersome than necessary. Theinstantaneous nature of the platforms means that someone has to be available to respond to commentsand questions from fans at almost any time. The company aims to reply within 6-10 hours, and onFacebook and Twitter at least, there is plenty of evidence of swift and meaningful interaction with users,who sometimes ask for advice on travel in the destinations. However, streamlining would make thisprocess more efficient and manageable. There is also talk of plans to integrate customer service forexisting clients into the social media platforms, particularly Facebook. This could not only benefit client 24
    • care, but would also help the social media strategy contribute more to the business as a commercialentity, which is discussed in the next chapter.Blogger relationsThe second part of OH’s social media strategy aims to exploit the power of travel blogging and travelbloggers. Initially, the travel industry was wary of the influence that these independent users wieldedamong their target audience, particularly in the form of negative word of mouth, which could have anegative impact on organisations criticized (Conrady 2007). Now, however, researchers likeSchmallegger (2008) believe that sponsored ‘professional blogging’ has become an industry norm intravel, replicating to some degree the traditional relationship between the newspaper travel editor andthe resort or hotel chain. There is now even a semi-professional international community of travelbloggers – The Travel Bloggers’ Exchange (TBEX) – whose activities and conferences are sponsored bybig travel organizations, such as Expedia and Canada Tourism (TBEX 2012). Aside from establishing apresence at TBEX, OH’s strategy involves identifying influential travel bloggers; those with a significantlylarge and engaged online following (largely as indicated by social media metrics such as number ofTwitter followers). These are generally bloggers already making money from reviewing and hostingadvertisements. The company offers to host them free-of-charge in a rental apartment in return forcoverage, most often in the form of photos of the apartment, mentions of the brand and links to thecompany’s sites. In this way, OH seeks to build a reputation for its product among highly-engaged andtravel-focused audiences.The challenges that face the company in this field are linked to the recurring issue of reconciling socialwith commercial activity. Despite the undeniable commercialization of the travel blogosphere (Cowper2011), the bloggers OH deals with tend to strongly value their independence, cultivating their image asglobal explorers discovering the world, rather than as brand promoters or publicists. The latter image, inall likelihood, would damage their influence, given that readers of blogs place a great value on theirobjectivity (Pan 2007). Thus from the bloggers’ point of view the challenge is an ethical one; how canthey remain objective while accepting complimentary services in return for granting exposure? Thisworry can limit the extent of positive word of mouth bestowed on the company by the writers. Theambiguity created by an essentially commercial exchange masquerading as a spontaneous social outputcan also make it difficult for OH to be sure of its return on investment. One blogging couple wasprovided with free accommodation in multiple cities on the understanding that they would share photosand brand mentions with their social media fans, but in the end their output was disappointingly low. 25
    • The company is now tentatively trying to avoid these scenarios by drafting written agreementsspecifying, for example, a required number of mentions, but there is always the fear of a backlash. Withusers so concerned about objectivity, it could only take one disgruntled blogger to damage thecompany’s reputation.It is clear that OH’s online marketing strategy is evolving and developing in response to the trends andchallenges of Web 2.0. The company’s application of emerging industry strategies like inboundmarketing reflects its commitment to an approach increasingly built on user engagement, interactivityand experience. The social media strategy mirrors the content strategy with its emphasis on destinationmarketing, but also seeks to build conversation and reputation by engaging users and unofficial industryinfluencers: the travel bloggers. But the company faces significant challenges in the Web 2.0environment, not least of which is trying to convey a commercial message without alienating a ‘social’audience. Also, I suggest that there is a need to more fully exploit the interactive potential of Web 2.0,as well as its very international scope. The next chapter sets out some ways in which these hurdles couldbe overcome. It also recommends ways in which the existing strategy can be adjusted and improved tomake better use of the opportunities presented by the current online climate. 26
    • 5. HOW SHOULD OH MEET THE CHALLENGES OF WEB 2.0?I have identified three major challenges facing Open House Group (OH) in its attempts to develop anonline marketing strategy that fully exploits the web 2.0 environment. This chapter presents threecorresponding sets of recommendations suggesting how the company can deal with these issues. Firstly,there is often no clear commercial advantage created by its current activities, chiefly the inbound (ICM)and social media aspects, which focus on building brand but could also be leveraged for more tangibleresults. Secondly, the levels of engagement and interaction from the audience, although positive andgrowing, need to be further enhanced in order to build a truly engaged and eventually lucrativecommunity. Thirdly, the company is failing to take advantage of the global opportunities presented bytoday’s Internet, and particularly given the current economic climate, I will suggest that the time is ripeto develop a strategy that is targeted, and actively seeks to go beyond the borders of Europe.Adding commercial valueICM strategyAs outlined previously, the company employs a strategy of destination marketing, developing writtenand video content around each of the cities in order to create interest and develop the brand as asource of expert local knowledge. Unfortunately, the benefits do not go far beyond this, as there is nolinked increase in traffic or apartment bookings. In order to make the content work commercially, thereneeds to be a shift in the way it is created, managed and shared.Currently, there is no evidence of research done into demand for content. Instead, the articles on thecity guides are created based on specific tourist attractions, or aspects of local culture that the authorsdeem interesting. One of the basic principles of content marketing is that content needs to be ofinterest and use to the viewer, as this will encourage traffic and sharing (Defren 2012; Kramer 2012).Therefore it would be useful to conduct research into the kind of information that the audience islooking for. It is also vital to get a better understanding of who that audience is. Although traffic figuresare available for the city guides, it is not really known who the readers are nor at what stage in the salesfunnel (ProBlogger 2010) they are when they read them. A better understanding of this would also helpto guide the content. One way to assess this would be to analyse the traffic sources, a component of theGoogle Analytics package which shows which sites visitors are coming from. In the case of search engine 27
    • referrals, it also reveals which search terms lead them to the company website. If a certain term ispopular at one time, for example, ‘city beach Berlin,’ OH could meet this demand by creating a newpiece of content on that theme, boosting search engine rankings at the same time.Another problem with the content strategy is that currently, too much information is available for free.For example, it is entirely possible for a prospective traveller to research and plan a trip to Barcelonausing the Oh-Barcelona city guide, creating an itinerary of top attractions and gaining useful insider tipsand local information from the website, without making a single contribution to the company.Eventually, the decision to travel being made, accommodation could be booked from an entirelydifferent website that offers no destination information, but rock-bottom prices. This kind of low-fidelitybehaviour is very normal among Internet travel consumers (Buhalis 2007). I would suggest that theamount of free information on the city guides be streamlined down to a few useful but basic articles andvideo, perhaps twenty or thirty instead of the hundreds that are now available. The full city guide canthen be provided in exchange for value, not necessarily money, but data, recognised as a vitalcommodity in online marketing (Accela 2005). Increasingly, company websites are offering usefulcontent – often in the form of a PDF download – in exchange for an email address, which they can usefor direct marketing in future. Such an approach would be one way for OH to extract more value from itscontent. Similarly, a short questionnaire in exchange for access to the full city guide would allow OH togather more information about, for example, what travellers would like to know before they go onholiday. This data would then help to inform future content creation.It has been noted already that personalisation and customisation is integral to the Web 2.0 ethos.Another way that OH could utilise its destination-based content would be to provide it to consumersafter booking an apartment, and allow them to select and deselect different articles and videos to builda personalised itinerary or guidebook, based on their own interests. Enhancing the after-sales offering inthis way would be likely to improve customer loyalty, while monitoring the popularity of differentarticles and videos would provide more useful data to guide content planning.Social mediaThe social media strategy so far focuses on building relationships and interactions with the audience.This is showing increasing signs of success. Many techniques have been developed for initiatingdiscussions, and attracting approval ratings (‘Likes’ and ‘Shares’ on Facebook, for example), not least of 28
    • which is publishing attractive photos of the various destinations. Now, however, there needs to be moreemphasis on the commercial side of the business. Many travel organisations have effectively integratedbooking services and special deals into their Facebook pages, for example Vueling (2012) and STA Travel(2012). While continuing to engage their fans with destination-focused updates, the Vueling airline andSTA Travel pages also function as commercial platforms. I suggest OH needs to adopt a similar approach.Currently, it is not immediately clear from any of the social media platforms that they are linked to anaccommodation provider.1Boosting engagement and interactionUser-generated content (UGC)As discussed in previous chapters, UGC is one of the most salient features of Web 2.0. Internet users areno longer content to be passive absorbers of information, but instead have come to expectopportunities for input and sharing (Wilson 2012), largely as a result of the interactive web with itsculture of social media, blogging and discussion platforms (O’Reilly 2005; Kozak 2006). Travel companiesare tapping into this phenomenon, OH among them. In spring 2012 the company ran very successfulUGC campaign: ‘Go with Oh,’ inviting travel bloggers to enter a competition for an accommodation-paidtrip around Europe. The entries were made in the form of articles, published on the bloggers’ own sites,featuring the Go with Oh logo, links to the company site and social media platforms. The result was ahuge surge in brand exposure; OH effectively created 140 brand ambassadors, each spreading the wordwith their own audience of travel enthusiasts. Such is the potential of user-generated content; it savesthe company’s own resources while at the same time opening up broader access for the brand message.I strongly recommend that the company invest more in similar incentivised competitions, but with widerappeal. One criticism of the ‘Go with Oh’ campaign is that it was limiting in its requirements: noteveryone has a travel blog, after all. It also required a time commitment in the form of writing andillustrating the articles. This meant that the target was a relatively small group of internet users;research shows that most users are viewers or curators. Although 77% of internet users read blogs, only19 million people are believed to write their own original content, compared with the 3.46 billion who1 In fact since the time of writing, a ‘Plan Your Trip’ application has been integrated into the Oh-BarcelonaFacebook page, linking users to the apartments booking page. There is also a dedicated discount code provided forusers of the page. Both of these developments represent steps towards making the social media strategy morecommercially beneficial. In time, I would recommend similar changes be rolled out across all the destinations. 29
    • read them (Singer 2009; NielsenWire 2012). Considering that 46% of adult internet users now sharetheir own photos and videos online (Rainie 2012), a photography competition, for example, wouldpotentially attract many more entries. Travel by its nature as a personal and social experience is veryconducive to the taking and sharing of photos, which are quickly and easily created and require noprofessional expertise. The rise of digital photography and the Web 2.0 social sharing culture now makesit even easier for people to enter such competitions. Using Twitter, for instance, OH could call for usersto enter by ‘tweeting’ (uploading and publishing) their image and tagging the ‘Go with Oh’ account. Thistagging creates a link to the company profile page, thus publicising the brand to each entrant’s networkof followers. Such a campaign would also provide a bank of user-generated images that could be usedpromotionally by OH in future, potentially increasing audience investment in the brand by allowing themto directly shape its output.Community-buildingChapter 2 included a detailed look at the popularity of online travel forums as a source of information totravel bookers. According to its own data, TripAdvisor, the largest travel forum, now hosts 75 millionconsumer-created reviews and has 32 million members (TripAdvisor 2012) OH is one of the 1.6 millionbusinesses mentioned by users of the platform, and so the company employs a policy of monitoring theforums regularly for mentions, responding to complaints where necessary with a message of apology orexplanation from a senior member of staff. This minimal intervention approach has become by and largean industry standard; the company’s own experience show that involvement beyond this, for example inthe form of self-promotion, causes a backlash, as forum users react negatively to commercialisation ofwhat they deem a social and objective space (Pan 2007).But this does not mean that travel forums hold no commercial benefit for the company. On thecontrary, I would suggest that the enthusiasm that forum users have for contributing to and curatingsuch platforms (TripAdvisor receives 50 new contributions per minute) is a force that OH could harness,by creating its own travel community. Already, on the social networks Facebook and Twitter, there isevidence of an involved and engaged fan base. I suggest that if OH were to create an online forumwhere it was easy and simple to share photos and opinions, on travel topics, an interactive communitycould be built. Such a community would be a valuable source of consumer insight for the company, whocould initiate discussions about key topics such as which destinations people want to visit or whatfacilities they consider indispensable in holiday accommodation. The challenge, as always, would be to 30
    • avoid over-commercialization and encourage organic social interaction, while still conveying the brandmessage. Done right, this forum would allow a deeper connection to be made between the brand andits audience. Other businesses, alert to the possibilities of this conversation-driven approach, arebeginning to use services such as Ning.com to set up their own social spaces (Mashable 2012).Expanding global horizonsAs discussed in Chapter 2, one of the vital aspects of Web 2.0 is its growing international scope. It wasoriginally anticipated that a large part of this project would deal with the strategies that OH uses tomarket online to global audiences; the nature of the business as both an online enterprise and a travelaccommodation provider means that a large proportion of its traffic and business comes from outsideits base country of Spain. However, the research conducted through observation, interviews andanalysis of the online content revealed very little evidence of an international strategy beyondmultilingual output. Each of the e-commerce sites and destination guides is available in English, Spanish,German, French, Italian and Dutch. These choices were not based particularly on initial research into themarket, but represent the main European languages. This reflects the fact that when the companystarted in 1997, it was expected that European tourists would be the major, if not the only, market.Fifteen years on, the multilingual approach has allowed the company to grow by attracting traffic fromdifferent countries in Europe, but it is not doing enough to exploit the potential offered by theincreasingly global nature of the web.Content creation and targetingAs mentioned in the previous chapter, there is a problem of translation quality that has been noted bymany within the workforce. The texts produced for the websites are marketing communications, and soare written to a high grammatical standard, in a persuasive tone, neither of which is necessarilyreproduced by the translations. The importance of good translations and local language is an importantelement in establishing trust from foreign language audiences online (Gracia 2011; King 2012).Therefore this would be the first issue to tackle; ensuring that the quality of the brand message as it iscommunicated in English is replicated effectively across the board.Secondly, the current strategy of replicating web copy, destination articles, and social media updates,seems to reflect an assumption that the needs of all the different market groups can be met with thesame communication. There is plenty of evidence to suggest, however, that adopting a more culturally- 31
    • nuanced approach to online marketing yields better results. Studies have shown that there are nationaland cultural variations in general online behaviour and attitudes (Chau 2002), what kind of web contentaudiences are interested in, and how they go about searching for it online (Flomenbaum 2012; Chung2008). One recent investigation revealed intra-European cultural differences in the reasons motivatingtravellers to share their experiences online, and in the platforms where they choose to do so (Wilson2012). This is particularly relevant to OH as a European company trying to develop a more interactiveand user-generated strategy. The company should take an analytical look at the characteristics anddemands of its different markets and develop a more targeted communications offering. For example,interviews revealed that popularity of its destinations varied from market to market, with Barcelonaperforming best in French. A small insight like this might be used to inform a particular push towardsthat destination on the French website, a Francophone social media campaign, or perhaps a discountoffering for other cities in that market, to try and boost French bookings in the less popular destinations.Going beyond EuropeWhile today’s internet offers the possibility to market to international audiences, my research indicatesthat OH’s online marketing is Eurocentric and thus not exploiting the wider opportunities now available.The vast majority of its bookings currently come from within Europe, and there was a downplaying ofthe importance of other markets when I explored this topic during the interviews. Plans for newdirections were hinted at but concerned further European languages – Portuguese or Swedish.Although the travel industry by its very nature might suggest a long tradition of international horizons,the famous globalisation phenomenon has had as much of an impact on the sector in the past twodecades as on other, more local industries (Horner 2005). The reason is twofold: traditionally, Europeanstravelled overwhelmingly within the continent, and the dominance of travel agents meant that mostbusinesses in the industry dealt mainly with local customers, although they were sending them abroadon holiday (Buhalis 2007; Kilion 2009). The international business boom of the 1980s and the arrival ofthe internet in the 1990s each played a part in bringing travel businesses and consumers from differentparts of the world into contact (Horner 2005). Breakdown of political barriers and increasing prosperityin traditionally poorer regions have also fuelled this trend. Tourists from Asia, Russia, the Middle Eastand Latin America are travelling internationally in unprecedented numbers (Risi/UNWTO 2011; Jing2011) and use of Internet as a gateway to travel services is increasing in countries like India and China(Kilion 2009). As Horner (2005) warns in his study of globalisation in the leisure industry, companies like 32
    • OH can no longer afford to simply focus on the European tourist market. This is especially true given thecurrent economic recession from which the continent’s travel market is still struggling to recover(UNWTO 2011). I believe that OH’s global approach needs to go beyond simply operating in six differentEuropean languages. There should be a concerted effort to develop understanding of demand,behaviour and attitudes of travellers from potentially lucrative tourist markets such as China and Russia(Jing 2011), with the aim of creating a targeted online marketing strategy to attract bookings from theseregions. This would necessarily require adding new languages, but more importantly, different tactics.If, for example, it was found that most visitors from China travel for business, the tone, content andplatforms chosen for the Chinese online marketing would reflect this. I agree with Thomas (2008) that‘firms using Internet marketing in the international arena should use localization of language andcontent to effectively serve foreign markets.’ 33
    • 6. CONCLUSIONThis project has generated many useful insights into the implications of the ‘second generation’ ofinternet – Web 2.0 – for marketing online in the travel industry. As the literature review revealed, thereis a lack of specific research into how exactly businesses in this sector are reacting to the phenomenon.The first of the four research questions asked: ‘How has the increasingly interactive and social web – theso-called Web 2.0 – affected the online travel domain?’ Through exploration of industry literature, andobservation of company practice at OH, it has become evident that the effect on the sector is significant.Consumers of travel across the world are keen and active users of the internet, embracing and shapingthe interactive and social ethos of Web 2.0 by sharing their experiences in blogs and online travelforums, turning away from industry sources and seeking advice and information from each other(Compete 2006; Wilson 2012). The rise of consumer-fed platforms such as TripAdvisor is a key indicatorof this cultural shift. While slow to react initially, businesses in the travel industry are now recognisingthe importance of these changes in relation to their online marketing strategy. The business-consumerbroadcasting approaches that once worked have to be adapted, and in many cases, swept aside.The second and third research questions sought to investigate in depth the effects of this trend on onetravel organisation. In answering ‘What is Open House Group’s current online marketing strategy?’ itbecame clear that this strategy was fluid and evolving, in response to Web 2.0. OH increasingly relies onsocial networking, inbound marketing and the blogosphere to maintain and increase its appeal topotential customers. There is evidence of a move from a sales-focused approach to one that is morefocused on building interaction and relationships with the audience. OH adopted a destinationmarketing approach, using its ten cities as topics around which to develop multimedia content andconversation, via online city guides and social media platforms including Facebook and Twitter. Thecompany is also attempting to leverage the power of travel bloggers, unofficial industry experts withhigh online influence, in order to build a positive brand reputation. This echoes wider developments inthe online marketing arena; as the Internet has become more user-led and experience-focused,companies have been forced to react by offering more to users than a mere sales platform, and to courtthe favour of the travel bloggers (Schmallegger 2008).The project then investigated: ‘What challenges and opportunities face a medium-sized travel enterpriselike Open House Group trying to market in the Web 2.0 environment?’ One of the major challenges facedby companies is reconciling the commercial aims of the business with the increasingly social and 34
    • community-based approach demanded by the new web culture. This culture also presents the challengeof how to boost interaction and engagement among potential customers, and harness the power of theonline community, which is a major marketing opportunity. A third issue identified was the absence of astrategy for targeting the different global audiences now emerging as important and active users ofonline travel services.Finally, the fourth research question asked: ‘How should a medium-sized travel enterprise like OpenHouse Group adapt its online marketing strategy to meet these challenges and opportunities?’ Throughanalysing OH’s online marketing strategy, I have identified a number of areas for development in Web2.0 marketing. I have recommended that OH increase commercial return by following other travelproviders in beginning to integrate e-commerce into their social media platforms. I also suggested that amore demand-based content strategy should be adopted, and that more travel information beexchanged for contact data and consumer insights rather than made freely available.Travel businesses marketing online must also fully exploit the travel consumer’s appetite for opinion-sharing and content generation. The popularity of photo-sharing and travel forums provideopportunities to create and manage interactive communities of brand ambassadors. Finally, thecompany’s current approach to global marketing is inadequate given its position as a travel provider,and the market opportunities available. Instead of remaining stuck in an early web model of simplyreplicating offering across different languages, internet travel providers like OH need to apply the Web2.0 values of customisation and user experience, developing a targeted and localised marketing strategyfor different international markets, especially those in the emerging tourist economies.This project has built on earlier research which established the foundation premise: that a wave ofincreasingly social, interactive and opinionated internet users have made Web 2.0 very relevant to thetravel industry, by using the new platforms as a tool for research, service reviewing (Gretzel 2008), peer-to-peer consultation (Xiang 2010) and purchase decisions (Compete 2006). The present study hasapproached this phenomenon from the industry point of view, conducting a detailed investigation intohow online marketing practices are evolving in response to it, and recommending strategies based onthe current internet environment. Building on this project, future research into the qualitative andquantitative effectiveness of the marketing techniques explored would provide further valuable insight.It is vital that service providers in the travel sector discover and apply the most effective methods ofonline communication, given the meteoric rise of the internet as a forum, information resource andmarketplace for travel products. 35
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    • APPENDIXTable 1 Interview details*Staff member Sub-department/Role at Open House GroupPaul Anderson Marketing ManagerNathalie Laurent Online Reputation Management (ORM) & Partner RelationsJulie Sheridan Content ManagerLuis Gasca Search & Direct Marketing ManagerSara Robles Romero Social Media Manager*Interviews took place in June 2012 in a private meeting room at the Barcelona premises ofOpen House Group. They lasted between 30-45 minutes.Table 2 The three overarching interview questions** Question1. Describe [sub-department’s] role within the company’s online marketing2. What challenges and limitations do you face in marketing OH via [sub- department]?3. How have these online marketing approaches changed over time and what are the factors affecting these changes?**As elaborated in the Methodology section, a flexible approach was taken, with thesequestions providing only a basic framework for the discussions. While avoiding leading theinterviewees, discussions always attempted to discover to what extent Web 2.0 factors –interactivity, customization, social networking, transparency – affected online marketingdecisions. 42
    • Table 3 Open House Group online presence ***E-commerce site Social media platformswww.openhousegroup.com -www.gowithoh.com www.facebook.com/gowithoh www.twitter.com/gowithohwww.oh-barcelona.com www.facebook.com/ohbarcelona www.facebook.com/OhBarcelonaES www.twitter.com/oh_barcelonawww.oh-berlin.com www.facebook.com/OhBerlin www.twitter.com/oh_berlinwww.oh-rome.com www.facebook.com/OhRome www.twitter.com/Oh_Romewww.oh-prague.com -www.oh-dublin.com -www.oh-london.com -www.oh-paris.com -www.oh-vienna.com -www.oh-venice.com -www.oh-florence.com -***There are a number of less used social media profiles on Pinterest, WAYN. These were not asignificant part of the activity while I was at the company and have not been listed here. TheGoogle Plus profiles have also been omitted from the list because of their low impact, and thefact that any posts shared there were duplicated from the Facebook output. 43