Social media tipped to become a legitimate business force

Published: 04 Mar 2010

IN-DEPTH: Interview with Morris Sim, co-founder, Circos Brand Karma.

A recent report, published on NielsenWire, indicated that time spent on social networking sites has increased from 3 hours per month to 5.5 hours per month in the last year alone, representing a staggering 82 percent increase in the use of social media.

It is increasingly being propagated that businesses have no choice but to access customers via this medium.

According to Morris Sim, co-founder, Circos Brand Karma, if 2009 was the year social media became a cultural phenomenon, 2010 will be the year in which it will become a legitimate business force.

Sim, who is scheduled to speak at the forthcoming Travel Distribution Summit Asia 2010 (to be held in Singapore, April 28-29), feels those who have invested and experimented in this domain last year are already ahead of the curve.

In an interview with EyeforTravel’s Ritesh Gupta, Sim spoke about digital technologies and other issues. Excerpts:

What according to you has been the biggest change the industry has witnessed, especially from social media marketing since last year? Do you think for brands, social media is primarily about test and learn at the moment?

Morris Sim: The speed in which social media reached scale has undoubtedly been the biggest thing that not only this industry, but any industry, has witnessed as it relates to marketing. When you consider that it took years instead of centuries for Facebook’s membership to surpass 350 million people, that’s impressive. And Facebook users are creating content to share at an unprecedented rate… if 2009 was the year social media became a cultural phenomenon, 2010 will be the year that it becomes a legitimate business force. We tell our clients that as a brand, you can’t be testing and learning about social media on your own pace; you’ve got to follow the pace your customers have set, and it’s moving very fast. I take my hat off to brands that invested and experimented in 2009, especially during the downturn, because now they’re ahead of the curve.

Until last year, travel companies were assessing how to develop their own strategy of how to best engage with their customers on the web. How do you assess the approach as of today in a market like Asia?

Morris Sim: I think it depends on the sector. The OTAs have been actively promoting the creation of social media on their sites for quite a few years now, and I see their reviews starting to come up on the first page of organic search results when consumers want to find out more about hotels. Hotels are also monitoring how they’re doing in customer reviews, and not just from an operational perspective; for example we’re helping quite a few hotel clients link bookings to their performance in reviews. Also, some hoteliers have done a fantastic job integrating social media into their brand marketing, like Accor with the Ibis Idol campaign in Thailand.

Airlines got a wake-up call from Twitter when customers were using it to complain about poor service, and many have incorporated the monitoring of it as part of their overall customer service protocol. Some are also using Twitter to publish deals.

Finally, this might be surprising to you but often when I go to conferences the traditional travel agencies approach me wanting to talk about social media as a strategy for them. So I’d say overall, all the consumer-facing sectors are getting engaged in social media, and to good effect.

Which is the best way to measure the ROI of advertising campaigns in a social media environment?

Morris Sim: I don’t think there should be a re-definition of ROI just because you’re using social media. Social media is mature enough that brands should be hardcore about measuring ROI when they decide to invest in it. The one caveat I’d have is this: because social media can be used to drive perception as well as promotions, if a brand is engaged in social media to improve perception, then to measure ROI it must have a good idea how much a net 1 point increase in favorability means to their bottom line to really understand the efficacy. If they don’t know, they can use social media to find out (a simple proxy is how does TripAdvisor ranking impact booking). On the other hand, for social media campaigns that are being run specifically to drive promotions, traditional ROI should be used to calculate its efficacy. It’s our opinion that traditional online campaigns that are either CPM or CPC based, though familiar, are not necessarily the optimal marketing tactics to use in the social media world.

The progression of technology and innovation in the travel industry continues at a quickening pace and Asian countries are closing the gap on their western counterparts. What according to you have been the major developments in this context in Asia?

Morris Sim: Actually, as it relates to social media, I don’t think Asian countries are behind their Western counterparts in the application of travel technology innovations to gain market share, which is really what matters in the end. This entire area is so nascent that it’s hard to say any region is the clear leader. However, if there is a gap between the East and the West, I think it’s in the form of information access.

Here in Asia, the various filters and censorships sometime create an information black hole, which is far less the case in the West. Does it really matter since travel isn’t related to politics or pornography in most cases? I think so. Operators may need to have a Facebook-less and Twitter-less and YouTube-less strategy that’s different from its strategy for the rest of the world. It may also need to understand how its perception differs due to different search results from a local search engine vs. a more global one such as Google. There are real costs that come out of people having access to different sets of perception-forming information.

Do you think predicting user preferences is the biggest unsolved problem in online travel? How do you assess the integration of social search into online travel?

Morris Sim: Before solving for user preferences prediction, all travel brands using online as a distribution channel to win customers should look at something way more basic: usability!

I think this is the biggest problem and while better search or social search may be a solution, it’s certainly not the only solution. Take a look at any OTA site; it’s gotten more complicated over the last 12 months. Meta-search sites are probably equally, if not more complex. This may be a result of more information being available, and therefore, a need to present more data and options. But, do we really need more information or just the most relevant one?

The complexity of the booking process may cap online travel unnecessarily because the data glut just overwhelms people. As it is, now I actually prefer to call my travel agent and have her book my air travel for me, and I know that I’m not the outlier. We recommend all of our clients do a usability audit when they’re thinking about their online investment. Sometimes we even make them book on their own website so they can experience what the customers experience. Often, it’s enlightening and leads to good conversation… and changes for the better.

This year, we have already seen a couple of significant moves from Apple and Google towards mobile advertising. How do you foresee the impact on search and social media via mobile phones on the travel industry?

Morris Sim: Mobile as a B2C communication platform has already exploded in places like China and India, and is waiting to explode elsewhere. This means that notifications and alerts can be done effectively via mobile. But how effective is it as a branding or distribution platform? I don’t know.

Certainly for a class of simple transactions, m-Commerce is convenient and acceptable by consumers (e.g. buying a train ticket). However, I think for things that are more personal, complex, or require research (e.g. hotel for my vacation, multi-destinations trip), mobile may not be the best device even with the web browsing advances that Apple and Google have developed. One thing that I do see a lot of people do sitting on public transportations now is using their handheld devices, whether connected or not, to be entertained during those long rides home. Whereas people used to listen to their MP3 players, they’re now watching movies, YouTube, or playing video games on their handhelds. This opens up an incredible opportunity for the travel industry to do product placements. Imagine someone playing a racing game whereby the course goes into and out of the grounds of your hotel, or if they race past billboards of your airline or travel agency. Mobile devices are connected devices that allow us to talk to one another, but I think the more sensible thing is to look broadly at handhelds in general, even if they don’t allow us to make calls.

What are you most looking forward to at Travel Distribution Summit Asia?

Morris Sim: This is the first TDS Asia that I’ll be attending, so I’m up for just about anything really! Several of my friends and customers are attending the conference, so I’m looking forward to catching up with them. But most of all, I hope to contribute by being insightful, and to learn from others on how we can be better partners for our clients and the travel industry overall.

Sim is scheduled to speak at the forthcoming Travel Distribution Summit Asia 2010 (to be held in Singapore, April 28-29).

For more information about the Summit, contact:

Marco Saio
Global Events Organiser
marco@eyefortravel.com
Direct Line: (+44) 020 7375 7219

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