Last night Cardiff Business School hosted, Mr David Roche, President of Hotels.com for an evening lecture about the Internet: Business, not as you know it! David introduced the audience to the data-informed and analytics led business model of Hotels.com.

It was an interesting talk that took us from the business model origins of Yahoo!, Google and Goto.com to the power of digital analytics and the loss of the high street travel retailer. In 1998 Yahoo! dominated the search business. However, by 2001/2002, who would have thought that it was the combination of a citation ranking algorithm, coupled with a pay-per-click business model and data informed decision making that would see Google evolve to who they are today, one of the most powerful multinationals and Internet businesses today.

David, reviewed the power of digital analytics for Hotels.com, wherein the value of the footprint through their and partner sites (e.g., tripadvisor.com) and advancements in industry back end systems (e.g., Sabre), has provided for advanced empirical evidence in managerial decision making in site design, pricing and service offering. Data-informed and analytic led Internet business is the business of the Internet today, and not as many people really know it.

When asked about the impact of the financial crisis for Hotels.com, he revealed that the traffic data at Hotels.com shows evidence of CFO’s cutting corporate travel budgets resulting in less traffic from these segments and a squeeze on hotel ‘price per night’. However such economic conditions are in contrast driving individual consumers online for hotel bookings due to increased choice wherein the average consumer scans a minimum of 3 sites for options at any one time, lower geographic barriers for information access and advanced price competitiveness. All resulting in increased consumer choice.

However one thing that David did touch on during the Q&A, was that, in contrast to the more traditional offline travel agent or the smaller online business, large Internet businesses, such as Hotels.com and Google do have an advantage. Something that is referred to in academic circles as ‘double jeopardy’ when talking about the power of large brands, is they have large data sets of traffic data from which to draw and teams of analysts with whom to work with. For the high street travel retailer or smaller internet business site usage and traffic data is not as reliable or large enough for any advanced statistical analysis, resulting in differing approaches in methods for research insight (e.g., focus groups), and the use of free service tools such as Google Analytics.

During his talk David raised a number of interesting points about data-informed and analytic led managerial decision making for the Internet business, but more importantly he raised a questions about skills and knowledge in digital analytics. How and what are universities and educational providers delivering in terms of skills and knowledge to ensure graduates and wider society have the necessary skills to participate in a data-informed and analytics led model of Internet business?

An enjoyable and very informative talk.

Smiles Kelly

P.S. For tweets from the event, see: #cbslecture

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Today while sitting in the sun reading the June edition of Psychologies Magazine I read an article titled ‘Why Mystery matters?’. It provides an interesting insight into Tanis Taylor view of the effect of constantly trying to control, survey, monitor, examine, plan and audit every minute, every moment and every action in our daily lives … what happens … we lose the mystery!

We can explain everything … or at least we try to!

One thing the growth of electronic technologies have most certainly done is developed a world where we try to explain everything … we live in an information age where we can access information at the click of a button if we can’t answer the ‘why’ question to our son or daughter, we Google it! If we feel out of date we subscribe! If we want to know what you are doing we follow you!

What of the Mystery in Marketing?

This is also true in marketing. Like what is happening in our everyday lives, in marketing we are also constantly focused on explaining everything, developing plans and strategies to remove uncertainty and control the impact and outcome of our marketing activities.

Why not just come up with a list of ideas and see what happens? Can you imagine that? Creative – Yes! Full of mystery – Yes! Would we be permitted to do this – NO!

This mindset of explaining and planning everything is further heightened by the impact electronic resources have and are having on marketing. We have at our finger tips a plethora of electronic resources that help us to collect data on those we regard as our markets – our customers, buyers, consumers – and with data comes a need to explore and profile that data.

Look at the Tesco Clubcard Scheme and the strategic analytical programme put in place by Dunnhumby, the people behind the scheme. They can identify from this data the type of household I live in, the type of lifestyle I lead and provide some explanation of my future purchase behaviour based on what I have purchased in the past!

Armed with this they already know what type of coupon or incentive to send me to intise me back into my local Tesco Extra. Great – marketing is becoming more accountable, measurable and …. my life more explainable!

But what of the mystery of people … marketing afterall has people at it’s centre .. the people who work in marketing and the people and communities to whom we market (or have a dialogue).

If we can measure and observe everything about people, than will this not result in us knowing everything about them?

In addition to the Tesco Clubcard Scheme, Tesco can also monitor your web behaviour what pages on their site you visit, what files your download, what purchases you make online. They can then merge this web usage data with your purchase data from their stores already they are starting to build a pretty good picture of who you are and how to reach you.

Oh and don’t forget your purchase fuel from their service stations, have your car insurance with them and have a Tesco-linked credit card! Are we getting the picture?

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So as new and differing resources are developed, they can be included. Therefore it’s underlying content coevolves with the changing landscape of marketing and technology.

The paper in which EMAM was first published, outlines five core marketing activities for which we use electronic resources in order to achieve our marketing objectives. These activities include, but may not be limited to:

• data & information acquisition and management
• information provision (1-to-many) and management
• communication (1-to-1 and many-to-many) and relationship management
• transaction conduct and management
• distribution and logistics management

EMAM: Page-Thomas (2005) Marketing Review,

Basically, electronic resources are having a profound impact on the environmental situation and community context within which we choose to compete.

However, for marketing management and planning, the implication lies not only in how our market responds to changing technological conditions, but also in how we as marketers respond.

The implications of electronic resources for marketing management are therefore not just in their existence or development, or even the presence of new ‘never been seen before’ features, but in how they are used to effectively and efficiently improve the management and implementation of marketing activities.

EMAM provides a framework upon which to further evolve how we view the managment and implementation of our electronic marketing activities.

Article Insights

• It shouldn’t be the technology that drives electronic marketing activities, but the business returns (marketing effectiveness and efficiency) from using electronic resources in marketing activities.
• Not all interactive marketing is electronic and not all electronic marketing is interactive.
• It is not sustainable to define marketing by the technologies, tools and channels we use to achieve marketing objectives (e.g., Internet Marketing, Social Media Marketing), as these can be both quickly outdated in relevance and application. Is a very narrow, technological-specific view of electronic marketing.
• The marketing implication of electronic technology lies in how they are used to improve the effectiveness and/or efficiency of the management and the conduct of marketing activities. Electronic resources are helping marketers to more effectively and efficiently manage and conduct five core marketing activities (see above).

Sources

• Page-Thomas, K. L. (2005). Electronic Marketing: The Bigger Picture. Marketing Review, 5(3 (Autumn)), 243-262.
• Page (2009) Article insights: Electronic Marketing: The Bigger Picture, from CASE Insights (Published on: Issuu.com)

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