However, the solemn fact remains that few foreign travel outfits have actually been successful in China, especially online. Just ask Expedia about how its China acquisition eLong is doing… Despite being the country’s number two OTA, eLong is still struggling with profitability given its huge marketing expenses. To be fair, foreign web companies have a difficult stand in China in general, and Expedia is in good company with businesses like Google and eBay – both struggling to gain market share. Nonetheless, Expedia’s or rather Tripadvisor’s latest foray into China with its platform daodao.com may actually have a good shot of succeeding, but it’s still too early to tell.

Overall, when talking about travel in China, there are 3 main market segments:

1. Inbound travel
2. Domestic travel
3. Outbound travel

Previously, all market segments were dominated by (formerly) state-owned travel agencies such as CTS or CITS, both due to regulations and learning-by-doing expertise. Inbound travel is probably the market area that is the most competitive with foreign companies such as Gray Line being quite successful here. However, because of high market fragmentation and low entry barriers, this is not a market with large opportunities to be reaped.

The domestic market, despite being fairly open, is dominated by local players given their expertise about local consumer behavior and their ability to adapt quickly to changing market conditions. Foreign companies have little competitive advantage here except for their financial clout (see Expedia) and technological edge (which is eroding quickly).

That leaves the outbound market, which has been the most regulated market segment due to fear of unlawful emigration. However, regulations have changed recently and now foreign companies are allowed to offer outbound services to Chinese customers without going through the hassle of finding a Chinese partner with a valid and costly license. Given Chinese traveler’s interest in traveling abroad, this is without doubt the new big opportunity for suppliers of destination activities around the world (think of a Chinese couple booking a Venice gondola ride). And, of course, we at GetYourGuide strive to be at the forefront of it all.

GetYourGuide office @ Technopark Zurich

As described in a recent blogpost, we have concentrated on sourcing suppliers of tours & activities in the last few weeks. Needless to say our highly motivated team has progressed quite rapidly and we are already halfway through our target locations in Germany, Austria, Switzerland & the Top 20 touristic destinations worldwide. See the blackboard screenshot to track progress :-)

So what are our first learnings, surfing on dozens of travel websites each day and entering contact information into our database. Not much you would think, right? Wrong!

First of all it is just mindblowing how many companies are out there. We are just at the very tip of the iceberg and already found a couple of thousand potential tour & activity products. So if they are so obvious to find, why don’t we all book our diving courses and golf lessons online?

We believe the magic word here is structure. Looking at all these websites, I just find it amazing how unstructured some of these products are presented. It is sometimes unbelievable companies get bookings through their websites, when it takes you 20min to find their contact information. However I would be mean to pretend that all is bad. In fact many SMEs also have very good websites and integrated Shopping Baskets (e.g. Google Checkout). However this alone is not enough, as you also need to actually find their site. For many tour & activity providers Tripadvisor is a good opportunity to enhance their Google ranking and increase traffic to the site.

It is also quite notable that many suppliers have set up a blog (probably hoping to attract new customers). To us it is reassuring that some suppliers already integrated such Web 2.0 applications by themselves as it shows that they are eager for technological innovation.

We will keep you updated on further news, as we progress with our sourcing activities…

Although much has changed in how payments are handled and the general eagerness to pay online has drastically increased thanks to big players such as eBay & Amazon, I would like to argue in this blog post that online payment systems still lack essential features that are needed for the further developmet of state-of-the-art e-commerce solutions.The rapid growth of social networks and the overwhelming success of Google’s AdWords application has brought Internet pioneers to think that e-commerce is a 90′s thing and the future of the web is in some form of advertisement or “premium feature” business model. I strongly disagree. At least the start-ups that have been recently backed in Germany & Switzerland mostly have solid e-commerce business models. VCs seem to have a clear preference towards transaction based business models these days. Just take a look at the newest offspring from Marc, Alexander and Oliver Samwer’s Rocket Incubator and you will see a variety of 90s style e-commerce start-ups centered around common consumer goods. Whether such websites are technologically innovative (and/or successful in the long run) or not is another discussion, but it underlines that e-businesses rediscover their original approach: Make money the straight way!

Now, it is clear that the landscape has changed. At least since Amazon’s move to integrate third-party suppliers on its website, payments are not straight forward between customer and supplier as they used to be in 1999. Still, payment systems such as Paypal. Moneybookers or Amazon Web Services have not fully adapted, yet. In my eyes the main problems small e-businesses currently have with the existing online payment options are the following:

1. The gateway systems and developer’s frameworks that can be built in a website are still very poor in functionality & flexibility. Let’s say you have a product for which a customer pays on your website, but you need to process this payment further to a couple of secondary suppliers at distinct points in time. Imagine some entity in your supply chain cancels a payment and you need to reverse the money flow and cancel automated transactions…All these things mentioned are really common sense to most web businesses (notably in the travel space, where everyone earns commissions), but very hard to execute in the given payment frameworks.
2. Integration of payment interfaces into third party solutions are still VERY ugly and look like webdesign in 1995. I understand that it needs to be safe, but you could certainly do a better job to improve the look-and-feel. After all design and intuitive UIs are extremely important for purchasing decisions.
3. The margins of payment providers are still completely outrageous. For instance Paypal commissions between 3-4% for credit card transactions, even if you have a reasonable turnover. There is a great need for better payment solutions (particularly micropayment) that carry less risk than the antique credit card business. And I don’t mean paying only with your Paypal account.

At least Paypal announced that it would launch a new flexible Payment API soon (see Techcrunch article here). Whether this will be sufficient to allow new innovation in e-commerce business models is still to be seen….

"Book hotel in Amsterdam next week" on Bing

"Book hotel in amsterdam next week" on Google

I don’t know whether I am too demanding here, but none of the searches are presenting my anything in particular for next week. No special deals, no availability information – really nothing in particular. I could have just left it out and just searched for “hotels in amsterdam”. Even more interesting is that none of the Ads even recognize that I want to go next week and thus promote special deals. I mean really, for all the money hotel websites pay their online marketing agencies, someone could have at least thought about targeted ads concerning dates and times.

Furthermore I thought it was quite interesting how very different hotel companies pop up on either Google or Bing as first results, which once again demonstrates the power of the search engine to specifically promote sites optimized to their standards. It’s quite funny how Bing ignores Booking.com, which is by far the No.1 hotel platform in Europe by now.

Hier eine kurze Zusammenfassung der Talks, die ich besucht habe

1) Keynote von Andreas Rohde, Industry Head Google Schweiz

Es war eine einleitende Keynote, die einen breiten Überblick über das Thema Suchmaschinenmarketing (SEM) gab. Die wesentlichen Take-Aways für mich waren zum einen die Einschätzung, dass es bezahlte Abo Systeme für Online Zeitungen geben wird (z.B. eine monatliche Gebühr zum Lesen von 5-6 Zeitungen). Dies von einem Google Mann zu hören erstaunte mich sehr, da ja gerade Google sich in den letzten Jahren sehr für kostenlose Inhalte in diesem Segment stark gemacht hat.

Weiterhin ging Andreas sehr auf den Einfluss von Online Werbung auf die Kaufentscheidung des Kunden ein. Laut Google wird lediglich das schalten von AdWords die Brand Awareness enorm (selbst wenn man nicht auf die Werbung klickt) und vervielfacht dadurch ihren Wert. Angeblich werden schon jetzt 40% aller Kaufentscheide basierend auf Internet Werbung oder Vergleichsseiten gefällt, welches überproportional zur Nutzung des Mediums im Vergleich zu TV oder Radio ist. Die Argumentation forcierte also noch einmal den ja schon bekannten Gedanken, dass das Internet gezielte Werbung ermöglicht deren Nutzen deutlich über Werbung liegt, die auf den traditionellen Kanälen geschaltet wird. Weiterhin stellte Andreas kurz das Google Tool Insights vor, welches es ermöglicht Statistiken & Trends für  Suchbegriffe abzufragen. Wer es noch nicht kennt, sollte es benutzen, ist ein sehr hilfreiches Werkzeug!

2) Patrick Singer, Agency & Product Consultant Google

Patrick leitet Google AdWords Schulungen bei Online Marketing Agenturen und hat das neue AdWords System vorgestellt. Google hat über einen längeren Zeitraum Kunden beobachtet und sich einige nette Dinge ausgedacht, wie man es dem Kunden noch leichter und schöner machen kann AdWords zu schalten und Kampagnen zu administrieren. Hier die wichtigsten neuen Features:

• UI ist stark modernisiert und sieht sehr schön aus
• Man kann einen Alarm einstellen, sobald ein spezifisches Keyword keine Impressionen mehr erzeugt
• Man kann seine Keywords gegenüber allen anderen Nutzern dieser Keywords benchmarken (mein Favorit!)
• Man kann ähnlich wie beim Google Website Check eine Marketing Kampagne testen und bestimmen ob sie sich signifikant von einer laufenden Kampagne unterscheidet. Dieses Feature ist noch in Entwicklung und Patrick hat nicht zu viel darüber verraten, aber es hat sich sehr gut angehört.

Zum Thema Google Website Check hat Patrick einen Use Case mit L’tur gezeigt, wobei sie bei einer identischen Flugbuchung nach Mallorca auf dem Buchungsbutton einmal “Jetzt buchen” und einmal “Auswählen” geschrieben haben. Nach einer längeren Testreihe war das Ergebnis überraschenderweise, dass “Auswählen” eine um 10% verbesserte Konversionsrate liefert. Ich fand das Ergebnis sehr uninuitiv, wodurch die Nützlichkeit des Tools noch einmal bestätigt wird.

3) Philipp Treyer, Campaign Manager Metapeople

Philipp hat einen sehr interessanten Talk zum ominösen Google Quality Score gehalten. Der Google Quality Score entscheidet neben dem Gebot für bestimmte Keywords über den AdRank, also die Platzierung einer Werbung. Je höher der Quality Score, desto höher ist die Wahrscheinlichtkeit, dass man relativ weit oben bei den Werbungen neben den Suchergebnissen erscheint. Nützlicherweise kann eine gute Quality Score sogar dazu führen, dass man im Mittel 30% weniger für ein Keyword bieten kann und trotzdem (falls die Quality Score optimal ist) oberhalb eines durchschnittlichen Mitbieters platziert sein kann. Anders herum muss aber für eine miserable Quality Score bis zu 600% draufgezahlt werden um gleich platziert zu werden, wie ein durchschnittlicher Mitbieter.

Was sind also die Parameter, die die Quality Score bestimmen?

Prinzipiell gibt es drei Dimensionen:

1. Die Landing Page (macht ca. 10% aus)
2. Die Relevanz der Keywords
3. Die Relevanz der AdCopy (der Anzeige selbst) im Vergleich zum dahinter liegenden Content

Weitergehend spielen eine wichtige Rolle die History, sprich die vergangenen Klickraten bei Werbeplatzierungen, die Ladezeit der Seite, sowie ob es sich um Original Content handelt, der beworben wird. Google kennt keine Gnade für Copy-Paste Webseiten. Dies ist besonders interessant im Zusammenhang mit Travelwebsites, da viele Anbieter ihren Content bei mehreren Distributoren einstellen. Eine gute Diskussion dieses Themas findet man hier.

Überraschenderweise honoriert Google ebenfalls das Offenlegen von AGBs oder anderen Massnahmen zur Transparenz einer Website. Einen intelligenten Algorithmus hierzu stelle ich mir sehr kompliziert vor, aber Google ist ja einiges zuzutrauen.

Für die eher algebraisch orientierten unter uns noch einmal die Formel mit der der AdRank kalkuliert wird:

1: Anbieter 1

2: Anbieter 2

p1 (Preis) x q1 (Qualität) = b2 (Gebot) x q2 (Qualität)

Logischerweise ist der Preis für den AdRank:

p1 = b2 x q2 /q1

In einfachen Worten ist also der Preis des AdRanks gleich dem Gebot des Mitbieters mal dem Quotienten aus Quality Score des Mitbieters und der eigenen Quality Score.

Als nützliche Take-Away Tipps gab Philipp vorallem an möglichst aktuelle und relevante Ads zu schalten. Als Beispiel hat Philipp Live Ads für einen Live Ticker einer schweizer Zeitung  während eines Ice Hockey Spiels genannt, wobei per RSS immer das neueste Ergebnis des Spiels in die Werbung eingeblendet wurde. Die Konversionsrate Click-Through-Rate (danke Philipp!) dieser Werbung lag bei ca. 15% und damit weit über der Konkurrenz. Es gibt also noch nach wie vor Strategien um im überlaufenden SEM Markt mit moderatem Geldeinsatz besser als die Konkurrenz zu sein.

Marissa Mayer, Google
Werner Vogel, Amazon
Russ Daniels, HP
Moderator: Spencer Reiss, Wired

• Classic cloud computing: Bittorent, governments unable to stop them. Users are reliant on clouds.
• does it matter where data is located? Vogel: yes, customers need to know where data is stored
• Mayer: It’s not clear where the cloud really is – is it where the data is stored? where the data lives etc. ?
• We use cloud computing every day -> where is the next frontier? where will we add more stuff to the cloud?
• technology takes more responsibility
• cloud is a great way to build software, why risk a lot of downtime using traditional server infrastructure
• what are the unique capabilities? Scalability, redundancy
• It is unlikely to be true that only a few companies operate huge data centres -> but clouds are great places to solve enterprise application processes, supply chain management
• no more islands of data? example: putting data into the car, not so easy -> different contact informations (outlook, Gmail etc.) but there is no URL for contact information. Needs all to come from one place.
• interesting market for niche operators in aggregating information to the cloud
• back cycles used to do highly complex and sensitive computations, such as protein simulations etc.
• device integration will be the main determining factor for cloud computing success

The Chinese travel market is huge. Domestic travel takes the lion’s share of the market with over 1 billion travelers per year although inbound travel with 50 million travelers in 2006 (WTO) and outbound travel with 41 million travelers in 2007 (ChinaContact Outbound Travel Handbook) are no slouch either. The WTO predicts that by 2020, China will become the biggest travel reception country and fourth largest outbound travel country in the world. Inbound travel is favoured by the government because it brings in foreign exchange.

There is huge potential for online travel but also barriers. According to Web 2.0 Travel Tools the Chinese online travel market, valued at US$204 million and growing at a breathtaking speed (72% in 2006), is still puny compared to the American market (US$83 billion in 2006). The biggest obstacle seems to be online payment as Chinese are still wary about online transactions and the use of credit cards. This, however, should change over time as both consumer perceptions changes and Alipay, the Chinese version of PayPal, is becoming more and more widespread. We also noticed that Chinese still like to use the phone. Pretty ladies with phone receivers in their hands take up the best real estate on most Chinese travel websites. It says something if Ctrip, the leading online travel giant in China with over fifty percent market share, also operates the largest call center in Asia’s travel industry. Not surprisingly, the most common form of booking a trip in China is still via calling a local travel agent.

Chinese are bargain hunters. Two of the most successful online travel sites are vertical search engines akin to Kayak: Kuxun and Qunar (Chinese for “Where to”). The latter even boasts cool features such as tracking and predicting prices over time.

Adding a social touch. China Web 2.0 Review compared a few travel 2.0 websites last year and it seems that there is still huge potential for travel websites with a social touch in China. In the meantime, online forums still dominate the internet landscape. 

Western companies don’t have it easy here. There are licenses for everything and in most cases cooperation with local partners is mandatory for success. We also noticed that marketing strategies which may work abroad, may not necessarily work in China. After pretty much botching a campus promotion campaign at several Beijing universities, we went back to the drawing board and came up with other promotion measures that would most certainly fail in Europe. But we are consoling ourselves that even Google is having a hard time here.