The Praized Blog

(original Flickr picture by SophieMuc)

I am traveling on the East Coast this week and I might have some free time in New York on Friday afternoon to meet, chat, have a coffee if anyone is interested. Ping me at sprovencher AT praizedmedia.com.

I will be in Europe next week for business, certainly in France, in Germany and in Italy and possibly in the UK. I’m still firming up meetings and if you’d like to meet while I’m there, send me an e-mail at sprovencher AT praizedmedia.com

I will also be back in Europe, beginning of November, as I will be speaking at the first Local Social Summit in London. The event is happening on November 3rd at the Institute of Contemporary Arts and tickets are still available. If we don’t have the chance to meet next week, we can also schedule something that first week of November as I will probably be traveling to other countries before or after the event.

On the second day of the Kelsey Drilling Down 2008 Conference, we heard from Rich Barton, Chairman and CEO, Zillow. He exposed us to his thesis that lead to the various projects he’s been involved in in the last 10 years. Before founding Zillow, Barton founded Expedia when he was at Microsoft. His basic thesis is that transparency of information is power. This leads to a consumer revolution in various verticals, releasing things that were locked-up, especially around big financial decisions. He mentioned stockbroking, travel and real estate as three verticals that were forever altered by the arrival of the Web. He also mentioned three other companies he’s involved with in the following verticals: Legal (Avvo.com), Healthcare (Realself.com), and Employment (Glassdoor.com).

(picture: zillow.com)

He finished his presentation with a “Power to the people” manifesto that’s very telling in this user-generated content age:

• Consumer crave information and power
• If it can be known, it will be known by all (the web causes transparency)
• If it can be rated, it will be rated
• If it can be free, it will be free
• Professionals who are active players in the new vertical marketplaces win
• There can be no vertical marketplace without community
• The digital media model rules (local is giant)

Very interesting first half-day yesterday at the Kelsey Group’s Drilling Down on Local ‘08. The theme of the conference is “Marketplaces”. It regroups products such as classifieds, auctions and vertical sites. Here are highlights from the first two sessions:

As an introduction, the Kelsey Group’s team provided us with some background information on “Marketplaces”. Neal Polachek first described the local end game as “better search, discovery, and engagement”. He even quoted the Cluetrain Manifesto’s “Markets are conversation”. He also talked about their latest global ad revenue forecast for 2007-2012, stating that the biggest category winner would be Internet and the biggest loser would be newspapers. As I wrote last week, the Kelsey group believes that Verticals will capture a large chunk of online advertising by 2012. Matt Booth then talked about three specific verticals (travel, automotive, home services) that have had a tremendous impact on offline/online business and media spending. For example, Matt showed two juxtaposed graphs showing the decline of newspapers’ automotive revenues vs. Autotrader.com’s revenue increase. Peter Krasilovsky finished the intro by stating that it’s now time to “uncouple” print and online media bundles. As print revenues decline, you need to have online-only ad products to compensate. Peter added that you also want to “verticalize” your offer to expand your revenues.

The second session “Remaking the Los Angeles Times (Online)” starred Rob Barrett, Senior VP of Interactive Media, GM, LATimes.com. He started by mentioning that most of what he’s currently working on is not very visible online now. He spent the first couple of years at the LA Times refocusing the online business. His main focus has been to build the display ad business (as opposed to classifieds). It’s going to generate $25M in revenues this year. Barrett says it’s now “time to finally break the newspaper paradigm online”. The LA Times’ online strategy needs to be local as opposed to national as it will allow them to differentiate their offer versus other “national” newspapers like the New York Times. They’ve realized that local users are key to online revenues as they generate more monthly page views and twice the display revenue per page views. Their product approach is “we want to own Los Angeles”, i.e. be integral to life of Angelinos, be the source of news and information about Los Angeles to the world and be an information retailer by creating, aggregating and curating LA content.

The Latimes.com web site is slowly transforming itself into a hyperlocal social network. All content pieces are going to be tagged and indexed by category and geography. By targeting on demographics and on geo, the LA Times is hoping to raise their average CPMs and improve ad effectiveness. They are creating the best targeting machine for the LA DNA. Barrett then showed us pilots of various new vertical sections that are very promising:

• The Travel section: http://travel.latimes.com
• A hyperlocal arts & entertainment guide: http://theguide.latimes.com
• Hollywood backlot to show pictures of movies shooting: launching next week
• User-generated photo and video content: photos & videos, http://yourscene.latimes.com
• The Homicide map: http://www.latimes.com/news/local/crime/homicidemap/

Great use of social media (YouTube in this case) to reply in context to a newscast (posted on YouTube as well) that portrayed Southwest Airlines as bad guys in a possible case of unruly passenger behavior.

Best quote from one of the passengers in the newscast: “I think they were just discriminating against us because we were young decent-looking girls. I mean, nobody else really on the plane looked like us except us”. (http://www.youtube.com/watch?v=FA2r_uCJUc0)

Best quote from SouthWest’s spokesperson (in the reply): “I just want to assure you that we welcome pretty people on-board our flights, we just ask that you leave your bad behavior at home”. (http://www.youtube.com/watch?v=aPdSs3AiRhA)

You can’t invent these things!

(via Stuart Macdonald’s Twitter feed)

Nokia announced this morning at the Mobile World Congress in Barcelona the launch of their Maps 2.0 service, for its Series 60 and 40 phones. According to the BBC News Web site,

Nokia has launched navigation tools designed to make the paper street map obsolete for pedestrians. The firm’s next generation of digital maps gives real-time walking directions on the mobile phone screen, just like sat-nav systems which guide drivers. “Nokia is taking navigation services out of the car so it can always be with you,” said Olli-Pekka Kallasvuo, president and CEO of the firm. “Struggling with oversized paper maps will become a thing of the past.”

What it means: another local application attached to mobile devices. This one is squarely competing against any mapping web site or any site that relies heavily on mapping as a main attraction. It could also be a threat to paper travel guides (see also Travel Guides Still Selling Well, Saved by Portability) (pictures by Nokia)

Today’s New York Times has an article on hotel and restaurant reviews. They mostly talk about TripAdvisor and IgoUgo (which I had never heard of until today) and compare them to Zagat. Most of the information in there has been thoroughly discussed before (user reviews vs. editor reviews, moderated vs. un-moderated comments) but one quote from Tim Zagat (Zagat’s co-founder) really stood out for me. Talking about consumer reviews, he said:

“Some Internet companies are running into the problem that anybody can throw up things on the wall, and after a while there are just too many people doing it.”

What it means: Tim Zagat is onto something. He doesn’t express it that way but it’s all about reviews from “trusted sources”. A trusted source could be, for example, a pro reviewer/critic (aggregated in sites like Metacritic.com), a friend or someone from an affinity group (or trusted community). Some of the travel and review sites out there suffer from a lack of “trusted sources” and it’s the reason why we often feel like there’s too much information to process when we see hundreds of reviews for a hotel or restaurant. Why would I trust travelingmom526 or baroudeur2004? If they’re not direct contacts, how do I know if they have the same taste as me?

This article from the New York Times talks about efforts being made by the travel guide industry to avoid being disrupted by the Internet.

“We want to be in a position where, if the business suddenly collapses in five years, we have a plan — unlike the music industry,” said Martin Dunford, publishing director of Rough Guides, which is part of the Penguin division of the media company Pearson, based in London.

So far, the digital media revolution has been much less turbulent for guidebook publishers than for record companies, which are fighting rampant online copying. Sales of travel guides, while flat in some traditionally stalwart markets like Britain, have been growing strongly in developing countries and in the United States (…).

Travel publishers sold 14.8 million books in the United States last year, up 11 percent from two years ago, according to Nielsen BookScan. Still, guidebook companies may have missed an opportunity on the Internet.

(Flickr photo by Malias)

What it means: Portability, brand and content are this industry’s key success factors. I think they’ve been saved from disruption so far because of the combo of crappy mobile devices, bad wireless access and half-baked applications. When you travel, it’s still much easier to carry your print guide book with you than try to access online sites and applications. The industry is doing interesting stuff right now but, if I was running their online strategy, I would be putting a lot more energy behind social travel mobile applications. This is where the industry will be disrupted, when mobile comes of age (check out Dopplr for a glimpse at the future).

By the way, the following excerpts/quotes from the article could have been written about the directory industry (or the newspaper industry):

• “While many travel publishers have had Web sites for a long time, some of them, along with booksellers, initially worried about cannibalizing sales of guidebooks”
• “Digital business still generates relatively little revenue for guidebook publishers — less than 5 percent of sales at Penguin’s travel division, for example, according to executives there.”
• “There’s been a lot of experimentation, but maybe not enough revenue coming back from digital,”
• “The travel guide business, the good old-fashioned paper book, is still a strong and healthy business,” Ms. Slatyer said. “And we think it will be for some time.”

(via TechCrunch)

Seattle-based Farecast, a startup that launched about 18 months ago to focus on predicting flight prices and guaranteeing users against increases, just expanded to help people find deals on hotel rooms as well.

The hotels area of the site helps users see prices based on a number of travel search engines (Orbitz, CheapTickets and ReserveTravel). All the results are shown on a map along with price and other basic information.

But the service also looks at each of the hotels to let you know if it’s priced attractively or not. For most hotels, the star rating isn’t enough to tell if the price is too high or low v. local competition. Over the long run market forces even the playing field, but a traveler unfamiliar with a specific hotel can (and often is) overcharged occasionally. Farecast will help you understand if you are getting a deal or not on that specific hotel.

What it means: I love these services that crack open what I call “black-box” industries and give the power back to the users. Farecast does it for flights and hotels. Zillow does it for real estate. I can think of at least a dozen other industries that could be disrupted that way.

• Ad spending on social network sites in Mediapost (registration required): “Ad spending on social network sites is set to top $1.8 billion by 2010, but the network operators such as MySpace and Facebook must develop tools to measure results.”

What it means: according to this eMarketer report, 2007 ad spending will be at $865M on these types of sites with MySpace getting 60% of those revenues. Looking at 2010 numbers, I believe social networks might become an advertising category of its own.

• SideStep buys TravelPost via Search Engine Watch: “TravelPost, with over 500,000 hotel reviews on its site, might be the smartest little travel site you’ve never heard of. The coolest feature is the ability to filter hotel reviews by Age, Gender, Budget, and Trip Purpose. TravelPost requires the reviewer to enter demographic information before posting.”

What it means: many larger organizations are buying small established companies instead of building from scratch. Also, I like the idea of having demographic information on user-generated content. Finally, I think word-of-mouth certainly plays an important role in any travel decision and therefore benefits from user-generated reviews and descriptions.