Finding Value in Data

Orbitz, an online travel booking site, has just launched a new specialized site for those who book their own travel - http://roadwarrior.orbtiz.com.

How does Orbitz plan to win over this small but lucrative segment of the hotly competitive business travel market? Apparently, not by having the lowest price. Indeed, in an article in the New York Times describing the new site, an Orbitz spokesperson described their fares as "roughly the same" as can be found on the airline's own sites. So why bother going to Orbitz?

Rather than focusing on deals and bargains, this new Orbitz site seeks to build a loyal following by indulging users with valuable, relevant information and useful productivity tools.

It starts with lots of notification options. In addition to the email or phone call a lot of us now already get about flight status, Orbitz offers to send the same status alerts to up to six people -- the person picking you up at your destination, for example. But then Orbitz goes much further, proactively monitoring weather, airport conditions and closures, gate changes, and even problems at your hotel that might impact your stay, and contacting you while there is still time to avoid the problem.

And Orbitz offers much more than just travel alerts. It provides detailed city guides (licensed from wcities.com), along with restaurant and event listings. Hotel listings contain commercial reviews (licensed from Frommer's) as well as reviews from verified Orbtiz business travelers. There's also a searchable database of wireless hotspots (powered by jiwire.com), and a hotel database searchable by business amenities such as Internet connectivity.

Overall, Orbitz has done a commendable job aggregating and integrating a variety of data sources to create a self-service travel agency for the business traveler. It's a great example of how information can power commerce by adding value and differentiation. It's also a great example of how there is increasingly a commerce component (in this case a ticketing business) that is providing the necessary revenue to justify aggregating and integrating all this content in the first place.

This vibrant intersection between information and commerce can be a good thing for data publishers (look at the number who have done deals with Orbitz!), but it can also be an area of concern. Companies selling products and services can justify building or licensing competitive databases and giving them away in the hope they will spur a sale. But when publishers find their subscription data product is someone else's free product catalog, it might not put them out of business, but it could make selling that content just that much harder.

Labels: data publishing, frommer, Infocommerce, jwire, orbitz, wcities

That's Entertainment!

I came away from the SIIA Content Summit in New York City this week enthused by the upbeat tone, but with a few alarm bells ringing in my head.

It started with the keynote presentation by Ann Moore of Time Inc. After taking us for a ride through her celebrity-studded product portfolio, she casually mentioned that while Time has created 133 viable, targeted communities in print, they will henceforth be lumped together into a handful of "content cluster" sites online. Rationale? Advertisers like big traffic numbers and operating 133 sites is too much work.

Maybe that's an intelligent approach in the consumer realm, and maybe more celebrity dross in one place makes for a more compelling site, but note to business information providers: don't try this at home. The targeted audiences you have built are, and will continue to be, one of your most important assets.

In a similar vein, references to "Second Life" managed to creep into virtually every session. The buzz around Second Life is extraordinary, though few in the room (including myself) seemed to have more than a vague understanding of this online simulated world. But I get nervous when I hear the discussion turn to how we need to "adopt Second Life concepts" in our own online sites, and possibly how we should even be looking to Second Life as a marketing channel. Though we learned that Reebok sold 20,000 pairs of sneakers through Second Life, I still suspect it will be a long while before there is a meaningful market on Second Life for industrial buying guides and business credit reports. Indeed, I'd want to run a credit check on anyone who said he found my business while pretending to be someone else in an imaginary online world! Second Life is fascinating, but that doesn't mean it has any relevance to business marketers.

Finally, there continues to be intense interest in user- generated content and the somewhat related concept of online communities. While I remain bullish on the power of user-generated content generally, I continue to shudder every time I hear community used in a discussion of a business site. I have seen far too few successful online business communities, and most of them seem to cluster in the IT/engineering world, where they exist as giant, collaborative help desks. It's not a concept easily portable to any business vertical, though it remains enticing because of its success in the consumer world where exchanging online opinions passes for entertainment. When it comes to role models and best practices be careful to stay on the proper side of the consumer- business divide because being on the wrong side creates a giant mess, and the middle is nothing but a deep hole.

Wake Up and Smell the Data

I ran across several particularly interesting articles by Mike Orren, president and founder of an online local newspaper venture in Dallas called Pegasus News, in which he reviewed some of the lessons learned in launching this new site.

One of his most intriguing findings was that the primary traffic draw to his site was not the highly localized news content that has become the new sine qua non of so many newspaper publishers these days, but rather data. Indeed, he reports that a full 75% of the traffic to his site was from users looking for specific pieces of data as opposed to news. Whether it was restaurant reviews, movie guides or local event calendars, the big benefit to users of online newspapers appears to be the compilation and aggregation of locally relevant facts, not local news.

This may be a somewhat chilling finding from the perspective of the newspaper industry, but it does tend to support what we're seeing in the world of online databases: there seems to be continuing and potentially endless opportunities in both developing and compiling and aggregating highly specialized datasets for both business and consumer use. Users are drowning in information, creating a growing need to organize, normalize and summarize this information to make it more useful and easier to act upon. If you build a quality, useful dataset, there is ample evidence that you'll have an audience for it, provided users know you exist -- and that's increasingly where the business challenge and expense appear to reside.

In another fascinating online posting, Orren muses intelligently on the difference between news stories and data, a favorite hobby horse of mine. Writing for journalists, he explains in a clear and concise way that news content stored in a database is not really databased content. It's only when you break out key aspects of the news story into separate fields, done in a consistent manner that you are building a database. This is what Orrens refers to as storing data "atomically," and only after this is done can you extract maximum value from news content.

What Orrens is really examining is the limitations of full text content, and full text search. While both are useful, convenient and have a clear and needed role, neither can do the full job for the user, because they both limit and obscure information in the process of finding and delivering it. In a world increasingly driven by the automated discovery and processing of information, the most useful, discoverable and valuable information will be that which is optimized for these automated systems (read: computers).

As regular Perspective readers know, we have been underwhelmed by the newspaper industry’s digital initiatives, and this industry insider nails it when he says, "The news business as we know it is only going to continue to contract and weaken unless and until news organizations start treating everything as data rather than stories." We couldn’t make a better case for infocommerce ourselves.

Labels: data, databases, journalism, newspaper, technology, text

Brand New

Not a day goes by, it seems, when we're not on the phone talking to advertisers on behalf of our clients. What's most stunning about all these conversations is that even in 2007, there remains a remarkably high level of web ambivalence out there. I used to feel that a lot of these advertisers just didn't get it. Now I am coming around to the view that a lot of publishers don't get it, with "it" being an understanding of what their advertisers want from them.

The biggest disconnect occurs in markets that are mature and increasingly consolidated. Consolidation means fewer players in the industry and less advertising overall. But this does not mean that advertising disappears, even in markets where companies can credibly claim to know most if not all of their prospects. Instead, companies shift their advertising objective from lead generation to branding. And make no mistake about it: these companies know what they are doing, and they are confident that brand advertising is important, delivers good value, and most importantly, supports their other selling activities. If only publishers these days could muster the same resolve about the power of brand advertising!

What about ROI? These advertisers know that ROI is difficult to measure for brand advertising, and as a consequence, few make any real effort to do so. And what about online advertising? Typically, we find these companies are devoting 10-30% of their advertising budgets to online, and most reluctantly confirm that the online percentage continues to increase each year.
Why the reluctance? Because these advertisers aren't seeing any compelling places to do brand advertising online. Most industry websites look weak and tired to them, and in the case of b2b magazine websites, they're usually correct. Where they do run across energized sites with good advertising potential, they actually feel a disconnect with the publisher's focus on lead generation.

There is no small amount of irony here. Just as publishers have begun to deliver the ROI-driven online products that advertisers have been clamoring for, a sizable number of them seem to be shifting back to brand advertising.

In short, all this provides more proof that neither the web, nor our advertisers, are monolithic, and that "one size fits all" online strategies are increasingly fraught with risk. As always, the prescription is clear: stay close to your advertisers, and don't be swayed by conventional wisdom. There's a lot of change going on out there, and it's not always easily discerned.

Labels: advertising, b2b, online, trends

Go Phish!

One of the most interesting features of Microsoft's Internet Explorer 7.0 browser is a visual alert system to identify potential phishing sites (sites that look as if they are reputable, well-known companies, but which are designed for identity theft). It's pretty cool: when visiting a site verified as legitimate, the address bar area of the browser turns green to connote safety. Suspect sites turn the address bar yellow, and known phishing sites turns the address bar red. On the surface, it seems like an elegant solution to a growing problem.

But to take the punch line from an old joke, "how do it know"?

How does Microsoft determine that a site is legitimate, suspect or fraudulent? It doesn't. Microsoft isn't validating companies or websites directly. Instead, it is relying on a program developed by the CA/Browser Forum, an industry group that has created a standards process for verifying legitimacy. These standards are in turn applied by a number of private companies (called "certification authorities") that actually do the certification work. A key screening criteria is a check of state incorporation records, meaning that unincorporated businesses currently aren't eligible for verification.

A fair amount of research on my part has not yet determined who identifies "suspicious" or "known" phishing sites, and who maintains this database of information. Good luck if you're ever accidentally included on this list, because there appears to be no appeal.

We're very bullish on the power of "3R" (rating, ranking and recommendation) features to add value to data. They can be even more powerful when tightly integrated into software tools, as in this new system. Yet, in its rush to do good, Microsoft (non-Microsoft browsers will participate in this program as well I should add) has made four major blunders:

• The program doesn't currently cover everyone, relegating a large number of companies to the status of "unknown." This angers the excluded companies while reducing the value of the 3R system to users.
• It has created a secretive blacklisting process that lacks any of the processes or safeguards you would expect of a system that has the power to put a company out of business virtually overnight.
• Its high certificate fees (reportedly, prices now range from $300 to $1,200) pose a barrier for smaller businesses. This works against a high participation rate, which is critical to success.
• It over-hypes the benefits of the system -- to qualify for "green" status, a company needs only to be legally incorporated somewhere, not exactly a demanding standard when you are vouching for the legitimacy of a business.

While the goal is laudable, this sloppily designed program has been rushed to market under pressure from the companies planning to become certification authorities. The lesson for information companies considering 3R systems of their own is don't rush to judgment, or ye yourself will be judged, and found wanting.

Labels: IE7, Infocommerce, Microsoft, Phish