Teletext chairman Steve Endacott explains the thinking behind the company’s phone-to-book strategy
The global online conference Phocuswright held in Los Angeles in November gave some excellent insights into how the migration of search traffic to mobile devices was impacting the developed and emerging markets quiet differently.
In emerging markets, most users have bypassed desktop computers and are using their phones as the primary computing device.
Here, the app has become the preferred user experience, which in turn has led to an all-out war between travel players attempting to dominate the app-download space.
The logic is that once customers have entered the walled garden of the app world brand loyalty is very high, leading to less comparative shopping and higher conversion levels.
With most users limiting their use of apps to a few dominant favourites, it’s easy to see why this race in emerging online super powers such as China and India is so important.
In developed markets, such as the US and Europe, customers seem wedded to Google as the primary search tool, with app usage limited primarily to social media tools and utility apps, such as airlines’ online check-in tools, weather and timetable apps, for example National Rail.
The two key problems faced by most travel companies in driving the use of apps appear to be:
• Comparative search. Desktop/laptop computing customers have bought into the idea of Google search providing a wide range of options. Making the decision to download a supplier’s app and restrict your search only to a particular company requires a high level of brand loyalty.
• Frequency of transaction. Most customers buy leisure travel products infrequently and even if they have downloaded an app this often gathers cyber dust and is forgotten.
Research published by Phocuswright seems to indicate that in developed markets mobile search will continue to be dominated by Google in the short term, with companies providing sites that have been optimised using reactive design techniques to provide usable booking journeys, irrespective of mobile device screen size.
However, there are some less obvious trends driven by the mobile migration, which in my opinion mean the travel sector is entering another period of disruptive evolution.
As usual, Google and how its customer interfaces work will be a key driver of change. For example, recent Google stats show that since 2012 the amount of SEO traffic delivered by a number-one SEO ranking position has dropped from 47% of clicks to just 20%, with paid-for clicks taking a larger share of traffic.
Combine this with the reduced paid-for advertising space available on mobile devices, e.g. two top-of-page slots, and it’s not hard to see why bid costs have been driven up aggressively on mobile devices until they match or even exceed those on desktops.
This is despite the lower initial conversion on these clicks, as many brands are now paranoid about dropping out of the customer-booking journey at any point in the process.
The natural conclusion is that Google, inadvertently or deliberately, is reducing customer choice. Driving advertising costs so high means that only the major brands, which can also rely on low-cost direct brand traffic, can survive the blended advertising cost.
Simultaneously, the migration to mobile is challenging the status quo on how booking journeys should work.
Currently, most travel companies have used reactive design techniques to make their existing desk-top booking journeys usable on mobile devices rather than take a wider look at the whole booking journey via mobile.
This opens the door to new entrants offering a better user experience as long as they can afford to attract the required traffic.
It is one of the reasons I was attracted to the role of non-executive chairman at Teletext Holidays.
Teletext has a very strong brand, which has been built on the premise of research online but “Call to Book”. The move to mobile makes this option more relevant than ever.
However, even here we are looking at re-engineering the whole booking process. Moving forward, it needs to facilitate screen sharing between call centre operatives and customers to allow call centre staff to push recommendations to a customer’s phone or to allow slick customer data entry using the phone’s camera.
The online travel world is evolving again, but this time you probably need a brand to be able to fully exploit the disruption curve that is coming.