Intent Media’s Richard Harris told delegates at the Travolution Asia Forum in Langkawi, Malaysia, that data is a weapon that they must make use of
Cooperating with arch-rivals on the sharing of data is vital if travel brands are to avoid ceding access to their customers to the major online platforms like Google, Facebook or Amazon.
This week’s Travolution Asia Forum held in Langkawi, Malaysia, during the Pacific Asia Travel Mart, heard from Richard Harris, chief executive and founder of intent media on the importance of data.
He told over 100 delegates data is their source of power and “one of the most powerful differentiators and weapons that you have”.
He said: “Data is power, so the relationship you have with your customers if you are selling travel product and the data that they give to you because you are offering a valuable service is an incredibly important asset.
“If you are in this business you need to harness your data because that is your source of power and you need to make sure that your access to data is not taken away from you.
“It’s relatively hard for every company out there to build a data science practice and whether it’s us or someone else I would encourage you to look at who you can partner with to take advantage of this asset you have.”
Harris said the question of how to avoid giving what he has dubbed ‘datagopolists’ – dominant global web platforms like Google, Facebook, Bing (Microsoft), Amazon or even Apple and Samsung – too much data and therefore power was complex.
“There’s no easy answer to this. The large players out there are in the business of identity. In the same way that data is your asset, so is your ability to create an experience that your user finds valuable. And the platforms like Google and Facebook they are in that same business as well.
“It’s no coincidence now that many of the services you like on apps now give you the option to sign up with Facebook or sign in with LinkedIn or Google or Apple or Samsung and that’s because they are very interested in owning identity.
“And every time you rent a movie or download the new version of iTunes and agree to those terms of service, which are 27 pages long and no one reads, you are giving your data away to these big platform companies.
“The fear is that if the single source of customer identity – your data, the understanding of what your consumption habits are, your brand preferences , how often you travel, how often you buy – caves in to Google or Facebook then you as a brand are going to have to go through them to access your customers because there is no other source of verifiable identity.
“What companies like Google or Apple are doing, they are increasingly restricting your access to your customers’ data. Look at what Apple’s doing with their Intelligent Tracking Protocol.
“They are saying if I’m a brand and have a direct customer relationship with you the customer and that’s based on a cookie, if you don’t log in for a certain amount of time I, Apple, are going to decide that cookie disappears and so the brand does not know who you are anymore, but Apple knows exactly who you are. And that’s the unfair advantage that owning a platform can create.
Harris said the counter this Intent Media has created model that encourages companies that consider themselves as arch-rivals to collaborate.
“You may know if you are selling travel who your arch rival is. But that can be a huge distraction from understanding that your biggest strategic threat may not be the person you compete with but it might be the platforms that own your customers’ data.
“We urge people to think about models that involve some level of cooperation with the person who they think is their arch rival to hopefully disintermediate or prevent the platforms taking all of your customer data.
“It seems weird for competitors to share data with each other but if the only alternative is to continue to compete fiercely so Facebook or Amazon or Google can continue to step in and be the data owner, you soon realise it’s much better to cooperate within the travel vertical.
Harris said there are differences between the markets it works in having started out in the US before expanding into Europe and now into APAC having made its first hire in the Malaysian capital Kuala Lumpur. But he said there are universal issues that must be tackled.
“The big one is focusing on consumer understanding and figuring out how to deliver the best user experience.
“Even if the particulars of the problem of consumer behaviour are different in different countries, understanding your users is a universal problem. How to increase transaction rates or conversion rates is a universal problem.”
Due to low conversion rates there is a growing trend among large online players with huge traffic levels to find ways of monetising that by acting as media or advertising platforms and this is also fostering a collaborative approach as sites promotes offer from their rivals.
“There’s really no need from a user perspective for there to be search and commerce. These are two different things and they should converge and there should be a single experience which allows me to articulate what I want and get good information back from the digital ether.
“Look at Amazon a lot. They are a transaction company, they’re a retailer, well not exactly. They are also a commerce search engine. More retail searches in the US and Europe now begin on Amazon than on Google and that’s a huge reversal.
“Amazon is growing a massive advertising business within Amazon. It’s going to be about $4 billion this year and predicted to be $20 billion by 2021.
“So Amazon gets this fact that commerce engines are also search engines and there is this latent advertising value. Travel will not be immune to this in north America and Europe. There’s a huge amount of revenue.
“Booking.com advertising inside Expedia drives very meaningful profit to the transaction engines, it could be double digit percentages of EBITDA. Once that happens and you realise you are building a better user experience to people who are high in the funnel there’s no turning back from that.”
Harris said he expects the APAC region to face the same challenges as other regions of the world as the travel sector experiences significant growth.
“Asia is clearly going to be the largest market on the planet. There will definitely be lessons we can learn from how the American and European markets have evolved but it’s also going to evolve in its own distinct way and within each country within in Asia.
“With growth comes competition. If you are growing at 40% annually more people are going to come into the market. With competition comes the need to differentiate and that will put significant pressure on the smaller players.
“We have seen the large wave of consolidation in the US and even China, so as markets become more developed there are winners and losers so it’s really important to stake out your turf, understand what your competitive differentiators are.
“I happen to think a lot of those will be in data, the user experience and customer relationships, but with growth comes competition.
“What I find highly interesting is how many low cost budget carriers there are in Asia. They are very focussed on going direct. If you look at Ryanair or Southwest, I think that’s a very smart strategy but I would say it comes at some cost to users in that it’s very inefficient to users when you don’t have multi-brand marketplaces, somewhere to go to one place and see all my options.
“When that doesn’t happen there’s a lot of cross-shopping and that’s when multi-brand marketplaces start becoming really advantageous to the user.”