Got your MOO cards yet?

These days it's increasingly hip to be geeky. If you really want to make a statement about how web 2.0 centric you are, you put your commitment to humanising business, personalisation, niche marketing, and social networking right on your business card. And you do it in a format that deliberately bucks the boring uniformity and conformity of ordinary everyday business cards.

How? You have a batch of MOO cards made up for you, printed in a “widescreen” 70x28 millimetre size, with a range of colour photographs on the back that reflect your personal interests or passions.



MOO cards started out with people who spend a lot of their private time in the 3D virtual world of Second Life, allowing them to put screen shots of their alter-ego online avatars on the back of their calling cards. A simple viral concept, the craze spread rapidly, and now it seems everyone in the web world is doing it.

How do you get your own MOO cards? Online, of course, from www.moo.com

No longer limited to Second Life images, you can upload your own photographs or choose from thousands already available at their site. MOO’s online tools let you easily crop your photos to get the best effect. You order packs of 100 cards with as many as 100 different images per pack, for only US$20, and they will ship anywhere in the world.

Not only do MOO cards say a lot about your cutting-edge geekiness, they present an opportunity to promote your interests – or your business – in a way that regular business cards cannot. Because there is a distinctly casual and “fun” element to MOO cards, you can put photos of your your product, or your service in action without risking looking tacky.

There's another advantage, at least while MOO cards are relatively new. Ordinary business cards get stuffed in a pocket and forgotten. MOO cards are not only ice-breakers for your own first encounters, they get shown to other people long after you have gone.

Advertising agencies get a digital wake-up call from Nike

Just Do It! Nike just did, ditching its running shoe advertising agency of twenty five years not because it was unhappy with creative or because of costs, but because Wieden & Kennedy just didn't have the digital media passion or expertise needed to adequately engage the new consumer.

While Nike moving its running shoe business after so long and successful a partnership is news in itself, what is really making waves in the agency world is the reason for the move. Agencies worldwide are generally still doing a half-hearted job of leveraging the internet and related technologies for brand building, and most of them know it. When a manufacturer as intimately in touch with its consumer as Nike is sees the need to do more and do it better, and is willing to just do it, the agency world looks over its shoulder to see who is next to go.

Wieden & Kennedy are not a minor agency – they have long been a creative powerhouse doing work for companies like Procter & Gamble and Coca-Cola. They must have seen this coming, and probably had plenty of warning from Nike, but were simply unable to change fast enough to keep the account.

In February, Mark Parker, Nike's CEO, told investors

The Nike brand will always be our strongest asset, but consumers are looking for new relevance and connections. We're fundamentally changing the way we're organized as a company. It's really all about going deeper to get deeper connections and deeper insights, to get more innovation and more relevance, and to make us ultimately more competitive in each of the discrete pieces of our business. This allows us to be more informed and more surgical in creating products and optimizing our go-to-market strategies within each category.

Nike gets it. The consumer – particularly in Nike’s demographic – is now calling the shots, and companies who insist on pursuing a 1980’s-style mass-market broadcast approach to communicating risk being marginalized or, worse, becoming irrelevant.

As the New York Times put it,

The message is clear: No matter how talented an agency's creative team or how well the client's management likes the firm's executives, the agency is of limited value unless it embraces digital media.

That means, just as the web has permeated the lives of consumers, agencies must permeate digital culture throughout their organisations, instead of regarding “internet stuff” as an afterthought, add-on, or external business. For many markets, digital thinking needs to be a foundation of advertising strategy. And while it makes sense to start digital operations as a separate entity (thus bypassing all of the legacy resistance), there has to be a plan to reintegrate online operations as soon as the “interactive agency” is up and running.

But advertising agencies the world over are still dragging their heels. Given that the internet attracts more advertising money than radio worldwide, and was second only to TV in the UK last year, it's hard to keep on regarding online as something that is still not important.

Last week at the Online Media Marketing & Advertising (OMMA) conference in Hollywood, a panel of industry insiders agreed that most ad agencies are simply not ready for the digital era. Tim Hanlon, from Publicis, was adamant that the traditional structure of ad agencies is an obstacle, and that de-siloing brand advertising and response advertising is essential to create the flexibility and spontaneity necessary to get to the online consumer.

Bant Breen of Interpublic was of the opinion that acquiring so-called interactive agencies is easy, but integrating them into existing agencies is not, and that’s the thing which is necessary for a more powerful approach to advertising which can do things like build customer relationships and enable transactions.

What’s the problem with traditional ad agencies?

Firstly, the whole structure within agencies (and the communication structures between agencies and clients) makes change a painfully slow process. Not good when rapid and disruptive change is a key characteristic of online consumer environments. How long does it take to brief, pitch, create and roll out a campaign? Given the aversion to risk within agencies and clients, it can take months. Online, you need to be able to do this stuff in days if not hours. The risk of not operating quickly vastly outweighs the risk of moving so slowly you are effectively doing nothing. Agencies need to be given more latitude to act almost spontaneously, but it is unlikely clients would allow that, and even less likely that agencies would want it.

Secondly, agencies and their clients are way too precious about protecting brand identity. Remember when the primary role of a brand manager was to police the “brand bible” and ensure the eternal purity of the proposition? In a web 2.0 world, consumers want to talk about products. And, in the words of the Cluetrain Manifesto, whether the news is good or bad, they tell everybody.

Trying to protect a brand from consumer comment, being afraid that customer opinion may pollute or hijack your carefully crafted identity, is no longer a valid marketing activity. But encouraging discussion and being ready to respond to it, and making sure you are structurally able to maximize net advocacy, are alien concepts to many marketers and their ad agencies.

Thirdly, the traditional approach to broadcasting generic messages to largely mass markets is inappropriate for digital media, which is all about sharply focused messages for niche audiences who are discerning, informed and impatient. When your medium is newspapers or television, you have to communicate across the broad mix of audiences that they reach, and being too focused in your message risks completely missing important components of those audiences. True, satellite TV and niche publications do allow for a more narrowcast approach, but it is nothing compared with the laser-focused nanocasting and individual consumer conversations that the web allows – and requires. But the broadcast mentality of traditional agencies results in nothing more imaginative online than generic corporate banners on mass traffic sites like directories and online newspapers.

Fourthly, the online business model does not work well for agencies. If a major part of your income originates in placement commissions paid by traditional media, it is very hard to look at online opportunities as anything but financially retrograde. So the only real financial incentives to pursue digital strategies are macro incentives: you’ll pull in big accounts if you are seen to be on top of this web thing, or you’ll lose big accounts if you are not. Ad agencies need to reinvent their business models for the 21st century, because their old models are a significant handicap to progress.

Social networks for KLM passengers and business travellers

Loyalty programmes are invariably about a company trying to create a relationship with a customer, with the primary motivations being to secure repeat business and cross-sell services. That’s so web 1.0. These days, the objective is not so much to form a company-customer relationship as to facilitate customer-customer networking relationships with the company providing the context.

There is probably no industry in which loyalty programmes are so widespread as travel, so when a major airline starts trying to get social networks working for its frequent flyers, it may be the first sign of a significant evolution. Not surprisingly it is the Dutch, who gave us the compact cassette and the CD, who were the first to move in this innovative direction.

KLM is the first airline in the world to build online social networking communities for its customers. Aimed primarily at frequent business travelers, and currently centered on specific destinations and activities, KLM’s communities connect people with common travel interests. Its first two destination communities, KLM Club Africa and KLM Club China, and its first activity community, Flying Blue Golf Club, are at the moment available only by invitation.





The benefit of belonging is that members of the networks can get to meet and share experiences with people working in similar markets, facilitating connections that might otherwise never happen. Members also get access to services such as translation, travel advice, or legal assistance provided by KLM business partners. And the networks are not exclusively online: face-to-face networking events take place regularly in he destination zones, as well as back home in the Netherlands.

Members of the golfing network (ever meet anyone from the Netherlands who doesn’t love golf?) can use the community to create profiles of their playing ability, arrange to play with other members who are going to be in the same place, and even use frequent flyer miles to pay for games or buy golf equipment.

It is a fairly bold move by KLM to try to unite its customers. Most airlines prefer to keep customers at bay with a divide-and-conquer mentality. But KLM has a good product and an already very loyal customer base. What KLM has done is leverage and lock in that loyalty not by offering “me-too” benefits like more comfortable seats or better in-flight entertainment, but by offering a unique service of potentially great personal value which other airlines might find harder to mimic.

In a similar vein, a new company called PairUp is offering to help travelers (on any airline) to connect face-to-face with fellow travelers with whom they may already have an online connection. PairUp members uploading their contacts list (from Outlook, or whatever their e-mail or contact management tool is). When they schedule a flight or participation in a conference, they put their flight and accommodation information in the system.

The system shows them people in their list whose uploaded travel details coincide with theirs, and lets them pick the contacts that they are interested in getting together with. The system is not exclusively for use by vaguely connected people – it can be used as a coordination tool by colleagues who need to share travel plans.



PairUp also provides a version of its tool to event managers, allowing convention organizers to offer a pairing-up service directly to people who register for their event. Anyone who has participated in major conferences where you struggle to find out who is attending, then battle to track down the people you want to talk with, can see the benefits of such a tool.

Online video ads get more clicks than static ads

South Africa’s bandwidth premium is of course a significant obstacle to advertisers who would like to use more than the old static banners or animated gifs. Indeed local web surfers are likely to avoid or resent any imbedded ads that chew voraciously into their meagre bandwidth rations.

When Flash animation banners first started appearing a few years ago, they were contentious even in the USA, though the concern there was that such ads were slowing down the browsing experience rather than using up any allocated download quota. Delivery technologies have moved on, and typical download speeds in the US have lifted from being approximately what South Africans experience today to anywhere from 4 mbps to 45Mbps, and online video has come into its own. But is a video ad more effective than a conventional ad?

DoubleClick studied 2.7 billion online video ad impressions for 300 campaigns, comparing them with data for non-video ads, and concluded that video ads are significantly more powerful than most other formats. They found web surfers are twice as likely to click the “play” button in video ads as they are to click through standard static image ads, though they rarely watch the video more than two-thirds of the way through. Those clicking the “play” button typically watched 10 seconds of 15 second videos and 19 seconds of 30 second videos.

Obviously the lesson, as with most things on the web, is to front-load your message rather than building to a punch-line.

The actual click-through rate for video ads ranged from 0.4 percent to 0.74 percent, compared with click-through rates for static image ads of between 0.1 percent and 0.2 percent.

Of course it’s not just a numbers game – the quality of your creative is clearly important contributor to click-through rates, as is the relevance of the ad content to its positioning. And click-through rates themselves are irrelevant if your conversion rates let you down. But it seems clear that video ads online are finally starting to have an impact on brand awareness and traffic generation.

Top 10 Trends in the Hospitality Industry

Ernst & Young released a report on February 15, 2007 where they identify ten key trends that will influence the hospitality industry in the US and major hospitality markets internationally.

Top trends that will influence the global hotel industry in the year ahead include the stabilizing of the U.S. lodging market, increasing capital flows into the hospitality sector from a broad range of investors, including offshore funds, and superior performance among luxury hotel brands, according to a report released today by Ernst & Young LLP.

“In this report we’ve identified ten key macro trends that, taken together, we believe will shape the hospitality sector this year and for years to come in the U.S. and in major hospitality markets around the world,” said Michael Fishbin, national director, Hospitality & Leisure, Ernst & Young LLP.

The ten key trends identified in the report are:

#1 Supply and Demand in Balance — Perhaps the biggest positive trend for the industry in 2007 is that supply growth is relatively low with a 2.5 percent increase projected this year. This, combined with last year’s 1.8 percent growth gives owners a chance to upwardly reposition existing hotels and grow revenue per daily room (RevPAR) and average daily room rate (ADR). Stability is good for the industry’s short term profitability and, as a result, the outlook for 2007 is positive.

#2 More Good News for Luxury — The hotel sector generally is experiencing positive growth, but the performance is particularly strong in the upscale sector. With no sign of a drop-off in the primary demographics populating upscale hotels, more stellar performance is expected.

#3 Construction Costs — Developers will have to be more creative in planning and building new hotels due to high construction costs. Look for more mixed-use developments incorporating hotels, especially in the upscale segment, more creative financing strategies and maximizing of project density to make the numbers work in a more expensive development environment.

#4 Operating Costs — For hotel operators, better control of energy and other major operating costs will be a key objective in 2007. For the last two years, costs such as labor, energy and insurance have skyrocketed. While automation has historically helped manufacturing, it has played a very limited role in reducing costs in service-based industries, such as hotels. Yet hotels’ use of web-based systems is increasingly helping the bottom line.

#5 All the World’s a Stage for Hotel Investors — One aspect of the phenomenal influx of capital into the hotel sector is that the sources of this capital wave are truly global, creating a worldwide investment market with growing cross-border transaction activity. In an increasingly complex business environment, investors are likely to seek out deals in all corners of the globe. However, the U.S. hotel sector, as the most transparent market in the world, will continue to garner more than its share of foreign capital.

#6 Will New Passport Rules Dampen Tourism? — The U.S. Western Hemisphere Travel Initiative may cause a short-term drop-off in travel to the Caribbean and Mexico as U.S. tourists balk at the almost $100 passport fee or get caught in a lengthy application process. Some hotels are proactively moving to offset the passport cost by offering discounts to first time passport holders. The passport impact is likely to be short term and may even help U.S. domestic tourism.

#7 Pricing Issues May Cloud Sector’s Future — The last few years have seen solid market fundamentals, limited construction of new product and low interest rates, the combination of which has driven pricing on some deals into the stratosphere. With more construction ahead, hotels’ operating growth levels are unlikely to be sustained. We’ll begin to see this year what return on investment these top premiums will yield.

#8 Private Equity’s Love Affair with Hotels — Private equity players were the biggest single buyers of existing hotels in 2006, and they are expected to continue to buy in 2007. Since many do not have significant lodging industry experience, the question remains, how will they perform as owners? And when and how will they execute their exit strategy? We’ll begin to learn the answers to such questions this year.

#9 Growing pains for condominium hotels — With the U.S. building boom of 2005-2006 now over, there may be headaches on the horizon for developers and owners who jumped into this market with both feet. An estimated 8,000 new units are expected to become operational in the next 12 months in the U.S. despite last year’s cooling of the development market. By 2008, developers and owners will have a good idea of what worked and what didn’t in the condo hotel craze. Meanwhile, the hotel condo craze has hit the Caribbean, Mexico, the Middle East and Europe’s resort vacation spots.

#10 The hotel market as an engine of economic recovery — In Mississippi’s Gulf Coast region, the inventory of hotel rooms leaped 23 percent between March and September 2006, contributing significantly to the area’s tourism and gaming recovery and boosting its struggling economy. Communities around the world have a growing awareness of the impact hotels can have on their economies and will move quickly to support rebuilding of this critical sector in the event of natural disasters or human conflicts.

“In general, the hotel sector continues to perform well and has been especially adept at attracting new investment,” said Fishbin. “But continued growth within the sector depends on many of these factors.”

Ernst & Young offers a range of services for every major hospitality segment, from lodging to travel and from tourism to attractions – including hotels, resorts, mixed use developments, convention and conference centers, stadiums, amusement parks, golf courses, and other leisure-related assets.

For a complete copy of the Ernst & Young Report ‘Top Ten Thoughts for the Hospitality Industry in 2007’ please visit www.ey.com/us/realestate.