wtic 2006 09 13

David SoskinCEOCheapflights18 September 2006

Turks & Caicos

The Internet: an online revolution for the travel industry

September, 2006

www.cheapflights.co.uk www.cheapflights.com

Is the internet still growing?

Online travel advertising options?

The internet: the future?

Today

Is the internet still growing?

September, 2006


Internet users around the world

Sources: Nua Internet surveys; and IWS

Use

rs a

rou

nd

th

e w

orl

d (

mill

ion

)

September, 2006


First and foremost

More and more people are using the internet

People have been spending an extra 1 hour 16 minutes each month on the internet since 2001 in the UK

16-24 year olds spend 11 hours 20 minutes per month on the internet in the UK (average: 9 hours 56 minutes)

Source: Ofcom research, April 2006

9hrs 56 mins

8hrs 40 mins

0

2.5

5

7.5

10

2001 2005

Hou

rs

Year

September, 2006


Question: Compared with a year ago, how much time do you think you spend today using…?

71

27

2

14

4541

25

61

14

7

57

36

7

54

39

10

52

38

11

54

35

More time About the same time Less time

Internet Cinema Radio TV Local Press Magazines National Press

Source: IAB/RAB Media Conjunction Study 2005

Changing UK media consumption

% time

September, 2006


Traditional media in decline

Travel companies are increasing their online marketing budgets

Research suggests:Overall, TV viewing has deteriorated the

most as a result of more people being online

More young people are turning away from newspapers and magazines

September, 2006


Reduced consumption resulting from increased internet use

September, 2006


Increasing internet sales

Travel is already by far the biggest sales category, worth:

$63 billion last year in the USA alone$115 billion in the USA, Europe, and

Asia-Pacific regions combined

In America, total online sales were up by a massive 25% in 2005 over the previous year

Source: The Economist August 19th 2006; and Hotel News Resource 2006

September, 2006


Sources: ABCe, Doubleclick, Cheapflights Internal

Uni

que

Use

rs (

‘000

) Ja

nuar

y

Unique Users January 1999-2006

-

1,000

2,000

3,000

4,000

5,000

6,000

1999 2000 2001 2002 2003 2004 2005 2006

Th

ou

sa

nd

sCheapflights unique user growth (1999-2006)

Online travel advertising options?

September, 2006


UK advertising growth rates 2005

3.65.8

-5.1 -4.8

1

-3.9 -4.4

66

-10

0

10

20

30

40

50

60

70

TV Outdoor Classified press ads

Radio Magazines Internet

Direct Mail Local Press

Source: WARC & Advertising Association / IAB 2006

%

September, 2006


Travel advertising options

PPC

Search

PPC & CPM

Travel Guides

“Community”

PPC & CPMPPC, CPA & CPM

Deals Publishers

“Mega-Search?”

Live-Search

“Meta-Search”

All offer an advertising platform

http://www.igougo.com/

September, 2006


Advertising options – search

September, 2006


Advertising options – meta-search

September, 2006


Advertising options – deals publishers

September, 2006


Advertising Options – travel Guides

The internet: the future?

September, 2006


Personalisation

Websites can be personalised to the user’s needs

A 65 year old would not be interested in advertisements for skate boards, but on the internet he/she can specify what advertisments they can view by defining their interests

Not possible in media such as television and radio

September, 2006


Personalisation – example 1

September, 2006


Personalisation – example 2

Weekly newsletter demographically targeted

September, 2006


Empowering the customer: blogging / RSS

Allows users to “blog” on their

preferred subject

Users are sent the most up-to-date

information without having to check the

site continuously

Users sign up for news/information

reports with specific internet sites

This may lend itself to further advertising options

September, 2006


Empowering the customer: blogging / RSS - example

Source: http://news.cheapflights.co.uk/flights/2006/08/easyjet_to_canc.html#comments

September, 2006


Video streaming

Improving and becoming more popular day by day on the internet (YouTube)

Travellers can view video clips of:Their destination (e.g. hotels, beaches)Travel companies’ advertisements (e.g. tourist boards,

airlines)

September, 2006


Video streaming - example

September, 2006


Empowering the consumer - Turks & Caicos review

http://www.tripadvisor.co.uk/ShowUserReviews-g147399-d254897-r5688308-Beaches_Turks_Caicos-Providenciales_Turks_and_Caicos.html

Online reviews about holidays and hotels can have a significant effect on the travel industry

http://www.tripadvisor.co.uk/ShowUserReviews-g147399-d254897-r5688308-Beaches_Turks_Caicos-Providenciales_Turks_and_Caicos.html

September, 2006


So why the internet?

The internet is ideal for advertising the travel industry:

It can be cheaper than peanuts It avoids the generalisation of traditional mediaPersonalisation (narrowcasting)We wouldn’t see this in a national newspaper...

September, 2006


Internet specialisation

September, 2006


Conclusion

More and more people are using the internet today, especially the younger generation

Many new ways to advertise effectively on the internet

Now is the time to maximise our companies’ presence and sell more products on the internet

Thank you

Questions, suggestions, feedback or complaints welcome…

[email protected]

wtic 2006 09 13

Technology