There has been a swirl of commentary and activity in the travel social media space, and much of it hasn’t been positive.  If you’re involved in the travel affiliate marketing industry, either as a travel supplier or an affiliate, and you’ve followed the public debate about social media, you may be concerned as to what future impact social media sites may hold for your business as the social media model continues to evolve.  TravelDividends doesn’t pretend to have a crystal ball, but we do have some thoughts on this issue.  Before sharing those, let’s first set the stage by summarizing what most of the social media brouhaha has been about.

While new social media sites focused on travel continue to be funded by VCs, the integrity of the user-generated information on TripAdvisor is being questioned yet again by many travel insiders, and a new online survey released in May concludes that while people readily use social networks for “staying connected to friends and family, as well as meeting new people,” the survey authors question the commercial value of social media networks for most industries – including travel and travel services – full-stop.

Let’s look first at the notion that social media’s impact on consumer purchasing decisions is less than what most industry pundits had been preaching.  It seems like no matter where you turned the last few years, everyone was talking about the large and growing importance that popular social media services were having on consumer purchasing decisions.

To quantify that assumption, this past spring online market research firm Knowledge Networks conducted a survey, How People Use® Social Media, canvassing the 502 members of the Company’s online panel (said to be the “only online panel based on a representative sample of the full U.S. population”) on their usage of social media.  Based on the findings from this study, Knowledge Networks strongly suggest that “marketers’ eager wishes to the contrary notwithstanding,” people fundamentally view social media as ‘social’ rather than ‘commercial’.  The statistics gleaned from the survey respondents that support the study conclusions are rather telling.

Knowledge Networks says that while 83% of online population aged 13 to 54 use social media – 47% on a weekly basis – less than 5% of these surfers “regularly turn to these sites for guidance on purchase decisions in any of nine common product/service categories.”  Moreover, only 16% of social media users say they are more likely to buy from companies that advertise on social sites.

Curiously, of these nine categories they tested, travel services scored the highest, at 4% (tied with banks and financial services companies), ahead of clothes/shoes and restaurants (3%).  Cell/mobile phones and services, cars or trucks, and groceries or food (each garnered just 2%), with the lowest score going to prescription or OTC drugs (1%).

David Tice, Vice President and Group Account Director, Knowledge Networks said in the company’s press release that:

“Our findings show that marketers need to be prudent and people-centric in how they approach social media…Social media users do not have a strong association between these sites and purchase decisions; they see them as being more about personal connection – so finding ways to embrace that powerful function is key. The fact that they are using social media more now than a year ago is a strong indicator that the influence of these sites and features is here to stay.”

Knowledge Networks admits that numbers are more compelling when respondents were allowed to “…apply the looser standard of whether they ‘sometimes’ use social media for guidance on purchase decisions in these same categories.” Yet, even when gauged against this less stringent definition, the highest figure achieved came from the travel industry, where “…a modest 24%” said they’d buy travel products based on recommendations from these types of

For the purposes of this study, “social media use” was defined by Knowledge Networks as someone aged 13 to 54 visiting any one of 27 social sites.  These 27 sites included well known social sites like Twitter, Facebook, MySpace, LinkedIn, Classmates.com, Flickr and YouTube, among others. Given the fact that none of the twenty-seven sites is remotely close to being classified as travel social network – we found it very odd that travel registered as the top vertical that social media users would turn to for guidance on purchase decisions.

To muddle the picture a bit more (in our view), the online market research firm also notes that “…the growing prominence of social media is reflected in the finding that 34% of this survey’s respondents are using the sites and features more often now than they did a year ago. But it’s also the case that some people give social media a try and then lose interest. Thus, 18% of respondents said they now use social media less often than they did a year ago.”

On the heels of this survey comes news from Travel Weekly (TW) that there is renewed concern within the travel industry about the integrity of some of TripAdvisor’s consumer hotel reviews.  This new criticism came three months after TripAdvisor subsidiary Cruise Critic was skewered for publishing reviews allegedly influenced by Royal Caribbean Cruises.

Travel Weekly noted in its article that “Paradoxically, the criticism was triggered by warnings that TripAdvisor displays about the credibility of certain reviews” on its site.   The article went on to name Jeff Tucker, a technology consultant and an editor at the Beat of Hawaii blog, as central to this new round of criticism.  It was Tucker who ostensibly discovered about 90 similar messages on TripAdvisor.com, although, according to TW, TripAdvisor has been posting such warnings since 2006.

“This doesn’t address the likelihood that a huge percentage of all their reviews are fraudulent in one way or another,” Tucker wrote. “Perhaps the warning is a start, but I question if they would post one if the hotel was one of their advertisers.”

Tucker also told Travel Weekly that he values reviews in general but approaches TripAdvisor’s user reviews “with a high degree of skepticism.” Travel Weekly went on to say that this “…skepticism is growing as a result of his sleuthing, which kicked off a new debate in the blogosphere about the integrity and worth of user-generated content.”

For example, TW quoted guidebook publisher Arthur Frommer, a longtime critic of travelers’ reviews, as speculating whether TripAdvisor “contains within itself the germs of its own undoing” because, he argues, “hoteliers logically would take steps to encourage positive reviews.”  TW also quotes a passage from noted travel journalist Chris Elliott’s blog, which states that he “uses TripAdvisor when I travel, but I do so with the knowledge that the travel industry is successfully manipulating the site.”

In its defense, TripAdvisor spokesperson Brooke Ferencsik replied to the accusations and criticisms that the site screens every review, has automated tools to blunt attempts to subvert the review system and relies on “more than 25 million monthly visitors to help screen our content.”

TripAdvisor, which touts “Unbiased reviews of hotels, resorts and vacations” as its consumer value proposition, is arguably one of the most successful online travel sites – social media or otherwise – and recently is responsible for driving much of the profitability of parent Expedia Inc.  Although it had long supported travel affiliates, TripAdvisor currently isn’t accepting new affiliates into its program.  We wonder how long this policy will be in force, and whether the bad press circulating about TripAdvisor may impact its decision to lift or retain its new travel affiliate sanction.  Regardless, having the largest travel social network temporarily shying away from the travel affiliate channel is not good news for our industry.

This is the end of Part One of this article; Part Two will be published in tomorrow’s post.

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