Guest Author: TJ Mahony, CEO & Co-Founder, FlipKey.com
(Former Managing Director at Compete)

Many moons ago, Carl Query and I helped create Compete.com. After working at Compete for five years and watching it grow from a little start-up to an industry leading web analytics firm, Carl and I decided it was time to start our own company.

Armed with a little angel money, an idea and Compete data we set off to create FlipKey.com - a community driven travel site to help consumers find trusted vacation rentals throughout the world, by providing real reviews of verified vacation rental properties.

I’m happy to report Flipkey.com is doing well and would like to share concrete examples of how Compete data helped us successfully get FlipKey.com off the ground.

Sizing the Market – Leverage Traffic Statistics to Measure the Opportunity

I will not profess to be an expert in writing business plans, but I can say that any decent business needs to know its market’s potential. If you can’t provide evidence of “how big” you could be, then there is little reason for people to get excited.

Vacation home rentals provide a great lodging option for vacationers. There are over 6M second / vacation homes in the United States which are rarely occupied by the owners. To help pay the bills, many of these second home owners will rent their beach homes, winter chalets and lake cabins to vacationers looking for a more personal, and often more affordable, lodging experience. It’s a brilliant example of P2P commerce; however, the potential can only be measured by how many consumers are aware and interested in staying in a vacation home vs. a hotel / resort.

Using Compete data, FlipKey measured how many people actually considered a vacation home accommodation as determined by unique visitor traffic to leading vacation rental listings sites (e.g. vacationhomerentals.com) and vacation rental property management sites (e.g. allstarvacationhomes.com).

Using Compete data we were able to determine over 30M domestic consumers consider vacation rentals each year. When accounting for the popularity of vacation rentals in Europe, we were able to confidently estimate over 50M consumers worldwide are seeking these unique accommodations…

Customer Acquisition – How will you attract visitors and how much will it cost you?

Last year I attended the Web 2.0 Summit in San Francisco and was able to listen to Reid Hoffman (PayPal, LinkedIn, Angel Investor Extraordinaire) discuss the keys to a successful start-up. Reid boiled it down to one point, “what’s your customer acquisition strategy? If you don’t know or you don’t know how much it’s going to cost you then you don’t have a business”.

I took Reid’s advice to heart.

Step 1: Using Compete customized ‘Site Referral’ reports, I was able to analyze the referral sources driving traffic to existing vacation rental sites. The data was pretty definitive – SEARCH (go figure).

Step 2: I knew it would take time for FlipKey to climb up the relevance rankings on Google, therefore SEM was the only immediate channel that could afford FlipKey access to substantial visitor traffic in the early stages of the company. As we all know, SEM can get expensive, so we needed to accurately estimate the types of key words we would need to bid on and how much they would cost.

Using Compete Search Analytics we downloaded a report of every search term in the Compete database over the last year used to refer visitors to sites in the vacation rental market. We then applied these key terms to the Google Estimator. After a few hours of copying and pasting we had a robust spreadsheet of 17K relevant key terms and a solid proxy for how much SEM would cost.

Buzz and Awareness – Let the words of consumers sell your value proposition

FlipKey is focused on delivering a community driven travel site to help consumers find trusted vacation rentals throughout the world, by providing real reviews of verified vacation rental properties. It’s easy to find reviews of hotels online, but nearly impossible to find a robust collection of vacation home reviews.

FlipKey works directly with vacation rental managers to provide a proactive guest review cultivation system. To help highlight the potential of guest reviews in driving more bookings, FlipKey conducted a survey of 400 consumers through Compete’s behaviorally targeted survey panel.

Relevance of Sample: Compete contacted consumers who exhibited interest in staying in a vacation home based on visitation to leading vacation rental listing and manager sites.

Results:

• 78% of vacation renters indicate they are significantly more likely to book a property that provides feedback from prior guests
• Only 16% of vacation rental guests were asked to leave an online review
• Had all participants been asked to leave a review, 81% would have recommended the unit, 16% were neutral and only 3% expressed a negative experience

By presenting the words and opinions of real consumers as measured by Compete’s survey panel, FlipKey was able to communicate its value proposition to the market and provide valuable research that had not previously been available.

Concluding Remarks

As of today, FlipKey has been a live service for little over two months and already represents 50,000+ vacation rental properties. Over 50 management companies have begun using FlipKey’s guest review platform and several partnerships are underway to bring FlipKey to an increasingly wider audience, both domestic and abroad.

Starting a new business and/or creating a new product requires more than data driven insights; however, I am witness to the advantages afforded by leveraging unique data sources like Compete to develop a business plan, guide tactical strategies and effectively communicate a service’s value proposition.

Today is like my birthday, but only a thousand times better. It’s Flag Day!!!! A day where we celebrate the day the American Flag was formally adopted by the Second Continental Congress in 1777.

I know… I have goose bumps too.

I’m finding many of my Compete colleagues mocking my enthusiasm… in fact, many have challenged me to a Flag Day duel of sorts:

Team: “If you can find one interesting thing to write about Flag Day we will invest in a full blown report on Arbor Day and the internet’s impact on trees.”

TJ: “Done-ski.”

Flag Day Findings:

• There are over a 200K people per month looking for flags online.
• Events of war and national emergency dramatically increase the demand for flags. The demand for flags has increased by ~75% every September since the events of 9/11.
• Flags are to Memorial Day as flowers are to Valentines Day… Visitor traffic to flag sites tends to increase by 20-30% in May.

Case closed… Flag Day can be interesting.

There has been a lot of talk about the “long tail” of the internet. In December we decided to investigate various attributes of the size of the internet and walked away with two primary conclusions:

• The internet is constantly expanding. In 2006 Compete’s panel visited over 5M unique websites, representing an increase of 77% since 2001.
• The expansion of the internet is not compromising the growth of larger sites – in fact, the larger sites are getting bigger, attracting more visitors and interaction than ever before.

But what about the middle? What we refer to as “The Torso” or sites attracting over a million visitors a month. How many sites are breaking this threshold and how fast is The Torso growing?

In Q1 of 2007, there were 1,718 sites attracting over 1M visitors (U.S.). This represents a 458% increase since 2001. This sets the five year compound annual growth rate (CAGR) of “The Torso” at 18.6%. By this time next year The Torso will be comprised of ~2,050 sites!

So who broke the million visitor threshold between Q1 ’06 – Q1 ’07?

Noteworthy additions to The Torso:

• Digg.com: broke the million visitor barrier in April ’06. Digg’s growth continues to impress and as of April ’07 is attracting over 15M visitors each month.
• eMusic.com: EMusic is the I-Tunes of the indie-music labels. I have been a member for years. The songs are considerably cheaper than I-Tunes, no DRM and the community is great at finding talented, but undiscovered artists.
• Foreclosure.com: A natural side effect of the recent real estate boom. Lets hope the growing popularity of the site is not indicative of a real estate crash.
• Gather.com: The social network with a brain is beginning catch on among the adult populous.
• “My” sites: There were “17” sites that broke the million visitor threshold whose domain name began with “my”. Example: mybloglog.com, mygirlyspace.com, myspacestop.com, myview.com, myhotquiz.com… (I’ll stop now).

TicketMaster is the website you love to hate. It has nearly monopolized the event ticket industry and makes a nice chunk of change on every ticket it sells by charging a delivery fee, a convenience fee, a save the unicorns fee and a fee for charging the fees.

TicketMaster has enjoyed its market dominance, but has recently seen StubHub nipping at its heels. (To accurately represent the situation this is like a poodle nipping at the heals of a grizzly bear).

Continue reading “TicketMaster and StubHub” »

Several weeks ago a new “social network for the family” called Geni, made the headlines with a big time valuation of $100M. Pundits are going back and forth on whether Geni’s valuation is reasonable or gonzo.

I could not help but investigate so I jumped into Geni and began playing around.

I found Geni to be like a piece of gum. It tasted great at first, but quickly wore off. I successfully got about 50% of my immediate family to join Geni. Working together we quickly built out our family tree, but now what?

Continue reading “Geni.com: A really expensive piece of gum” »

For the last few months we have made several posts using a new metric we refer to as Attention. We created our Attention metric because all of us in online marketing need a better way to gauge the influence of a site beyond unique visitors, page views and “visits”. While these are all critical pieces of the puzzle that is the web, they all also have their short comings.

Today we announce that you can use Compete.com to measure a site’s Attention. Attention fuses engagement (measured by time) and traffic (measured by unique visitors) into a single, more complete picture of a web site’s value.

Today’s Enhancements:

• Attention: Introduction of the only attention-based web metrics
• Daily Data: Monitor site performance on a daily basis
• Velocity: Compare the relative growth of your site to another property
• Visits: Analyze the popularity of a site not only by how many people access it, but also how often they “visit”
• Embeddable Graphs: Easily embed Compete graphs on your web site

Why is Attention Important?

• A site’s influence can be under/over stated by traditional metrics.
• There are only 24 hours in a day – our time is finite. Where we spend our time is where we find the most value.

Notice in the chart above how runescape.com only ranks 436th in unique visitors, yet based on Attention is the 15th most prominent site on the web. If we relied solely on traditional metrics we would overlook the real value and prominence of Runescape.

Above is a Velocity graph of Yelp compared to Yahoo. Although Yahoo saw a 3.8% increase in unique visitor traffic in February the percent of our Attention (e.g. time) we spend on Yahoo has decreased over the last 45 days. Yelp, on the other hand, is attracting more of our Attention every day. Being able to gauge where people’s Attention is migrating is extremely valuable in determining where we can effectively reach and engage an audience.

We wanted to thank all of our users and members for providing us the feedback and encouragement that led us to today’s release. There are over 400,000 people using Compete.com who have requested over 3,000,000 site SnapShots. We receive 10 emails a day suggesting new features/enhancements and we read every one… Thanks for helping make Compete.com the smartest site on the web!

To see the full press release of this announcement click here.