Anna Pollock, DestiCorpKeynote Presentation, Sydney, October 17th, 2007

What do these men have in common?

An Age of Uncertainty‘Italy relies on external resources and the life of the Roman people is tossed daily on the uncertainties of sea and storm’

TACITUS

Predicting the Future

“There are many methods for predicting the future. For example, you can read horoscopes, tea leaves, tarot cards, or crystal balls. Collectively, these methods are known as “nutty methods”.

Or you can put well-researched facts into sophisticated computer models, morecommonly referred to as “a complete waste of time”.

The Challenges of Forecasting

Today’s Focus

• The difference between: – Trends– Drivers– Paradigms

• Key Tourism trends, drivers and paradigms• Recommended responses for Australia

Tourism

The Earth at Night

Internet Connections

Flight Connections

Economic Growth a function of Communication

Economic Growth a function of

Connectivity & Travel

It’s Not Size but Connections That Matter!

CONNECTIVITY

INFORMATION and COMPLEXITY

1.5 billion Mobile phones

1.2 billion web users

108 million web sites

100 million blogs

6 billion people

9 billion people

More Connectivity = More Complexity

More Complexity = More Uncertainty

CONNECTIVITY

VOLATILITY & UNCERTAINTY

TRENDS

PARADIGMS

DRIVERS

Where Should leaders Focus Their Attention?

TRENDS

DRIVERS

PARADIGMS

Or, Looked at Another Way

TRENDS

DRIVERS

PARADIGMS

Most damage comes from from what you can’t see coming at you on the surface

Distinguishing Trends, Drivers and Paradigms

Distinguishing Trends, Drivers and Paradigms

Even the “Big Guys” can get It Wrong – for a while

Trends!

“It was the Best of Times and the

Worst of Times”

Charles Dickens, A Tale of Two Cities

1947-2007:

Sixty years of MORE

More GDP

US Data

More Tourists

More Product, More Choice, More Competition

•TNS Media Intelligence has 2 million brands in its database, growing at over 10% per year

•Personal branding and self-employment potentially put that number in the billions

•Add in the impact of eBay and Craigslist

•Add in Virtual Worlds – Second Life

What do you get? Saturation and Numbness!

More Access

More Media, More Traditional Channels

1960 2003 *

Radio Stations 4400 13,500

Magazine Titles 8,400 17,300

Channels per home

5.7 82.4

* Before digital radio and podcasting, Not counting blogs, face book and myspace pages

New Channels

200,000,000 blogs

1.5 million residents

>100,000,000 videos(65,000/day)

www.ebay.com 21 Nov 200614,463,346 auctions

Almost 4,000,000 articles(10 languages)

33,347,000 profiles

60 million members

More New Channels

Having to Be Everywhere

1947-2007:

Sixty years of

LESS

Less Comfort

Less Peace

Less Peace, Less ease

50% of UK buyers find holiday bookings stressful!

Everyone has Less Time

More Importantly, We have less Trust

76% of consumers don’t trust brands (Yankelovich)

80% of US shoppers place more trust in brands that offer ratings and reviews than those that don’t

75% of shoppers stated that it was extremely or very important to read customer reviews.

Peer reviews are preferred over expert reviews by a 6 to 1 margin.

Source: FutureLab

Less Attention

• In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” (Jim Stengel, Global Marketing Officer, P&G)

• Big Six study (US): People with PVR’s watch 12% more TV, yet 90% of them adskip (Germany : 88.2%)

• 78.2% of Germans are irritated by advertising, only 24% actually still watches it (GfK Marktforschung)

• 54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners)

• 85% of Chinese stop watching TV during commercial breaks. More than half change the channel, while the rest do housework, eat, chat or use the bathroom. (McKinsey & Co.)

Source: FutureLab

Blind FaithCollectivismCommand

Reasoned FaithElective Collectivism

Contract

People are saying: “I can no longer rely on a single source of information. The omniscient, all-powerfull source – whether a news anchor, doctor, CEO

or government official – is gone.

Edelman Trust Barometer, 2006

While institutional trust is eroding

Source: FutureLab

THERE IS STILL ONE TRUSTED MEDIUMLEFT IN THE WORLD

MY FRIENDS – THEIR FRIENDS – AND ALL THOSE WE COLLECTIVELY RESPECT

So Whom Do we Trust?

Source: FutureLab

33%

61%55%

51%

2003 2004 2005 2006

A person like yourself or a peer

Edelman Trust Barometer 2006When forming an opinion of a company, how credible would the information be from …

%

Academic 62

Doctor or similar 62

Person like yourself/peer 61

Financial Analyst 58

NGO Rep 58

Accountant 53

Lawyer 36

Regular employee 33

CEO 29

Union 19

Entertainer 17

PR person 16

Blogger 15

People Trust People

Source: FutureLab

This is not a “new hype” just an ignored reality

1955 Word-of-Mouth (WOM) is 7x more effective than newspaper advertising, 5x stronger than a personal sales pitch and 2x as effective as radio advertising

1967 36% of surveyed consumers reported learning of an innovation through word-of-mouth, while 48% reported being influenced by WOM when making a purchase decision

2001 Diffusion studies found that WOM is 10x more effective than media advertising

2006 61% trust other people like themselves (as media) - Edelman Trust Barometer, 2006

Source: FutureLab

Top 3 Purchase Influencers %In-store Sales Associate 49

In-store demonstration 36

Word-of-mouth from family & friends 33

Newspaper Coupons 25

Internet 21

Product/Company Information 16

Retailer information 14

Other 14

Magazines 4

TV 4

Radio 3

Good ExperienceI tell 4 people

Anonymous Case: UK Consumer

Electronics

Bad ExperienceI tell 18 people

Average Sale£ 230

WOM - It Works!

Source: FutureLab

WOM Works!

Source: Yahoo!

UK FRA DEU ITA ESP

Quality of products & services 2 1 1 1 1

Attentiveness to customer needs 1 1 2 2 2

Fair pricing for products & services 3 4 7 3 3

Good employee and labour relations 5 3 3 4 4

Strong financial performance 6 7 9 5 6

Socially responsible activities 7 5 5 5 6

Well-known corporate brand 4 6 8 7 5

Dialogue with all stakeholders 8 8 6 8 9

A visible CEO 9 8 4 9 8

Employee or CEO blogs 10 10 10 10 10

Based on: Edelman Trust Barometer, 2006 – attributes for building trust

The key drivers for trust & closeness are “quality & service”

Source: FutureLab

Drivers

1. Open Source Technology

Interoperability – software that talked

Mix ‘n Match software

From “web services” to widgets

DestiCorp Paper – “Why web services will turn the industry on its head and why that’s a good thing!” 2002

Everyone can become an Intermediary

Boom

BustEcho

2. Generational Influences

Generational Influencers

• Boom – the Baby Boomers– Born 1945 – 1963– Born into an analogue world; adjusting to a digital world

• Bust – Generation X– Born 1963 – 1975– Grew up with TV, mass media. PC’s– The new “sandwich” generation

• Echo – Generation Y, Net Gen– Grew up with computers; Net arrived in their teens– Mobile phone an essential– Think & Act completely differently to parents

Know them Not as “Y” but “C” generation

•Connected

•Creative

•Customise

•Community

•Collaborative

•Concerned

•Content

Tribal and Communities

The Connected Individual Sits at the Centre of their Universe and Pulls!

Semi-amateurs start to “play for real”

NEWS MEDIA

BBC Newlsline Ticker 19,550 /millionCNN 18,600New York Times 8,740Drudge Report 4,210Washington Post 3,755Reuters Online 3,680Guardian Unlimited 2,985Al Jazeera 2,925Wall Street Journal 1,995Le Monde 990The Huffington Post 959The Economist 740Daily Kos (State of theNation) 722Crooks&Liars (John Amato) 525

Xu Jing Lei 56,750/million

1,000-4,000comments per

article

Blogs vs. Mainstream News Media : Early days, yet traffic is growing

Every Citizen is a Reporter

3. Power Shift

We’ve talked about this for years

Not done much to truly treat customer as king

Technology now enables a change in approach

2. Power Shift

Intermediary

Host Guest

2. Power Shift

Reviews

Ratings

Videos

Blogs

Syndication

Blogs

Travel an Early Adopter of Social media

3. Traditional Marketing is Dead

•Mass Marketing is dead - long live the customer

•CRM is dead – long live customer-managed relationship building

•Where is Value Created and By Whom?

•PUSH is giving way to PULL

•SELLING is being replaced with SUPPORTING

•DOING will be secondary to ENABLING

•Build the ECOSYTEM, creation the CONDITIONS for Emergence to happen…

•SEGMENTS shrinking to segments of one

4. Changing Demand Drivers & The Role of Brands

5. Other Key Drivers to Worry About

•Environment

•Energy

•Water

•Security

•Consumer Values

•Government responses

Paradigm

Old New

Old New

Recommendations

1. Destroy and rebuild your marketing model

• Think like a colonizing organism not a machine

• Break down boundaries, engage all aspects of Australia

• Enable More, DO less!• Put Customers as the Sun in your

universe

FANTASY

EXPERIENCE

MEMORY

BEFORE

DURING

AFTER

RETURN

RECOMMEND

Virtual Virtual

Real

2. Show Your CARE. Full Circle Marketing

Full Circle Marketing, Dancing with the Customer!

3. Learn to Let GO!

• Turn your business over to your customers

• Engage residents – personal and business

• Create the conditions for creativity to emerge

3. Invest in Your People & Infrastructure!

• How aware, alert, adaptable and nimble are your suppliers?

• Do they understand the changes occurring

• Do they know their roles (ants…)• Can they WOO, WOW and WOM?