Extracting Value From Friendships: Dopplr Extends Social Atlas
Dopplr, a social networking site that allows travelers to share trips in advance with friends, has proved popular with some of the world's most frequent travelers. In late May the company started allowing its users to add in their favorite haunts as part of an extention of the site's new social atlas feature. CEO Marko Ahtisaari reckons users will eventually be willing to pay to subscribe to info on the best places to stay, eat and explore. Click "read more" to see the video.
Dopplr's new social atlas feature allows its users to click if they have been to a listed place and click twice if they liked it. If a place they really liked is not on the list they can add it. Think of it as" a pops chart for the cities of the world," says Ahtisaari. Over time, the company plans to anonymize and aggregate all the recommendations that have been added to Dopplr, creating a kind of world map representing the combined wisdom of smart travellers. Ahtisaari, a former Nokia executive who took over as CEO in January, reckons there is gold in that data. He is betting that people will be willing to pay a subscription fee to access the top picks of people using the network.
Fees from subscriptions would augment existing revenues from travel related bookings made via the Dopplr site. Its attempts to cash in on recommendations that friends make to friends is part of a larger struggle by social networks like Facebook to find business models that work. In a May 21 article in BusinessWeek entitiled "Learning, and Profiting, from Online Friendships" journalist Stephen Baker makes the point that "Marketers are finding that if our friends buy something, there's a better-than-average chance we'll buy it, too. It's a simple insight but one that could lead to targeted messaging in an age of growing media clutter."
It already is. San Francisco advertising company Rapleaf , which follows the network behavior of 480 million people, culls data from blogs, online forums, and social networks and furnishes friendship data to help businesses better targer their promotions. "If your friend likes a pair of jeans you are much more likely to like that pair of jeans," says Auren Hoffman, Rapleaf's CEO. "The point is not that you like everything your friends like but are more likely to like what they like, so if I am deciding what product to show you -- like a vacation package -- if I can use what your friends like as part of the recommendation I am likely to get a better result."
It is no surprise, then, that Dopplr is not alone in its quest to make money from recommendations made by friends and like-minded people. Online friendship is a big focus for Facebook, Google, and Yahoo, notes the BusinessWeek article. Start-ups are also trying to earn revenues from friendships. ASmallWorld, which describes itself as a private international community of people who are connected by three degrees, also aims to make money from the recommendations its users make to one another. And, Tech Crunch reported on May 8 that a group of ex-Googlers have launched a new social online travel guide called nextstop which mixes social recommendations with search, a reputation system and elements of gameplay.
Ahtisaari says he believes Dopplr has advantages over other sites. For starters, it is more international. The company's operations are split between Helsinki and London. Its backers and users include high-profile members of the digerati such as Reid Hoffman, the Silicon Valley-based founder of LinkedIn, Madrid-base serial entrepreneur Martin Varsavsky, Internet Doyenne Esther Dyson and Japan's Joi Ito, the current CEO of Creative Commons. About one-half othe two-year-old company's users are in Europe, one-third in the U.S. and one-third in the rest of the world, with Asia-Pacific growing fast. And, over half of the people on Dopplr share trips with a person from another country.
Data collected indicates that Dopplr users are receptive to advertising because when people share a trip through Dopplr some two-thirds have not yet booked a hotel and one-half have not made travel arrangements. Compared to traditional frequent travelers Doppler users are more used to booking diretly online with 80% booking directly on an airline website, compared with 30% for traditional frequent travellers, according to data released by Dopplr. The site also boasts that its users tend to be younger, better educated, more technically savvy and earn more than traditional frequent travelers, according to the company.
Going mobile will be key, because it will allow users to have a social atlas in their pocket, says Ahtisaari. A Dopplr app is expected to be added to the Apple store in June. The application will act like a kind of social phone book, allowing you to see where your friends are at that moment and where you are likely to overlap next. With the frequency of members' travel -- Dopplr users average 15 trips a year -- that is likely to be often.