The Pellucid Perspective - February 2012 - (Page 2)

TEE TIME MARKETING PGA/GolfNow deal torpedoed by members’ and owners’ reactions PGA cancels tee time marketing alliance pending further study By Harvey Silverman T he 2012 PGA Merchandise Show got off to a rollicking start with the announcement on Tuesday at the PGA annual meeting that the PGA had entered into a partnership agreement with GolfNow. The announcement reverberated up and down International Drive and launched a tumultuous two days of head counting and politicking that ended on Wednesday with a subsequent announcement that the deal was under further review and tabled for at least two months. Last week, as word spread and PGA officials were barraged by complaints and concerns voiced by PGA members and course owners, the PGA notified members that it was canceling the proposed partnership with GolfNow and would poll members and study the issue internally to try to come up with a PGA-backed tee time marketing solution that would be more acceptable to its membership and their employers. What happened initially? Lots. Led by people within the PGA ranks as well as owners and operators aligned with the NGCOA and many independent thinkers from either organization, voices were heard loud and clear citing fears of “who controls my tee sheet?” and “there’s a bounty on my head?” The PGA, and the NGCOA as well, have long coveted being able to be the primary electronic tee sheet provider for the golf industry, and by so doing, to create revenue streams for their respective organizations. The NGCOA gave up some time ago with what was formerly known as Golf Digest Information Systems (GDIS), which now resides in Myrtle Beach as Tee Links. Instead, NGCOA has become a discussion leader in best practices for dealing with third party tee time providers. The PGA also took a look at GDIS along with Turner Sports as a potential media partner. These forays into online tee time activity go back to the late 90’s, so seeing it surface again was not a surprise to people tracking technology in golf. In a leak bigger than that of the Costa Concordia’s, a PGApublished PowerPoint presentation made its rounds to email inboxes across the country. We got wind of it well before the show and had already heard some reaction from Pellucid sympathizers. It leads off with a very brief and incomplete history of hospitality industry online activity. In one reference that seems contradictory to the deal’s aim, it cites Marriott as one that saw the devastation wrought by third-party travel websites and “enhanced their online practices presence to address deep discounting on hotel portals.” In short, Marriott and others adopted a “best price guarantee on our website” philosophy and business practice. More on this later. Next, the presentation cited data on online tee time activity. The PGA reports and is in sync with numbers reported by Pellucid and Stuart Lindsay of Edgehill Golf Advisors that since 1994 (the PGA says 1998) the golf industry has managed to build online tee times to 10% of all rounds played. The PGA then projects that 25% of all rounds will be reserved online by 2016; and if golf trends upward like the travel industry, 66% of rounds will be booked online, resulting in 300 million-plus online rounds and $9 billion in online revenue. When will this happen? Doesn’t say. But here’s a curious note: 300 million is 66% of 450 million, about the number of rounds played in 2011. Is the PGA conceding that rounds will not grow in the future? Hello, Golf 2.0? And the sources for these numbers? The PGA and GolfNow. The PGA identified GolfSwitch and GolfNow as the two potential tee time technology providers. Both have “switch” functionality patented by GolfSwitch, and both have API (application programming interface) connections to most if not all the electronic tee sheets in the industry. GolfSwitch ended prolonged negotiations with the PGA after being faced with the stark reality that, according to GolfSwitch President Doug Reichel, the PGA does not sign the front of checks, only the back of checks. Reichel could not confirm or deny that GolfNow then attempted and failed to purchase GolfSwitch, but if that turns out to be true, it would confirm what Pellucid reported in January, that GolfNow is pursuing purchases of golf technology providers in order to both increase market share and to control the tee sheet at the golf shop counter. The PGA assigned an eight member e-commerce task force the responsibility of establishing strategic objectives which would guide the negotiation of a satisfactory agreement with GolfNow. The task force included an “education subject manner expert,” an “e-commerce subject matter expert,” users of GolfNow, GolfSwitch, and EZLinks, a member of the Members Benefits committee, a private owner/operator, and an executive from one of the largest PGA sections. The four objectives were: 1. Create a PGA-branded tee time solution 2. Gain ownership and control of consumer data 3. Create new revenue opportunities 4. Provide opportunities for facilities to manage price points According to the proposed deal, PGA would receive support from GolfNow on several key objectives and strategic goals including: 1. On-air and online integration, marketing, and promotional support for Golf 2.0 initiatives (See Tee Time Marketing on page 4) February 2012 2 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - February 2012

The Pellucid Perspective - February 2012
Contents
PGA/GolfNow deal torpedoed by members’, owners’ reactions
More core golfers playing less = trouble
Point-Counterpoint: Alternative Golf
January weather impact: Golf benefits from an inconvenient truth
Pro Kids Golf Academy builds on distinguished legacy
The phantom golf ball market
Tampa, FL
Forest Preserve still seeking golf course developer
Golf ’s Clash of the Titans

The Pellucid Perspective - February 2012