Kaufer's comments about TripAdvisor's wait-and-see attitude about Facebook should give pause to other travel brands throwing so much money into their Facebook efforts.
Facebook is always touting TripAdvisor as its best buddy in travel, but despite all the hype, TripAdvisor is now saying Facebook is a “somewhat expensive” channel, and that the jury is out on whether marketing through Facebook will sufficiently “move the needle.”
TripAdvisor announced its third-quarter earnings yesterday and trumpeted the fact that it gets 34 million monthly Facebook visitors to TripAdvisor.com and its Facebook app, Cities I’ve Visited.
But in response to an analyst’s question during the conference call about TripAdvisor’s return on investment from marketing on Facebook, TripAdvisor CEO Steve Kaufer said the company “gets a certain amount of uptake” from advertising TripAdvisor’s apps on Facebook, but does so “at a somewhat expensive rate.”
Kaufer explained that its Cities I’ve Visited app on Facebook enables TripAdvisor to build a large database of travelers, find out where they’ve traveled, and it provides access to their friends’ social networks so TripAdvisor can use the social data when — or if — the friends visit TripAdvisor.
After all, at that point, the Cities I’ve Visited users, who must join TripAdvisor to use the app, are just members and don’t yet represent travel bookings to TripAdvisor’s clients.
Will they convert to TripAdvisor users?
“And then the longer-term question is and through that mechanism, will they be converted to the more domain-direct, the more branded association?” Kaufer asked. “We see positive signs, but the jury is still out by several quarters, in our opinion, as to whether that’s going to move the needle as much as we hope going forward.”
Thus, despite all its marketing efforts on Facebook, TripAdvisor might find Facebook to be a disappointing channel.
If Facebook doesn’t live up to its hype as a marketing channel for TripAdvisor, with its big footprint there and best-friends relationship with Facebook, just think what this may mean for smaller travel brands which are devoting so many resources to Facebook.
Other channels, such as search (meaning paid search engine marketing on Google), are much more effective, says Kaufer, adding that Facebook is not a large traffic acquisition play for TripAdvisor, and more of a branding and social-data gathering expedition.
In other words, TripAdvisor will continue marketing at these levels on Facebook for now, but whether TripAdvisor’s marketing will retain the same focus on Facebook in the future is an open graph question.