TripAdvisor Is Tracking Whether Its TV Advertisements Really Work

TripAdvisor has conducted two recent studies to figure out where its website traffic comes from — and where it goes.

In one such exercise, in recent months TripAdvisor has launched a series of consumer surveys asking users what prompted them to visit its sites in an effort to figure out how effective TripAdvisor’s TV advertising campaigns have been.

One of the survey choices was radio advertising even though TripAdvisor isn’t currently on radio, said CFO Julie Bradley, speaking to the Morgan Stanley Technology, Media and Telecom Conference in San Francisco March 3.

Don’t select radio, she quipped.

But for consumers who said they visited TripAdvisor sites because of its TV advertising, TripAdvisor goes back and tracks users’ revenue per session over time to extrapolate the return on its advertising spend, Bradley said.

TripAdvisor apparently likes the results of its calculations because it has announced it plans on doubling its TV advertising spend in 2015 to $60 million. Bradley said around $10 million to $12 million of that advertising campaign will occur in the first quarter of 2015 while the remainder will be spread out over the second and third quarters.

Where Did Those Hotel Shoppers Go?

A key goal of the campaign is to increase consumer awareness of TripAdvisor as a place to book trips, and that’s where the second study comes in.

Bradley said TripAdvisor commissioned a comScore study in nine markets that determined about 40 percent of respondents visited TripAdvisor before booking a hotel.

However, the problem is that TripAdvisor is losing a lot of those booking opportunities, Bradley said, a phenomenon that the company refers to as “leakage.”

Bradley said users may interrupt their hotel research to consult with a spouse, for example, and may not remember where they were in the booking flow when  they dropped out, believing that they might have been researching on Expedia or another booking site other than TripAdvisor.

People know about TripAdvisor but they may not be aware of its booking capabilities, Bradley said, and that is where the TV advertising campaign, which revolves around the theme of “plan, compare and book,” comes in.

TripAdvisor wants users to come back to TripAdvisor to book, Bradley said.

And, equipped with its series of consumer studies, TripAdvisor will spend a whole lot of money to remind consumers of that option.

Ownership Structure

On the question of TripAdvisor’s ownership structure, Bradley told investors that TripAdvisor has had a series of controlling shareholders, including Barry Diller, Liberty TripAdvisor Holding and Greg Maffei, since it became a public company and current management is not focusing on the issue.