Trivago's TV ads are a key element of its growth and success; other travel companies should view them as a case study in taking the digitally oriented test and learn manta into offline advertising.
Hotel-search site Trivago’s success in television advertising, epitomized by that the fact that the U.S. is now the Germany-based company’s largest market, goes way beyond its choice of actor Tim Williams and his scruffy and controversial look — there is an almost scientific method to the madness.
Soon after Expedia CEO Dara Khosrowshahi pointed out last week that the Expedia brand alone — as opposed to sister companies such at Hotels.com, Hotwire or Venere — conducted some 1,375 A/B tests of site features in 2015, CFO Mark Okerstrom said its Trivago unit takes a similar approach to vetting television advertisements.
“They have a very unique approach to television advertising,” said Okerstrom at Expedia investor day in New York City March 16, adding that Trivago produces “hundreds of different versions of ads that they are testing to see which ones work.”
At the bottom of this post, for example, you can view four Trivago adds that revolve around “Jim,” the hotel owner.
“And that allows them to go into a market and generally spend much more than anyone spends in the travel category on television advertising,” Okerstrom said, referring to Trivago. “In many cases multiples more. They take that traffic and drop it onto the world’s leading experience in hotel search.”
In fact, Okerstrom disclosed that Trivago spends an astounding 80-85 percent of its revenue on sales and marketing, and this was a big factor that enabled Trivago to “quintuple” its revenue since 2012 to $550 million in 2015.
That would translate to Trivago spending some $440 million on sales and marketing last year, according to Okerstrom’s percentages.
Trivago has a presence in more than 55 countries and runs a variety of TV ads around the world, using different actors in various parts of the world. The company’s revenue is growing more than 20 percent in its core European markets and is increasing more than 130 percent in newer markets around the world, Expedia states.
Okerstrom says Trivago is executing this growth at “break even.”
“We’re not digging big holes here,” Okerstrom said.
Okerstrom said Trivago is “growing significantly faster than TripAdvisor, Google, you name it, in the hotel category.”
iSpot.tv estimates that Trivago spent $100 million on U.S. TV advertising in the U.S. alone in 2015, almost doubling its nearest competitor, Expedia’s spend. And Trivago aired 25 different spots, which was likewise double any other company.
Here are three Trivago TV ads, all including “Jim,” the hotel owner.
Jim’s Hotel Rabbit Breeders Convention
Jim the Proud Hotel Owner
Jim’s Hotel Reviews
Jim’s Hotel Prices On 3 Different Sites
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Photo credit: Trivago takes a test and learn approach to figuring out which TV ads work. Pictured is a screenshot from a Trivago TV ad in Japan. Trivago