Can TripAdvisor turn things around?
The company, the largest travel site in the world with some 390 million average monthly unique visitors, is in the midst of a painful transition from a hotel-search site to one that combines searching and booking. TripAdvisor introduced Instant Booking, where consumers complete their bookings on TripAdvisor, to supplement links to other sites in the United States in August 2015 and has gradually rolled it out globally.
As of the fourth quarter of 2016, TripAdvisor’s booking and search revenue improved sequentially to negative 7 percent growth, an improvement from negative 12 percent in the third quarter. So the click and transaction-based revenue trended upwards but was still in the red, and the company stock, which opened Friday at $41.16, isn’t far from its 52-week low.
TripAdvisor has announced that it is considering returning to TV advertising this year after having been absent in 2016. The company admitted that it had been overly optimistic that its product changes would lead to a consequent change in consumer behavior. In other words, consumers come to TripAdvisor sites to read hotel and restaurant reviews; now the trick is to get them to realize they can book hotels there, too. [See one of TripAdvisor’s 2015 ads, “Beach 30 U.S.,” below.]
Can TV Be part of the solution?
But can a new TV blitz, as part of a multifaceted marketing campaign, tip the scales, change ingrained consumer habits, and convince travelers that TripAdvisor might be the opportune place to book their hotels — and a better option than Expedia, Booking.com, Marriott or Hilton? One daunting factor to consider is that TripAdvisor grew its total selling and marketing spend 9 percent to $756 million in 2016 while Expedia Inc. ratcheted up its marketing spend 29 percent to $4.36 billion, and the Priceline Group’s jumped 23 percent to $4.35 billion.
So TripAdvisor’s marketing spend is a fraction of some of its biggest competitors’ efforts.
Skift consulted two advertising/marketing experts and solicited their views on whether TripAdvisor could really force a change in consumer perceptions with a TV campaign as part of a new, overall advertising and marketing strategy. They had different views on TripAdvisor’s prospects.
Gerry Graf, founder and creative director at creative agency Barton F. Graf, says TripAdvisor has tremendous assets and is capable of “making that judo move to show why I should book there and for these reasons.”
Meanwhile, Robert Birge, the former CMO of Kayak and Lola and the original head of marketing for Orbitz, is pessimistic about TripAdvisor. “Without Search Engine Optimization, they need to acquire brand building competence but based on their disastrous brand positioning and five failed attempts at television advertising, it doesn’t look promising.”
Gerry Graf, founder Barton F. Graf Creative Agency
In January, YouTube ranked Barton F. Graf’s 2015 Clash of Clans: Revenge ad, featuring actor Liam Neeson, as the second-most-viewed Super Bowl ad since 2007. Gerry Graf worked on a Kayak TV campaign in 2011 at a time when the metasearch site was being massively outspent by online travel agency rivals and was struggling to differentiate itself from them. [See Graf’s “Kayak Think” ad below and a hilarious and enlightening video case study about one of the campaigns here.]
One of the things that TripAdvisor is undoubtedly debating about a potential re-entry into the TV markets is how to pace its spending. Does the company go in with a big show of force and saturate the airwaves in a way that Trivago has been doing in the last couple of years in the U.S. and elsewhere, or should TripAdvisor opt for a more prolonged approach over several years?
“If you come up with a breakthrough communication, you don’t need to spend as much,” Graf argues.
Graf says Kayak’s prospects turned on defining it as a search engine and not just another travel site. The ads revolved around the time-savings consumers would accrue by letting Kayak search hundreds of other travel sites at once.
In the run-up to Kayak’s IPO in July 2012, before it was acquired by the Priceline Group, Kayak disclosed that TV advertising boosted its unaided awareness from 9 percent to 39 percent in the U.S. in two-and-a- half years [Expedia’s was around 55 percent]; in the first two years Kayak’s direct queries climbed 207 percent.
So TV helped put Kayak on the map for consumers.
While getting increased awareness will be part of the battle for TripAdvisor, it will have to give consumers a good reason to view the site as the best place to book a hotel, Graf says.
“They have great equity,” Graf says. “I would assume people love TripAdvisor. They just don’t know why they should book there. But they have a lot to work with.”
“You don’t need to outspend,” he adds. “You need to embrace creativity. The power of a breakthrough idea to get noticed and once you get noticed you need to provide a clear strategic reason why to use it. You don’t need to outspend people. You need to outthink people.”
Graf says one of the things he looks for in a new client — and his creative agency has worked for brands ranging from Kayak to GoDaddy, and from Esquire to Ragu — is whether the brand has a strong connection with customers. Strong emotions can work regardless of whether they are positive or negative, he says.
TripAdvisor probably has a strong connection with its users, Graf says. “They need to repurpose the message. They have a lot more to work with than other clients I’ve had in the past.”
Robert Birge, former CMO of Kayak and Lola
Asked about TripAdvisor’s product and marketing prospects, Birge emailed the following:
“TripAdvisor has significant demand challenges and faces a complex brand challenge, and it doesn’t appear that they have a great handle on either.
“Each of the major upper funnel shopping channels in travel have powerful brands: Google, TripAdvisor, Kayak and Trivago, which is a clear prerequisite for being able to sit in front of so many high value, considered purchases.
“TripAdvisor built their brand through probably the best SEO machine in the world and an innovative B2B program that essentially turned hotels around the world into free marketing for the brand. This all came under the idea that TripAdvisor provided ‘the world’s most trusted travel advice.’
“Even if TripAdvisor wasn’t known for elegant branding, this position was incredibly powerful in the hearts and minds of travelers. TripAdvisor long held the strongest position among travelers with this attribute. Effective positioning requires building an idea in people’s heads that differentiates your brand in a dimension that matters and framing your brand in a way that no other brand can really compete. This is often referred to as creating a category of one. Apple famously started this in the late ’90s with the ‘Think Different’ campaign that aimed to position Apple as ‘tools for creative minds,’ which was something they could own given that they’d lost the PC battle.
“TripAdvisor needs to shift its brand to align with the company’s shifting competitive strategy, but they’ve landed on a very poor brand strategy: know better, book better, go better. There are a myriad of Web-based tools for researching, booking and managing your travel. TripAdvisor is now claiming that they do it better. A superiority positioning is generally problematic for a variety of reasons. First, is it credible? In this case, it’s obviously not. Second, it puts their brand on the same dimension as every other online travel brand as opposed to framing their brand in a way they can win. In other words, it doesn’t differentiate them — it says we do the things you can do on the Internet for travel, only we do it better. There are very few cases that this type of generic positioning has ever worked.
“Part of their problem in shifting their brand strategy also seems to be that their overall competitive strategy as a company is unclear. Are they trying to be a hybrid OTA with price comparison information or is booking more a matter of giving travelers another choice in their price comparison information? They also seemed to have been operating under the illusion that they could just rationally hammer people with the idea that ‘you can now book on TripAdvisor’ and people would start doing it.
“Many left-brained engineering or economics-schooled CEOs make this classic mistake in assuming that their users behave rationally and pay attention to what they’re saying. Shifting from the world’s most trusted travel advice effectively is going to require something far more thoughtful than just shouting BOOK at people.
“In terms of their overall demand strategy, they seem to be relying on ancillary traffic from all of their non-hotel content and performance marketing. Call me a skeptic but the history of tours and activities seems like a wasteland, and they’ll always be disadvantaged to the two big OTA companies in performance channels. Without SEO, they’ll need to acquire brand building competence but based on their disastrous brand positioning and five failed attempts at television advertising, it doesn’t look promising.”
Here’s Barton F. Graf’s “Kayak Think” ad of 2011:
“So don’t just visit TripAdvisor. Book at TripAdvisor.”
Here’s the “TripAdvisor Beach 30 US” ad of 2015, which featured the tagline, delivered in part by a barking dog, “So don’t just visit TripAdvisor. Book at TripAdvisor.”