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Direct Response Marketing

The Travel Market Thrives

1 Nov, 2013 By: Bridget McCrea Response

The deep-pocketed travel industry invests heavily in both direct response and digital advertising in 2013.


With airplanes often overbooked (or at least really cramped and crowded), hotel rooms fetching premium rates, and cut-rate rental cars getting harder to come by, the travel industry is well into recovery mode and on its way to posting another profitable year. The trend can be tracked across various industry reports — each of which paints a picture of a sector that’s not only pouring money into tried-and-tested marketing methods, but also investing heavily in new digital strategies.

According to the eMarketer report, “The U.S. Travel Industry 2013: Digital Ad Spending Forecast and Key Trends,” the U.S. travel industry’s advertising spending in paid digital media will hit $3.35 billion this year and then will rise to $5 billion by 2017, for a five-year compound annual growth rate (CAGR) of 11 percent. And while growth has slowed from a post-recession high of 30.4 percent in 2011, travel’s share of digital spending relative to other industries is expected to remain stable during the forecast period.

eMarketer estimates that marketers in the travel industry will invest 73 percent of their paid digital dollars in direct response efforts this year, and calls the method “an ad tactic primarily intended to drive leads.” Brand-focused campaigns will make up the remaining 27 percent. Leading the pack in spending are the large online travel agencies (OTAs) — mostly Priceline, Expedia and Orbitz — which comprise the largest U.S. and global ad investments (according to eMarketer, privately-held Travelocity spends significantly less.)

Victoria Petrock, an eMarketer principal analyst, says paid mobile advertising is a hot spot for the travel industry right now. According to The Search Agency’s latest statistics, between first-quarter 2012 and first-quarter 2013, the majority of U.S. travel and leisure paid search clicks came from PC searches while the proportion from mobile devices rose fairly steadily.

“The travel industry is embracing mobile more than ever,” says Petrock, “but in many cases these companies are reaching travelers who are on the go and using their mobile phones to make reservations and interact with providers.”

Tethering DRTV and Digital

During the past several years, travel search has undergone significant changes. While OTAs and suppliers have long been mired in intense competition for the same customers and visibility, says Petrock, they are now facing additional challenges as companies such as Google, Yahoo, Bing, Microsoft and others move aggressively into the travel arena. “These companies are seeking to control the direction of more travel traffic and become consumers’ search mechanism of choice,” she says.

And while travel industry marketers rely on direct response ads to drive leads and conversions, a post-recession renaissance in digital brand advertising is also taking place. According to eMarketer, display investments are growing across the board, though the mix is slowly evolving away from standard banner units to rich media, video, mobile-social display and hybrid formats that can integrate more tightly with traditional branding workhorses like TV and print.

Petrock says a mixture of economic recovery and intense competition is driving OTAs, hotels, cruise lines and other travel entities to spend more on direct advertising. Among the various industries that eMarketer tracks, Petrock says travel has, by far, the largest percent of direct response versus branding spending.

“During the recession, the big focus on branding was displaced somewhat by the need to offer the best price and/or get the consumer on his or her first search,” she explains. “It’s about getting the consumers’ attention and being found, and that way of thinking has driven up the spending for DR.”

Beth Vendice, president of Mercury Media’s performance division, says her firm has been working with various Las Vegas-based gaming properties that are using DR to drive hotel room sales. “They’ve used this mechanism for a while,” says Vendice, who adds that the strategy works particularly well when it comes to getting impressions on national cable, “and during the past two to three years are really starting to dive back into it and increase their DR budgets.”

In most cases, Vendice says travel marketers are using integrated campaigns that include a healthy dose of digital advertising. “They are tethering digital to their DRTV efforts and seeing the results,” she says.

A few of the hotel properties Vendice works with, for example, are using Twitter hashtags in their campaigns in order to boost social media presence and engage customers on a new level. “Instead of a 1-800 number, they’re using Twitter hashtags at the end of their shows,” says Vendice. “It really helps to get the buzz going.”

Going on Holiday

Online travel agencies and hotels aren’t the only travel entities investing in DR. In January, Viking River Cruises launched a campaign across various TV networks to garner interest in its “January Sale.” Viewers who watched the spot were offered a significant savings off cruises booked that month and also saw highlights of a number of European destinations like Amsterdam, Cologne and Budapest.

While the operator of the world’s largest fleet of deluxe river travel vessels wouldn’t comment on the campaign’s results, David Pearson, CEO of The DRTV Centre in London, says DR is an attractive choice for a growing number of travel companies due to its ability to “produce new customers within minutes.”

That quick turnaround is particularly relevant for travel firms whose very business relies on consumers to make discretionary — and sometimes extravagant — spending decisions. “TV helps create a real appetite appeal because it can convey the mood and ambiance of a holiday better than any other medium,” says Pearson, who produced the show for Viking.

For their DR campaigns, Pearson says most travel firms in the U.K. use an equal mix of 60-second and 30-second spots to sell travel and vacations to consumers. The spots are usually focused on a special offer (such as a reduced price for a trip to a particular destination) and a not-too-distant time limit for the offer (to infuse a sense of urgency into the equation). He says the strategy works best for travel firms that commit to having a regular presence on television to establish a sense of reputability and consistency.

Throw digital into the mix, says Pearson, and DR’s proposition gets even better for travel firms. “We’re at a point where it takes a mix of things to succeed, with Facebook and Twitter both playing more important roles in the scheme of things,” says Pearson, who admits that such expanded efforts tend to dilute the advertisers’ ability to benefit from one of DRTV’s most attractive qualities: accountability.

“Analysis has become commensurately difficult; at this point you’re never sure where you inquiry came from. It’s just not as pure as a phone call anymore,” he adds.

Production values also come into play when developing direct response and digital ads for the travel industry. You see, while consumers may like the idea of an inexpensive vacation, hotel room or cruise, they certainly won’t react well to a cheaply made commercial advertising such an offer. In fact, the typical buyer expects to be able to see, smell and even feel the experience that he or she is investing in. That’s where well-produced DR comes into the picture.

“Marketers have to bite the bullet and realize that they can’t do these shows on the cheap,” says Pearson, who sees this as a major stumbling block for travel companies looking to leverage direct response methods.

“A lot of the companies in the travel industry are less familiar than fast-moving packaged goods marketers with the importance of writing a creative strategy and truly understanding what they want to communicate,” says Pearson, who points out that many travel-related firms are entrepreneurial and operate with a seat-of-the-pants mentality. “They get bored at the thought of going through the discipline of defining the target audience, figuring out the consumer benefits, determining the tone of voice that should be used, and so forth.”

Full Speed Ahead

If the industry reports are on track, the travel industry will ride the current wave of growth right into 2014 — taking its favorite advertising mechanisms along with it for the ride. “We’ve seen increased budgets by travel-related firms this year, and we hope to see more of them using DR to a greater extent,” says Vendice. With mobile playing an ever-larger presence on the digital advertising side, she expects more travel firms to step up their efforts in that realm as well. “The path to mobile will continue to move forward.”

Vendice also sees more marketers testing out the intersection between DR and Web 2.0 innovations like social media. “It will be interesting to see how those firms that consider themselves more ‘traditional’ in nature use DR to buy the impressions and the targeted rating points,” says Vendice, “while also incorporating Twitter hashtags into the mix and tying digital and TV altogether into one bundle.”

Expect to see travel companies learning how to differentiate themselves on more than just price through the rest of 2013 and into next year, says Petrock. “Consumers have gotten into the mindset of ‘price, price, price,’” she says, “and I think some of the key players in the industry are going to use social media, dynamic display advertising formats, and other methods to restart the brand-building efforts that have been on the back burner for the last few years.”

Finally, Petrock says the travel industry is well positioned to leverage the massive volumes of data that it generates on a daily basis. “Big data will become even more important to the travel industry, where the information can be used to target customers, reach them on different devices, and market to them in very effective ways,” she contends. ■


About the Author: Bridget McCrea

Bridget McCrea

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