IN-DEPTH: Interview with Doug Miller, Global VP, Media Solutions, Expedia -

Online media owners say travel marketers need to look at online advertising more holistically.

It is strongly believed that combining brand and direct response together online is the key to success. In fact, it is also being highlighted that traditionally, online has been held to a much more stringent metric than offline channels and it is often bought with a very fragmented approach.

EyeforTravel's Ritesh Gupta recently spoke to Doug Miller, Global VP, Media Solutions, Expedia about the last-click model, the social media vs travel booking and planning channels debate and lot more. Excerpts:

It is acknowledged that advertisers favoured online channels over the last couple of years. How do you assess the current approach towards online advertising?

Doug Miller: I think the last-touch model favoured by travel marketers is flawed. It disproportionately rewards low-funnel impressions or clicks from search engines and ad networks. Travel marketers are currently ignoring 80 percent or more of the online touch points that lead to a conversion.

For example, we know that a great number of travelers shop Expedia before booking somewhere else. If you discover the Fairmont Orchid on Expedia, spend 20 minutes reading reviews and determining that it's right for you, then bounce to a search engine before booking somewhere else, did Expedia help make the sale?

Of course, but the last-click model ignores the influencers. Leading travel marketers, ad agencies and technology firms are on a path to overcome the challenge, and deliver more holistic views, but these changes will take time. As these solutions come online, and multi-touch attribution is increasingly possible, it will bring more travel marketing dollars online, and change the online mix.

According to SEM specialist, Greenlight, search as a standalone channel can be great for delivering high ROIs and tight CPA, due to its ability to target at a very granular and specific level. However, as a branding tool, it is not so efficient and depending on the industry, an advertiser's ability to convert high core generic activity may actually depend on their brand being recognisable outside of the Search environment. What's your take on this?

Doug Miller: Like search engines, Expedia and Hotels.com help travellers discover hotels through search. Our experience suggests strong travel brands tend to convert better at the point-of-sale. Moreover, strong travel brands also enjoy improved billboard effects from OTA point-of-sale advertising. One study for a top global hotel brand showed a 191 percent increase in direct-bookings among travel shoppers exposed to point-of-sale ads.

There are many independent hotels that don't spend much on brand building beyond Search or OTA point-of-sale marketing. If these brands execute flawlessly, deliver a great travel experience, the customer will develop positive associations with the brand. On the other hand, a brand can be hyper-relevant in Search, and fail in execution, and the customer will develop a negative association with the brand.

Consider Search an amplifier, rather than enabler, of both good and bad branding. If the full experience is positive, Search will help drive more positive brand experiences. If the experience is negative, Search will just drive more negative experiences.

Facebook reached an important milestone for the week ending March 13, 2010 as it became the most visited website for the week. How do you expect the power of social media to nudge ahead of some of the traditional online travel booking and planning channels especially with integration of real-time feeds from Facebook and Twitter on search engines?

Doug Miller: It's funny to think of online travel channels as "traditional." That happened fast. I feel so yesterday.

My view is that travel booking and planning sites lead in aggregating travel intention data. What does that mean? For several years now, Federate Media's John Battelle has talked about search engines creating a massive "Database of Intentions." All our Google searches, aggregated together, can tell us a great deal about what we want. More recently, John has gone on to suggest that sites like Facebook add who I am and who I know to the database of intentions. Sites like Expedia, Amazon and eBay add signals about what I buy, and so on. Travellers browse, search and buy with Expedia sites. They signal through our channels "here's the travel I want" and "here's the travel I will buy" on a global scale.

Therefore, I don't believe that social media will "nudge ahead" of travel booking and planning channels. Rather, search, social and commerce channels will become more and more complementary, and new partnerships will form, as intention signals accelerate to fuel online media and commerce. The signals of "here's the travel I want" and "here are the people I know" will find new ways of working together to improve travel planning and booking. Travelers get more relevant offers and travel marketers will discover new opportunities. These models are coming around the corner.

Marketers including ones from hotels admit that many advertisers have actually switched their offline advertising to online, which has resulted in an increase in CPC. In many search terms, they are now competing with twice as many advertisers as they used to. It is becoming much harder to achieve high ROIs and they now have to focus more on long tail terms as generics are just not a viable option anymore. How do you assess the situation?

Doug Miller: Generics haven't been viable for a lot of players for a long time because of poor conversion, which is sometimes a function of poor or limited supply. Supplier-direct is going to have a harder time converting a customer on generic terms than a reseller because of breadth of selection. This doesn't preclude many from trying, though, for better or worse. Sometimes, a supplier can make up the conversion gap with better margin and add-on revenue, but not always.

The long tail is just getting longer. To manage it, you have to have significant ability to scale your programmes and the ability to manage bids through ambiguity and data sparseness. It's difficult to set a bid for keywords that get a click every other week or month. It's even harder to bid millions of keywords like this.

Oversimplifying, suppliers have two choices – spend on salaries & marketing dollars directly against acquiring these more expensive conversions or allow resellers to bear the burden and cost. It's a simple break-even analysis for them. Plus, hotels can now even bid for premium search placement on Expedia and Hotels.com through our TravelAds auction platform. It's just a matter of where resellers are most comfortable with yield management – through Google or their partners' marketplaces.

Video is a growing area, with strengths and weaknesses. Watching a video takes time and you can't skim or filter them very easily to find the ones most relevant to you but there's always that old saying that a picture speaks louder than words. The ability to share what a hotel actually looks like, what another traveler actually experienced, is incredibly powerful. How do you assess the current investment benchmarks and RoI?

Doug Miller: The next real innovation for online travel selling lies at the intersection of creativity and technology. We need to invest more here. We often overlook the emotional drivers of shopping and transactions. Today, selling travel online is very rational and linear. By contrast, video and forms of online rich media allow brands to connect emotionally and aesthetically with customers - to tell stories. Hawaii and San Diego gained material share on Expedia using point of sale sight, sound and motion media, our StorePoint Expandables programme. Likewise, Bing's visual search has great potential in travel.

I'm a big fan of Kevin Roberts of Saatchi & Saatchi. I think he's right about screens and the power of sight, sound and motion to move us to act. Roberts suggests that stories – told with sight, sound and motion – are the way through information overload. When stories are set against information, the story wins. I agree, and we all have work to do in travel.

Behaviour analytics help in understanding and predicting customers' desires and to more effectively serve relevant content and products in real time, ultimately increasing satisfaction and conversion. How do you assess the adoption of behaviour analytics at this stage?

Doug Miller: This is the future of digital travel marketing. Travel marketers want to connect with known travel shoppers, especially during the window that they're "in-market" to book. Remarketing based on recent browsing and shopping behaviors makes this possible, and it works.

Travel marketers can reach travelers in the vacation planning and shopping process with point of sale marketing, and if they don't book right then, marketers can now extend campaigns across the Internet. The practice of remarketing is rapidly accelerating in travel.

Moreover, it's converging with real-time ad buying, dynamic-creative solutions and SEM science. It's an exciting time.

Online Marketing Strategies for Travel USA 2010 Conference

Doug Miller, Global VP, Media Solutions, Expedia, is scheduled to speak at the Online Marketing Strategies for Travel USA conference which will take place in Miami (2-3 June).

For more information, click here: http://events.eyefortravel.com/online-marketing/agenda.asp

Or contact:

Gina Baillie
VP Global Marketing & Events
+44 (0) 207 375 7197 (UK)
gina@eyefortravel.com