Understanding the "marketing value spectrum" from an OTA's perspective
Published: 26 Jun 2008
Online Marketing in Travel Special
Being mindful of the total cost of your investments and prioritising according to your "value spectrum" are the areas, which the online travel marketers need to focus on to achieve the desired results.
This recommendation came from Aaron Cooper, VP Online Marketing, Orbitz Worldwide, during EyeforTravel's Online Marketing in Travel 2008 conference, being held in Chicago.
During his presentation `Understanding the marketing value spectrum', Cooper said that profit is income today (revenue less all costs of doing business), whereas, value is today's worth of all future profits.
"The domestic growth is slower than was a few years ago – but that hasn't prevented a number of new players from launching sites and more are still popping up. I still see significant upside for online travel companies in the US. The fact is that no matter how many sites there are out there – you still need to consumate your booking at a supplier or an online travel company like orbitz.com. So when I talk about "your value spectrum", I'm talking picking justifiable levels of investment, brand and direct marketing budget that fit your business plans. Once you have this, the next step is to set the right goals – from search engine marketing to social media to brand – and leave it to your company's experts in these areas to deliver," he said.
"Focus on the goal of marketing … to spiral up," said Cooper.
Explaining the same, he said that once websites gain traffic via online and offline marketing, various departments within the company need to work together to ensure that there is a superior customer
experience and differentiated product offering. This will increase overall site monetisation and profit. And significantly, there will be repeat visitors.
Cooper said the marketers need to stay mindful of the full investment.
"People often focus most on budgets but organisations bear a huge cost in other areas – employees' time, managerial focus and the opportunity cost," he said.
Cooper added, "It is imperative to develop the best brand/product and your marketing will be easier. For those of us who are not Google, we need to figure out how to prioritise scarce resources be it for SEO, SEM, PR, brand marketing, social media, CRM etc."
He recommended that marketers need to priortise such marketing initiatives across four dimensions. These are – the amount of return on the marketing spend, certainty (the likelihood of the amount of return), timing (estimating when the return would be accrued) and sustainability (for how long there can be a steady stream of profit).
Referring to these dimensions and translating the potential of various marketing initiatives, Cooper recommended that the focus should be on brand/ product, which falls under the highest sustainability section.
Citing examples from the industry, he said that Farecast's launch stands out for its PR, TripAdvisor's website structure for SEO, Travelocity's center spot for onsite personalisation, TripAdvisor's "Cities I've Visited" for social media, Expedia's share of voice for advertising and Priceline's no fee for price.
For his company, Cooper referred to the new service for its customers called Orbitz Price Assurance. "It allows customers to book and buy airfare and rest easy, knowing they are getting the best price for their flight available on our site," he said.
With Orbitz Price Assurance, if the price drops for a plane ticket booked on Orbitz.com and another customer subsequently books the same airline ticket on Orbitz.com for less, Orbitz will automatically send travelers a cash refund for the difference.
Summarising his presentation, Cooper said the companies need to understand their risk profile and strategic goals, develop marketing plans/investments in the proper priority and encourage
a culture of testing new ideas and optimising existing programmes.
"Stay in tune with customer needs and keep product and brand aligned and differentiated," said Cooper.
Ritesh Gupta,
EyeforTravel.com
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