The five-year-old company achieved profitability earlier this year. And through June, Expedia—rated the No. 1 online travel agent by Gomez.com and responsible for 25 percent of gross online bookings—took in total revenues of $78.5 million. While transactions and agency commission revenues accounted for $70 million, the company earned the balance from advertising and licensing. Increasing those ad dollars will certainly enhance the company’s stability in unsteady times.
Expedia’s online advertising inventory includes ROS and geo-targeted banners, A-column button ads, mid-page ads, advertorial sections, sweepstakes, featured suppliers (such as cruise lines and destinations), and seasonal, section, and slide-show sponsorships. Offline it carries advertising messages on ticket-jacket inserts and sponsorships.
But no advertising category has proven as successful in increasing sales and building relationships for Expedia as outbound email. “Email marketing is a core component of our customer-communication matrix, designed to deliver relevant and timely information that maximizes customers’ travel experiences,” explains Tony Gonchar, Expedia CRM director.
According to director of product marketing Suzi LeVine, 80 to 90 percent of Expedia visitors know where they want to go when they arrive on the site. What isn’t firm is exactly how they’re going to get there and where they will lodge.
To guide users in their journeys, Expedia issues several different email products. Members receive Expedia communications when they sign up, buy travel, participate in the site’s Price Matcher service, and elect to receive promotional communications. Millions of messages are generated in a continuum that connects with the customer, from the time he starts to research a trip through when he buys travel and again as he prepares to leave home.
Customer emails consist of transactional and marketing messages. Expedia’s two transactional email programs are Price Matcher (issued when a price bid is either accepted or not), and Travel Alert, sent if mechanical, weather, or other conditions are likely to disrupt a scheduled trip.
Fare Tracker, Travel Arranger, Travel Right, and Trip Guides are Expedia’s promotional communications. Structured to deliver customized marketing information along with practical details, they record low unsubscribe and high click-through rates. All are available as HTML or text.
Issued a week prior to departure, Trip Guide features a link to the customer's flight itinerary, provides destination-related information on weather conditions and special events in more than 100 locations, and strives to upsell those who have only bought one component of a trip. Trip Guides to sunny destinations have proven to be a good environment for advertisers such as Schering-Plough’s Coppertone.
Introduced this summer, Travel Right segments more than one million Expedia past-purchasers based on home airport. East Coast members receive weekly news of European and Caribbean deals, while West Coast recipients are lured by Hawaii, Las Vegas, and California idylls.
Expedia’s first email program, Fair Tracker, launched in June 1997. Today it provides more than two million subscribers with updates on low fares between cities of their choice. Reaching customers who are in a planning phase, FareTracker also provides advertisers with geo-targeted exposure.
LeVine points out, “With FareTracker, we use our database as a ‘positive feedback loop’: Customers stipulate what destinations they’re shopping for, and we go to suppliers and show them their products are in demand. Then we work with them to obtain special deals and promotions that we communicate back to customers in promotional emails.”
Advertisers have been strongly receptive to this vehicle. Expedia’s five-person sales staff positions members as affluent, tech-savvy individuals who demonstrate a willingness to make high-dollar purchases online. Demos show an audience that’s 51 percent female and has a median age of 43 (78 percent are ages 25 to 54). HHI is $76,000, according to June 2001 Media Metrix. In addition, 28 percent have a portfolio value exceeding $100,000, and 68 percent have graduated from college or attained even higher levels of education.
Advertisers in Expedia emails represent a mix of travel suppliers and non-endemic-product merchandisers. The roster includes destination marketing organizations FLAUSA and the Mexico Tourist Board, Disney Buena Vista, Avis, Thrifty, Away.com, Northwest Airlines, Sprint, International Living, Best Buy, and several American Express divisions.
CPMs vary from $25 to $90 depending on exposure level, whether an ad is geo-targeted, and if Expedia provides content or other added value. Advertisers receive reports of estimated impressions, click, and click-through rates. With banners, Expedia provides ad requests, rather than impressions, via partner DoubleClick.
Creative testing is ongoing. “Emails are treated as direct-response advertising,” says Gonchar. “Formats are constantly being tweaked, we evaluate CTR, we test subject lines throughout the customer relationship.”
IDT, which markets long-distance and global calling cards, is among advertisers pleased by the response to its email sponsorship. In July it began a targeted banner campaign in FareTracker to generate brand awareness and new business. It ran a column ad and large banner linking to its website. Chris Hogan, Expedia’s Northeast sales manager, reports, “The industry standard for click-throughs is now around .27. IDT well exceeded that average and is renewing their contract. Compared to all vehicles IDT used, Expedia email pulled in the top 10 percent.”