You’d think it’s July and travel industry would slow down in marketing spend, as travel season gets underway. However, the competition is too high and booking sites continue to battle with each other, as well with independent hotel chains and hotels. It was reported that online travel agencies now control more than half of online hotel bookings. According to Ad Age’s 200 Leading National Advertisers 2017 report Priceline group was ranked 96, it grew ad spending by 10.3% to $461mln to promote brands like Booking.com etc.
Booking.com is a representative of new wave of marketers. These brands are born with Internet and they are online marketing gurus. They are different from traditional ad agencies that have years of experience running TV campaigns. Booking.com hires data scientists and researchers and other digital media buying experts in order to do all digital media buying in-house. According to Booking.com CMO, Pepijn Rijvers, there are several reasons for that.
First, Booking.com was not happy with latest collaboration with one of the media buying ad agencies. “We’d have meetings where we’d sit down and say, ‘We should put this much on YouTube, this much on other sites,’ et cetera,” Pepijn Rijvers told Business Insider. “And then three months later we’d ask, ‘How’d we do?'”.
Second, lack of speed and data is behind Booking.com’s decision of cutting out a middle-man and doing all media buying in house. “I would not like to have meetings with long decks of data,” Rijvers said, who recalled trying to set up “meetings with 30 people at agencies that take a week and a half to set up. […] We have way more data than the media agency has. I’d make a very strong case that anything that generates data, you need to own as a business. You cannot have anyone else be the expert.”
It’s a big change for an ad agency industry: will other companies follow Booking.com’s example of taking all aspects of marketing in-house? In addition, the ad industry already suffered last year from report compiled by the Association of National Advertisers, who found that cash rebates and “other non-transparent practices” to be pervasive in the US media-buying world. In short, the ad agencies were spending client’s money without being transparent about what they were buying and how much money they were making.
Booking.com has also a strategy to compete on US-market, where it’s presence is not as strong as in Europe. “We are still fairly new to the U.S. and relatively unknown compared to many of the others,” said Rijvers. Booking.com is planning more varied marketing soon, such as stunt-driven activations, sponsorships and deals with influencers.
Lessons for Others
Booking.com is a data-driven company with in-house transaction-oriented ad buying marketing department. It’s interesting to follow their progress, as their marketing strategies may have an impact on the whole industry.
Industry: Online Travel Agency
Name of Organization Contact: NA
Authored by: Ksenia N
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Schields, Mike. The future of ad agencies has never been more in doubt. Retrieved on 2017, June 30th. http://www.businessinsider.com/companies-are-cutting-out-ad-agencies-and-going-in-house-2017-6
Schultz, E.J. and Pasquarelli, Adrianne. Online Travel Agencies Go on $ummer $pending $pree. Retrieved on 2017, June 30th. http://adage.com/article/news/online-travel-agencies-ummer-pending-pree/309570/
200 Leading National Advertisers 2017 Index. Retrieved on 2017, June 30th. http://adage.com/article/datacenter/200-leading-national-advertisers/309283/
Chaturverdi, Anumeha. We are constantly innovating: Gillian Tans, CEO, Booking.com. Retrieved on 2017, June 30th. http://economictimes.indiatimes.com/articleshow/59043690.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst