For months, traffic to Castrol.com has trailed rivals, notably Shell.com.  That all changed in September, with the Castrol site reaching its highest traffic level in at least a year and pulling ahead of Shell.  The gains were unique to Castrol, so are not seasonal.  Not seasonal to oil at least…

Continue reading “More Castrol Traffic No Fantasy” »

On August 12th, JetBlue announced an All-You-Can-Jet promotion which allows travelers to fly anywhere JetBlue flies as often as they would like within a month for $599. JetBlue ended the program sooner than expected as response was stronger than anticipated. The program had a number of quirks that make it challenging to track the drivers of its success. For example, you could enroll and book only via phone. The phone-based system may have also facilitated enrollment in JetBlue’s frequent flyer program—required if you were not a member already.

While enrollment and booking was limited to phone, consumers could still visit JetBlue.com to learn more. Compete measured the potential interest by trending daily reach of JetBlue.com before, during, and after the promotion. Reach equals the share of all US Internet users that visited a website.

Reach results corroborate the overall success. In the period, JetBlue captured the highest percentage of all internet users on the two days immediately following the launch of AYCJ (August 12th and August 13th). Reach drops quickly thereafter, but traffic to JetBlue.com may have been supplanted by consumers reading news and other sites that explained the program and included the phone number.

Compete also evaluated reach success over the past year. On average, JetBlue’s reach is 0.09% over the past year. The impact of AYCJ is still evident, but pales in comparison to the March 4, 2009 event. Compete leveraged its archive of homepage screenshots and historical clickstream data to identify this event as a one-day only sample sale, with fares starting at $29. On March 4th, JetBlue reach hit 0.39%, 322% over the yearly average. The All-You-Can-Jet promotion drove reach to 0.29%, or 215% over the yearly average. The results suggest that overall JetBlue may have been more aggressive (or more successful) with promotions in 2009 (several big spikes) than in 2008, again limited to traffic to JetBlue.

Reach is only part of the story, and in many cases with online promotions—travel and otherwise—more traffic is not always high-quality traffic. Because of the integral telephone element of AYCJ, the online impacts may not be immediately obvious. For example, the more the AYCJ bookings were incremental, the lower the corresponding drop in online bookings when the program was active. Longer term impacts could be evident by more travelers engaging with the TrueBlue® loyalty member areas, without a pre-cursor increase in online enrollments (that is, those that enrolled via telephone as part of AYCJ but who later check status and redeem awards online).

But the bottom line question is to what extent any incremental revenue from the program was offset recently and over time by the higher price of telephone-based reservations vs. online reservations, today and longer-term. That’s something only JetBlue may know.

Twitter continues to capture the attention and imagination of marketers; the site has posted twenty consecutive months of all time highs in site traffic. Its 23M+ monthly user base (as of July) provides a huge opportunity for brand marketers to directly engage customers, drive brand awareness, and drive revenue. Jetblue, Southwest and United are the most active airline brands on Twitter with approximately 1M, 460K & 30K ‘followers’ respectively (at the time of writing). Leveraging its ability to track consumer behavior across the internet, Compete measured the directional potential for twitter traffic to drive airline business by quantifying the extent to which shoppers of these airlines also visited Twitter.

At a high level:

• Airline site visitors’ propensity to visit Twitter is up nearly six-fold year-over-year
• Moreover, there is a positive correlation between airlines on Twitter than promote low rates and airlines’ booking success

Visitors to Twitter

Approximately 1 in 5 visitors to each of the three airline websites in July 2009 also visited Twitter.com that month (not accounting for those using mobile clients or other software applications). That figure is up a staggering 562% on average from a year ago. The gains are relatively consistent across the three airlines assessed.

Connecting Twitter to Revenue

Overlap is only part of the story however; the real end-game is evaluating the impact on business. A key challenge for marketers is to employ the right metrics to measure progress. To do that, Compete indexed the July conversion rate of airline supplier shoppers who visited Twitter against those who did not (conversion meaning visiting the airline site and booking a trip on-site). The higher the index, the higher the relationship between Twitter and revenue.

While all three airline sites have similar Twitter.com visitation rates (first chart), there are clear differences in the Twitter conversion lift experienced.

• United & JetBlue visitors who also visited Twitter in July 2009 were more likely to complete a booking than visitors who did not visit Twitter (10% and 35% more likely, respectively)
• Southwest visitors who also visited Twitter were 7% less likely to complete a booking that those who did not

Findings could indicate that Twitter played an important role in driving business for United and Jet Blue, but had a negative effect on Southwest bookings. But there is more to the story: United and JetBlue use Twitter not primarily to engage and inform customers (as Southwest & other brands do) but to heavily promote very low airfares. In fact, JetBlue launched a Twitter page dedicated to these low fare promotions or “Cheeps” on July 6th, while United has been promoting Twitter-only “Twares” since May 20th. Given that each airline’s visitors posted a similar growth in Twitter overlap and given the difference in the index results, it is possible that some Southwest visitors booked on JetBlue or United after seeing the low-fare Twitter promotions.

Implications

Travel industry insiders agree that Twitter holds transformative potential for deal publishers, big and small. And given Twitter’s explosive growth, airline & other travel marketers will undoubtedly be lured into using it to engage current customers, influence prospects and execute promotions. As with any media, the richest success comes from employing the soundest strategy and the best intelligence, but at the same time implementing quickly and dynamically. Given social media’s widespread reach, missteps will become public quickly, and a sound strategy is needed to mitigate blowback from well-publicized consumer complaints.

On the flip side, the best social media intelligence will allow marketers to understand where to find customers and prospects, to measure success in engaging those consumers, and to connect to ROI on an ongoing basis (just as Armano alludes to in his fifth point in the Harvard Business Review). Connecting social media efforts directly to ROI, while challenging, will allow for quick identification of innovative successes (including those of rivals) and for early detection of when the space becomes so saturated with a technique that it loses its effectiveness. This will help players in the travel industry optimize their efforts to integrate with and participate meaningfully on Twitter and other social networks.

In March and April of this year, some of the biggest online travel agencies (OTAs) cut their flight booking fees. The booking fee changes were largely a response to competitive pressures: why would a consumer pay a fee on an OTA site when the same flight is available at the same price on the airline site without a fee? Moreover, Priceline has been operating without flight booking fees since the summer of 2007. Compete leveraged behavioral data from its panel of millions of US consumers to examine who wins and who loses in a world without flight bookings fees.

The short answer is that the impact was strong, immediate, and beneficial for the OTAs. Moreover, Orbitz, the OTA most reliant on flight booking fees, has generated impressive improvements in flight bookers and flight booking efficiency since dropping its booking fees on April 7th.

The above shows the top OTA’s monthly share of flight bookers for the period from just before the booking fee changes were announced through June 2009. The top OTA’s share of flight bookers (which peaked at 36% in early 2006) rebounded 7 points from January 2009 to June 2009.

Year-over-year growth in flight shoppers and flight bookers (below) for Q2 2009 (i.e. the change in flight shoppers and flight bookers from Q2 2008 to Q2 2009) for three top OTAs. Travelocity, and Orbitz have experienced significant declines in flight shoppers resulting from the economy-driven cutback in travel shopping as well as a loss of shopper share to the airline sites. Expedia’s quarterly traffic was only down 7.5% year-over-year after a big jump in June flight traffic.

But look at Orbitz booker growth. Compete’s data shows a 22% year-over-year increase in Q2 flight bookers for Orbitz despite the 24% decline in flight shoppers. In the period from March 2008 through March 2009 (the year prior to dropping the flight booking fee), Orbitz saw year-over-year declines in flight bookers of 17% in an average month.

Orbitz is growing its number of bookers by better leveraging the traffic it already has. Figure 3 shows booking rates (the % of site flight path visitors who book a flight in the same month) for the 3 biggest traditional OTAs. Compared to Q2 2008, Orbitz booking rate is up 61% to 7.3% while Expedia’s very respectable improvement is only a 17% gain from Q2 2008.

Orbitz has thrown down the gauntlet to its OTA competitors and demonstrated that it remains a player in flight. However, Orbitz (and the other OTAs) face a couple challenges:

1. Addressing Barriers to Booking at an OTA. OTAs need to understand and respond to consumers’ motivations for booking on airline sites. Behaviorally-targeted surveys are an opportunity to discover preferences and attitudes among a group of consumers who, for example, Compete observed shopping at an OTA for a flight but booking at an airline site.
2. Adapt to Airlines Marketing Tactics. Dropping OTA flight booking fees are likely to produce a strong response from the airlines. United’s plan to have some agencies pay the airline’s credit card fees on flights they book may be the first response by the airlines. OTAs need to closely monitor and benchmark their traffic and conversion against the other OTAs and airline sites.

Note: The Expedia numbers in Figures 2 and 3 have been updated to reflect a change in Compete’s calculation of Expedia flight traffic. Please see the comments below for more details

Each month roughly 22 million US consumers shop for hotel rooms online at hotel supplier sites or online travel agencies – with notable peaks and troughs in the summer and winter months respectively. In Q1 2009, hotel shopper volumes surged to an all-time high 24.5 million monthly shoppers, outpacing the seasonally-strong third quarters in 2008 and 2007.

In the fourth quarter of 2008, amidst a challenging economic environment, consumer interest in hotels slowed even after accounting for seasonality. While the previous three quarters in 2008 experienced 4% growth from a year ago on average, online hotel shopping activity in the fourth quarter was virtually unchanged from Q4 2007 levels. In Q1 2009 however, aggregate hotel shopping bounced back, growing a healthy 13% from the previous year, the best growth performance in recent history.

While current economic forces have undoubtedly played a role in shaping consumer behavior offline and online, consumer interest in hotels online has continued to grow. During each quarter in 2008 and in the first quarter of 2009, online hotel shopper volumes were up from the same period a year ago. Though this study does not take into account the discounted rates and deals that hotel marketers may be using in order to stimulate demand, it is nonetheless significant in that it shows continued and resilient consumer interest in hotels. If travel sellers put together the right combination of price and product, consumer demand will be there to snap it up.

Social networks have been quite successful in capturing the attention of consumers online. As the level of interaction consumers have with this group of sites continues to grow, the opportunity for travel marketers to leverage these sites to drive brand awareness grows as well. Moreover, social networks are becoming increasingly well-positioned to drive traffic to brands in the online travel industry. From February 2008 to February 2009, the number of total monthly visits to social networking sites jumped 60%; just over 2.5 billion visits were made to social networking sites in February 2009.

As the volume of visits to social networks grows, it is not surprising that many online travel sites are experiencing increased traffic coming from this segment. We find first that the share of referrals from social networks to hotel websites is growing rapidly (up 151% since February 2008). Indeed, a similar trend (with respect to social networks’ share of referrals) exists for many other segments within and outside of the online travel industry. The more interesting finding is that the conversion rate of the referrals from social networks to hotel websites exhibits a similar growth trend, growing 98% year over year. Taken together, these findings indicate that social networks are increasingly a source of in-market traffic for hoteliers.

To be sure, as the role of social networks as a traffic source for the online travel industry continues to rise, the opportunity for savvy marketers to tap into the potential of these sites to generate incremental business value also grows. Competitive digital intelligence is a great tool for travel marketers in this respect and can be used to analyze which social networks resonate with a particular brand and to assess the conversion performance of social network referrals at competing brands to discover unexploited opportunities. It can also be used to investigate brand shopper engagement with various social networking features to ascertain which features and functionalities would align with a brand’s own social media implementations.