Marketing Strategy for Booking.com
Background :
Booking.com relies on an agency booking model. Instead of selling rooms at a markup booking collects a commission on the rooms booked through its service. This results in minimal transactional costs for both the customers and the suppliers(hotel owners). As the travel space has insane levels of competition, the plan is to help booking.com acquire more users which in turn will attract more hotels to sign up on the platform which in turn attracts marginal users.
Expedia along with hotels.com etc has a total of 65 million room nights whereas Booking.com along with its subsidiaries(priceline, kayak, agoda) has a total of 116 room nights that accounted to 22% growth. In contrast, Expedia‘s growth is a lot faster at 36%.
The biggest challenge for Booking.com(which causes the lack lustre growth) is that most of the travellers who book hotels still rely upon 3–4 different websites and review sites and most of them still complete the process at a brick and mortar agent. This indicates a lower degree of confidence in price and content accuracy.
Breaking down the propensity of Booking.com’s interest in Digital marketing services from an agency into two fundamental signals:
- Need: OTA’s like Booking.com and Priceline need not learn any new lessons on using search engines to acquire customers. They have excellent teams working on outbound marketing and traditional advertising. However, from a customer trust point of view digital agencies can come up with creative campaigns(mostly on social channels) that induce trust and thus increase the look to book ratio.
- Budget: Booking.com’s annual adspend in 2017 is ~ $4.3 billion. So, no issues there.
Since there is an inherent need for Booking.com to build brand affinity and increase customer retention to bring down the CAC in the long run, the agency should have adequate leverage.
Goal of the marketing campaign: To reduce the Marketing cost per booking, to induce brand awareness and improve customer trust and sentiment.
Metrics: In view of all the above facts we will be assuming the CAC and look to book ratio as the north star growth metrics for Booking.com. Since customer affinity is a subjective variable, we will tie this to a real-world metrics like NPS score or survey responses.
Core Messages :
- The primary message that these marketing campaigns convey the customer is “No transactional costs for the user”. This is the point of differentiation for Booking.com and can be crafted into a good message(all other OTAs charge around 15% of the transaction).
- The second message of these marketing campaigns highlights Booking.com’s other strong point — superior discovery. Since it is increasingly difficult to find a hotel last minute in all price silos with other vendors.
- The third message will aim to boost the look-to-book metric of Booking.com by effective social messaging that induces trust and triggers customer affinity towards the brand. A series of videos/rich media messages to boost Customer loyalty. This is infact the most important message since this happens to be the area they are struggling.
Target Audience: The campaigns will be targeted display ads/video adverts for users who are looking at hotel reviews, who are actively travelling and are likely to travel-basically having the intent(people who subscribe to r/travel, r/digitalnomad and other subreddits, engaging with travel pages on Insta/Fb, read travel blogs, consume identical content on youtube).
Channels: Untraditional PR, Facebook, Instagram, Youtube, GDN.
TLDR: We help Booking.com boost its net revenue by decreasing customer acquisition costs over the long run by using geographical targeting across not so traditional marketing channels. It also helps boost customer trust and affinity towards the brand by rich media ads on the most effective social platforms.
