the optimal media mix for expedia to drive more shoppers ... · shopper response to ppc marketing 0...

The Optimal Media Mix for Expedia to Drive More Shoppers to its Website Evaluation of how offline and online media drive shoppers on Expedia.co.uk Google/Expedia/Marketshare Partners UK, April 2010

Source: Google/Expedia/Marketshare Partners, How Expedia Drove More Shoppers to its Website, UK, April 2010

Agenda

1 Overview, Project Objective, and Model

2 Results

3 Summary

2


Digital: Overview, Project Objective, & Model


Overview

Flight Hotel

Car Package

Leading UK online travel agent

Average > 1.5 Million Visitors to the website every week

Four main Lines of Business (LOB)

Note: Size of box represents the size of shopper volume by line of business

Expedia has sophisticated attribution methods that primarily focus on the direct impact of marketing and distribution channels

4


Expedia Shoppers

TV

Radio

Outdoor

Online Search Press

Economy

Paid Search

Online Display/Advertising

Share of Voice

Competition

Partnerships /Affiliates

Seasonality

Web Traffic

Key Project Objective MSP was asked to build econometric

models quantifying the drivers & synergies of Expedia’s advertising

resources in driving ‘Shoppers’ and online brand search.

Total Shoppers across all lines of business (Jul 07 – Nov 09)

A shopper is a somebody who specifies travel criteria on the Expedia home page

and then selects search

Shopper Visual

2007 2008 2009

Why model Shoppers?

The shopper metric was selected as it represents a pure measure of how

marketing is driving consumers with intent to purchase

What is a Shopper?

5

Project Objective Advertising effectiveness models for Expedia.co.uk


Expedia Advertising

Expedia Shopper By Line of Business by

Source of Traffic

TV Press

Season Base Level

Radio OOH

Online Adv

PPC Pay/Click

Distribution

Direct Relationships

Indirect Relationships

Measure how the drivers indirectly affect/drive

intermediate outcomes

Measure how the drivers directly affect/drive the outcome

Indirect Relationships

Control for and extract the Season and Trend

Model Structure: Direct and Indirect Paths to ’Shoppers’

Offline

Online

6


Digital: Results


Evident correlation between media channels and brand search

Print Adverting Driving Online Search

2009

Brand Search on Expedia

Print Advertising

2008

Brand Search on Expedia

TV Advertisin

g

GO

OG

LE Q

UE

RY

VO

LUM

E IN

DE

X

£ A

DV

ER

TIS

ME

NT

INV

ES

TME

NT £ A

DV

ER

TIS

ME

NT

INV

ES

TME

NT

GO

OG

LE Q

UE

RY

VO

LUM

E IN

DE

X

Source: Expedia & Google UK

Television ‘Burst’ Adverting and the impact on Online Search

Source: Expedia & Google UK

8


After modeling, the results are surprising....

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

TV Press Outdoor Radio

% c

ontri

butio

n dr

ivin

g sh

oppe

rs Indirectly Driving Shoppers

Directly Driving Shoppers

The combined Direct and Indirect media effects and contribution to driving shoppers (Credit Where Credit Is Due)

The way Expedia are viewing and

evaluating the performance of their

media has been changed as a result of understanding the direct and indirect

effects

14%

86% 58%

42%

9


Moving from thinking about the past to thinking about the future

PAST FUTURE For future investment decisions, measuring these indirect paths simply allows the right level of investment to be allocated to each

medium to deliver back optimal return

Despite uncovering indirect effectiveness of Expedia’s media, this doesn't mean the recommendation is to invest more in those mediums as a result.

10


0 2 4 6 8 10

TV

Press

Radio

Outdoor

Partnerships

Paid Search

Indexed Optimal Budget Allocation

Modeling enables optimal budget setting by media channel

Historical allocation vs. Optimal Allocation (Same Budget) Historical allocation vs. Optimal Allocation

0 2 4 6 8 10

PPC Package

PPC Hotel

PPC Car

PPC Flight

PPC Brand

Indexed Optimal Budget Allocation

8% increase in shoppers for same budget

29%

8%

-50%

25%

33%

-40%

13%

25%

50%

133%

20%

Negative values doesn't mean the

medium isn't effective. It simple infers that the

optimal investment level versus the past

should be lower

Optimal allocation Historical allocation

11


Shopper response to PPC Marketing

0

20

40

60

80

100

120

% C

hang

e in

Sho

pper

s

£ Investment 1

1.05

1.1

1.15

1.2

1.25

1.3

1.35

% C

hang

e in

Sho

pper

s

£ Investment

PPC Package (underspending)

PPC Flight (underspending)

PPC Hotel (overspending)

Expedia Branded Clicks Response Curve

Investment period Jan 2008 – Oct 2009

Generic Clicks by Line of Business

Current (underspending)

Optimal

Important Note: Maximums on paid search been applied to constrain the optimization - Hitting inventory constraints by LOB

Investment period Jan 2008 – Oct 2009

The response curve illustrates how ‘shoppers’ respond to increases in PPC investment. The optimal point on the curve is where marginal response across each medium is equal.

12


Quantify the payback from marketing

TV PRESS RADIO OOH PAID SEARCH

ROI is derived in three steps: 1)  Sum the addi6onal shoppers 2)  Mul6ply the addi6onal shoppers by their value to Expedia 3)  Take the total addi6onal value and divide by cost

Inde

xed

RO

I Sca

le

8.4

0.7

0.6

3.7

1.8

Indirect ROI Contribution

Direct ROI Contribution

13


Digital: Summary


Summary

1 Modelling direct and indirect paths to purchase helps uncover additional effectiveness of offline media – especially for TV in this case

2 Reallocating the same budget to the optimal mix could drive an extra 8% shoppers for Expedia

3 Branded PPC search is very effective in driving incremental shoppers for Expedia over and above organic search

4 The models confirm that AdWords is even more effective than last click attribution schemes typically measure

5 Expedia is using these models to reallocate their marketing investments to extract maximum value for money

15

the optimal media mix for expedia to drive more shoppers ... · shopper response to ppc marketing 0...

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