Study shows online travel is not impulse buy

NEEDHAM, Mass. -- A new study by TripAdvisor indicates that online travel marketers need to track consumer visits over time to better measure campaign performance. TripAdvisor, the first and only performance-based marketing service targeted specifically at the travel industry, has announced the results of a study conducted during the month of March 2002 to measure consumer purchase behavior for hotel and vacation products. The study highlighted the fact that consumers often take as long as a month to purchase "complex" online travel products, including hotel and vacation packages.

Of particular significance for travel marketers, the study also highlighted the need for tracking mechanisms to measure the performance of marketing campaigns as far out as a month after a consumer's initial visit to an online travel commerce site. In fact, when measured a month after a consumer's initial visit to an online travel commerce site, the cumulative conversion rates were five times higher than those measured for the same group of consumers for the day of the initial visit.

During the month of March, TripAdvisor measured the number of conversions or purchases on several third party online travel commerce sites that resulted from CPC (cost per click) marketing campaigns run on TripAdvisor.com and its network of sites. In this time period, TripAdvisor measured the number of conversions resulting from these marketing campaigns across a sample size of 25,000 leads or people that clicked through on the CPC marketing campaign to visit the online commerce site.

TripAdvisor measured the total cumulative number of conversions (purchases) for the marketing campaigns for three periods: the same day that the visitor initially clicked through and visited the travel commerce site, five days after the initial click through to the travel commerce site, and one month after the initial click through.

Conversion rates

When measured at the one-month mark, the cumulative number of conversions (purchases) was five times higher than those seen on the day of the initial click through and visit to the commerce site, and two times higher than what was recorded at the five day interval. The results show that the proper "look back" period (time from consumers initially visiting a site to making a purchase) for "complex" leisure travel products such as hotel and vacation packages is at least a month.

When measuring the effectiveness of their marketing campaigns, travel marketers need to take into account that leisure travel is not an impulse buy, and that consumers often take a month or longer conducting research before deciding upon a major travel purchase.

In fact, the study concluded that if measured purely based on the purchases generated by the initial click through and visit, with no regard for repeat visits, most marketing campaigns for travel products will incorrectly appear to have very low conversion rates and will be deemed a failure. To more accurately measure the effectiveness of a marketing campaign, tracking tools must measure a consumer's visits for several weeks or months after their initial click-through on a marketing promotion.

After initial visit

"We conducted this study to give our marketing partners useful data on the time it takes consumers to purchase travel products after viewing advertising campaigns," said Steve Kaufer, CEO of TripAdvisor. "These results highlight the importance of implementing adequate tracking tools to identify the consumers that come back to web sites to purchase after the initial visit. If a marketer's tracking tools only measure conversion rates during the initial session or the first five days thereafter, they are going to understate the performance of many marketing campaigns by as much as 50% to 80%."

TripAdvisor offers travel suppliers a performance-based marketing medium that generates claimed average click-through rates of over 10% per page. TripAdvisor a privately held, venture-backed company that has won dozens of awards including "Best of the Web 2001" from The San Francisco Chronicle and "Incredibly Useful Site of the Day" by Yahoo! Internet Life. 

TripAdvisor.com is one of the top travel sites on the web, averaging a reported 800,000 unique visitors per month. Partners include leading travel companies such as Expedia, Travelocity, Trip.com, Orbitz, Priceline, Hotels.com, United Airlines and American Airlines, and its content is featured on other popular sites including www.lycos.com and www.smarterliving.com.