TripAdvisor Promotes Its Meta-Search Feature In New Branding Campaign

by Trefis Team
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In an effort to promote its newly launched meta-display feature, TripAdvisor (NASDAQ:TRIP) is launching its first offline campaign in the U.S. The company plans to spend approximately $30 million on the TV campaign which will start showing this fall onward. [1] Though the advertising cost could further put pressure on its operating margin, we believe that by promoting TripAdvisor’s meta-search feature to a wider audience the ad campaign can help expand its user base in the future.

In TripAdvisor’s earlier feature, its partner pages appeared behind the main browser window when a user entered a travel query. However, TripAdvisor has started integrating all the search query results on the main page known as meta-search. This enhancement allows users to see hotel pricing options and availability from booking partners on a single page. During Q4 2012, TripAdvisor rolled out the meta display feature to 100% of its smartphone traffic and started testing it on desktops and tablets in Q1 2013.

With over 50% of its global traffic using the meta feature, TripAdvisor declared last quarter that it saw higher conversion rates after the introduction of meta display. The meta-display feature will roll out to 100% of TripAdvisor’s users by the time the campaign hits the market.

Priceline recently completed its acquisition of Kayak, a leading meta-search company, which accounts for over 50% share of the U.S. meta-search market. Last year, Priceline launched its first offline advertising campaign to build the brand in the U.S. to narrow its market share gap with Expedia. The two companies combined spend around $65 million annually on TV advertising. ((TripAdvisor prepares to launch its first TV ad campaign in the US, Tnooz, May 31, 2013))

Despite growing at a comparatively slower pace compared to other economies, the U.S. travel market is the biggest in terms of online travel sales with estimated revenues of $151 billion in 2012. [2] While the aggressive ad campaign might restrict its short-term market growth, we think that it will help TripAdvisor compete better with other established players in the region.

See our complete analysis for TripAdvisor’s stock

Our price estimate of $53.73 for TripAdvisor is at a discount of over 10% to the current market price.

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  1. TripAdvisor prepares to launch its first TV ad campaign in the US, Tnooz, May 31, 2013 []
  2. Online Travel Sales Explode In Latin America, eMarketer, November 20, 2013 []
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