Expedia ads get going

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Expedia, flying high on stronger financial results but facing daunting new competition, this week launches an estimated $25 million ad campaign touting the easy use of its travel site.

The push breaks May 31 and uses the same tagline inaugurated in Expedia's first brand campaign in January 2000: "Don't just travel. Travel right." The new effort, however, focuses on specific advantages of the Expedia site. In one of two humorous TV spots, for example, a couple planning a romantic getaway realizes amid the planning that their teen-ager needs to come along.soon finds their teen-ager going along. The site then allows for an easy transition to the new number of travelers.

Commercials are slated to run on network cable programming, with radio, print and magazine ads starting later this spring. Interpublic Group of Cos.' Deutsch, Los Angeles, is the agency.

The Web site reported a net loss of $17.6 million for the quarter ended March 31, vs. a $66.5 million net loss a year earlier. Excluding non-cash charges, it reported its first profit ($4.4 million), ahead of expectations. Microsoft Corp. owns 69% of Expedia.

The stock price May 24 was $28.95, down from its 52-week high of $32.77.


Jupiter Media Metrix, in its April 2001 category listing, ranked Expedia third in unique users with 6.8 million visitors; AOL Time Warner's MapQuest had 9.9 million, and Travelocity.com, 70% owned by Sabre Holdings Co., had 7.4 million. AOL's Travel Channel, tallied in a different category, had 8.7 million unique visitors.

The $15 billion plus online travel category, though burgeoning and one of the few still healthy dot-com segments, is increasingly becoming more competitive. Even though revenue is growing, competition is heating up with entrants into the category including Orbitz, an online travel agency owned by five airlines.

In a May 9 report, Goldman Sachs said it was "bullish" on e-travel long term, but saw a risk due to the softer economy, reduced commissions and the Orbitz launch. Southwest Airlines, not a part of the group, has sued Orbitz.

Goldman Sachs analysts noted Expedia has gained market share from Travelocity, which remains the largest online travel company in terms of gross bookings, with $833.6 million for the quarter ended March 2001, vs. Expedia's $674 million. However, Goldman said Travelocity's market share dropped from 59% in December, 2000 to 55% in March 2001, vs. an increase in Expedia's share from 41% to 45%.

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