Travelocity Boosts TV Buy 50% to Improve Online Search Results

More Roaming Gnome Spots Needed to Keep Brand Name Top of Mind

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NEW YORK (AdAge.com) -- Want to sell more products online? Buy good old-fashioned TV.
As competitors Expedia and Orbitz cut back on their TV ad spending, Travelocity is shifting money out of newspapers and radio to boost its TV ad budget. | ALSO: Comment on this article in the 'Your Opinion' box below.
As competitors Expedia and Orbitz cut back on their TV ad spending, Travelocity is shifting money out of newspapers and radio to boost its TV ad budget. | ALSO: Comment on this article in the 'Your Opinion' box below.

That's the conclusion of Jeffrey Glueck, chief marketing officer for internet travel agency Travelocity, which is increasing its TV ad budget to encourage travelers who book online to search out its name rather than generic terms such as "discount travel" or "Hawaii vacation."

'Dirty little secret'
"The dirty little secret to search [engine advertising] is you make money buying your own brand name, but on generic terms, the clicks are more expensive and the return is low," he said. "So how do you get those customers to search you out by brand name? You do more TV advertising."

Mr. Glueck did not say how much he would increase his TV outlay, but it's already apparent that Travelocity is putting more effort into the medium. Last year, the company spent one-third of its $85.2 million budget on TV, according to TNS Media Intelligence. Through the first six months of this year, Travelocity dedicated half its total $53.5 million budget to TV. So expect to see more of its iconic and ubiquitous "Roaming Gnome" created by its agency, McKinney, Raleigh, N.C.

Cut newspaper and radio spending
Travelocity is still on target to spend the same online in 2006 as it did in 2005, but in order to up its TV budget, it cut newspaper spending 33% and radio buys 67% in the first six months of this year compared to last year.

By comparison, Travelocity's main online competitors, Expedia and Orbitz have trimmed their TV spending so far this year by 13% and 31%, respectively, according to TNS.

"There has to be some differentiation somewhere," said Jeffrey Grau, retail e-commerce and online travel senior analyst for the online-market-research firm e-Marketer. "The online travel agencies are in a real dogfight. They're seeing their share taken away by aggressive suppliers like hotels and airlines, who are drawing people to their site. They're struggling to differentiate and looking for ways to create loyalty, and that's very difficult."

Travelocity, in fact, earlier this month introduced a loyalty program awarding points for dollars spent on its site for flight and hotel packages.

Brand search terms
According to a presentation Mr. Glueck recently made, brand search terms cost about 20% of his online marketing budget but deliver an 80% return. Search terms can cost as little as a dime and as much as $59, which is the cost for the term "mesothelioma." The reason? Mesothelioma, a form of cancer most often caused by exposure to asbestos, also leads searchers to links to personal-injury lawyers.

A report from Jupiter Research estimated that online ad spending will reach $15.7 billion this year, with search totaling $6.5 billion, or 41.4%.

"You can buy your brand name for pennies," Mr. Glueck said. "But our industry is also highly competitive, which makes generic terms expensive, and the ROI is far less than you'd expect."

Josh Stylman, managing partner of New York search-ad agency Reprise, said he is seeing more dedicated online companies turning back to traditional media and is surprised it hasn't happened sooner.

'Not be in a silo'
"The whole notion of internet marketing is to not be in a silo," Mr. Stylman said, adding that more and more web users are searching for URLs through search engines rather than trying to type in the exact name or remember the spelling. "Search activity is driven by the interest generated in other media. TV commercials drive search usage."

Mr. Stylman cautioned, however, that competitors often take advantage of such situations online. Google, for instance, allows companies to buy other marketers' brand terms but doesn't allow their use in creative. Still, General Motors Corp. showed how effective that can be during the Super Bowl. While rival Ford Motor Co. was introducing a "green" automobile, GM was scooping up search terms such as "eco-friendly" and "Kermit" (the Frog, which Ford used in its creative).

"That was a great example of one company using their competitor's energy against them," Mr. Stylman said.
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