Microsoft Corp. spun off part of the Internet travel site in November, but still retains an 86% stake.
Expedia ranked as the No. 2 travel site after America Online, with 3.9 million unique visitors, according to Media Metrix's November ratings, the most recent data available.
Media Metrix rankings put the site slightly ahead of Sabre-owned Travelocity, but Travelocity's merger with Preview Travel could move Travelocity solidly ahead of Expedia. The site also faces competition from more than 20 airlines, which last week announced a joint online effort that's to embark by summer. Even so, Expedia is confident it will emerge the leader in the online travel space.
COMPETITORS FOCUS ON PRICE
"Most of the competitors in the industry position themselves around price, low fares and cheap tickets," said Erik Blachford, VP-marketing, Expedia. "We're positioning ourselves as a travel adviser. . . . We're not really targeting our service at the folks who are interested in saving money at all costs. We're here to present people with all the different options, and they can make their own choices."
With the merger of Travelocity and Preview, expected to be completed in the first quarter, Travelocity will gain clout in dealing with customers, suppliers and developing "best-in-class resources," said Melissa Shore, analyst in digital commerce strategies at consultancy Jupiter Communications.
"Expedia has a six-month window to really set itself apart," Ms. Shore said. "The brand campaign will certainly help [Expedia.] They'll test a variety of promotional offers, but they should allocate some of the money to targeted marketing offers to convert registered users to actual customers."
In gross bookings, Expedia and Travelocity have been neck and neck in recent months, she said.
Other Expedia competitors range from Priceline.com to offline travel agencies such as Liberty Travel and American Express Co., which has stepped up online efforts in recent months.
Expedia's target? People who have bought an airplane ticket in the past year and want a relationship with a travel agency they can trust, Mr. Blachford said. These people tend to be college educated, Web savvy and have above average incomes.
Expedia recently dropped its registration requirement, a move it believes will spur growth. Many travel and e-tailing sites require registration and passwords, a step Jupiter found deterred 40% of consumers from using them. Even without registering, "We'll still store your information when you make a purchase and offer personalization benefits," said Suzi Levine, Expedia product manager.
Expedia's campaign via Deutsch, Marina del Ray, Calif., sympathizes with travelers and the disappointments many face, with the tag: "Don't just travel. Travel right."
"Ocean Bluff Hotel," the first of two TV spots in the initial ad flight, shows a couple misled by the name of their vacation accommodation. When the taxi driver takes them to the Ocean Bluff Hotel, they find it's not even on the beach. Creative leverages Expedia's yellow airplane logo to highlight tips and guidance.
"We wanted to create a personality that's friendly and on your side, whispering in your ear all the stuff you wish you knew when you book travel," said Eric Hirshberg, exec VP and executive creative director for Deutsch.
Outdoor ads for Chicago show the headline: "The `El' is quicker to O'Hare" emblazoned on the yellow airplane icon and "Just another tip from Expedia.com."
Print highlights functions such as Expedia's Fare Calendar. One ad pictures a calendar and airplane icons, one with "Flight to Hawaii, $625," and "Flight to Hawaii, $297" on the next day.
"People share this feeling of being a victim, of not being in control," Mr. Hirshberg said.
Expedia's $50 million might be close to near-term revenue -- an indication of the level of brand-building that's commonplace among dot-coms. The $73 million raised in its IPO gives Expedia cash that can help pay for the advertising.
SKIPPING THE SUPER BOWL
Unlike many dot-coms, Expedia won't participate in the Super Bowl frenzy.
"We don 't think that's a particularly smart way to spend our money right now," Mr. Blachford said.
Instead, Expedia, through Deutsch, has focused on cable TV, local newspaper and radio ad buys, and magazines such as Wired and Yahoo! Internet Life. Localized outdoor will target 10 markets.
Avenue A, Seattle, handles all online ad buys, which include sites such as Ask Jeeves, Women.com Networks and E*Trade Securities.
A second TV spot that will break next week focuses on Expedia's ability to inform travelers of airports' on-time percentages.