Path to expansion takes in every corner of world

Marketing Week (MW): You joined Expedia in March from LG Electronics, what changes have you made in that time?

Andrew Warner (AW): When I joined [Expedia] it was almost like being given a blank sheet of paper to restructure how we worked as a European operation rather than a disconnected series of country operations.

We now have a more central model. Everyone who works in our European marketing team is based in our London office. We no longer have a marketing team in each country, but we do have about 400 employees around the world, who work as market managers – they are the people on the ground who are our eyes and ears in each individual market.

We work as a co-ordinated European team around PR and marketing, social media and point of sale. That allows us to have a mix of local insight and cut out the layers of decision making so we can move really quickly, which can help us stay ahead of the game.

MW: In October, Expedia announced that it was going to re-tender its advertising agency business across Europe. What are you looking for from the successful candidates?

AW: As we used to have separate marketing teams in each country, we also had a number of agency partners which worked in that context.

We want our agency structure to reflect the way in which we now work. We want to be flexible, quick and able to co-ordinate things out of London. We also want to work with people who understand the local markets we operate in so we don’t just put out bland international campaigns that no one engages with.

In the UK, Germany and Italy…we have really strong market positions and are pretty much the leader in terms of trust and brand awareness

We are looking to find some more creative breakthrough thinking. But we don’t want an idea that is just going to work in Soho and win creative awards, we want an idea that we can translate across our markets, will drive transactions and help us build our brand in the long term.

MW: What sort of initiatives are you working on to move the business forward in 2011?

AW: Next year we are going to launch more products and services than we have launched over the past five years, which is a real step change for the business.

Earlier this year, we conducted a pan-European study to define what the segments are in the European market and how Expedia can best serve them – from the more price-conscious segment, to the business traveller who travels frequently and has a different set of needs from someone who is just looking for some summer sun.

MW: How will you serve those individual customer segments that your research has highlighted?

AW: There will be products that are more targeted to a particular type of customer, for example a younger customer who is in their first job and doesn’t have a great deal of money to spend on a holiday but is keen to see the world. We will be looking at products that are more price sensitive and deal-centric than we have done in the past.

We will also be looking [to target] the other end of the spectrum by exploring how we can leverage digital media channels to better serve fast-moving business people – ways they can interact with us more immediately, for example.

There are other trends we are also responding to. We have seen domestic business go up by about 25% in most of our markets this year, so we have increased the number of independent hotels that we have available on the site. We are also looking at ways to better highlight the different types of hotels we offer so people don’t have to wade through thousands of results to find what they want.

Next year the real focus will be in the UK, Germany and Italy where we have really strong market positions and are pretty much the leader in terms of trust and brand awareness.

MW: Will the Expedia brand need to be revitalised further as you highlight your new offerings?

AW: There is an opportunity to do more interesting stuff than perhaps is the norm in the travel category. We’re as guilty of this as anyone, but if you look at the range of communication from the sector it’s hard for the consumer to tell who’s who – that came through in our research.

We want to cut through all of that clutter in the sector and really differentiate.

MW: Is it becoming more difficult to differentiate with the rapid expansion of the online travel market in the past two years?

AW: It’s hard in some ways to define who your competitors are because the travel industry is so multifaceted. In all the countries that we operate, we have slightly different competitor sets that go with local market nuances. Our competitors in Europe include Priceline, Booking.com, Lastminute.com and ebookers.

Then there are the established travel operators that are upping their game when it comes to online. And you can define the market as leisure, too, so that brings in a whole raft of other competitors. We’re trying to focus on making sure we understand our position relative to those competitors.

MW: How will you be pushing the brand outside the UK in order to continue Expedia’s expansion?

AW: Next year the real focus will be in the UK, Germany and Italy where we have really strong market positions and are pretty much the leader in terms of trust and brand awareness. We will look to invest more in these markets to build on this position and grow our breadth of services. In The Netherlands and Scandinavia we will be looking at more of a customer acquisition approach.

MW: Does being a digital brand make the business more adept at developing a digital communications strategy to keep ahead of the competition?

AW: It’s not about asking: “What is our digital strategy?” Instead, it’s about asking: “What is our strategy and what is the best way to engage with these segments that we’ve identified?”

For example, in The Netherlands there is a social media site called Hyves that you don’t get anywhere else, but it is huge in the Dutch market. This is an important channel for us to consider and engage with in this region.

MW: Will Expedia follow the trend of brands becoming content providers?

AW: Our focus is on the booking experience, so we work with content players to bring together our booking service and their content. We will probably not become a content publisher in our own right, but as we delve more into social media we will be creating more user-generated content for the site.

MW: How does Expedia work with its sister brands such as TripAdvisor and Hotels.com across all of the regions?

AW: We operate as separate businesses even though we are in the same group. For example, it’s important to TripAdvisor’s model that it remains impartial so we are deliberately kept separate.

MW: How has recent negative press around TripAdvisor and the validity of online reviews affected what customers think of your brand? Do you feel a need to educate the market on the importance of customer reviews?

AW: Making sure our customers are more informed about the choices they are making is a good thing. Most consumers are pretty savvy when it comes to reading reviews and they are smart enough to weigh up the comments that are out of step with the consensus of other viewpoints against the majority of opinion.

Expedia is slightly different from TripAdvisor in that we will only run reviews from people who have definitely stayed at that place. There are pros and cons to both approaches.

MW: What are the advantages of marketing an online brand compared with a physical product?

AW: The great thing about being in a digital business is that we have an opportunity to understand how our customers are really interacting with us in real time.

When you make a physical product you spend a lot of time developing it, then you can get to the shopfloor and realise it’s not quite how you expected it to be, so then you have to work to address that. In our business we can very quickly see if something is working or not. We get dynamic feedback through the site and we can act on insights far more quickly than a traditional supply business.