In many ways, cruise is the outlier of the travel industry.
While more travelers are turning to digital sources to book
their travel – Phocuswright’s U.S. Online Travel Overview 2018 predicts online
penetration will increase from 50% in 2018 to 53% in 2022 – in cruise,
distribution is predominantly managed offline.
Online bookings account for just 20% of overall cruise
revenue, split about half and half between cruise line websites and
But the reliance on agents doesn’t seem to be a negative factor.
Quite the contrary.
While both air and lodging markets are growing, the cruise
industry is outpacing all others. According to Phocuswright’s U.S. Cruise and
Packaged Travel 2018 report, the cruise segment in the United States jumped 10%
in 2018, its third consecutive year of double-digit gains.
And the industry still has substantial headroom for growth.
The Cruise Lines International Association says 26.7 million
people cruised in 2017 - and that number is expected to reach 30 million in
2019. Compare that to the United Nations World Tourism Organization’s estimate
of the total number of international tourist arrivals in 2017: 1.32 billion.
With that large of an unrealized market and the fact that
most ships operate at nearly 100% capacity, it is clear cruise lines are
confident that if they build it, travelers will come.
All major operators are adding to their fleets, with a
steady supply of ships setting sail in the next few years: In 2019 alone, about
two dozen new berths are scheduled.
And to fill those ships, cruise lines have created robust
digital marketing tool kits – filled with an integrated mix of social, search
and content strategies.
As senior vice president and chief marketing officer for
Norwegian Cruise Line, Meg Lee embraces all of those strategies to attract
travelers to the brand’s 16 ships (another seven are in the pipeline).
For the final piece in our cruise industry theme month, we
talked to Lee about Norwegian’s digital marketing strategy, the three pillars
of social, search and content, and how technology is enabling marketers to sell
their products in new ways.
How has the work of a
marketer in the cruise industry change during your time at Norwegian?
When I started here 11 years ago, we were spending a significant
portion of our marketing investment in print and a tiny, nominal amount in digital.
That has completely flipped over the past decade. And that’s driven by consumers.
A lot of it sounds kind of old-fashioned at this point, but at the end of the day
as marketers, we’re still driving the right message to the right person at the right
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The difference is the format of the messages has gotten much
more sophisticated, our ability to target has gotten much more sophisticated and
our ability to time them has gotten much more sophisticated, all because of the
evolution of technology platforms, data platforms and how consumers interact with
internet, cloud-based, digital platforms.
From the time I started working in travel… what has always
been true and has not changed is that word of mouth is the number one driver of
consideration and purchase for vacation consumers. When we are planning for
vacations, what do we do? The first thing is we talk to our friends. The way we
talk to our friends and who qualifies as a friend these days has reached scale thanks
to social media.
Social media is word of mouth on steroids, scalable and
Social media is just
one piece of your strategy. Tell us about the others.
Paid search has always been oxygen. Travel got there
quickly, was an early adopter because you figure out pretty quickly that consumers
are going to search, and if they are going to search for a vacation you need to
be there. That continues to be important and continues to get more and more sophisticated.
So social media, search and then for us, content - which is
a major word on every CMO’s lips these days.
The great things for us is we have tons of user-generated content.
People love to share about their experiences and particularly about their vacation
experience. So we’ve been in the content curation business for many years also
and leveraging that content and interacting with people who are great content providers
and producers to help us, quite frankly. Nothing is better than somebody who’s
actually having a real experience represent that to the world for you. So that’s
been great for us.
Now we are getting more into the business of actually producing
content in a different way that allows us to support the channels that I just
mentioned in a better way - so social media, online and then proving more segmented
and targeted content to make sure we are serving the consumer when they are
looking for a particular vacation, to show them what they need to know to make
the best choice.
media, have you found certain platforms that are particularly effective to
reach your audience?
It all works, essentially. If there are people on the
platform, and they are interacting and they are talking about and planning a vacation,
it works. You have to be where consumers are actually thinking about your category.
We’re thrilled that Norwegian has had the fastest growth rate among our competitive
set across the top three social media platforms [Facebook, Instagram, Twitter]
for the last year, and that’s been growing at double digits. That’s outpacing the
rest of the category due to the fact that we have a team that’s been forward-thinking
about that for many years. That’s not an overnight result. We’ve been in the
social media business since it really started to take off, driven by how consumers
were using the platforms to talk to their friends, to interact with us and to
basically demand that we support that channel.
Social media is word of mouth on steroids, scalable and monetizable.
Meg Lee - Norwegian Cruise Line
And are you using
these social channels both to push out marketing messages and also to provide
real-time customer service?
That is critical. We are in the people business and we are
in the hospitality business and in the service business in every place that
people choose to interact with us. So it’s critical for us that we not only are
using those platforms for the marketing purposes that we use them for - to help
people plan and make purchase decision about vacations - but also to service
them. [And that] continues to grow in terms of consumers wanting to interact
directly with brands, including Norwegian Cruise Line, through social media platforms,
whether it’s Messenger or posts to the page, however they choose to do it. We are
very focused on making sure we service them properly in their preferred
You said paid search
continues to be important – but it’s also gotten expensive. How do you
determine if it’s worth it?
For us it’s not about the expense it’s about the return. And
search continues to be an incredibly efficient channel for us from a return on marketing
investment perspective. We participate in search wherever consumers are
searching for our brand. We are platform agnostic, but of course Google is the
300-pound gorilla - but that’s true not only for search.
For us it’s all about optimizing return and that’s in terms of
people raising their hands to hear from us, people calling travel agents, people
coming to our website, however it is that we measure success. Digital platforms
allow us to really have great visibility into the impact of those channels on
the business, which is one of the biggest benefits of how digital has evolved. It
allows marketers to be much smarter in terms of optimizing investment to ultimately
drive the business and satisfy our consumers.
That visibility you
refer to comes through data – but at some point can there be too much to make
sense of it? And what about privacy issues?
From a data perspective, there’s data, and then there’s
insight and then there’s the action that you can take to actually get a result.
So more is better when it comes to data, but you have to have the people, the platforms,
the tools, the processes to actually pull relevant insights or actions from the
data, depending on if you are talking about an automated campaign effort or something
that is going to drive a more extensive creative effort, in terms of developing
advertising for example.
We’ve had very strong controls in place for many years with best
in class partners assisting us to make sure we are managing consumer data appropriately.
User-generated content, that’s sort of foundational for us. We’ve been doing it for
years and we’ve been using whatever platforms are available to us that are best
in class to curate and manage that to get necessary approvals. For us it’s not
a challenge, it’s really just managing the volume. People are very eager to
share their content with us.
In addition to
pushing our marketing content on various channels yourself, you also provide it
for the travel agent community?
That has been a huge priority for us for many, many years. We
have an industry leading training and education program at NCLU [Norwegian
Cruise Line University]. Norwegian Central
is our online platform that we’ve had for many years. It’s a huge, robust platform
for travel agents to get anything they need about the brand, fully online, [such
as] NCLU training for them to understand the brand and be able to help
consumers understand if we are the right fit for them… to deep destination content if they want to become a specialist… to digital marketing tools as well
as things they can pull down through our online platforms and then go to print
with or put it in whatever format they need for their potential cruise guest.
How important is
Over half of the interactions we get with certain marketing
channels are through mobile. Mobile has been first for us for some time and
that has driven a lot of the evolution of how we do our jobs as marketers in
terms of format and the type of things we are doing with video and building
assets for consumption across all channels. It has to work for mobile. And it
continues to grow every year, and I think everybody in the category at this point
has really been provided investment to make sure we are delivering the right
mobile experience for guests.
...making tangible the incredible experiences that we offer on board and the destinations we take you to is a huge opportunity, and technology enables us to better offer that to consumers.
Meg Lee - Norwegian Cruise Line
I think a key area of opportunity for cruise and for us is
we are all continuing to try to simplify the shopping and booking process, whether
people want to do it on a mobile phone or if they want to do it over the phone
or in person with an agent. It is a complex purchase. It’s usually involving
many people. We want to make that process and smooth and seamless as their
cruise vacation is.
You recently launched
a campaign on Facebook to promote your Alaska cruise with a video that’s about
a minute and a half long – much longer than a typical television ad. Does
digital marketing - and technology in general - enable you to reach consumers in
new and different ways?
What’s so exciting about our industry is that we take people
to amazing places and we deliver incredible experiences. But the destination is
always going to be the key driver for guests who are planning and choosing
vacations. So we have the privilege of now showing that to guests in a very different
way, in places where they are willing to consume huge quantities of content and
spend a lot of time with it.
Digital in general and the way content is going, I think it’s
just a huge opportunity for cruise to help consumers understand the experience
we offer even better. And help more people make the choice to come sail with all
And we’ve seen huge success with bringing those experiences
that are removed from the consumer and the travel agent – i.e. they can’t experience
it right now – but they have to facilitate or make a purchase decision to try
it. An example is the race track that we
launched on Joy and have on Bliss and coming on Encore. We’ve been able to take advantage of new formats like virtual
reality to be able to actually bring that to life for consumers and travel partners.
When we launched Bliss, we had an interactive physical experience that we took around
the country. Everybody who would come to these physical events, whether it was a
trade show a travel agent conference or some sort of event that we hosted around
the Bliss launch, everybody there could put on the goggles and sit in the chair
and have the experience of what it would be like to drive at 30 mph around that
So really making tangible the incredible experiences that we
offer on board and the destinations we take you to is a huge opportunity, and
technology enables us to better offer that to consumers.