TripAdvisor is opening a TV front in its hotel booking battle with Priceline Inc's major US brands.
This autumn, TV viewers in the US will be blitzed with advertisements for TripAdvisor's new hotel booking meta search service.
This national TV campaign will be TripAdvisor's first. The company will spend $30 million creating and placing the commercials, according to AdWeek.
In a typical year, the US TV advertising spend of the major online travel brands works out to roughly as follows: Priceline: $35 million, Travelocity: $55 million, Expedia: $45 million, Kayak: $30 million, and Orbitz: $20 million.
TripAdvisor needs to have a profitable success with its hotel metasearch service, which should roll out to 100% of TripAdvisor's users by the time the ad campaign is expected to start this fall. It needs to reversea trend in declining margins since 2009. After spinning TripAdvisor off, Expedia cut its per-click commission fee it pays to TripAdvisor, slashing TripAdvisor's 2012 revenue by about 5%, according to financial statements.
In February's quarterly earnings conference call, Priceline's president and CEO Jeffery H. Boyd made these remarks about TripAdvisor's hotel metasearch offering:
I think we understand why TripAdvisor is doing it and we are significant customer of TripAdvisor. They send us a lot of business and we pay them for advertising.
Ultimately, we believe that the user experience of TripAdvisor is distinct from that of primarily metasearch business and certainly distinct from that of an OTA and that distinctive brand experience for us is positive in terms our advertising relationship with them.
I don't have any educated insight on this, but my guess is that TripAdvisor will try to maintain that distinctive user experience and that the metasearch will just be one feature of what is a unique experience that are offering today.
Given the ad spend size of TripAdvisor's campaign and the pressure to turn around the trend in margins, Boyd may have underestimated TripAdvisor's commitment to making its hotel meta search tool the Kayak killer.