Lee McCabe has been the global head of travel at Facebook, the social network with 1.2 billion users, since October 2012. A veteran of Expedia, he knows the travel industry well.
McCabe recently spoke with Tnooz by phone about how travel marketers are getting better at using Facebook to gain transactions.
He had a lot to say about mobile, particularly about how Facebook can help travel companies maintain engagement with their own branded mobile apps. He also thinks travel suppliers still haven't fully grasped how mobile will upend their digital marketing strategies.
A closer attention to travel marketing
In 2011, Facebook created a team of employees whose jobs are to liaise with travel brands. McCabe oversees this group, which he says was created:
"...to better understand brands' needs, learn to speak their language, and most importantly, build the right products and services for the industry.... We verticalized for several industries, not just travel.... I can't give you specifics, but travel is one of our fastest growing verticals."
Facebook doesn't disclose its headcount numbers or revenue by vertical. But a source at the company has put the travel vertical headcount at a little more than 50 employees.
Q&A with McCabe
Does the travel industry understand mobile?
I think the online travel agencies get it, but I don't think suppliers understand that the whole travel booking paradigm is changing -- moving from web to apps.
A recent PhoCusWright report shows that mobile travel bookings will be 12% of bookings -- not just online but the total travel market -- in the US next year. [via US Online Travel Overview Report Thirteenth Edition].
That's huge. And it requires different tactics than marketing for the desktop web.
We're moving away from this world where people will browse 20 to 30 different websites. Surfing, browsing, and searching.
We're moving toward apps. On mobile devices, apps offer a superior user experience than the web does. That's why show something like 80% of the typical mobile user's time is spent on apps.
A huge chunk of that, maybe 25% of that mobile usage, is time spent on Facebook's own app, people's window on the world.
If you think the average person only has about 26 apps on their mobile device, they'll never have a lot of travel apps. They will probably have an aggregator app, like an OTA or a metasearch. Maybe a hotel brand they're loyal to. An airline they're loyal to. Maybe a car rental one.
In terms of transactional apps, that will pretty much be it. All the rest of the apps will be utility -- maps, currency conversion, maybe language.
So bearing that in mind, all these travel companies want to, first, develop a good app that people like, and, second, do everything they can to get as much penetration on as much mobile real estate as possible.
First mover advantage is going to count. Once a user has an app that he or she is happy with, the opportunity or inclination for switching will be low. This is where the world is moving. Especially for apps about travel bookings.
So there's just a huge window of opportunity now to 1) landgrab that as quickly as possible -- which Facebook will play a big part in faciliating -- and 2) keep people active on the app -- and again, we'll play a big part in that. In both cases via ads in News Feed that encourage people to take action in travel brands' apps.
Another thing the industry isn't grasping is that apps are about more than just about smartphones. Today we think of apps only about smartphones or tablets. But in the next five years, all the new devices will be app-driven. In-car platforms, like Apple's CarPlay, that will all be app-driven.
And whatever direction we go in with wearables -- smartwatches or smart glasses or something else -- I don't know which. But I do know they'll be driven by apps.
What's a successful example of Facebook helping a travel client boost mobile app installs?
Hotel Tonight, the same-day booking app, is a good example of a company we've had a positive case study with. It was able to get a 10 times higher click-to-install rate using Facebook’s mobile app install ads.
Mobile app install messages can appear in News Feed. When Hotel Tonight advertises. We display an ad unit that says something simple like "Hotel Tonight -- Install now". Clicking on the link takes users to, say, the Android or Apple store for easy installation. That is working really, really well.
Anything newer in mobile?
We recently released "mobile app engagement."
So once users have installed your app, it's important to keep people aware of it and to maintain usage. So rather than the call-to-action being "install now", it can be "book now."
An example might be Hotel Tonight. The ad in the News Feed references a specific hotel, it says "book now," and if you click on that, Facebook can deep-link you straight into the Hotel Tonight app's checkout process for that specific property.
On mobile, has Facebook's new Creative Labs ruled out making a travel-specific app, similar to Paper?
Facebook Creative Labs is an area we launched only a couple of months ago. It gives the company a lot of potential and flexibility to test new things. There's a lot in the works.
Is it true that Facebook is just not the place for bookings?
I disagree with that. We have the reach, we also have the targeting.
You mention the targeting, but lack of precise targeting has frustrated many companies. For instance, why can't travel marketers target users who have checked in to a particular city/place?
These are things we're developing all the time. We have various betas in place to get that targeting as good as it can be. I can't comment on specifics, but you'll see more targeting options emerge, when it comes to travel.
But bear in mind, we're learning more and more about what travel marketers need. A subset of that is what they would like in targeting capabilities.
Facebook's been promising targeted social marketing since 2007, but many critics say it hasn't delivered.
I'd disagree with that broadly. But specifically in travel, we've come a long way in a few things in past year and a half.
We now have far better solutions that speak better to travel marketers' needs. Today marketers can far better measure the effects they care about.
Can you give some examples?
The things that are working especially well are re-targeting. We have better re-targeting than anybody else. We can help you precisely and rapidly find the people who matter to your business.
Facebook Exchange, a solution that came out of beta in 2012, that's working really well.
Re-targeting is not a new concept, but it works particularly well on Facebook because of the recency.
The key to retargeting is getting the message in front of someone as quickly as possible. Especially in travel. If a customer is looking at a hotel, it's pointless to do the re-targeting a week after or three days after or even a day after.
This is where Facebook wins. Because people use Facebook so much every day on mobile devices, typically a travel company can get a re-targeted message in front of somebody within one hour. We see a high correlation between recency and conversion.
Custom Audiences is also really working well. Travel companies have their own data. They can match their data with ours, to find their existing customers on our platform.
All of these tools, plus our reach, together make Facebook the most efficient and effective marketing platform for travel.
The third thing that's working exceptionally well for us is our mobile business, especially to drive downloads and repeat usage of travel brands' own apps.
What's one of the biggest misconceptions travel brands have about how to use Facebook?
In the past few years, some marketers have been confused by the word social. They've really over-complicated that word.
At the end of the day, nobody has an objective of being social. Their objectives have been the same for the past 50 years. Their objectives are usually around brand awareness and inspiration, or around conversion and revenue, or around loyalty and retention.
I would say, the companies that do well on Facebook are very clear about their objectives. Do they want to inspire, convert to bookings, or retain?
Then they know the people they need to target for each objective. They test the messaging until they find the right one that resonates and then they refine the timing.
As soon as they're meeting their primary objectives of inspiring, converting, or retaining, the social aspect comes afterwards. That's a bonus.
When you target people well with the right message, you'll boost brand awareness or transactions or retainment. Telling their friends is something that comes after.
Grasping that flow is something some companies have been getting wrong for the past few years.
What has been the impact of apps allowing hotels to make bookings within FB, on a scale of 1 to 10 (1 being shite, 10 being gasping for breath at its awesomosity)?
Bookings on Facebook were never the right strategy for travel brands.
In-Facebook apps were never meant for bookings. Here’s why it wasn't necessary: Most of these companies have good booking engine on their own sites. So why create a lesser version of that on a Facebook app? You can deep-link users into their own booking engine.
That's what companies are doing. Converting with the right mention. With one click, getting transactions on their own sites.
Is Facebook just about inspiration?
No. We see hotel chains, airlines, CVBs, booking apps, and other players getting great results at all stages -- not just at inspiration.
In the Facebook context, the three main marketing goals are inspiring people at scale on the platform, converting users and booking transactional revenue, or building loyalty for repeat business and word-of-mouth recommendations.
Specifically talking about bookings and converting customers, we're also seeing marketers getting there. Again, Facebook is a very efficient and effective marketing platform for companies that have the right creative and who think about how to target accurately.
Most of the time, travel brands do that by focusing on the right people in News Feed. The users click on ads and click off to the brands' own sites, where users will complete the transaction.
But Facebook isn't driving those bookings, right?
You could say same for metasearch. The bookings don't actually happen on metasearch but it’s a big driver of conversion. Facebook is, too.
I don't think it's important the transaction actually has to happen on the Facebook platform. Letting the transaction happen on brands' own site is fine.
Hotels, airlines, and other travel companies are starting to get better at using Facebook. As they do, conversions will increase.
Travel brands live in a world where they're seeing declining open rates and action rates in email marketing. Companies are reacting by wanting to target their own customers on a site those customers are using every single day.
They’re testing a lot of things, working on how to use this platform well for retention. They're learning how to speak to their customers in a personalized way in frequent messaging. It's a new skill for them, but they're seeing that it does help retention.
Is there an increase in the number of travel brands working with Facebook's travel marketing team testing new techniques?
Yes, on the increase. We work, I would say, with every major travel company. They're testing more and more, and they're investing in what works.
When you say "Facebook is working with every major travel company," what does that mean?
We have a sales team. They work with the OTAs, airlines, hotel chains, and other players to understand their business objectives. They work on strategies that will help their partners to meet those objectives on Facebook.
Have brands' booking tools custom-built within Facebook delivered enough value to keep them happy?
In-Facebook apps were designed for engagement. The best practice in travel, by far, is TripAdvisor. Its app has driven substantial engagement and has helped in inspiration and brand awareness.
A BBC report recently talked about how marketing brands are plagued by clickfarms, "fake likes," and other illegitimate social marketing issues. What's your advice to travel brands?
Here is our statement to the Facebook Fraud YouTube video:
Fake likes don’t help us. For the last two years, we have focused on proving that our ads drive business results and we have even updated our ads to focus more on driving business objectives. Those kinds of real-world results would not be possible with fake likes. In addition, we are continually improving the systems we have to monitor and remove fake likes from the system.
Just to be clear, he created a low quality Page about something a lot of people like – cats. He spent $10 and got 150 people who liked cats to like the Page. They may also like a lot of other Pages which does not mean that they are not real people – lots of real people like lots of things.
Facebook acquired Instagram, a platform travel brands also use. But there doesn't seem to be much coordination between the two. Why, for instance, can't a travel brand's images shared from Instagram have any influence on Facebook engagement? If a consumer likes an image on Instagram, and then the brand posts that to Facebook, the image starts with zero likes on Facebook and no sense that it was popular.
When Facebook buys companies, it tends to keep them separate. Each company manages its own future and grows itself.
It's still early days for Instagram, a company that's still testing on a lot of things on how to work for verticals. It's too early to give specifics or comment.
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ELSEWHERE ON THE WEB: Report: Facebook plans to slash "organic page reach" down to 1 or 2 percent, ending the free ride
Facebook has posted several travel marketing case studies online.
EARLIER ON TNOOZ:A Facebook take on travel in 2014 – silent, blurred and visual
NB:Image of McCabe courtesy World Travel and Tourism Council/Creative Commons/Flickr.