Monday Keynote, United.com’s Pete Peterson
Pete Peterson, president of United.com’s Travel Distribution and Airlines Loyalty Services gave what was one of the meatiest keynotes I’ve ever seen at an AdTech or any other industry show for that matter. (Due to the fact that wifi is only in the hotel lobby and another round of sessions are starting momentarily, I must be brief in summarizing the speech, though I’ll try to come back and flesh this out more later.)
Peterson began by noting that the travel industry has been impacted by the Internet more than virtually any other industry. Whereas in 1996, there was virtually no travel sales transacted online, in 2004 more than $50 billion will be, according to online travel researchers PhocusWright, and by 2006 that should account for more than 50 percent of all leisure and “unmanaged business” travel. Whereas eight years ago, industry watchers were dubious as to whether the likes of Expedia and Travelocity would ever be profitable, today they and Orbitz are all multibillion companies.
Moreover, all of the web portals for the major airlines are also doing more than $1 billion in annual sales, accounting for 25-30% of United’s overall revenue, which Peterson said was similar for his competitors. In fact, the airlines’ web portals account for 60 percent of all online travel revenue.
All aspects of online travel - air travel, car rentals, hotels, cruises, vacation packages - are growing fast, with travel packages currently the hottest sector of the market.
Why is travel doing so well online? It’s a perfect product to sell over the net, Peterson contends; there is nothing to try on, nothing to taste, nothing to test, nothing to ship and no waiting. From a point of view of convenience and control, the web offers unparalleled service for travel. In fact, United.com’s goal “is to offer service better than a human interaction.”
In addition to profiling United.com’s many sophisticated features for customers, Peterson also profiled several successful campaigns the company has done in web advertising, rich media, PDA integration, cross-media campaigns, email, search and more. More than anything, he emphasized that research and analytics on campaigns and user experience was key to United.com’s success. Among the programs he highlighted that the airline uses for tracking the success of its online marketing efforts are:
- site traffic analytics (including the vendor Insight First)
- Internet “prototype review” (meaning a survey of 5,000 customers about recent changes to the home page)
- continuous usability testing (weekly customer focus groups)
- expert heuristic review (outside consultants)
- direct user feedback
- usability board (a board of advisers composed of members of product strategy and development and internal web experts who regularly meet to critique the web site and online marketing efforts)
In that period, United has also introduced full travel services to the site, including car rental, hotels, cruises and packages, and while many of the services are fulfilled by partners, the airline has determined that customers who use those features buy considerably more air travel through the site. Tracking sales and costs of sale is the bottom-line metric of every campaign. Peterson was able to cite the average increased price of ticket sales and reduced cost of acquisition for several of the online ad campaigns he highlighted.
In summary, the best news of this keynote was that the lessons of AdTech are getting through to the marketers who matter. This being the 21st AdTech conference, it often feels like we’re all just preaching to the choir about measuring ROI so carefully and researching customer experience, etc. Yet seeing a multibillion-dollar company open up its marketing operations so freely to show that, in the lingo of the late ‘90s, “they get it,” makes it feel like it’s all been worthwhile after all.
