Travelocity: “Profound Mistake To Think We’ve Figured Out How To Measure ROI On Search”

Jeffrey Glueck, CMO at Travelocity, offered some controversial, and to some, nearly heretical comments while speaking at the IAB’s Performance Marketing Forum this week in Chicago. According to coverage in Advertising Age, Travelocity has found that it’s a waste to buy non-branded search terms.

Fully 96% of Travelocity’s bookings coming from paid search are from ads using branded keywords. And just 2% of paid-search conversions happen when a searcher originally clicked on a nonbranded term only to click and convert on a branded term later.

These findings have led Glueck to be dismissive of the “portfolio” approach to search advertising, bidding on lots of generic keywords to drive maximum traffic. This approach is essentially a waste of marketing dollars, according to Glueck, adding that it’s “a “profound mistake by all of us to think we’ve figured out how to measure ROI on search. We’re in stage one.”

These findings may be true for Travelocity, but I’ve also heard many success stories from other search marketers using generic, non-branded or long-tail search terms. It is refreshing to hear a contrarian point of view, however, especially one based on systematic analysis of searcher behavior.

Postscript: See Travelocity: Non-Branded Terms Convert Nearly 25% But “Assists” Might Be Less Than Assumed for a follow-up to this story.

Related Topics: Channel: Strategy | Search Marketing: Branding | Stats: Search Behavior

Sponsored


About The Author: (@CJSherman) is a Founding Editor of SearchEngineLand.com and President of Searchwise LLC, a Boulder Colorado based Web consulting firm. He also programs and co-chairs the Search Marketing Expo - SMX conference series.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



SearchCap:

Get all the top search stories emailed daily!  

Share

Other ways to share:
 

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. Comments may also be removed if they are posted from anonymous accounts. You can read more about our comments policy here.
  • Matt Greitzer

    Challenging the assumption that non-branded keywords drive brand conversions is important. I think the relationship will be different for every advertiser; we’ve looked at this across different industries and find results vary widely. In general, we see a higher correlation between branded and non-branded keywords leading to a conversion on high consideration items (though apparently Jeffrey does not – a Hawaii vacation is fairly high consideration). I also wonder if Jeffrey is incorporating natural search clicks/conversions into his analysis. This can change the picture considerably.

    On a related note, just curious if anyone found the call-out of 100 keywords making up 50% of search volume way off base.

  • David Quiec

    I cant believe that 96% of conversions are from brand-related search. If you look at the volume alone, you have different variations of travel search:

    las vegas
    las vegas vacations
    las vegas – san francisco
    las – sfo
    las to san fo

    Are you telling me that their 96% of their conversions are for travelocity, travelocity.com, or www travelocity com?

    Or am I missing something here?

  • http://www.traffick.com AndrewGoodman

    Certainly, it’s easier to convert on branded terms in some industries. But just because it’s hard to move beyond the low-hanging fruit… doesn’t mean the orchard owner should get rid of all the ladders.

    Saying just advertise on a few brand terms is coming very close to saying consumers will just come to the site via direct navigation (because aren’t browsers great, and our company is so big). Best Buy will tell you they get a ton of direct navigation to the site especially after a Sunday flyer comes out in the newspaper. Yes, but they’re Best Buy. And the flyer expense over a year is enormous. This says very little about the incremental benefit of search one way or another – especially for smaller, not-top-of-mind firms.

    Surely it isn’t rocket science to convert customers for whom one’s brand name is already top of mind. I don’t even consider most searches for “Travelocity” to be searches. They’re just navigation – “get me to the site, I’m ready to book.”

    But that work is already done – at great expense. So from there, do you just sit on the brand or try to acquire incremental customers? That is the question.

    From what I can tell, Mr. Glueck is not giving paid search credit for what it can accomplish when a broad-based (so-called) keyword portfolio is organized and directed to compelling value propositions and offers. Obviously, if they know they just want Travelocity, then they’re not in comparison mode. Yep, it’s a real challenge to get them to buy from you when they *haven’t* already decided to do business with you. But that’s precisely the challenge that needs to be taken on – because in real life, in real research mode, consumers *are* comparing.

    We don’t know the ROI on search? Let’s start with the ROI on the massive radio & TV ad effort from the top 5 or so travel engines. Isn’t that ROI far more uncertain?

    True, brand terms are easy to convert from paid clicks. But letting competitors have the other terms is the lazy way out. Someone will be growing as a result of cheap exposure in this auction. Drop out because of some inherent bias, and no doubt competitors will be thrilled at the bargain clicks you’ve left in your wake.

    Also, if other terms in the research cycle led up to the final search for the term Travelocity, then the conversion coming from that search term is misleading because the other research might have led to that last search term being typed in purely as a navigational formality. This is precisely why Yahoo has been working on the “assists” concept to explain the role of multiple searches in contributing to a final purchase decision.

  • http://www.emergence-media.com DanielR

    Chris,

    Back in October 2006, Jefferey Glueky said the exact opposite:

    “Although non-brand keywords may not always appear to be valuable at producing sales in search engine marketing campaigns, they often contribute to the profit margins produced by branded keywords, Travelocity CMO Jeffrey Glueck said at Shop.org this week.”

    Link:
    http://www.internetretailer.com/dailyNews.asp?id=20176

    Any clue why the change in tune?

  • http://www.optimizeandprophesize.com/ Jonathan Mendez

    Three steps to understanding why Travelocity has poor ROI on “portfolio” terms.

    1) Do a search on “Las Vegas.”

    2) Click on the Travelocity ad

    3) Look at the landing page

    It’s real easy to blame the keywords and the users. I suggest Jeff asks himself “what have we done to improve our landing page performance?”

  • http://www.efrontier.com Jonathan Beeston

    “You never want to pay for advertising that’s not incremental” says Mr Glueck, but I don’t see how buying brand names gives you that much incremental traffic.

    If you’re dependent on your brand, how are you going grow your business? How are you going to attract new customers who haven’t yet decided where to buy their holiday?

    If I was Mr Glueck, I’d want to know why these non-brand searches aren’t converting. If people want Las Vegas holidays, and I have them, but they don’t sell, eventually I’d have to look at my business and work out why.

  • http://www.logicwerks.com Vu

    There are few tests that I have conducted for couple of my clients. And I can definitely tell from the results I analyzed and observed that all the comments that Mr. Glueck makes depends on brand name, recognition, popularity as well as your industry and account structure. His comments should be made specific for Travelocity name and travel industry. (also Travelocity’s SEM campaign structure)

  • http://www.daviddlaka.com/createvalue/ David Dalka

    point of information…there were a dozen Orbitz people in the audience.

  • http://www.reubenyau.com Pittbug

    So by a “branded term” he means bidding on “travelocity”? Consider the user base that needs to search for that, they probably don’t realize that the top listing is sponsored, so surely this is just an indication that his offline branding is working well?

  • http://www.lynchpin.com?blog=Search+Engine+Land+Travelocity Shona

    If you have one of the longest established online travel brands on the Internet, you’re likely to get a pretty good conversion rate from branded terms….

    Equally, if you pump the majority of your marketing budget into brand-building (TV, display etc.) then it’s hardly surprising that the majority of bookings come through those branded terms.

    Long-tail works differently for different brands, but it has to take into account what is going on across the line and not just looking at PPC in a vacuum.

  • http://searchquant.blogspot.com Searchquant

    My $0.02:
    1)Like Expedia, Orbitz and eBay for that matter, Travelocity built its brand in no small part thanks to massive non-brand keyword buys starting way back in 2002-2003, so when Glueck says non-branded keywords don’t work I think that remark must be taken in the proper historical context. They *don’t* work for Travelocity – when compared to how they performed before every Tom, Dick & Harry in the travel space found search and the tail of search.

    2)I wholeheartedly agree with Andrew and others that the concept of the assist is critical to optimize any paid search campaign these days. That said, however, I don’t think it changes the game that much. We manage ~$350M in annual PPC spend for our clients, and our data indicates that factoring in assists only changes the ROI outcome by a few percent – so that alone isn’t a panacea.

    3)One poster notes that there’s more that could be done to align ad copy and landing page with searcher intent. Improper marketing & merchanding is *the* major issue keeping people from succeeding with non-branded terms, and Mendez rightly notes that that’s where the focus should be. Firms like Offermatica and others offer great multivariate A/B testing platforms to facilitate testing of ad copy and LP’s, but I’ll bet that Travelocity (or their SEM) isn’t doing that work at the scale needed to succeed. I know that for our clients in the travel space, the ones that are kicking ass are the ones whose marketing departments
    a) are incredibly analytical and require that all systems and partners are scalable
    b) spend almost zero time on keyword management (outsourcing to us) so they *can* focus on marketing & merchandising = the real battle.

  • http://www.exposureonline.com exposureTim

    Is it any coincidence they are hiring an SEO?

    Job: Travelocity ‘SEO lead’ job via Indeed

  • http://www.exposureonline.com exposureTim

    (I suspect an SMO job opening soon too.)

  • JGlueck

    Hello everyone. I’ve read all the comments and questions, and fortunately, there are relatively easy explanations I can offer.

    First, there were several inaccuracies and mis-quotes in the original AdAge article, and AdAge has been kind enough to issue a correction. You can read the corrected article at:

    http://adage.com/digital/article?article_id=115594

    AdAge also published subsequently an interview which clarified my speech: http://adage.com/digital/article?article_id=115726

    The corrections answer several of the above questions:

    1) I never said that buying non-brand searh terms was a waste of time, or that it’s impossible to measure. Far from it. At Travelocity we spend half our marketing budget in online and search. My point was that search marketers should get more precise about calculating “assist” percentages, and more accurate in their ROI methods. As the comment from SearchQuant agrees above, I was simply saying that assist percentages only modified our ROI by a few percentage points– same as SearchQuant calculates.

    2) We calculated that 4% of brand bookings should be attributed to earlier nonbrand clicks. Based on better “assist” measurement, we think non-brand terms drive about 24% of our search bookings, rather than the 20% indicated by last click measurement. Every SEM campaign will be different, so you have to calculate your own figures. I was very clear everyone should do their own research, depending on their own unique situation. AdAge misunderstood the 4% assist and jumped to the conclusion that 96% of bookings were from brand terms, but the math is closer to 76%.

    2) The Nielsen NetRatings study I cited was for the TRAVEL category, not the whole internet. It indicated 47% of all searches came from 100 terms, the majority of which were brands.

    3) On the comment by Mr.Greitzer in regards to natural SEO, I would simply say that thanks to click tracking, buyers who come back to a site thanks to SEO links would still be attributed to the original paid CPC click (within a long lookback window), so the problem is not in natural clicks being missed, but rather that last click tracking has problems with multiple paid clicks.

    4) As to the comment by DanielR that my October 2006 speech at Shop.org was a change in tune, that’s an easy misunderstanding as well. In that speech, I cited the authors of a 360i published study which looked at a large number of large etailers (not including Travelocity) and noted that 12% of their brand profits should be attributed to earlier nonbrand clicks. I invited the audience to do their own studies on their own circumstances. Travelocity upgraded its web analytics to VisualSciences and we finally in 2007 were able to do our own study on clickstream for the first time, and that’s where the 4% figure emerged. Every company will be different.

    Regardless of whether the assist is 4% or 12%, that’s a long way from the funnel/clickstream theory that the majority of generic term searchers come back via brand terms to buy. That was my key point, and it remained unchanged. There is some lift/assist, absolutely, just not a huge one.

    5) As to the comments that focusing on landing page optimization and conversion is the key to making paid search work, I couldn’t agree more. I think we’re a strong site– or we wouldn’t sell over $10B of travel a year–but we absolutely can get better. And that will help our non-brand profits.

    6) As to the comment above that offline marketing is completely unmeasurable, I respectfully disagree. Those who heard my speech know that I emphasized multivariate regression models across all channels. My point is that nearly ALL marketing is measurable over the long term, and that unified models will actually measure MORE ACCURATELY than click tracking in some sense, because they get at the inter-relationships between TV and Radio and search.

    In sum, I think search marketing is a fantastic channel. My plea is for companies to get more precise about measuring it, to bid smarter. Because if they don’t, they can lose their shirts. And I suppose, I have a second plea: To read my comments in the proper context.

    thanks,
    Jeff Glueck

Get Our News, Everywhere!

Daily Email:

Follow Search Engine Land on Twitter @sengineland Like Search Engine Land on Facebook Follow Search Engine Land on Google+ Get the Search Engine Land Feed Connect with Search Engine Land on LinkedIn Check out our Tumblr! See us on Pinterest

 
 

Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States

Europe

Australia & China

Learn more about: SMX | MarTech


Free Daily Search News Recap!

SearchCap is a once-per-day newsletter update - sign up below and get the news delivered to you!

 


 

Search Engine Land Periodic Table of SEO Success Factors

Get Your Copy
Read The Full SEO Guide