Sounding Off: Every travel brand needs to find a new route to customers

Mark Mahaney, RBC Capital Market

“Expedia needs to wean off of Google SEO as a source of traffic or face getting further squeezed as Google continues to convert more traffic from free to paid.”

Quote from Mark Mahaney, RBC Capital Market’s lead internet analyst, in an article on PhocusWire this week on executive changes at Expedia Group.

Each Friday, PhocusWire dissects and debates an industry trend or new development covered on our site that week.

There are a number of reasons why Mark Okerstrom has found himself without a job at the end of this week.

Financial analysts – those that have the ability to send the stock price of any brand up or down a few notches with just a few words – have had their say, of course.

And there is the merest of suggestions that perhaps he really was never in tune with the board and the all-powerful Barry Diller, given that the chair’s protege Dara Khosrowshahi (who, it is worth pointing out, had remained a director) had left to run Uber in the summer of 2017.

Scuttlebutt aside, Okerstrom’s departure should be a wake-up call for brands across the industry.

His recent comments during Expedia Group’s third quarter earnings for 2019 illustrated just how damaging Google’s gradual creep into travel has become, at least in terms of those brands that rely so heavily on it for customer acquisition.

Okerstrom’s big, overarching strategy was the final nail in the executive coffin for him, according to Diller, but there must be many company bosses around the industry who do not have the marketing power of an Expedia Group (or, indeed, Booking Holdings) and are wondering how the next few years will play out.

Search – be it paid-for or organic – has changed beyond recognition and, some might argue, the game is up for both brands and Google.

The ecosystem that provides free (through search engine optimized content) or loosely qualified leads for a price is becoming less efficient and, as online travel agencies such as Expedia Group, are finally calling it out as having a detrimental effect on their business.

“A new Google” is not going to emerge at scale any time soon, let’s face it, but there are other avenues that might need to be explored.

Social media, through Facebook or Instagram, is one option. But this, arguably, is not at the top of the funnel for many consumers when they are in the travel shopping zone.

This is perhaps why the emergence of a new source of traffic in the shape of Amazon is so curious to many in the industry, especially if it adopts the “marketplace”-type offering that it deploys elsewhere for consumer goods.

Whether it’s Amazon or some other channel, the current process for customer acquisition is unlikely to remain in its current guise for much longer.

In short: it can’t.

PhocusWire’s regular editorials

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