“The challenge for us, as an Internet company that doesn’t have signed-in users, is how many smartphone users are doing the research there and then going back to desktop or tablet to the purchase. Anecdotally, we know it’s a chunk,” Kaufer said, adding the metrics to track that don’t exist yet.
The company invested in technology, including a content recommendation engine called “Just for You,” which considers factors like user location, site behavior, travel preferences and intent. Kaufer cited that as a huge step forward for the company, given that consumer travel needs are “nuanced, contextual and episodic.”
That personalization may lead to long-term gains at the expense of short-term revenue.
“If we get people to the correct property quickly, they might generate two clicks, from four to five clicks,” said CFO Julie Bradler. “But the quality of our leads improves, and clients pay us more. We see that, time and time again, fewer clicks can generate higher CPCs down the road.”
TripAdvisor’s mixed quarter put it in company with Priceline, which said it was facing trouble with a weaker economy in Europe affecting travel. Expedia, which has more of a national business, grew profits by 50%. In this competitive environment, TripAdvisor ramped up television spending to $19 million for the quarter, for a total of $30 million for the year. It plans to expand offline advertising through 2015.
The digital-only company voiced a familiar complaint with gauging the effectiveness of a TV spend. “We see that lift,” Kaufer said, citing surveys, Google trend data and increases in site traffic as sources, “but it’s hard to tell who would have come anyway.”