Google Confidential and Proprietary 1
Expedia UK Marketing Mix Effectiveness Analysis Evaluation of how offline and online media drive shoppers on
Expedia.co.uk
April 2010
Google Confidential and Proprietary
Overview & Context
2
Flight Hotel
Car
Package
Leading UK online travel agent
Average > 1.5 Million Visitors
to the website every week
Four main Lines of Business (LOB)
Note: Size of box represents the size of shopper
volume by line of business
Expedia has sophisticated attribution methods that primarily focus on the direct impact of
marketing and distribution channels
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
About MarketShare Partners
3
•! Strategic analytics firm deploying industry’s most advanced analytic
models for marketing effectiveness, ROI and allocation
•! Reputation of being the most innovative firm in the category, with
focus on advanced math, thought leadership and action
•! Significant experience with new media, including search, social
networks and display
•! Heavy emphasis on application of analytics to make better decisions
going forward
•! An independently owned company delivering 100% objectivity in
assessing marketing effectiveness.
Resource Allocation for the 21st Century
www.MarketSharePartners.com
Google Confidential and Proprietary
Project Objective & Scope Advertising effectiveness models for Expedia.co.uk
4
Expedia Shoppers
TV
Radio
Outdoor
Online Search Press
Economy
Paid Search
Online Display/Advertising
Share of Voice
Competition
Partnerships
/Affiliates
Seasonality
Web Traffic
Key Project Objective
MSP was asked to build econometric
models quantifying the drivers
& synergies of Expedia’s advertising
resources in driving ‘Shoppers’ and online
brand search.
Total Shoppers across all lines of business (Jul 07 – Nov 09)
A shopper is a somebody
who specifies travel criteria
on the Expedia home page and then selects search
Shopper Visual
2007 2008 2009
Why model Shoppers?
The shopper metric was selected as it
represents a pure measure of how
marketing is driving consumers with intent to
purchase
What is a Shopper?
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
Expedia Advertising
5
Cross-media analytics enables the direct and indirect effects of advertising to be measured
Expedia Shopper
By Line of Business by
Source of Traffic
TV Press
Season Base Level
Radio OOH
Online
Adv
PPC
Pay/
Click
Distribu
tion
Direct
Relationships
Indirect
Relationships
Measure how the drivers indirectly affect/drive
intermediate outcomes
Measure how the drivers directly affect/drive the outcome
Indirect
Relationships
Control for and extract the Season and Trend
Model Structure: Direct and Indirect Paths to ’Shoppers’
Offline
Online
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
Evident correlation between media channels and brand search
6
Visually we can see the impact traditional media has on Google search
Print Adverting Driving Online Search
2009
Brand Search
on Expedia
Advertising
2008
Brand Search
on Expedia
TV
Advertisin
g
GO
OG
LE
QU
ER
Y V
OLU
ME
IN
DE
X
£ A
DV
ER
TIS
ME
NT
INV
ES
TM
EN
T
£ A
DV
ER
TIS
ME
NT
INV
ES
TM
EN
T
GO
OG
LE
QU
ER
Y V
OLU
ME
IN
DE
X
Source: Expedia & Google UK
Television ‘Burst’ Adverting and the impact on Online Search
Source: Expedia & Google UK
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
After modeling, the results are surprising....
7
The significance of traditional media driving online search is huge, TV has been an undervalued hero
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
TV Press Outdoor Radio
% c
on
trib
utio
n d
rivin
g s
ho
pp
ers
Indirectly Driving Shoppers
Directly Driving Shoppers
The combined Direct and Indirect media effects and contribution to driving shoppers (Credit Where Credit Is Due)
The way Expedia are viewing and
evaluating the performance of their
media has been changed as a result of understanding the
direct and indirect effects
14%
86% 58%
42%
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
Moving from thinking about the past to thinking about the future
8
Historical contribution vs. Marginal ROI
PAST FUTURE
For future investment decisions, measuring
these indirect paths simply allows the right level of investment to be allocated to each
medium to deliver back optimal return
Despite uncovering indirect
effectiveness of Expedia’s media, this doesn't mean the recommendation is
to invest more in those mediums as a result.
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
0 2 4 6 8 10
TV
Press
Radio
Outdoor
Partnerships
Paid Search
Indexed Optimal Budget Allocation
Modeling enables optimal budget setting by media channel
9
The optimisation routine supports the need for re-evaluation of media allocation
Historical allocation vs. Optimal Allocation (Same Budget) Historical allocation vs. Optimal Allocation
0 2 4 6 8 10
PPC Package
PPC Hotel
PPC Car
PPC Flight
PPC Brand
Indexed Optimal Budget Allocation
8% increase in shoppers for same budget
29%
8%
-50%
25%
33%
-40%
13%
25%
50%
133%
20%
Negative values
doesn't mean the
medium isn't effective. It simple infers that the
optimal investment
level versus the past
should be lower
Source: Expedia & MarketShare Partners, April 2010
Optimal allocation
Historical allocation
Google Confidential and Proprietary
Shopper response to PPC Marketing
10
Paid search response curves for Expedia.co.uk
0
20
40
60
80
100
120
% C
hange in S
hoppers
£ Investment 1
1.05
1.1
1.15
1.2
1.25
1.3
1.35
% C
hange in S
hoppers
£ Investment
PPC Package (underspending)
PPC Flight (underspending)
PPC Hotel (overspending)
Expedia Branded Clicks Response Curve
Investment period Jan 2008 – Oct 2009
Generic Clicks by Line of Business
Current (underspending)
Optimal
Important Note:
Maximums on paid search been applied to constrain the optimization - Hitting inventory constraints by LOB
Investment period Jan 2008 – Oct 2009
The response curve illustrates how ‘shoppers’ respond to increases in PPC investment.
The optimal point on the curve is where marginal response across each medium is equal.
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
Quantify the payback from marketing
11
Link between marketing and sales via the Direct and Indirect paths
TV PRESS RADIO OOH PAID
SEARCH
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01! 234$,-($5''%67+58$&-7..()&$
91! :386.8;$,-($5''%67+58$&-7..()&$<;$,-(%)$*583($,7$=>.('%5$
?1! @5A($,-($,7,58$5''%67+58$*583($5+'$'%*%'($<;$B7&,$
Indexed R
OI S
cale
8.4
0.7
0.6
3.7
1.8
Indirect ROI Contribution
Direct ROI Contribution
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary
Client Response
12
!"#$%&'(()*#+,-$-.-/01%($*#2"'+($3,4#$5#62&-$%&#+,27$2'$'8,.#$*#+,-$9'&$+&,4,.3$:&-.+$(#-&%"$-.+$2"#$;'<#&$'9$
=''3/#>($?+@'&+($2'$%'.4#&2$:&-.+#+$%'.(A*#&$,.2#&#(2$,.2'$B6;#+,-$("';;#&(C$$$
!"#$*'+#/($%'.D&*#+$2"-2$?+@'&+($,($#4#.$*'&#$;'<#&9A/$2"-.$/-(2$%/,%E$-F&,:A1'.$(%"#*#($20;,%-//0$*#-(A&#C$
!"#$.#2$&#(A/2$,($2"-2$B6;#+,-$"-($-$"'/,(1%$;#&(;#%14#$'.$"'<$'A&$-+4#&1(,.3$-.+$+,(2&,:A1'.$%"-..#/($<'&E$
+,&#%2/0$-.+$,.+,&#%2/0$2'$+&,4#$("';;#&(C$$@#$-&#$A(,.3$2"#$*'+#/($2'$&#-//'%-2#$'A&$*-&E#1.3$,.4#(2*#.2($2'$
#62&-%2$*-6,*A*$4-/A#$9'&$#-%"$;'A.+C7$
Alex Gisbert (Director Online Marketing Partnerships – Expedia EMEA)
Expedia.co.uk
5B6;#+,-$"-($4#&0$(';",(1%-2#+$-F&,:A1'.$*#2"'+($2"-2$;&,*-&,/0$9'%A($'.$2"#$+,&#%2$
,*;-%2$'9$'A&$*-&E#1.3$-.+$+,(2&,:A1'.$%"-..#/(C5$
G-&E#2H"-&#$I-&2.#&($<'&E#+$"-.+$,.$"-.+$<,2"$B6;#+,->($J.(,3"2($2#-*$2'$#/#4-2#$'A&$
-F&,:A1'.$*#2"'+($2'$-$.#<$/#4#/C$$!"#,&$%&'(()*#+,-$-.-/01%($#.-:/#+$A($2'$;&#%,(#/0$
*#-(A&#$2<'$,*;'&2-.2$2",.3(K$
LM$"'<$B6;#+,-$-+4#&1(,.3$+&,4#($:&-.+$(#-&%"$'.$=''3/#$NO$-.+$,.%&#-(#+$PQJ$
RM$"'<$#-%"$-+4#&1(,.3$*#+,A*$,*;-%2($#-%"$/,.#$'9$:A(,.#(($
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary 13
Summary
1 Modelling direct and indirect paths to purchase helps uncover
additional effectiveness of offline media – especially for TV in this case
2 Reallocating the same budget to the optimal mix could drive an extra
8% shoppers for Expedia
3 Branded PPC search is very effective in driving incremental shoppers
for Expedia over and above organic search
4 The models confirm that AdWords is even more effective than last click
attribution schemes typically measure
5 Expedia is using these models to reallocate their marketing
investments to extract maximum value for money
Source: Expedia & MarketShare Partners, April 2010
Google Confidential and Proprietary 14
Expedia UK Marketing Mix Effectiveness Analysis Evaluation of how offline and online media drive shoppers on
Expedia.co.uk
April 2010