Consumer Evolution from Target Audiences to Value Co-Creators: A Case of TripAdvisor

This blog examines the impact of consumer behaviour on TripAdvisor's business and its business model. It also delves into how TripAdvisor has emerged as an influential force in shaping consumers' purchasing choices.

According to Harvard Business Review, TripAdvisor's journey began as a vertical search engine in travel, facing challenges in attracting clients and revenue. The aftermath of 9/11 initially posed hurdles for the platform, but a demo website showcasing its capabilities garnered traffic, leading to TripAdvisor adopting an online advertising model with banner ads. Launching a Cost Per Click (CPC) model proved successful, earning $70K monthly within three months. Transitioning from editor-created content to user reviews further streamlined costs. From an initial $4 million investment, TripAdvisor's value surged to $4 billion, maintaining profitability pound for pound. In 2022, the platform reported impressive financials, with a revenue of $1492M, gross profit margins at 85.72%, and EBIT at (109), as per Wall Street Journal.

Highlighted by a New Oxford Economics Study, TripAdvisor significantly influences the $5 trillion+ global travel economy. As per Statista, in June 2023, the website experienced its highest traffic in four years, reaching 206.7 million visits. Every month, TripAdvisor enables 463 million travellers to plan their trips, and travellers from across the globe use the platform to browse around 860 million reviews and opinions on 8.7 million properties, restaurants, cruises, car hires, flights, entertainment venues, travel packages, guides, and most importantly, travel experiences. This solidifies TripAdvisor's integral role in shaping the travel industry.

Overview of TripAdvisor's Digital Marketing Strategies 

• Travel Community: Over the past half-decade, TripAdvisor has transformed from a conventional travel website to a robust social media platform. This evolution introduces novel features like friend connections, targeted content, multimedia elements (videos and photos), informative articles, and personalised recommendations from friends and family.

• In-house Studio: An integral part of this progression is the recent establishment of Wanderlab, TripAdvisor's in-house creative and content studio. Leveraging first-party data, Wanderlab crafts innovative marketing solutions for brands to target travel enthusiasts with high intent and spending potential.

• Differentiated Targeting: The official website reveals a well-designed layout with sections like Top Destinations, Top Experiences, and Last-minute Getaways. Employing differentiated targeting and concentrated marketing techniques, TripAdvisor caters to two primary audiences: customers (travellers) and businesses (hotels, restaurants, guides, car hires, airlines, etc.).

• Personalised Filters: Travellers engage with TripAdvisor by exploring destinations based on travel preferences, companionship, and more. They plan itineraries, seek the best deals, participate in thematic Travel Forums, and even create collaborative "Trips" for personal or community sharing.

• Affiliate Programs: On the other side, businesses partner with TripAdvisor to promote themselves on the platform. They can also join the affiliate program, tap into TripAdvisor's extensive user base, and utilise proprietary tools like Navigator and Navigator Pro for targeted marketing.

• Brand Experiences: TripAdvisor offers brand experiences, including content solutions, social media engagement, high-impact media, native media, programmatic advertising, and TripAdvisor Ad Express.

• Omni-channel Approach: TripAdvisor's omni-channel approach ensures it reaches potential customers across all touch-points, using tools like Rove for efficient campaigns beyond the website and social media. The platform thrives on asynchronous communication, where travellers and businesses contribute substantial content, creating a wealth of insightful articles and inspirational audio-visual materials.

• Technology Integration: With 117 technologies in play, including LetsEncrypt, CDN (Content Delivery Network), and Google Universal Analytics, TripAdvisor operates on the world's first "travel feed." This unique feature allows members to swiftly access relevant information and draw inspiration from peers, friends, and trusted experts during travel planning.

• Influencer Marketing: Gamification seamlessly integrates into the TripAdvisor experience, motivating users to engage with website tasks and influencing behaviours. The platform collaborates with over 500 notable social media influencers, consumer brands, publishers, and travel partners.

TripAdvisor's former President and CEO, Stephen Kaufer, emphasises the platform's commitment to providing the best travel experience. Each stakeholder, whether a designated influencer or a reviewer, customer, business, or publisher, contributes to the dynamic and influential ecosystem TripAdvisor has cultivated. As Stephen Kaufer notes, TripAdvisor continues to welcome more brands and influencers, solidifying its status as a go-to platform for worldwide travellers.

The Road Ahead: Immersive Experiences

As TripAdvisor dominates the travel search engine market, its evolution must align with shifting consumer behaviours. Forbes predicts that Augmented Reality (AR) and Virtual Reality (VR) will redefine destination experiences, allowing consumers to explore virtually before committing. British travel agent Thomas Cook's VR trials saw a remarkable 190% surge in bookings. The trend suggests a shift from User-Generated Content (UGC) to immersive experiences in the pre-buying phase, mirroring retail's "try before you buy" approach (Forbes). As consumers seek streamlined, one-click solutions akin to tech giants, TripAdvisor faces the challenge of transforming into a tech-driven platform that meets these evolving expectations.

Takeaway 

Digital collaboration empowers consumers beyond being mere purchasers. Their active engagement, two-way interactions, and innovative contributions redefine their role. No longer mere targets, consumers now shape the travel industry through preferences, choices, and feedback. In this dynamic sector, businesses attuned to evolving consumer needs thrive, recognising them as content makers, influencers, and value co-creators. The Muddy Marketer understands your consumers and their needs better than anyone else. If you need a reliable digital marketing agency, drop us a line today, and we will set you up for long-term and sustainable growth.