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Trivago—Early Days of the Big USA Push

Compete Blog August 22, 2013 Comments Off

Hotel Bell

Image from: Hotel / Shutterstock

Trivago LogoThe recovering travel industry in the USA means more revenue potential and more players interested in tapping into that. One of those is Trivago, based in Germany and started in 2005, and newly penetrating the US. Trivago calls itself a “hotel comparison site” (i.e., meta-search engine) meaning consumers do not book on Trivago but are shown prices from across the web, which in theory allows them a complete view of pricing options before booking. The site reports it shows pricing for over 700,000 hotels and about 200 websites worldwide . It does not offer other categories of travel, such as fight, rental cars, packages, etc. Trivago’s recent US push includes television ads.

Trivago ScreenshotTrivago reports that it’s profitable, but makes no money from consumers or advertising. Instead, revenue comes from leads. They are looking to balance their depth in the hotel space presented in an unbiased, lowest-price-first, uncluttered-by-ads approach against making consumers look elsewhere for flights, rental cars, etc.

Millward Brown Digital assessed the early effectiveness based on unique US visitors to trivago.com and how engaged they are. Unique visitor (UV) counts are the number of consumers visiting the site each month, with no double-counting/false positives. We measured engagement by each UV’s average number of page views. Our gathering and reporting of site metrics leverages our industry-leading panel size and patented normalization process.

Good News: Volume Gains, Steady Engagement

TrivagoMillward Brown Digital data show a notable increase in traffic in CY13 to date, with the biggest jump in June 2013: UV volume nearly doubled m-o-m to just shy of a million consumers. Traffic reached a period-high in July at 1.3M consumers, though m-o-m growth slowed.

Engagement has been relatively steady, averaging 4.7 over the past two months (those with the most traffic). Steady is good for a fast-ramping site because it suggests new consumers are as engaged as earlier visitors. A sharp drop in average PVs could indicate that newer customers are visiting the site, but perhaps out of curiosity and as such not leave quickly/do not stay long enough to engage.

Trivago Traffic and Engagement

Closing

Trivago’s reported profitability worldwide suggests it has a proven business model; its continued success hinges on a solid US roll-out. This analysis only covers the early big push months for Trivago US and on only two simple metrics. While those suggest positive momentum, long-term success here depends establishing its brand and value proposition in a sea of digital competition—plus leveraging its recent $600M+ majority investment by Expedia. And it’s likely most trivago.com visitors will already in-market for travel (not market-incremental), which means it will need to conquest traffic from established travel sites).

Requisite next steps to complete the assessment include:

  • Further assessing traffic quality by understanding the types of pages and content Trivago visitors are consuming
  • Validating that the ads are attracting the target consumers based on the extent to which Trivago UVs also visit (1) other target travel sites and (2) non-travel sites representative of target audience characteristics
  • Quantifying ad spend efficiency—including TV—by comparing campaign total spend per unique visitor to that of rivals
  • Revealing from which sites Trivago is conquesting
  • Benchmarking the rate at which Trivago visitors ultimately book compared to visitors to other sites, and where they book
  • Evaluating the best way to leverage the Expedia connection

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