Technology

Phocuswright Europe: Rising costs of marketing on mobile are inevitable, says Booking.com

Posted by Lee Hayhurst on
Phocuswright Europe: Rising costs of marketing on mobile are inevitable, says Booking.com

The transition from desktop to small screen mobile devices is inevitably increasing the cost of achieving visibility among consumer.

Booking.com EMEA managing director, Peter Verhoeven, told the Phocuswright Europe conference in Amsterdam that innovation on mobile is the big thing today.

Asked about the impact of Google pushing down organic search results in its Search Engine Results Pages, Verhoeven said:

“To innovate on mobile is the big thing. It needs to happen on this screen. Forget about their [Google’s] own ads if you really look at it who is going to be credible in this space is really important.

“There is big competition out there because visibility to the consumer comes at a cost. Less space for free listings makes it more expensive for all of us in the industry, but that’s the way the model works and as consumers we see the benefits.”

Vehoeven said Booking.com was carrying out tests in voice and chatbots including Facebook Messenger using artificial intelligence.

He said it was still at early stages and in very small scale and was not yet available in all languages.

The Priceline-owned accommodation specialist is also taking “small steps” into the attractions sector with London, Paris, Rome, Dubai and Amsterdam currently covered.

“We want to work with partners that are willing to test. We will go in small incremental steps.”

Asked if Booking.com would look to buy an attractions specialist to speed up entry into the sector, Verhoeven said it does look at opportunities but it historically has also done a lot of things itself.

He told delegates that they should rip up five year plans and “embrace the chaos” by adopting a test and learn approach.

“You have to come to terms with chaos,” he said. “Throw away your road map and five year plans because the tests will determine where the product takes you.

“Consumers will determine which tests are successful and you next steps. Only the velocity of tests that you do is a key indicator of how much you innovate.”

Verhoeven said this approach is the reason why Booking.com has seen such phenomenal growth over the last two decades.

And he said all indicators are that the firm is operating in a market set for continuous growth “as long as national borders stay open”.

Online penetration will also continue to rise as well as mobile which now account for 40% of Booking.com’s bookings, Verhoeven added.

This requires firms to embrace personalisation and geo-location, but Verhoeven warned against limiting choice.

“Choice matters,” he said. “Every time you try to restrict choice it never works. If you try to pre-fill filters it has not worked so choice is hugely important.”

Booking.com now books 1.4 million room nights every 24 hours and Verhoeven said that was down to breadth of choice and being easy to use and book.

Verhoeven said hotels needed to have partners to help distribute product and he warned against making assumptions about which channels are most valuable based on averages.

“There are many different types of product and owner. For us to sit here and decide what is the best distribution model isn’t scalable. The entrepreneur will decide.

“Look at the ROI. Be very careful about averages, look at the spread of distribution, look at the typology of partners because one size definitely does not fit all.”

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