Travel firms are failing to grasp the opportunities that social platforms like Facebook represent when they are looking to break into overseas markets, according to Oban Digital.
Matt Owen, the newly installed chief executive of the international marketing agency, says the world of online advertising has moved on from CPA-based direct search marketing.
Hs said that advertising spend has been shown to represent a “remarkably consistent” figure of 1.56% GDP in markets across the world.
So any increases in the number of platforms, like online with the advent of the web, mobile and social inevitably takes share from established sectors.
Owen said: “Travel was one of the sectors that really realised you could interact purely online.
“Then it went to Cost Per Acquisition (CPA) and digital as a direct marketing channel. But now we know much more about audiences and different segments.
“One interesting dynamic in travel is people are generally buying a destination not a brand. I would imagine brand loyalty in travel is low to zero because ultimately as a customer I’m interested in the destination.”
Owen contrasted how travel approaches retailing its product with the likes of Apple, that marries up face-to-face high street branding and retail with online to drive brand loyalty, but has a real product focus.
“If you are really being looked after by an operator at the upper end I guess you get some brand loyalty, but otherwise differentiation is zero and that’s why firms are always competing on price,” he said.
“That’s an issue with tour operators. Are there any differences because many do not focus on one thing or a small range of things? In the online world there is too much choice, proliferation is a problem.”
The challenge for brands is to engage sufficiently that their brands get known, trusted and used repeatedly, and this is especially tricky when firms are trying to break into new markets.
Owen said with paid search tied up, television’s reach waning and ad blockers set to close down an entire route to market, especially on Apple mobile devices that represent 90% of the profit globally made on mobile, social is set to gain share.
Facebook is at the fore, and with its Instagram arm poised to launch a paid advertising platform offering the ability to tie campaigns in with the social media site, travel brands need to act to exploit this opportunity, Owen said.
“Not enough is spent on Facebook in Travel. The direct marketing side of digital, that’s done. The flip side of that is back to the original starting point, it’s brand engagement, and Facebook is undoubtedly going to be the best platform for engagement in travel.
“What you will see from Facebook is an increasing ability to dominate the media sphere. Television will suffer. It is on mobile devices, which is killer. It wants to be the internet. Globally Facebook is huge.
“The big advantage of Facebook is that initially you can use it at quite a low cost, you do not have to invest in a big print campaign or above the line activity, you can test and learn very effectively. You can test what really engages audiences in new markets.
“With the right local knowledge and an authentic voice I believe you can be as good as any local incumbent. Facebook allows you to find an audience and put some content infront of them and see if it’s out of whack or appealing.”
Owen joined Oban on July 1 from Jellyfish where he was managing director as it grew from 50 employees to 260. He was previously at another agency well-known in travel iCrossing.
Oban Digital is sponsoring the next Travel Weekly Business Breakfast event that will discuss the challenges of internationalisation and will be held at Google’s London headquarters on October 23.