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Expedia-IHG Tease


Douglas Quinby 01/16/2008

How is Expedia-IHG's recently announced "media-pricing" deal different from "pay for placement" or other already standard advertising and promotion options that OTAs provide to suppliers?

Maybe I'm missing something very basic here....

My sense from the original press release, what makes this different would be the possibility for EXPE to actually hand off the customer to an IHG web site and for IHG to pay for the hand off. That would be truly significant, but it's not clear that that is what is happening, or could happen in the future. In all of the searching I've done on Expedia family of sites since the release (granted not huge) I have not seen any possibility to hand off to an IHG site. And, for that matter, I've actually had a pretty hard time even finding IHG brand properties.

If at some point major OTAs would consider a pay per click hand-off model, this would overturn the decades-old model for supplier-agency relationships where suppliers provided select agencies with financial benefits and co-op marketing dollars in return for playing favorites with their brand. However there was always a key element (sometimes ignored) -- that suppliers would not take a direct booking from an agency client, let alone specifically try to lure agency clients to book direct.

Maybe in the new dynamics, giving away a client on one transaction doesn't mean you've lost the client for the next one, and that there's more opportunity to better monitize the clients you lose anyway.

More to come.... I'm sure...

comments

On 16 January, 2008, Lorraine Sileo wrote:
I agree that if Expedia isn't handing off the customer to IHG (which it does not look like they are doing) the only real change is the payment (PPC + transaction vs. merchant) and not the customer experience or perhaps, going forward, even the ROI for IHG. But I believe the "understanding" between suppliers and agencies got turned on its ear when properties started to invite customers during check-in who booked via OTAs to "book direct with us next time..." OTAs would rather that not happen on their sites as well.

On 16 January, 2008, Douglas Quinby wrote:
PPC is pay per click? So IHG pays Expedia not just on top of the booking, but just when a consumer views an IHG property on Expedia?

On 17 January, 2008, Brendan May wrote:
Exactly. It is monetizing the value that IHG received from being listed, rather than just when a transaction occurs. Presumably there is a lower transaction fee to compensate. It sounds like a "fair deal" to me. IHG pays Expedia when someone finds a IHG property (in a preferred position) and wants some information (now with a high potential of going direct to IHG own Web site directly). Alternatively Expedia changes more when they actually produce a booking. A booking fee, and a presumably lower lead generation fee. I wonder what will happen when nearly every hotel is preferred (just like nearly every hotel is an Expedia Pick).

On 18 June, 2008, jpyykpmkse wrote:
4wQcYn delkbwvvwjhy, [url=http://bactvrpaytyb.com/]bactvrpaytyb[/url], [link=http://lqxxtejscsad.com/]lqxxtejscsad[/link], http://vkqctsycmwgm.com/

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