CMO interview: Taking test and learn marketing to the extreme at Expedia
- 21 December, 2016 11:30
Test and learn is so ingrained in Expedia’s culture, its brand marketing team leader describes her campaign activity as “science experiments”.
“We are very test and learn, and everything we do has an ROI and focus in mind,” says Expedia A/NZ marketing director, Louise Crompton. “We use that as a lens to make our decisions.
“We will set a hypothesis, record observations, and build a methodology framework for how we test that.”
Crompton has been with Expedia for nine years and has responsibility for building the brand in A/NZ. When she started, the brand was new to the local market, and hadn’t invested in above-the-line activities. Today, Expedia has become one of Australia’s most well-known and considered travel entities.
Having started her career as a trafficker at Australia’s first full-service digital agency, One Media, Crompton moved on to become a media planner and buyer. She then worked in the UK, predominantly as marketing manager at online booking site, Lastminute.com.
But while her background may be highly digital and technology driven, Crompton is a firm believer in the power of storytelling and marketing’s “creative gut”.
“I’ve seen lots of change, and even more so now, thanks to changes to process and how we communicate, which comes from the improvement from a technology perspective,” she tells CMO. “But the fundamentals of brand marketing are more important today than they have ever been.
“We’re living in the era of great creative and ‘advertainment’. Creative storytelling is what really helps overcomes the challenges marketers face today, such as growing media fragmentation, shorter attention spans, and people alwaysbeing on devices. Brands need to move people, have a clear purpose and demonstrate how they make lives better for the customer – those key fundamentals are more important than ever today.
“At any stage, if you don’t move someone and connect someone back to your brand, you haven’t succeeded as a marketer.”
Key marketing priorities
Crompton’s short-term and long-term priorities remain the same: To grow and build a brand that’s synonymous with travel, and that people love and respect. The way she’s executing that, however, has changed dramatically.
Programmatic advertising, first launched as a way of trading digital advertising and now increasingly a way of trading TV, is a big area of focus for Expedia’s brand marketing team, and Crompton says she’s striving to be ahead of the curve in order to gain benefits. Expedia US has been involved in a number of beta trials, including the initial launch of MCN’s programmatic platform, and most recently, conducted tests with programmatic video advertising vendor and now Adobe subsidiary, TubeMogul, around how to utilise its technology to reach Facebook and Instagram audiences on top of its TV advertising.
That campaign reached 9.4 million unique viewers and generated 5500 bookings.
Internally, Expedia has brought on specialists to help transition to the new programmatic landscape. At the same time, while more targeted advertising is a priority, Crompton says Expedia still needs mass reach in order to bring its brand to a wider audience.
“It’s about getting the balance right between more niche, one-to-one conversations, but at the same time reaching people en masse and moving them,” she says. “What we are focusing on is testing and learning our way into what is the right amount of investment in those digital environments versus broader reaching mass channels.
“I’m also really interested in consumer psychology, really understanding what motivates people at a deeper subconscious level, and how can we build neuroscience into the way we test creative and how we deploy media.”
A third priority is being mobile first. Crompton notes one in four room nights are booked via mobile devices today. “As a marketer, thinking about how consumers are using mobile devices more so than desktop, it’s critical we create an experience that is world-class in that environment,” she says.
Investing in the content mix is also ongoing, and Crompton points to Expedia’s acquisition of online photographer community site, Trover, in July, as one way the brand is looking to tell stories better.
“We’ve also done things like blogs, worked with influencers and we continue to test and learn,” she says.
Building a test-and-learn approach
For Crompton, being Expedia’s marketing director is about subscribing to the marriage of art and service. To do this, she says her team has had to adopt a more agile approach to go to market, using learnings from campaigns in-market to quickly pivot and improve the next activity.
“Most of the time we use metrics to understand the transactional lift, so we can see the halo effect of marketing, and we aim to learn from every dollar that we invest,” she explains.
“Our tests can be small – for example, let’s start branding upfront versus back to see an incremental lift in transactions. Or we’ll consider what percentage of the content is skippable. You can create lots of small tests and big ones as well. With some of the bigger tests we’ve done, we’ve run markets against each other as test and control. We might put a different media mix in one market or region, versus another, and see the difference to business numbers.”
Helping to drive this incrementality is a culture and philosophy of learning from failure, Crompton continues.
“The key is to be transparent,”she says. “Being global as well, failure is for the good of all. By sharing and being transparent about what we learnt in one market, we can work out whether to apply that to another region, or if it’s worth replicating that experiment in that region. I’m lucky the culture push us to take risks and try new things.”
To get there, Crompton says marketing teams need to be increasingly analytical and commercially astute. “We are encouraged to build the tests out and work with other markets to double check our science experiments and make sure there isn’t something we haven’t considered from a statistical perspective,”she says.
“All this has certainly improved my understanding of correlation, regression analysis over time… that’s the art and science. And with people I recruit into the team, I expect them to be analytical and curious as well.”
With the amount of opportunities and more fragmented media experiences available to consumers, it’s vital marketers demonstrate both the value of channels as well as their contribution to the business, Crompton says.
“For me, a key way of demonstrating brand marketing has been this incrementality testing, because it help us demonstrate the effect it is having on the business,” she says.
“It’s easier to link the short-term effect of marketing back to the business bottom line, particularly from a deterministic perspective. What I think about a lot is how we prove the long-term brand marketing not through market mix modelling, but in a more deterministic fashion. It’s a really hard one.”
Being so test-and-learn driven, Crompton says Expedia really does follow the data to make decisions.
“It all boils down to data enabling us to be more customer centric,” she says. “Data gives us the opportunity to create more value all the way through the booking and travel experience, whether it’s onsite, offsite, from a brand point of view, or our call centre.
More widely, data is being used to increasingly personalise customer experiences outside of acquisition. One new offering launched by Expedia for members of its loyalty program is dynamic pricing based on the points that individual has earnt.
“When you do a hotel search, you’ll see these points applied and see reduced discounts on the listings,” Crompton says. “Every loyalty member sees different prices of products based on their points, so it’s completely personalised.”
From an advertising standpoint, personalisation is coming through creative built specifically for niche audiences via Facebook, and retargeting. “We’re still a way off from addressable TV, but with programmatic TV, that allows us to start to target people based on broader intents in travel,” Crompton says.
And with the evolution of social media and content, marketers are getting better reads on engagement and more quickly than ever before, she adds.
Top attributes of the CMO
If she had to pick a few must-have attributes for the modern marketing leader, Crompton says being agile and learning quickly is key. Being commercially astute and analytical is another, as is a combination of IQ and EQ.
“And you need to have a great creative gut,” Crompton says. “It’s one of the first questions I ask people when I interview them: What advertising they like and what moves them. Someone who can see a lot of stuff presented to them and pick the real cherries on the cake and understand when they’re looking at a script or great idea on paper can get through the weeds and pick the strong idea that will move and engage people.
“It’s a refined skill, and it’s an important part of being a great marketing leader.”