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Join Our Research Team at DMA 2014
Jan 31, 2002
Case Study

Why Orbitz

SUMMARY: When travel site Orbitz launched just seven months ago, marketer Michael Sands had to make it a household name in no-time flat -- here's how he did it. This Case Study is especially useful reading for marketers who are purchasing (or considering purchasing) online media on a CPA or CPC basis.   Sands is a big proponent of buying banners and email lists on a "partnerships only basis."  Whether you agree or disagree with his principals, it's still fascinating reading.
CHALLENGE

When Orbitz launched just seven months ago, on June 4, 2001, then-VP Marketing (now CMO) Michael Sands and his team had to:

1. Generate substantial online sales in a field dominated by long-entrenched sites such as Travelocity and Expedia

2. Grow the company's opt-in house lists quickly

3. Make Orbitz a household name, without a "Superbowl" ad

4. Create highly cost-effective campaigns that would bring the biggest bang for the buck

CAMPAIGN

Sands' first challenge was the Company's name. He explains, "If you say the word 'Orbitz' to somebody, 75% of the time they think it's 'Orbits'." So he made sure all radio ads end with the phrase, "That's Orbitz with a Z" and also that the Company owns and forwards all traffic from the URL Orbits.com.

Aside from that, all other messages in Orbitz's campaigns across a wide variety of media -- TV, print, radio, Internet ads, and paid search engine listings -- are as tightly integrated as possible to present one brand message for maximum impact.

As 2001 wore on, the initial launch campaign, themed 'Visit Planet Earth Via Orbitz' to convey "fun and confidence in travel", was replaced with a message designed to appeal to consumers in a recession: 'Lower Fares.' Sands says, "It's what people really want, and we try to reinforce that message at every contact point with customers."

Sands' initial media budget was split pretty evenly between offline and online media. However he says, "Online accounts for more than half of our resources today. I always believed from the get-go that the way you build a great plan is to start by maximizing online first and then adding offline as the icing on top of the cake."

While he pays for offline media in a traditional manner, Sands stands firm on his decision to do 100% of online media buying "on a performance basis. We do CPA. No CPM." He's bought co-registrations, worked performance deals with many portals and high traffic sites such as NYTimes.com, and invested in travel-related keywords through pay-per-performance search engine systems at Overture and Google.

Sands counters publisher arguments that it's not fair to buy online media differently than offline media by saying, "Online represents the future of all marketing. Why go back and treat online media like traditional media? That's a big step backwards. There are a lot of sites that say, 'No thank you' and I hope they can meet their ad sales elsewhere. More progressive sites understand this is the future. They make money and we make money."

"At the end of the day," he continues, "it's about conversion. Getting the right kind of traffic to our site so the return on investment makes sense for both of us. It creates a much stronger partnership between the publisher and the client because we're in it together."

Orbitz's online marketing team strengthens publisher relations by proactively seeking publishers' input and feedback about ad creative, and by working with publishers to tweak ad placement. Sands says, "It's a two-way street. We work together to optimize."

Also Orbitz doesn't demand a long-term publisher commitment up front. Instead, the Company generally starts with a limited three to four week test campaign on a site, with intensive attention and tweaking. If the publisher and Orbitz aren't pleased with results, they agree to part ways amicably. "Nobody's out a tremendous amount of money, it's without a lot of risk to either side."

Unlike many marketers who are focusing on highly targeted media buys, Sands' placements are on all sorts of sites. He doesn't care where his ads end up (aside from avoiding unsavory or adults-only sites), he just cares that they work. He explains, "We look at ROI. We'll do a deal with anybody who can meet our economic terms. It doesn't matter to us whether it’s a banking site, an entertainment site, a news site…"

He works with email list owners in the same way. He'll test and roll out to almost anyone's list, paying on a performance basis. He says, "Any list will do. The one place we've never looked to buy a list was from somebody selling us a travel list. The priceyou pay for such targeted advertising online is beyond the point beyond which you can derive positive ROI."

He adds, "I'm different than 99% of the folks out there because everybody travels. I don't need to buy a travel list. It's about casting a broad net at an efficient price and letting the chips fall where they may. If I was selling something like plastic polymers that might be a different story."

Orbitz runs special deals and sweepstakes, such as the 'Love is in the Air: Win tickets to a romantic destination!' sweeps currently running, in order to capture registrations from as many site visitors and ad click throughs as possible. The site registration form is pared down to just a few required fields (name, email, password, zip code and preferred home airport) in order to maximize response.

The last question is an opt-in box with a powerfully written offer, 'Yes! Sign me up for the Orbitz Deals email to receive the most airline Web-only fares and other exciting travel promotions.' This benefit-oriented phrasing increases opt-in rates beyond what a vanilla free newsletter offer would get, and continues the brand's low fares message.

Instead of sending a standard newsletter, Orbitz sends its house list one or two emails per week featuring special offers. Email offers are personalized to recipients based on their zip code and preferred home airport. So, someone in Atlanta will just get offers for flights leaving Atlanta.



RESULTS

Fueled by heavy launch marketing, Orbitz's traffic soared to 2.07 million unique visitors for the month of June 2001, 5.9 million in August and 6.3 million in October. Then it
took an expected seasonal dip in December to 5.3 million and remains healthy in January 2002.

Orbitz is now the third largest travel site on the Web. And this month Sands was promoted from VP Marketing to Chief Marketing Officer.

He shared these additional results with us:

-> Online Ads

Online ad creative that works best for Orbitz generally features low fare deals spelled out in text with the Orbitz logo. Sands says, "Obviously the stronger you make your offer, the higher the click and the better the conversion. If I have an air fare that's $49, it's going to get more clicks than one for $89."

He's stayed away from rich media ads, including Flash, in favor of very informational ads. He explains, "Rich media just drives up your creative costs and doesn't make up for it at the end of the day. Flash does have a role online -- but it's more about trying to translate a traditional brand message to online glitz for glitzyness' sake. We've done straightforward messaging that I think people online are interested in, without pulsating buttons and colors."

However, he did experiment with pop-unders in the late Fall and the test did so well that he's investing in them substantially. "We love them because they work. Consumers interact with them a great deal. It's also a larger format so it allows us to put more information in them, make them more relevant to the consumer. We stay away from X10 gimmicks like pretty women and stick with the facts." If anyone complains about pop-unders, Orbitz quickly sends them a link to a downloadable program that stops them from seeing them.

-> Paid Search Engine Placement

Sands is very pleased with results from paid search engine placements, and has a deal in place with Google for the rest of 2002. However, he's frustrated by the fact that surfers searching for travel-related terms at AOL and MSN will never see an Orbitz listing. (AOL has an exclusive deal with Travelocity, and Microsoft is a majority shareholder in Expedia.)

-> Broadcast Email to Rented Lists

Broadcast email to rented lists have done well enough that Sands is continuing with it. Subject lines that work also focus on a particular low-fare offer. "If you've got a great price to a great destination, put it in the subject line," Sands says.

He advises, "A gimmick might work once, but it breaks the bond of trust with the consumer. I don't want to trick them just to get them to come to the site once. They'd never come back." So Orbitz's email subject lines explicitly spell out the offer the consumer can take advantage off if they choose to open the email.

Sands says, "Consumers don't want to open email that's not relevant to them. If you put 'Great deals to the Caribbean from $300', and they're not interested, I don't want them to open the email. Because the next time they are interested, they will open it."

-> Email Campaigns to House Lists

Email campaigns to Orbitz's collected opt-in list have performed very well as expected. However there was one surprise. When visitors purchase a ticket, they can opt-in to receive an FAA monitor email that will tell them about delays, congestion and weather relating to their flight. Sands was bowled over by customers' response to the service. "It does really well. It surprised us."

Orbitz
http://www.orbitz.com

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