This interview is part of the Marketer’s Toolkit 2020. Download the summary report here.
In this exclusive interview for WARC’s annual Marketer’s Toolkit release, Gabriel Garcia, Global Head of Mobile Marketing and App Ecosystems, Expedia – speaks to WARC’s Gabey Goh about living up to brand purpose in a scalable way, taking a data-driven approach to media mixes and the role performance plays in the bigger brand building picture.
WARC: Let’s start with the notion of brand purpose, how does Expedia define and articulate its purpose?
Garcia: Expedia's brand purpose is to help people go places. If you think of those words and start peeling the onion of what that means, it means we have a great responsibility on helping people achieve their travel dreams and being able to help them as a technology and platform company. Now with that comes great responsibility.
I think one of the biggest things that has come up recently is our company being responsible and sustainable in taking things like environmental impact into consideration. So, I think there is a responsibility on different layers. There's a responsibility in ensuring a trip goes well and putting the customer at the heart of everything we do.
But also, as a global company, we are responsible in ensuring we're addressing issues that have to do with the environment, that have to do with the mass tourism and over-tourism that we're seeing in different parts of the world. It's not only about listening to our customers better, because they are more and more aware of the impact. But also taking a stand on it, and actively doing that.
WARC: Could you share examples of the work Expedia does in living up to this responsibility?
Garcia: As a company, we recently became an affiliate member of the United Nations Tourism Organisation, working on the United Nations Sustainable Goals around sustainable tourism and urban tourism policies.
Perhaps one that I'm most excited about is recently we signed an agreement with UNESCO, an industry-first pledge between the Expedia Group and UNESCO, with the purpose to promote sustainable tourism and protection of cultural heritage. And that is huge in the sense of its scope and what it could become. But there are very specific things as part of that pledge, like reducing or taking a stand on eliminating single-use plastics. We started that in our own office but as a travel company it must go beyond your employees, right? Working with partners to achieve that sort of hairy and audacious goal is key part of it. So hence why a global agreement with an organisation like that helps, and then that cascades down into, "Okay, how do you put it into practice?"
Our pilot model is in Thailand, working with the Tourism Authority of Thailand to get hotel partners and any member of the tourism industry to make a commitment and develop ways of measuring how they're helping. Another example is the work that we do with tourism boards in coming up with innovative and creative media executions to promote places that are less travelled, but also how to travel in a more sustainable manner.
WARC: Are you seeing a shift in consumer sentiment when it comes to the sustainability message that Expedia promotes?
Garcia: Absolutely. We're seeing a shift, and I think you will have to be blind as a traveller not to realize what's happening. And particularly in this region, when you go to different places and all you can see in the water is plastic. So, there is certainly a wider awareness of the situation and certainly more receptiveness.
Now the challenge is how do you communicate this to the masses in a scalable way? We are not yet taking this to our TV ads, for example, around the world to just talk about sustainable tourism. But we're taking steps towards what it could look like, because if you're going to go and promote those sorts of things, you've got to reflect that on your product.
One of the things that we're working on, for example – and again this is part of the pilot in Thailand – is to see how we can enlist hotels that have taken a stance on the subject, that are reducing plastic, that are eco-friendly, to have almost a stamp of validation, accreditation. And that's where it gets complex, because what system do you use? But there are ways, the same ways that you end up with a system that gives a hotel one or five stars. We can surface that on our own platforms. On the web, on the app. So that as people become more aware, they eventually have the option to select and filter hotels that are doing something about it. It's a process.
WARC: How does Expedia tackle the balancing act between long-term brand investment and short-term performance campaigns?
Garcia: You see a lot of debate around the two, and often, treated in a separate way. You either go long-term or you do short-term, or how do you balance? I certainly believe it's a balancing act, but I don't see them as separate. There's an interdependence and that’s the first thing and most important thing.
Secondly, you might be already building your brand through performance marketing if you do it properly. Optimising spend and utilising technology, algorithms and data science more broadly to make the most out of your performance marketing spend doesn't mean that the value and purpose of your brand is not being delivered and communicated in the best way. And I think that's where sometimes it breaks.
Because if you are advertising on a platform or marketplace where you're paying per click, are you really building your brand? Well, it depends on what you're communicating on that ad, on where you're landing that customer, on what is the experience that you're providing to your customers once they land on one of your properties. If you deliver a seamless experience that solves a customer problem, you're building brand equity. There's no doubt about it.
I think brand building has evolved as well, and that's what companies need to realise. It's also measurable. I mean, the days of just investing a lot and people are happy because your brand is on billboards with mass traffic and the board of directors drives past and sees it - that's all gone. You must be able to measure the impact.
Also, you measure the impact looking not only at brand health but also the correlation between those investments and how your performance marketing operates; or ultimately the lift you see in your sales applying incrementality testing. You can measure performance marketing in ways that deliver short-term metrics but there are also ways to ingest customer lifetime value metrics into that formula. Not on the metric that you will see straight away, but the long-term outcome that you're trying to achieve.
The challenge is for companies to adopt those practices. We've certainly done that, and we take that seriously, which it just makes way easier continue to invest, right? It's a way easier conversation when you can measure results in that way.
WARC: What’s your take on the ongoing struggles that marketers have in getting C-suite buy-in for long-term investments?
Garcia: First, you need full alignment across the executive suite on what's your objective as a company. If your objective as a company is to grow a sustainable business, you need to be investing in your brand. It's as simple as that. If the CFO of your company only cares about quarterly earnings and what the P&L looks like in a short-term basis, maybe it's not the right CFO for a company that is looking at building a business in the long run. Now, having said that, I mean, we're publicly listed, same as other big companies, and you need to manage shareholders, for sure.
But again, I think it's a balancing act in which you need to maintain the health of your P&L, particularly when you're doing planning and looking at things beyond next quarter. The health of your P&L's going to be defined by not only the transactions that happen today, but the transactions that repeat over a period. It's way more efficient to get a customer to transact today and to transact again, as opposed to acquiring them again through a performance marketing channel. The only way they're going to come direct to you is if you build your brand, if you deliver a memorable customer experience. So as a CFO, you might want more of those customers that, through a brand equity and brand-building exercise over the long run, they will become loyal customers. And those are the customers we like the most.
Those are the most profitable customers, customers that repeat with you because they're getting the value and they just want your app instead of going and clicking around different marketplaces.
WARC: How do you approach the science of balancing of media spend across channels?
Garcia: You need to know exactly what the operational efficiencies are and return on ad spend that each one of those channels provide, to begin with. Once you fully understand that and know what marketing spend levers you have and at what level of return, you can then come up with an ideal formula for what you want to achieve – based on metrics and outcomes that you decide as a business are important.
If you're seeing that a mix is going to provide you with a better or more profitable mix in 12 months' time or in 6 months' time or in 3 months, you've got to decide what is the outcome you are seeking.
Do you want to go hard with market share, and which market? Different market maturities might require different mixes. Depending on the outcome that you want to achieve, you fine-tune your machine. So, it's completely data-driven, to be honest.
WARC: Any advice for marketers just starting this data-driven journey of achieving a more sophisticated level of media mix formulation?
Garcia: Well, you must be ready to fail. Allocate a pocket of money that everyone's comfortable knowing that it is going to be burnt. And maybe you won't, but you've got to be ready. And then you'll learn, because it takes time for that machine to get going. If you have a curve, it takes time for that curve to stabilise. It takes time for algorithms to learn. So that is perhaps the biggest learning I’ve had.
You've got to just allocate an investment amount that you're comfortable maintaining for a period so that you can learn. And if what you learn is that the formula is just a cash-burning formula, that's fine but you learned it. You won't repeat it.
I think something else to consider is you cannot treat every market the same way. All markets are so different, and in Asia, I mean, there's so many nuances amongst markets. And when you're doing planning, you cannot plan in the same way in which you plan Hong Kong, Japan, and Korea because the marketing mix is going to be different, because the players, the platforms, the marketplaces are different, and they all behave in a different way.
The web versus mobile mix is different. There are markets that are more app-centric and that changes the entire economics of your business. You need to take those into consideration, as opposed to, "Hey, here's something that we feel could work because it worked somewhere else. Let's roll it out."
Sometimes you've got to take those local nuances a lot more seriously and test accordingly.
WARC: Looking at the next 12 months ahead, what would you say would be the biggest challenge for you and the team?
Garcia: It's a very competitive and fragmented marketplace. So, I think one of the biggest challenges is also the biggest opportunity, which makes it exciting. How do we leverage all that data we have in a secure manner to provide personalised experiences, but in real-time? How can we really transform that data into experiences that are meaningful to our customers? That drives purpose, that solves their problems and their needs when it comes to travel. To ensure that those customers are coming back to Expedia repeatedly despite the fragmentation, despite the competitive marketplace.
So, I think that if we're able to solve for that user experience within complex marketplaces, we should be well-positioned to continue delivering on our purpose of helping people go places, and our broader mission of bringing the world within reach.