Trivago Says It Needs to Be the Star of Its Advertising, Not Some Guy
Actor Tim Williams is featured in a TV ad that's a company explainer. Trivago
Was the U.S. Trivago Guy, actor Tim Williams, becoming a distraction because he was becoming too much of a star in the hotel-search site’s seemingly never-ending stream of television commercials?
In a switch, the German hotel-search site in recent weeks has been running TV ads in the U.S. separately featuring two actors, American Tim Williams and Australian Gabrielle Miller. Previously, most of Trivago’s English-language ads in the U.S. featured Williams alone.
Until now, Trivago, which last year spent 87 percent of its revenue on advertising, and a lot of that on TV, has been coy about its strategy shift on U.S. television.
But in a call with analysts to discuss earnings earlier this week, CEO Rolf Schromgens said its worldwide advertising strategy is that the star of the advertising should not be the spokesperson but the star should be the platform, namely Trivago.
“So, for example, I know that Tim [Williams, the Trivago Guy] became quite famous in the U.S., but this concept is not focusing on one person,” Schromgens said.
Dual Spokespeople Strategy Has Worked Elsewhere
CFO Axel Hefer said the advertising strategy to feature two different actors in their own commercials simultaneously in a given country has worked well for Trivago in other global markets “and that’s why we believe that it is a good concept and that it will be successful.”
Having male and female spokespeople starring in the TV commercials can also be useful for Trivago when it wants to target various audiences, Schromgens said.
“And we want to be more flexible in the future,” he said. “We want to be more targeted so our idea is to create fully targeted spots. And the more we want to go into targeting, the more it’s important for us that we also have the flexibility in the spokesperson because a different spokesperson also can address different target groups.
“And that’s very important,” Schromgens said. “We want to really micro-target, and be micro-targeting in our advertising.”
A Serious Business Question
The issue of whether the Trivago Guy or Trivago Woman has fallen out of favor or is this month’s teacher’s pet is not a mere gossipy question for fans or detractors of Williams or Miller, but revolves around very serious business issues.
Trivago may want to use them for various targeting activities or may seek to deemphasize one or the other at various times to put a spotlight on the company’s brand.
And TV advertising is a critical growth and profit driver for the company in a very competitive online travel marketplace.
For example, in a two-hour span this morning, we saw U.S. TV commercials on the air for Trivago (2), HomeAway (2), and Travelocity (1). Incidentally, all three brands are in the Expedia Inc. portfolio.
Trivago increased its TV advertising globally in the fourth quarter last year, and this week Schromgens said it positively impacted profitability in the first quarter. Trivago notched a profit of $8.45 million in the first quarter versus a small loss a year earlier.
“From our side, so first of all we can see that our strategy to invest more into the fourth quarter that this was paying out,” Schromgens told analysts. “And that is — also you can see the brand after-effect also on the profitability of the first quarter. So we had higher investments into TV in the fourth quarter, we see some of the results today.”
The issue of whether to have an actor/spokesperson — or two — is a key one for many companies, including TripAdvisor, which is poised to kick off a TV campaign this year after a two-year absence, and plans to spend $70 million to $80 million on it in 2017.
It will also be interesting to see how Trivago responds, spending-wise, to TripAdvisor’s TV blitz since they butt heads in the highly competitive hotel search and booking sector.