Once an online destination for anonymous (and often brutal) hotel reviews, TripAdvisor has been working more closely with Facebook to make the site a friendlier recommendation engine and mobile app for travelers. TripAdvisor co-founder and CEO Stephen Kaufer explained the impact of the company’s social efforts in an earnings call on Tuesday night.
From the transcript:
In Social, we are finding great ways to leverage the building blocks we put in place on the Facebook platform. In April, we merged our TripAdvisor and Cities I’ve Visited apps into one app, better integrating Facebook’s users’ activity within TripAdvisor and allowing friends to find TripAdvisor more easily on Facebook.
In the first half of the year, TripAdvisor published more than 300 million actions generated from member activity on our website or using our App into Facebook’s Open Graph. In June alone, we had over 32 million logged-in Facebook users use the TripAdvisor app or be instantly personalized on the site. This traffic level makes TripAdvisor the second most popular Facebook app, according to AppData. These efforts have been very successful in terms of brand awareness, content and community building, and growing our friend-connected member base.
TripAdvisor’s revenues totaled $197.1 million in the second quarter, increasing $27.9 million, or 16 percent, over the second quarter of 2011, but were still not as high analysts had expected.
More specifically, the number of hotel shoppers –”the key metric for our click-based revenue line,” according to Kaufer –saw an increase of around 30 percent year-over-year, but should have been higher. Click-based advertising accounted for 77 percent of the total revenue in the second quarter of 2012, down from 79 percent in the same quarter of 2011.
Kaufer attributes the difference to the company’s focus on improving traffic and increasing adoption of its social media and mobile offerings. TripAdvisor had also reduced search engine marketing spend on traffic that didn’t convert to sales on partner sites. The money was reallocated to marketing campaigns on Facebook and other “traffic diversification efforts.”
Explained Kaufer, “This traffic quality improvement strategy is another example of us doing what’s right for the business, longer term, even at the expense of near-term growth.”
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