Hotwire Launches First Print Ad Campaign
Hotwire is running the campaign in 16 markets and plans to go national in April.
The radio spots, called the "Hotwire Travel Challenge," use a man-on-the-street approach and challenge consumers to try Hotwire and Priceline to see which offers the best deals. The print ad is headlined: "Give Priceline.com your credit card before you see a price. Was this ever a good idea?"
It points out one of the differences between the two services, namely that Priceline makes users register and provide a credit card number before they can get hotel, car rental and airline discounts. Hotwire provides its discount fares without any of these restrictions.
"This is the first time we've come out and spent any money on advertising," said Ty Shay, Hotwire's vice president of marketing. "The idea came from consumers' frustration with Priceline.com."
Priceline.com, Norwalk, CT, and Hotwire, San Francisco, are similar in that both provide discount travel services and users must have flexible travel plans to take full advantage of the services.
"The main driver in this category is price," Shay said. "Consumers in the online travel space are cynical and jaded about where to find the best deals. The main challenge now is getting our name out there."
He also said the company's comparing itself directly to Priceline is a new approach, but one that it plans to continue.
Shay said Hotwire last year spent $17 million on marketing. This year, the company plans to spend about $75 million, with about $50 million slated for its current campaign.
Priceline said in its year-end 2001 earnings report that it spent more than $115 million in sales and marketing for the year.
Priceline spokesman Brian Ek said the Hotwire ads avoid a direct comparison between the two companies' services because the differences are too many to mention.
"If I were in their shoes I'd probably do the same thing," he said. "They don't have the inventory we do. Or the pricing. You just can't do a side-by-side comparison."
Ek also said Priceline features more than 8,000 hotels, to Hotwire's 4,000. Hotwire offers two rental car companies, he said, while Priceline offers five.
According to Priceline's earnings report, the company added 854,082 customers in the fourth quarter, raising its year-end 2001 total customer base to nearly 12.7 million. Hotwire has 7 million registered users.
Shay said that about 80 percent of its 7 million users also have opted in to receive e-mail from the company.
"We send one message out every two weeks," he said.
Ninety-eight percent of the company's list was culled from people visiting its Web site and opting in to receive e-mail, he said. Hotwire's opt-out rate is less than 1 percent.
"We tried list acquisition in the past, but we haven't had any success," he said. "The quality of the names was not so good. We get better quality names from our own Web site."