Days ago，The co-founders and CFO of 188bet Online Sports Betting and Casino Hotel metasearch price comparison website Trivago conduct an IPO roadshow in New York，Sell the company’s various advantages to investors，During the period, they also talked about how they built the Trivago brand and why they formed the current style of the brand。

If you take Trivago, a 188bet Online Sports Betting and Casino Hotel metasearch website headquartered in Dusseldorf, Germany, and Booking, which is both a competitor and a partner in Europe,com’s development experience for comparison，You may find this comparison meaningful。Represented by Rolf Schrömgens，The company has huge potential for future development，There are currently no restrictions on its future development scale。He also said，Trivago aspires to become a “player” in the hotel search field。

188bet Online Sports Betting and Casino

Trivago was founded in 2005，Only $1.2 million in external financing so far (four years ago，Expedia acquires investors in the company 63.5% shares)。2008，Due to concerns about the risks of relying on Google and other search engines to import traffic，Trivago began to try to build its brand by running TV ads。

In a roadshow video attached to the company’s IPO submission，Trivago CFO Alex Hefer said: “We realized，Trivago wants to become customers’ first brand choice，The only way to achieve this goal is to develop your own brand。”

This competes with Booking, a global hotel online booking site headquartered in Amsterdam, Netherlands.com’s marketing approach is completely different。Booking.com sold 4 in 188bet online sports betting 2015.3.2 billion room nights，The marketing method is mainly digital marketing、Supplementary by TV advertising，Trivago’s marketing method relies more on TV advertising。

Trivago CEO Schrömgens said，2008-2009 When Trivago conducted its first TV advertising campaign，At that time, there were not many travel companies doing brand marketing，It’s not as competitive as the TV advertising market now。

Although it is relatively difficult to measure the effectiveness of television advertising，But Trivago developed such a marketing strategy based on testing and data analysis。

Schrömgens says: “We keep an eye on which TV shows are showing Trivago ads，Then observe the performance of these ads on the website。We will continue to place ads in TV programs that perform well，Stop advertising in poorly performing programs。In this way we can obtain a large amount of data，I think this is what differentiates us from other previous companies。”

Due to its size and efficiency，Booking.com has gained great advantages in digital marketing。Same，Trivago’s TV advertising campaign in its German headquarters also achieved great success，And use the excess revenue from it to expand in Europe，One country at a time。Currently，Europe is still the most mature market for Trivago development。

Schrömgens says: “Our business is basically growing across Europe，Invest the income earned in a country where advertising is effective in another country (TV advertising)。”

He said，After we realized that this marketing method can expand the scale of profits，Trivago began to increase investment。He said: "More and more money is being spent on TV advertising。We invest profits from Germany in another country。”

Trivago data display，In 2015, its advertising costs accounted for 88% of total revenue。Calculated by region，Costs in the Americas account for 88% of total revenue，Costs in developed European regions account for 131% of total revenue，Rest of world costs account for 114% of total revenue。

Create global brand awareness

Trivago is committed to building a global brand image。Data display，Trivago leads in alert awareness in five of its seven largest markets，The five major markets and their reminder 188bet sports betting app download awareness are: Italy 92%、Spain 89%、Germany 86%、France 79% and Australia 77%。

In fact，Trivago has entered the US market many years ago，The brand enjoys 63% prompt awareness in the United States，And Expedia、TripAdvisor、Priceline.com、Metasearch competitor Kayak、Booking.com’s awareness in the United States is 80% respectively、69%、68%、62% and 39%。(Note: TripAdvisor did not run TV ads in 2016，But since Trivago is tied to TripAdvisor’s tip visibility，TripAdvisor gets 69% tip awareness，This is a very good result。）

Schrömgens said，Trivago has achieved significant growth in the United States，Becoming a player in this field in the United States in the future is just around the corner。

Is Trivago’s business model clear?

2015，Trivago achieves revenue of 5.USD 73.4 billion，59% year-on-year increase。Trivago claims，Another reason why the company has grown so rapidly is，Almost all of its revenue comes from the CPC profit model。In other words，Every time a consumer clicks on an advertiser link，Advertisers will pay Trivago。

Thinks Trivago co-founder and managing director Malte Siewert，This bidding model is both accurate and transparent。Different from competitors such as TripAdvisor，Trivago doesn’t have to waste time negotiating commissions。Siewert said: "That is to say，Both parties do not have to negotiate the price all the time，Advertisers will bid for traffic。”

2015，Trivago upgrades this business model，Promote CPC pay-per-click model to hotels，This allows advertisers to fine-tune their bidding strategies by hotel，Instead of having to choose from preset price options。

For every hotel listed on the platform，Trivago displays prices from an average of 10 advertisers and always prioritizes the lowest price。Of all prices shown，The lowest price is on average 19% lower than the highest price。

Three major challenges facing Trivago

In a video of the IPO，Trivago executives addressed several issues of great concern to investors，And Trivago thinks about these issues more convincingly than anyone else，In summary，Trvago currently faces three major problems。

1. The impact of mobile booking trends on Trivago

Many investors are concerned about the proliferation 188bet online sports betting of mobile devices and the fact that mobile terminals are less profitable than PC terminals。For example，TripAdvisor is trying to solve this problem by continuing to promote instant booking functions，In other words，TripAdvisor no longer directs consumers to advertisers (OTA、Complete booking on airline or hotel website，Instead, complete the booking directly on your own website。

Schrömgens claims，actually，Trivago’s business model works even better on mobile than on PC，Because consumers now generally go to the Trivago website to search for all available hotel prices in one place。Currently PC revenue accounts for more than 50% of Trivago’s revenue，

However，This topic may not have achieved the desired effect。Trivago currently adopts a single price structure for price comparisons on mobile and PC。But in the prospectus，Trivago admits that the company may adopt a dual price structure in the future，Although Trivago believes that this change will not have a substantial impact on the company's revenue。

Trivago’s prospectus reads: “We believe，Advertisers’ prices on the price comparison system based on the Trivago CPC model can overall reflect the overall effectiveness of their combined prices on mobile and PC terminals。”

2. Risk of too much concentration of advertisers

Another issue investors worry about is，Trivago’s revenue is too dependent on advertiser Priceline and parent company Expedia。First three quarters of 2016，These two competing OTAs account for 78% of Trivago’s revenue，Priceline accounts for 43% of them，Major shareholder Expedia contributes 35% to Trivago’s revenue。

Schrömgen did not propose a solution to the OTA problem in the video，But he argued，Trivago’s price comparison platform is very competitive，The development momentum is also very strong，Even if individual advertisers withdraw，The overall impact on Trivago is relatively small。

Theoretically，If Priceline really no longer contributes to Trivago’s revenue，Instead, all marketing expenditures will be invested in competitor Kayak (this situation is unlikely to be realized in the future。)But，Having said that，If Priceline really does this，Trivago will definitely be hurt a lot。

Prospectus display，Trivago lists “concentration of advertisers” as one of the company’s future risk factors。 

3. Sacrificing profits to gain market growth

In IPO video，CFO Hefer admits that the company needs to strike a balance between growth and profitability，It is also said that the company’s profitability is expected to increase after listing。

Currently Trivago’s adjusted earnings before interest, taxes, discounts and amortization (EBITDA) is 0，Hefer said: "In our opinion，It is important to actually improve profitability at the expense of growth。”

he added，Trivago is still in the early stages of solving 188bet Online Sports Betting and Casino Hotel metasearch problems，There is still a lot of room for growth in the future。

Hefer said，A company’s growth cannot be based solely on revenue，We also need to collect a large amount of data during the company's expansion，And the more data collected, the better。

Schrömgens agrees that data can help improve the level of customized services，Connect in-demand customers with attractive hotels at the right time，This is the real value of data。

We will continue to learn and embrace changes in the future

Schrömgens said，He may position Trivago as “at the top of the funnel，”That is to say，Dominating in the early stages of 188bet Online Sports Betting and Casino Hotel metasearch。

he added，We currently have no limits on how large Trivago can grow。

Schrömgens also stated，Trivago’s corporate culture，Including a staff composition focused on learning and diversity，will form the company’s real competitive advantage。

He described Trivago as such a company，“No matter what happens in the future，The continuous learning capabilities we focus on are able to adapt to any changes。”

Interesting thing，Although Trivago lists Airbnb and HomeAway as competitors in its written communications，But company executives did not mention the sharing economy in the roadshow video，This topic will undoubtedly be probed by investors in the future。

Schrömgens says，“We want to be one of the most important players in hotel search in the world。”

To realize this vision，The next step to achieve is，The stock price of Trivago with the code TRVG can be found on the Nasdaq stock market。

At this critical moment - when nothing 188bet Online Sports Betting and Casino has been decided yet，Trivago plans to raise funds in IPO4.US$2.8 billion，Company valuation $5 billion。

Much of the money raised from the Trivago IPO will be invested in new TV ads。

*The author of this article: Zhihui reporter Li Haiqiang (personal WeChat: lhq434849653) compiled from skift，Welcome to follow and communicate！

[Extra number]《 hosted by Zhihui2016 China Tourism Consumption Annual Summit and Awards Ceremony》will be held in Beijing on December 14-15。2017 Industry Trend Vane，Focus on leisure and vacation，Cultural tourism and “tourism + N” model；Top ten tourism consumption giants gather together，Covering the entire industry chain of tourism consumption；Annual event of tourism industry，Zhihui sincerely invites your participation、Witness。For details and registration, please click the link:I want to register！