TripAdvisor is an example of effectiveness because it becomes the largest travel site in the world by rapid product development and content generation process.
TripAdvisor’s business model is to provide travel information, gather travelers , and monetize traffic. TripAdvisor provides over 200 million reviews about hotels, attractions, and restaurants and attracts travelers by enhancing search engine optimization, search engine marketing, partnering with other travel related sites, communicating its members via e-mails, and providing its application. TripAdvisor also offers a price comparison feature with which travelers can compare prices of hotels from commercial partners including online travel agencies (OTAs) and hoteliers at a glance. Clicking one of prices shown leads travelers to a partner and TripAdvisor receives commissions from the partner. This cost per click (CPC) model accounts for over 50% of TripAdvisor’s revenue.
In the internet hospitality industry, each player competes in getting travelers by various features such as price comparisons and incentive programs and providing travel information. Moreover, travelers go to other services by just one click when they are not satisfied with features and content on a site. Therefore, in order to satisfy travelers and win the competition, TripAdvisor has to keep improving its products at a faster pace and generating high-quality travel information than its competitors do. TripAdvisor’s operating model syncs with these strategic objectives.
In terms of product development, TripAdvisor streamlines its product development process. Each product manager owns certain product areas with key metrics such as traffic and conversion rates and works together with designers and engineers. This development process is a highly data-driven process. Product managers analyze data, define issues, ideate solutions, develop minimal viable products with engineers and designers, test the products on the development server, run A/B tests on the live site, analyze the results, decide whether to implement the products or not, and iterate this process. Especially, testing with minimal viable products rather than fully developed products shortens this cycle. With this streamlined process, TripAdvisor keeps its high development speed.
Moreover, the number of tests at the same time is also notable. Each product manager handles multiple products concurrently and hundreds of A/B tests are running on the site. The big difference between A/B tests at TripAdvisor and in Team New Zealand is the easiness of tests: virtual products are cheaper and faster to test than physical ones. To take advantage of this virtual product characteristic, TripAdvisor develops solid backend infrastructure and enables the fast and large-scale product testing.
In terms of travel information, TripAdvisor relies on its community. Travelers submit their reviews on properties by clicking the “write a review” button and completing forms on TripAdvisor. TripAdvisor, like Threadless, generates a large volume of content everyday with little content creation by itself.
Moreover, TripAdvisor keeps review quality high by moderating reviews. Submitted reviews go to TripAdvisor’s moderation process in which moderators confirm whether reviews are qualified and authentic. Firstly, algorithm assesses submitted reviews and judges if their quality is high enough. If the quality score is high, the review is published on the site. Otherwise, human moderators check the review manually and decide whether it should be listed or rejected. By using and constantly improving algorithm process, the company deals with nearly 300,000 reviews per day with a fairly small number of people. In addition, algorithm based moderation absorbs volume changed caused by seasonality as travelers write more reviews in travel peak seasons. With this combination of algorithm and human moderation process, TripAdvisor keeps review quality and deals with variability caused by seasonality. Moreover, this algorithm becomes more accurate with more data through machine learning process.
In conclusion, TripAdvisor’s operating model of product development, review generation, and moderation supports its fast and constant product improvements and content generation. The accumulated product improvements and reviews sustain the company’s competitive advantage. From TripAdvisor’s case, we can learn about how to continuously improve the service. Especially, the following tactical options are worth considering when we launch a web service: 1) rapid A/B testing, 2) community based content generation, and 3) automation by using algorithm.
- Why TripAdvisor Excels at Product
- My 2.5-year working experience as product manager at TripAdvisor.
Disclaimer: This article does not represent the company’s view.