Priceline Bets It All on the Web
Priceline will always be unique because of its name-your-price model. But it now has further separation from its pack of competitors.
Jun 12, 2002 1:49 PM PT
Amid the chaos of the past two weeks, when travel companies were tripping over one another to cut deals, merge and otherwise grab whatever they could while the grabbing was good, Priceline.com.com was just as busy as its competitors.
But Priceline might have something the others don't: a plan. It might not be a workable plan, but it also might be the only chance Priceline has.
Of course, it's possible Priceline doesn't have a plan after all. Perhaps the company looked up after the deal-making dust settled and tried to figure out how its past pacts with AOL and eBay, as well as its more recent alliances with LastMinuteTravel and LowestFare.com, all fit together. The common denominator, it turns out, is that all of these companies are based on the Web.
On the Line
Regardless of which came first, plan or results, the upshot is the same: Priceline has put the vast majority, if not all, of its eggs into a single basket. The company has gambled that it can drive traffic and, by extension, sell tickets, by conducting its marketing efforts exclusively online.
It's quite a departure. Priceline itself acknowledges that when it began life, finding space on top sites was difficult, and paying for it was even harder. Times have certainly changed, and few things in this world have gone from penthouse to pavement as quickly as online advertising rates.
Will it work? It might. And the gamble is a smart one because it requires Priceline to invest relatively little money, which is good since Priceline doesn't have all that much. Its stock hasn't followed its competitors' shares skyward, although it sits comfortably above the two-dollar lows set last year.
Anyway, what are Priceline's options? The company can't go toe to toe with Orbitz and Expedia in a marketing blitz. Priceline's pockets are too shallow, its competitors' too deep. Besides, it seems likely that Priceline has already built its brand to the extent it is able. People have been hearing its name now for several years, from the lips of William Shatner, no less.
Brand Spanking New
If consumers don't get the company's message yet, they probably never will. Meanwhile, Priceline's rather unfortunate overextension a couple of years ago, which took it well off the beaten travel path into ill-fated gasoline and grocery experiments, might have tarnished its shiny image.
So why bother investing millions more to reach people watching football games, people who might or might not shop for travel online? Why spend money trying to market to people watching game shows who aren't even planning on traveling? Viewed in that light, Priceline's move makes sense.
It's smart for another reason too: It distinguishes Priceline. Yes, the company will always be unique because of its name-your-price model. But it now has further separation from the pack of rivals.
And that's good news, because the pack is big. Too big to keep running as fast as it has so far. There are clearly too many lead runners as well. Even the biggest optimists have to acknowledge that at some point, companies will start to drop out of the great online travel race.
And when they do, Priceline will be running its own race, or at least taking a different route to the finish line.
In short, Priceline has found its niche, and, lo and behold, that niche is online. Priceline, it turns out, is a pure play in the truest sense. It may have taken five or so years for the company to figure that out, but better late than never.
What do you think? Let's talk about it.
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.