PowerPoint Presentation

Travel Redefined: Connecting with People in a Mobile-first, Always-on WorldLee McCabe, Global Head of Travel Strategy

-Welcome, etc.-I want to talk with you today about how we at Facebook view travel. -This industry is thriving. And its changing so quickly. -The advent, adoption and implementation of digital presents you with massive potential to grow.

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MECHANIZED PRODUCTIONMASS PRODUCTIONAUTOMATED PRODUCTION4th INDUSTRIAL REVOLUTION

1Mobile is a Consumer Behaviour

-First, mobile is not just a technology.[CLICK]-Mobile is a consumer behavior.-People are mobile. Fitting your business into their lives is how to build relationships with customers and make them more valuable over time.-People continue to add to the total time they spend with media as they leverage the power of mobile to remain connected to the people and things they care about throughout the day.-Our phones and tables are the remote control for our lives, so to speak.-They are very personal devices-And they provide you with the most incredible opportunity to connect with the people who matter to you at a scale that has never been seen.[CLICK]

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140M 2.5B

active smartphones on the planet1

60%of global mobile consumers use their mobile device as their primary or exclusive internet source3

40%of people use 3+ devices2Source: Source 1: eMarketer estimate , July 2015Source: Source 2: Google and TNS Consumer Barometer, Oct 2014Source: Source 3: Internet Retailer Jan 2015

-In 2008, there were about 140M smart phones sold, [according to Gartner.]-Today there are over 1.75B smart phones in the world, [according to eMarketer.]-Think of that growth in such a short period of time. Its really astonishing.-60% of people use 2 or more devices and.-79% of people keep their phone with them for all but two hours of their waking day. TWO HOURS.-These statistics are not anomalies. There are the norm.-In fact, when it comes to Travel bookings, 7

The Next Mobile RevolutionSource: Mobile Ate The World Andreessen HorowitzGlobal Population (b)

People are living their lives on mobile devices. At Facebook, we have been fortunate to play a role in shaping changes in peoples relationship to technology and to each other. But I'll admit that at times even we've struggled to keep up. In many ways, this struggle has defined our business.

Just a few years ago, we were a company based primarily on desktop computers. We knew mobile was coming, but not how fast. Frankly, we almost missed it. We had to make a massive shift, very quickly, and rebuild ourselves as a mobile-first company.

Today mobile is at the core of everything we do. It informs every product decision we make, for both businesses and consumers.

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Our Facebook community

Source:1: DAU 1.04B in Dec 2015, Facebook Internal Data (December 2015); 2: Facebook Data (Feb. 2016), Benedict Evans (Jan. 2015); 3: Facebook Data (Jan.2016), Verto Analytics (May 2015), eMarketer (2015); 4: Instagram Internal data (Nov. 2015), Library of Congress 1.59 BILLIONpeople on Facebook each month

1.04B Daily Visitors

9x the viewers for Super Bowl 5011 BILLIONpeople on WhatsAppeach month

30B messages/day

50% more messages/daythan global SMS 2900 MILLIONpeople on Messengereach month

400 MILLIONpeople on Instagrameach month

80M photos per day

6x the size of Library of Congresses' Prints and Photos Collection4

9.5B photos

sent by Messenger every month

1: http://newsroom.fb.com/company-info/2:https://blog.whatsapp.com/; http://ben-evans.com/benedictevans/2015/1/11/whatsapp-sails-past-sms-but-where-does-messaging-go-next3: http://www.vertoanalytics.com/wp-content/uploads/2015/06/2015_Verto-Publication_US-Digital-Content-Market-May-2015.pdf; http://dashboard-na1.emarketer.com/app/dist/#template/timespentwithmagazines4: http://blog.instagram.com/post/129662501137/150922-400million; http://www.loc.gov/pictures/about/

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2Media consumption is stacking,not shifting.

-Second, media consumption is stacking, not shifting. -And think of how this plays out in the real world. -We dont only use our phones, people use a couple of devices simultaneously and throughout their day. -Cross-device. -Omni-channel world. In a sense, mobile has stacked time in peoples lives. Meaning that, with mobile, people are consuming new forms of media (think: multiscreening) in addition to consuming traditional media rather than wholesale shifting away from formats like TV.-But the truth is that the amount of time all people and age groups spend watching TV has actually decreased since 2010.[TRANSITION] -And as this shift has happened, its as though.

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Mobile has created timeSource: eMarketer, April 2015Daily share of U.S. media consumption 2011 20152:512:474:342:573:405:382:124:1512:0511:11TVRadio/PrintDigitalMobileDesk/LaptopHours/Day

as this shift has happened, its as if mobile has created time.This leaves you with more opportunities to connectAudiences are spending more time than ever before consuming media.People are stacking new forms of consumption onto existing, rather than shifting traditional time to new.This means you have more opportunity to reach more people on the devices where they are spending their time. From a reach and scale perspective, this opens up a world of new possibilities.As youll see, the majority of time audiences spend consuming media is now via digital.And the majority of that time is spent on mobile, so you can see where Im going with this.Importantly, the use of mobile skyrocketing in the last couple of years has completely redefined peoples expectations.

TV time is decreasing.The amount of time people spent per week watching traditional TV has gone down since 2010. This is true for all age groups (according to Nielsen)

20112015Digital3:405:38Radio/Print/Other2:572:12TV4:344:15

Mobile2:5112

TV Time is decreasingChange in hours spent watching traditional TV per week since 2010Age Group50 64-1%35 49-10%25 34-23%18 24-32%Source: Nielsen June 2015

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Mobile first = More immersive &interactive communication

-And third, a mobile first world equates to more immersive and interactive communication.-I mentioned earlier that most people use two or more devices per day. -And we want them to work seamlessly in sync with the other. -When people are on their many devices, they are operating within the framework of apps. [TRANSITION] In factthe amount of time people spend within apps has actually increased over the last 2.5 years

LEES NOTES:-In the 2020 transition from home to work, device-to-device, there will be no such thing as offline mode. Connected devices will be fully integrated into every task on a daily basis.-And recall the number of media messages todays most connected consumers absorb 1,000 each day?

ORIGINAL COPY:-The smartphone is the key to unlocking the internet of things

Talk about Pre-Digital >Internet >Mobile Web>Apps

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Fastest to 50M users

Radio38 years

Television3x faster13 years

10x fasterInternet4 yrs

Facebook

11x faster3.5 yrs

iPod

13x faster3 yrs

Surpassed Angry Birds to become the fastest growing mobile game with over 50M downloadsTemple Run 2

1066x faster13 days

Draw Something

277x faster50 daysSource: Localytics The evolution of the almighty app, Aug. 2013

Re-order chronologically Radio, TV, Internet etc (remove LInkedIn and Twitter)15

Average number of apps used and time per person per monthSource: Nielsen, Q4 2014, smartphone users accessed 26.7 apps per month on average, and spent 37 hours and 28 minutes per month on apps.~23hrs~30hrs~37hrs

-[TRANSITION] In fact, according to Nielsenthe amount of time people spend within apps has actually increased over the last 2.5 years -So while the average number of apps has stayed the same, the time spent within them has increased. -This tells us a few things:1) apps are here to stay. 2) they are a great way to connect and engage with the people you care most about. 3, and most importantly, they are huge drivers of loyalty and in this business, loyalty goes a long way.-Part of this is bc our mobile-first world is app-driven, yes. But part of this is because weve gotten better at taking cues from what smartphones tell us about people.16

The average smartphone user spends significantly more time (46%) on their most used than on their next 4 apps App 1App 2App 3Apps 5-24Apps 4

Source: :Forrester Research, "US Consumer Technographics Behavioral Study" as cited in company blog, Jan 28, 2016 (eMarketer); Top 10 apps downloaded, AppAnnie (Jan-Dec 2015, all smartphones worldwide)

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In CarIn FlightIn HotelIn VR

-Already, were starting to see them in cars, hotel rooms, in flight, and in Virtual Reality as well.-Just a few short years ago, these things seemed like a distant reality, but theyre becoming increasingly more mainstream, which will all amount to more opportunity in Travel.[TRANSITION] Think about a few years ago when texting became a normal part of our lives

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We have reached a new era

Its exciting to think that weve reached a new era. There is a lot this industry has to look forward to. Although VR and AR are not mainstream yet, there is a ton of opportunity for this industry to take better advantage of. More time on mobile has led to more chat, more video, more texting, more user generated content. More communication and feedback bw organizations and their customers. More opportunity for 1:many; 1:few, and 1:1 communication at the touch of your fingertips.Weve reached a new era in that people are sharing photos and videos, texting, and messaging more and more.And people are also able to do that with businesses. Whether youre an airliner and want to chat with customers about a change in flight or recent purchase, whether youre a customer and you want to ask about an upgrade via texting, communication is becoming even more immediate, more effective, friendlier, more convenient. Were getting there. Whether you want an ad to deep link to your app to convert or whether you want a customer to reingage with your app, these are all realities that will make it more convenient to build meaningful connections with your customers, and to do so with context.DESPITE ALL THESE CHANGES AND OPPORTUNITIES, AND GIVEN THAT PEOPLE ARE PREDOMINANTLY SPENDING THE BULK OF THEIR TIME ON MOBILE DEVICES, MARKETING STILL HASNT CAUGHT UP IN TERMS OF REACHING PEOPLE WHERE THEY ARE SPENDING THEIR TIME.Heres what I mean:

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IDC Media Model, 2015 Ad Spend Estimates

$44B2015 marketing spend $2.4B - mobile spendUntapped opportunity in Travel

$8.2B - digital spend

And ever since there were products to sell, there were marketers, and marketers have followed the people. But so far thats not proving to be the case with mobile. As an example of what this means on a macro level, people in the US spend 25% of their media time on mobile, yet [CLICK] advertisers only spend 11% of their budgets there. The IDC estimates that 632B will be spent on advertising this year -- $16B, or 2.5%, of that will be spent on mobile. This is disproportionate at best and when you think about evolving your business in a way that will both propel growth and keep pace with peoples expectations, this disparity will have to shrink.But I want to be clear. This shift wont happen overnight. Digital is difficult, but its not daunting. Your longest-held objectives are not only achievable, but they are more efficient on mobile.And when you think about employing digital and mobile in a way that will grow your business and your brand, it requires putting in place organizational structures that enable your Marketing team to work with your Communications team, to work with your agency, and so on.So that your customers are seeing and feeling personally relevant messages that you want convey at the right momentand within context of family and friends.While the landscape is certainly more complicated, theres a ton of opportunity in this new mobile-first, mobile-obsessed environment to advertise and be able to connect with people, en masse, in new ways. [TRANSITION]. I want to talk about how we apply this new, mobile-first world to advance this industrys longest held objectives:

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ConnectionConvenienceContext

InspirationConversionRetention-We know that technology has changed the dreaming phase of travel to be infinitely more shareable. Travel companies can now inspire their customers at scale.-As prices have commoditized to the lowest common denominator, leveraging data for more efficiency and accuracy is essential to conversion.-Third, retention. Keep people. You want to keep people coming back. In a commoditized and increasingly crowded travel ecosystem, customer loyalty is an increasingly important lever. But regardless of your objectives, your business is based on people and people are at the heart of travel[TRANSITION] -Doing this will rely on three key areas:

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Context

Connection

FIRST, Connection.-This means establishing meaningful and timely connections with all of your prospective and current customers. -On the customer spectrum, you can use large, people-based platforms to engage with people you think are in market, those who have given clear signals that theyre ready to buy or book, and even your most loyal customers. -[TRANSITION] For context, there are XXX million apps in the app store.

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VR / AR

aa

Videos

PHOTOS

Text

-[TRANSITION] Think about a few years ago when texting became a normal part of our lives-We started taking and sharing more photos. As a matter of fact, smartphones enabled just about anyone to be a photographer, and a travel agent. Game changes for this industry.-About a year of so ago, video became one of the newer capabilities, providing an even more engaging mechanism for inspiring customers, their journeys, and sharing.-[TRANSITION] Now, were reaching a world of spherical videos.

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Mark Zuckerberg

Andrea Besmehn

Mark Zuckerberg

First time in Italy and I am absolutely mesmerized. What a beautiful day tolook around and share the amazing scenery with everyone!

Pallack ChandhokCheck out my new virtual pet Zeus. Were gonna go for a walk.

Michael Flanders

HARDER,BETTER,FASTER,STRONGER.

These are spherical videos. You can move around by changing your viewing angle, because these are filmed with up to 24 cameras.

This is a new and much more immersive type of video content. Its not something you consume passively, you can interact with it.

We will feel more immersed AND more connected.

I'm sure you've heard quite a bit about Facebook Messenger. I'd like to tell you a bit more about it now, share how we are thinking about the product, and give you a glimpse into the tests we're running now that will help guide the product's future. Facebook has always been about helping you connect with the people, businesses and organizations that matter to you. While part of that is enabling public one-to-many communication like Page Posts and Status Updates, it's also about driving private one-to-one and one-to-some communication. We've been fascinated with and keeping a close eye on person-to-person messaging for years and that's why that functionality has actually been built into our products since the early days of the company. It's evolved from a simple message product, to Facebook's inbox (your @facebook.com email address) and ultimately, in 2010 into Messaging. After seeing usage grow exponentially month over month, we spun Messaging off into its own mobile App in 2011. And eventually, due to our belief that Messaging is core to our business and to help grow the product and behavior, we both established Messenger as a primary part of our Family of Apps and Services by removing it from the Big Blue App and also acquired WhatsApp in early 2014. 25

Share of Usage Time Spent in Top 5 Email & Messaging AppsSource: Adapting Your Strategy to User Engagement Patterns: Age & App Usage in the United States App Annie Mar 2016

Context

Convenience

The second way to inspire, covert and retain customers is to provide a convenience.This seems simple but some of the best-performing apps are easy to use and make peoples lives easier.This is true in Travel, just as it is in Retail, Financial Services, or even Gaming.

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In this mobile-first, app-driven environment, everything is on-demand and at our fingertips.Our phones are essentially supercomputers -- 100x more powerful that the computers that sent the Apollo to the moon. From grocery delivery, to cleaning services, Uber or Lift, dinner at your doorstep in a matter of minutes, the ease of convenience should not be overlooked.This is no different in Travel. And it is no different for your brand.[TRANSITION] Lets take hotels for example. And see how this is playing out right now.

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Limited serviceLimitless service

Where you used to have limited service, you now have limitless service. Inexpensive, faster, more opportunities for feedback, overall a more convenient and seamless experience.LEE EXPLAIN!!!

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In-room entertainment

Laundry

Gym

Mini-Bar

Spa

Bedroom

Bathroom

Wi-fi

Restaurant

In-room dining

Parking

Reservation

Netflix

Saucey

OpenTable

Hotel Tonight

Uber

grubHub

StyleSeat

ClassPass

Washio

Think of your hotel experience: In-room ent NetflixLaundry WashioGym ClassPassMini-Bar SauceyIn-room dining GrubHubRestaurant Open TableParking Uber

1. Restaurant = OpenTable2. Spa = StyleSeat3.Reservations = HotelTonight5. Laundry = Washio6. Gym = ClassPass7. Mini-Bar = Saucey8. In-room Dining = GrubHub9.Parking = Uber

Hotel only left with bed, bathroom, Wifi

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Context

Context

-Third, I want to talk about context-Bc you can now identify who people are across their devices, you can serve them more meaningful and more timely messages, within the context of their family and friends. Within the context of feeds. -In a time where people are connected all the timeevery dayand using multiple devices, the ability to know who youre reaching and when youre reaching them helps advance ongoing conversations.-Reaching people within context is pivotal

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But there is a lot of noise. A lot of activity. A lot of competition and distractions. And you need to be able to breakthrough the clutter.You no longer have to rely on generic demographics, you can deliver messages that matter, at moments that matter.I often get the question of, what is the best ad on Facebook or Instagram? And there is no generic answer.TRANSITION: My best advice is to make your add personally relevant. Because you can do so. Because people expect this. Because doing so is what will make your brand matter to someone immediately and over time.

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Personal relevance

And each ad experience on platforms like Facebook and Instagram should be meaningful and relevant. In Facebook News Feed for example, which is essentially a personalized newspaper, you have a patchwork of what and who you care about, your interestswhat matters to you. And when you think about your ability to drop in your highly relevant adin that news feed--and show it to just the right people, and at just the right time, you now have a formula for turning people into customers and for turning customers into long-time customersAnd the capability of doing this en masse is truly personalized marketing at scale. [TRANSITION] Sounds like an oxymoron, but theres a lot of merit to it and heres what I mean.

EXTRA(BRAND NOTES)And when you think reaching her or him or whoever those people are, youre shaping perceptions that all add up to how people perceive your brand. So making those interactions matter over time is what will move your business over time. But this day in age, people dont want to just buy something. They want to buy into something.They want to buy into what you stand for. So the idea of humanizing your brand, in a way that people can connect with, is, ironically, becomes more powerful and meaningful in this digital landscape.

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Ted,enjoys exotic vacations

Julie,just got scuba-certified

Jesse,loves yachting

Neil, loves hiking

Troy,likes adventure travel

William, avid golfer

Jane, thinking of taking a cruise

-On large, people-based platforms, youre not reaching an email address or an account number. -You can reach real people and gain a deep understanding of their intentions. -Lots of signals that indicate intent-No better signals than people who have visited your app or website, or both.-Once you have that signal, its massive missed opportunity.Good targeting is the difference between a conversion and a missed opportunity. Its that simple. -This takes the meaning of big dataor targeting, which is how I think about itto an entirely new realm of possibility.-It has also changed the face of travel because you can use information to personalize experiences for people.-You can pinpoint, to a science, who you want to reach and when you want to reach them. -Real identity-based networking (like Facebook) plus your data allows for long-term relationships with customers that increase the ROI of each customer over time. -With privacy-safe structures in place, combine that data.-Leverage your own dataand match it with that on digital for maximum reach.-That is how so many businesses are seeing tremendous result.

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ConnectionConvenienceContext

That's what this new mobile-first, constantly connected world allows for Travel marketers.-And putting systems in place that allow you to build systems that will allow you to change your futurewill actually change your future.-Integral to that is an investment in connectivity because PEOPLE are always connected. -What I mean is: one of THE best investments you can make is in mobile.-This also includes breaking down the silos within your organization to make those investments possibleInvestments that will give you access to reach all of the people who matter to you.-Access to having those meaningful conversations.-From inspiring people, booking people, and keeping your most loyal customers close to you, you have more control than ever how to help drive profit. -With mobile,-You have the power to drive growth and optimize your market potential. -You have the power to scale farther and faster than ever. -You have the power to harness the power of all of the people who matter to you.Thank you.

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