Ranked by ad digital spending, travel is the sixth-largest industry in the U.S. and it is predicted to become the fifth-largest next year after surpassing the consumer packaged goods (CPG) industry. A strong economy, considerable competition for travelers and a shift from traditional to digital media are noted as three primary reasons for the growth in travel ad spending.
Travel Advertising Shifts From TV To Digital
“Travel has historically been big on TV – we’ve seen that with the likes of Expedia and Travelocity – but,” said Monica Peart, eMarketer VP of Forecasting, “what we are now seeing is a move from TV storytelling to digital storytelling.”
The shift from traditional media to digital media is a story shared across all verticals, because “time spent on mobile devices surpassed time spent watching TV for the first time ever” this year.
Competition For Digital Travel Bookings Has Intensified
Another reason for the scaled spend in digital travel advertising is the increased intensity with which travel brands must compete to secure digital bookings. With “companies such as Airbnb, Google and Facebook vying for a slice of what stalwarts like Expedia and Priceline have historically had all to themselves,” according to George P. Slefo, an AdAge technology reporter, the competition for travel bookings has become cutthroat.
Google, for example, is competing with their own search tools, such as Google Hotel Search, at the same time they’re changing the search experience to include more information, such as flight prices. As a result, major brands are spending more than ever to appear at the top of Google’s search engine results page (SERP).
In fact, according to the Q3 2018 earnings report filing of Booking Holdings, the owner of Priceline and Kayak, the company spent $1.3 billion on performance marketing in Q3 2018, and the majority of it was “related to the use of online search engines (primarily Google).”
Within their Q3 2018 filing, Bookings Holdings noted that, “Changes by Google in how it presents travel search results, including by placing its own offerings at or near the top of search results, or the manner in which it conducts the auction for placement among search results may be competitively disadvantageous to us and may impact our ability to efficiently generate traffic to our websites.”
Some Travel Brands Are Using First-Party Data To Combat Growing Digital Media Expenditures
While many travel brands are investing more in digital media and search marketing, other travel brands are discovering opportunities to save on advertising expenses by leveraging first-party data. Caesars Entertainment, for example, has been collecting customer data from its Total Rewards program for almost 20 years. According to Michael Marino, Chief Experience Officer and SVP of Marketing at Caesars, they now have “near-perfect information on what the customer would do and when they visited our properties.” This data is put to use by Caesars when messaging customers to bring them back to Caesars and spend more when they’re there.
For travel brands that have not been collecting data for decades, subscriber acquisition campaigns can help build lists of consumers who opt-in to hear about special offers. Over time, brands learn which offers resonate with which consumers, and campaigns can be optimized with that data.
Reimagining Your Travel Marketing Win?
Travel marketers looking to launch or grow their email marketing campaigns can leverage people-based marketing to drive targeted traffic to travel websites or generate reliable, scalable data from opt-in forms on partner sites. When travel brands own their subscriber lists, they can bypass Google and go directly to their loyal followers with great offers, rewards program incentives and last-minute deals. Contact Digital Media Solutions® today to learn how people-based marketing campaigns help travel brands compete in a cost-conscious way.