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BizReport : Social Marketing : May 24, 2013

Travel: Paid search spend continues downward trend

New data highlights a continuing downward trend in paid search spend in the travel category on U.S. AdWords since 2010. Why might that be? AdGooroo thinks they know.

by Helen Leggatt

In the four months to April, 2013, U.S. AdWords spend was $238 million, down 19% from the same period in 2012 which, in turn, was 17% down from 2011. In fact, advertisers shelled out $75 million more during January - April of 2010 than in the same period this year.

The same downward trend can be see in travel advertisers' summer spend during the months of May through August. Last year's $300 million spend was $51 million, or 15%, down on the previous year.

Projecting that trend to the upcoming summer season means a forecast spend of $242 million during May through August this year.

However, AdGooroo found more advertisers in the travel category in the first quarter of 2013 than in the first quarter of 2012 - 228 compared with 217. While site 'stickiness' could be behind the downturn in AdWords spend among travel advertisers, with travel websites retaining consumers who have had good experiences, AdGooroo is more inclined to suspect cannibalization of ad spend, and clicks, due to Google's Flight Search and Hotel Finder products.

According to Gregg Hamilton, SVP of Research & Analytics and Business Development at AdGooroo, "the decline in PPC spend began in 2011, a year in which Google Flight Search and Google Hotel Finder launched (in September and August, respectively). It would not be a stretch to conclude that the presence of these new Google features in the first SERP results - the travel equivalent of their Product Listing Ads in that they display a provider AND a price - may be poaching large amounts of clickthrough traffic (and thus PPC spend) from the paid ads on the page."

Read more of AdGooroo's paid search and travel analysis on the company blog.

Image via Shutterstock

Tags: advertising, advertising spend, search marketing, travel advertising, travel industry, trend analysis

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