In the US, digital ad spending is on the rise in the travel sector. In 2013, paid digital media spending will increase to $3.35 billion and by 2017, it is predicted to further increase to $4.96 billion. Although growth will be slowing down from 2014 to 2017, overall travel industry digital ad spending is still on the rise. According to eMarketer, more investments in terms of digital ad spending go into direct response, 73% of marketers in the travel industry, however, branding is still important as well and will make up the other 27% of ad spending (eMarketer 2013).
US PAID AD SPENDING
In the US, paid ad spending is dominated by OTAs such as Priceline.com, Expedia and Orbitz. These OTAs are spending billions on advertising worldwide each year. In 2012, Booking.com spent $1.27 billion on internet advertising which was up from $919.2 million in 2011. This is a major growth and was happening across all OTAs.
In 2012 and 2013, the majority of paid search clicks from US consumers actually came from computer searches. However, mobile advertising is growing quickly. The overall proportion of paid search click shares from Smartphones and tablets are growing steadily. In the first quarter in 2013, 16.7% of travel and leisure paid search clicks came from Tablets and another 6.5% from Smartphones. This is an extraordinary increase from the first quarter of 2012 where 9% of paid search clicks came from Tablets and only 3.9% from Smartphones. Mobile ads are therefore very important for today’s marketer and in the future, the overall share of paid search clicks is only predicted to increase further from mobile devices.
During the last years, travel search has actually grown in importance with search engine marketing being the backbone of tourism. Marketers in tourism spend a large amount of their advertisement budget on mobile paid search and search engine optimisation. However, travel search is still changing and especially with companies such as Google trying to tap into travel, there are more challenges for tourism companies as these big players are fighting over travel traffic.
Travel advertisers are successfully using retargeting as search and display performance-based formats as well as keyword targeting. Direct response ads drive leads and conversions but display investments are still increasing and moving more towards using rich media such as videos, mobile and social displays rather than using standard banners.
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