Travelport’s announcement that it is bringing all of its GDS advertising business in-house — and it is the first major GDS to do so — is a fairly momentous development because it breaks TravelClick’s near monopoly on green-screen advertising.
Until Travelport’s announcement, TravelClick handled virtually all the advertising sales and ad-serving for Travelport GDS [Galileo, Apollo and Worldspan], Amadeus and Sabre.
The adds typically are messages from hotels about promotions and specials, and they appear on travel agent’s green screens.
With Travelport’s decisions to have its own sales teams exclusively handle this advertising and to use an ad-serving platform of its own choosing, TravelClick is losing a very substantial percentage of global green-screen real estate.
TravelClick is heavily into handling advertising for hotels and GDSs so Travelport’s initiative is by no means a knockout punch for TravelClick, but assuredly it hurts.
For Travelport, which is slated to launch its Universal Desktop in the U.S. later this year, the move means it can earn higher margins in its advertising programs by eliminating a middleman.
The advertising business is a high-margin affair, and many travel e-commerce players are seeking to get the most out of it.
Travelport’s execution of the strategy will answer the question of whether TravelClick or Travelport’s own sales squads can handle the business more efficiently.
The other major GDSs — Sabre and Amadeus — assuredly are monitoring Travelport’s initiative.
Good post – But actually, Sabre has been offering Sabre Spotlight as well as traditional GDS advertising direct to hotels and chains alike for several years with considerable success. Galileo has also sold Featured Property listings directly to hotels and chains for even longer.
Clearly not welcome news but there has been mounting pressure in this area for some time.
Tom, what would you define as considerable success?
I would say both of the companies you mentioned have made mediocre progress in selling directly to hotels. My guess would be if you compared the volumes that TravelClick has historically been able to bring in for its GDS publishers compared to what those publishers are able to bring in for themselves, it’s heavily skewed to the TravelClick side.
Also, most of the GDSs have relationships with supplier distribution folks, not the marketing decision-makers. And surprisingly, those two groups don’t talk very often inside of large supplier organizations.
I think any publisher that doesn’t carefully calculate how much investment it might take to sell directly – not only with regard to resources, but also by theoretically making the lives of these supplier marketing managers more difficult (giving them yet another person they have to negotiate media with) – would be ill-advised to go cold turkey on their reseller partnerships such as TravelClick.
However, Travelport may have been planning this transition for years and now may execute it so well that they will make fools of the other publishers still working with TravelClick.
Only time will tell – kudos to Tport for being so bold as to cut out resellers 100% before anyone else. Fortune favors the bold, right?
Tom: I think the point is true that Travelport is the first to bring all its GDS advertising in-house. Sabre may offer Sabre Spotlight, but also uses TravelClick.
So, the development is “not welcome news.” For whom, TravelClick? Well, that’s obvious.
Is it unwelcome news for Travelport? Hmmmm…I guess that depends on how Travelport manages its new advertising role.