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834 days ago
 

US travel marketers increasing digital ad spending as Google tweaks the rules

Oh, the complexity of paid search.

That’s the theme running through the eMarketer June report on digital ad spending for leisure travel in the US.

eMarketer estimates that US online leisure travel ad spend stood at $2.56 billion in 2011 and will grow 23.4% to $3.16 billion in 2012.

The forecast, benchmarked against Interactive Advertising Bureau and PricewaterhouseCoopers data and completed in January 2012, includes spending on “banners, classified ads, email (embedded ads only), lead generation, rich media, search, sponsorships and video,” eMarketer says. It also includes some mobile ad spend within search and display.

By 2016, that digital ad spend in the US is projected to reach $5.58 billion at a compound annual growth rate of 16.8%

“Search marketing is increasingly complex,” eMarketer states. “Heightened competition for keywords, ongoing tweaks to Google’s algorithm and changes in consumer search behavior are keeping marketers on their toes. To rise above the clutter, they are fine-tuning organic and paid investments.”

Among their tools, marketers are turning to retargeting to find customers further along in the travel-planning process at lower cost; social media, and mobile advertising, eMarketer says.

Google, of course, is an overwhelming factor in digital ad spending in the US and eMarketer notes that “Google is changing the rules” and driving up ad spend. It states:

On one hand, the search engine’s Panda and Penguin algorithm updates assign less organic search priority to travel aggregator sites with duplicate listings. Similarly, Google’s flight and hotel search offerings, which can potentially return search results that compete with existing travel aggregators and suppliers, and its Google Places and +1 functionality can deliver social content that appears above other companies’ organic listings. These changes have forced travel marketers to buy keywords to replace organic results that were displaced by Google content.

Actually, regarding the above reference to Google Places, it has been replaced by Google+ Local, but the principles are the same.

Google has been staunchly criticized for giving its own products preference over organic results, although the company argues that it is just trying to enhance the user experience.

Among the new Google advertising programs in Hotel Finder are Promoted Hotels, a program which has OTAs and hotels bidding against each other on hotel ads and links.

While airline ads dominate Google Flight Search, OTAs are battling against one another and hotels for ads in Google Hotel Finder — and that prospect may turn into a valuable business proposition for Google.

In a testament to Google’s power over digital ad spend, it’s tough to get a major chain to comment on Google Promoted Hotels even though InterContinental Hotels is dabbling in it.

Representatives of Marriott, Wyndham, InterContinental, Hotel Electronic Distribution Network Association (HEDNA) and Room Key all declined to comment out on Google’s Promoted Hotels, for example.

In eMarketer’s report, meanwhile, Grazia Sorice Ochoa, director of global digital marketing for Starwood Hotels, talked about some of the positives of the chain’s participation in Google Hotel Finder, although her comments came before the launch of Promoted Hotels.

Google’s Hotel Price Ads are “the single biggest innovation we’ve accounted for,” Sorice Ochoa told eMarketer, because the ads give Starwood more insight into consumer behavior. She continues:

With Google’s hotel search program, consumers can not only see the price of a hotel, but they can change the date range. This enables us to learn something we didn’t previously know in search, which is what dates [thesearcher is] interested in. We can then decide whether or not to participate or bid against that particular person.

 
 
Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.

 

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  1. hotelmarketing@facebook.com

    Sorice Ochoa could have had that demand data earlier and cheaper – logging API requests of meta searches provides great insights ;)

     
 
 

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