HSMAI has partnered with Phocuswright on a new report that offers a deep dive into travel-ad spend in the United States and Europe, exploring the essential trends that define digital travel advertising. You can download the executive summary of Travel Advertising in U.S. and Europe: Industry Sizing and Trends here and order the full report here.
Meanwhile, here are key takeaways:
Online Travel Is Travel
- The distinction between online and offline travel is blurring, with a majority of consumers engaging with digital in some form from the dream state through their travel plans.
- Advertisers are aligning budgets with consumer travel behavior to guarantee their presence wherever the traveler may be.
- Digital ad spend budgets account for a substantial and growing share of total budgets, and this trend will only continue.
Mobile and Desktop Are Not One and the Same
- Mobile spend has increased nearly to that of desktop, but traveler behavior determines the final split. Most bookings are completed on desktop, while travelers use mobile to peruse and plan their travels. Advertisers must be active on both.
- More than half of U.S. online travelers now shop on mobile, but European travelers are still more likely to shop on desktop. Mobile shopping in Europe will continue to rise, however.
SEM Delivers the Conversions, but the Dependency Is Problematic
- The word Google has become synonymous with online search, making it no surprise that search engine presence is a key component of ad-spend strategies.
- Search engine marketing (SEM) is expanding rapidly and accounts, on average, for the biggest share of advertising budgets. Google AdWords is one of the most widely used SEM products. More than four out of five advertisers use SEM because they are considered the most effective products for delivering bookings.
- Keyword competition is a major challenge, and advertisers are in a search for ways to lessen their heavy dependence on SEM.
Distinct Channel Strategies Connect to Distinct Channel Goals
- In today’s multiscreen, multichannel world, there are many more opportunities to reach travelers. Advertisers need to be present across channels or risk missing their chance at a conversion.
- Some advertising channels are viewed as better than others for specific goals. Direct response is more successful through SEM, metasearch, and online travel agency (OTA) advertising, while brand awareness is aided by platforms such as social media or video advertising.
TV Is Keeping Offline Relevant for Now
- Offline budgets are shrinking due to less interest in channels like print and out of home and to travelers’ ongoing shift to online shopping and booking. TV advertising spend accounts for the biggest offline advertising expense.
- TV stands the test of time as the most effective way to deliver brand lift to a big audience, though the hefty price tag means that not all travel brands can participate.
- Of the many new advertising technologies, online video stands out as an effective branding channel. Though not yet widely adopted, many travel advertisers are experimenting with or have plans to implement this new medium. Online video marries the old with the new, offering a more affordable alternative to delivering rich, engaging content similar to TV.
So Many Advertising Channels, So Little Attribution
- Travel advertisers are managing the use of many different products, so identifying what works and what doesn’t is more important than ever to ensure dollars are spent effectively. But employing attribution models that truly reflect the performance of multichannel strategies remains a major challenge.
- Advertisers are overwhelmingly using simplistic single-click attribution models — or none at all — creating somewhat misleading success metrics. The future of attribution must consider cross-channel and cross-device behavior.