Secret to Kayak’s 2012 profits: $75 million advertising spend
Kayak is anxiously awaiting its move into the Priceline fold, and toward the end of the year will have to renegotiate its contract with ITA Software/Google for airfare data.
Kayak increased its advertising spend 30% to $75 million in 2012 as it saw ncreased travel queries on its websites and mobile apps — and posted its largest profit.
Kayak’s 2012 net income came in at $18.8 million, its highest ever, a 93.8% jump over 2011.
The travel metasearch company likewise saw its 2012 revenue increase 30.4% to $292.7 million, which was built largely on a 32.6% increase in travel queries on its websites and mobile apps.
The $75 milliion Kayak spent on brand advertising went to TV, outdoor signage, and online banner ads, the company said, and this was key because the company believes it will grow as its brand becomes better-known.
Last year was a big one for Kayak as it executed an IPO, and Priceline announced it intends to acquire Kayak for $1.8 billion. The acquisition hasn’t gone through yet as it is being held up by a UK regulatory review.
In 2012, Kayak’s largest customers were Expedia (26% of Kayak’s total revenue), Priceline (10%), and Orbitz Worldwide (7%).
Kayak’s mobile queries chimed in for 17.6% of total queries in 2012, up from 12.4% in 2011. Kayak estimates that mobile revenue stood at 3.8% of total revenue in 2012 compared with 1.7% a year earlier.