Priceline Dominates Paid Search, With Expedia Playing Catch Up

The Priceline Group is almost omnipresent in paid search in emerging markets, Expedia Inc. is a distant second, but gaining, and TripAdvisor is hardly in the conversation, a survey found.

In a PiperJaffray web-scraping survey in February 2014 of these companies' search engine marketing placements for hotels in 34 emerging markets in Europe (12 markets), APAC (9), the Americas (11) and Africa/Middle East (2), it found that Priceline companies were present 100% of the time, Expedia had ad placements 79% of the time, and TripAdvisor was a distant third at 29%.

The ramping up of Expedia's paid search presence since March 2012 was the most dramatic change since at that juncture its hotel ads appeared only 62% of the time.

In addition to Expedia accelerating its paid-marketing spend in emerging markets over the last two years, as a side note it is interesting to see how both Expedia and TripAdvisor, which by then was spun off from Expedia, turned down its SEM spending in the September 2012 survey, but were back at it five months later.

Of its most recent survey in February 2014, PiperJaffray analysts Michael Olson and Andrew Connor write: "We must give credit to Expedia-owned sites for gaining exposure at a rapid clip, appearing in 79% of emerging country searches in February 2014 vs. 71% in August 2013."

"Trivago in particular (an Expedia-owned site) shows up well in Eastern Europe," the analysts wrote.

PiperJaffray attributed Expedia's increased SEM presence in emerging markets as likely being a "major driver" in the online travel agency's room night growth acceleration from 20% year over year in the third quarter of 2013 to 25% in the fourth quarter.

Here are PiperJaffray's numbers:

Hotel Paid Search Placements February 2014

Source: PiperJaffray

The latest PiperJaffray survey found that paid links from Priceline's Booking.com or Agoda were atop sponsored search results in all of the 34 emerging markets, but that doesn't mean the Priceline Group's growth will now plateau.

"We could not interpret these results to suggest there is no more ceiling room for Booking.com and Agoda to grow," the analysts wrote, as online adoption generally is relatively low in emerging markets.