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Priceline Group CEO Darren Huston says the company’s TV advertising, which is smaller but growing much faster than its online advertising, has been a “breakthrough,” reducing Priceline’s dependence on Google.
“This has been a real breakthrough for us,” said Huston during Priceline’s third quarter earnings call today, adding that TV advertising enhances the company’s ability to drive customers direct to its websites.
“Our dependence on Google has lessened,” Huston added.
Priceline, including its Booking.com unit, has been one of Google’s largest advertising customers and Priceline’s online advertising in the third quarter increased 31.2% to nearly $700 million.
But offline advertising for brands including Booking.com, Priceline.com and Kayak jumped 79.5% in the third quarter to $71.6 million.
Booking.com advertises on TV in the U.S., Canada, the UK and Australia and recently launched in Germany; Priceline.com airs TV commercials in the U.S. and Canada, and the Priceline Group’s Kayak.com advertises in the U.S. and Canada and is increasing its offline advertising in Europe.
Huston said he is feeling better about the company’s TV advertising in building long-term direct relationships with customers. “It also diversifies our source of demand nicely,” Huston said.
The advertising blitz by travel brands, including, Expedia, Hotels.com, Kayak, Trivago, Booking.com, Priceline.com and Travelocity, in the last couple of years is a challenge for Google as it tries to increase its clicks, Huston said.
Eating Expedia’s Lunch?
Huston was very bullish about the Priceline Group’s prospects globally, where he said it is gaining share in all markets that it participates in, adding that the company is increasing its efforts in the U.S. “where our product deserves more market share and we plan to make that happen.”
Priceline’s lodging-only Booking.com unit is the fastest-growing major player in the U.S., Huston said. He said Booking.com is increasing its hotel supply in the U.S. and enjoying positive metrics on repeat customers, which reduces dependence on advertising through Google.
“It’s a very competitive market and we stand ready to compete in that business,” Huston, said, referring to the U.S.
The Big Get Bigger
The Priceline Group edged Expedia Inc. in gross bookings in the third quarter, and Booking.com increased its hotel supply 52% to a world-leading 540,000 bookable properties. Expedia, the number two player in hotels, is roughly 200,000 properties behind that number.
Huston said he’s “very optimistic” about the Priceline Group’s global prospects despite the fact that the company reiterated that it expects its growth to decelerate because of the large size of its business.
Said Huston: “Share is shifting to large players in the OTA [online travel agency] space and there are a lot of things shifting in our direction.”