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Or maybe they are on a personal level, but see potential revenue from these online travel agency TV advertising campaigns leaking out the door.
Major online travel sites such as Booking.com, Expedia, Hotels.com, Trivago, TripAdvisor, and Priceline have been heavily advertising on TV over the last couple of years, and TripAdvisor and the Priceline Group revealed in the past week that they intend to increase their spending on TV advertising in 2015.
All of these companies have finite marketing budgets, of course, so money spent on TV is dollars, euros or reals not spent on Google paid search or Google Hotel Finder ads.
All of this occurs as Priceline Group CEO Darren Huston revealed this week that he sees TV advertising as a breakthrough that reduces the dependence of the company, one of Google’s largest customers, on paid search.
Don’t Shed Tears for Google
Google generated nearly $14.7 billion in total advertising revenue in the third quarter, and that included a 17% year over year increase in paid clicks, so its search empire will not crumble because a handful of online travel agencies are taking to the airwaves and cable wires like never before.
But Google, which declined to comment on the TV advertising trend in travel, won’t be reacting passively, either.
In one possible response, Google is testing a way to take consumers’ queries for a travel brand — a company they may have learned about or been inspired to look for through TV advertising — and divert them toward paid ads, often for that brand’s competitors.
When many consumers search for a brand they don’t necessarily type its URL into a browser. They often type the name of the brand into a Google search box, such as a query for “trivago” shown at right.
This query for “trivago” in Google retrieves a paid Trivago ad at the top of the page, but also produces a Google search results box for what looks like organic Trivago results for cities such as Berlin, Hamburg and Paris, for example.
The user would expect to navigate to Trivago.de hotel results for Berlin, for example, after clicking on Trivago’s Berlin hotels link in Google. But Google has something else in mind for this query, which started with a search for “trivago.”
As shown in the second screenshot, the user doesn’t end up on Trivago.de, as expected, but navigates to another Google page filled with paid ads from, yes, Trivago, but also from Booking.com, HRS and Ramada, for instance.
The screenshots shown are from one of Google’s umpteen experiments and can be viewed as a commercial response to the spate of online travel sites’ spirited TV advertising and branding campaigns.
If these companies want to spend their ad dollars/euros building their brands on TV, Google managers might say, we’ll still get paid placements out of travelers’ subsequent searches for these brands on Google and we’ll hijack and monetize them for a bevy of other brands, too.
[Update: A Google spokesperson said afar this article was published that in the example cited it was a “bug” that that had users navigating from site-specific links — such as Trivago hotels in Berlin or Hamburg — to a page with more paid ads instead of to the relevant page on Trivago’s websites, and that bug has been fixed. The spokesperson also said that this was not “related to OTAs investing in TV ads since this was never by design.”]
Trying to Get Direct Traffic
Michael Olson of Piper Jaffray sees a shift under way in online travel agencies’ new love affair with TV, but doesn’t think the near-term impact on Google will be monumental.
“As far as the impact on Google, I would imagine it will be minimal near-term,” Olson tells Skift. “I don’t think the online travel players are looking to abandon paid search, but there could be incrementally more marketing dollars shifting to additional direct-traffic acquisition strategies, which TV appears it will be one of.”
The major online travel agencies’ advertising on TV may be motivated in part by the shift to mobile for trip-planning and bookings, Olson says.
“This is clearly a push to drive more direct acquisition of traffic, which may be a function of anticipation of more mobile bookings in the future,” Olson says. “Assuming travelers use mobile devices to book more travel going forward, the ability for an OTA or metasearch site to drive more traffic directly to the mobile site or app (which can create a stickier user base) will become increasingly important.”
Analyst Ken Sena of Evercore acknowledges that TV advertising may help online travel companies generate demand, but it won’t too much to help them with suppliers, including hotels and airlines, which are increasingly looking for data insights from booking partners.
“The issue we find in speaking with suppliers and their partners is that they have more choices then they use to, and they are prioritizing channels that can somehow prove themselves incremental in terms of offering the right supply or customers that resemble their most loyal,” Sena says.
“Facebook is doing a lot of heavy lifting here in terms of trying to get suppliers more comfortable with the idea of leveraging their data in a protected way,” Sena adds. “Google is, too. And, to Priceline’s credit, they have made a move in this direction with a few recent acquisitions, including Buuteeq, Hotel Ninjas and OpenTable.”
Sena believes that winning consumer loyalties in the future will mean that online travel companies will have to execute on tighter integration with suppliers “where things like status, loyalty and travel rewards and check-ins are all seamlessly integrated as part of the search experience.”
“Google is moving down stack so in addition to search, we are seeing more in the way of research, transaction, and a willingness to leverage this transaction data into the travel experience itself, such as voice notifications, calendar, maps, etc.,” Sena says. “This seems like the future to us as opposed to offline TV advertising.”
In sum, Sena argues, TV advertising will attract new customers for the online travel companies, “but unless they can move closer to the sellers, then they risk their sellers bringing their best inventory and pricing elsewhere.”
Priceline, though, rejects the argument that TV advertising would reduce its effectiveness in leveraging data for suppliers.
Says Priceline Group spokesperson Leslie Cafferty: “We aren’t losing dependence on Google at the cost of losing data or conversions. We’re getting customers to come directly to our URL, which is great.”