Facebook’s ability to retarget consumers combined with the ads being visual, aspirational, cost-effective, and largely in-app for Facebook’s massive and highly-engaged user base will make the platform an increasingly important tool for the travel industry.
Today we are launching the latest report in our Skift Research Reports service, A Deep Dive Into Facebook’s Impact on Travel.
Facebook has become far more than a social network as it continues to expand its reach into everything digital with Instagram, Facebook Messenger, WhatsApp, Oculus and other integrated widgets and apps such as shopping, reviews and mapping functionality. In this report, we look at Facebook’s growing relevance as an advertising and retargeting platform for travel brands, and how Facebook could disrupt the broader online travel ecosystem.
For travel, advertising on Facebook was more about brand awareness. Now hotels and online travel sites have picked up the pace with dynamic ads that were so successful in retail to help drive bookings. And while we expect Facebook to grow its travel revenue meaningfully, there are several challenges including that the broader travel industry is typically slow to embrace change, attributing ad performance is more difficult in a multi-touch world, Google continues to command the bulk of ad spend, and it is complicated to optimize ad spend on Facebook.
Nevertheless, we expect the cost of advertising on Facebook to rise over time. Those that get in early stand to gain better return on ad spend in the long run.
The largest online travel companies spend billions each year on digital advertising with the majority going to Google. The report provides estimates on how much Priceline, Expedia, TripAdvisor, and Ctrip likely spend on digital advertising, what market share that represents, how much the travel industry spends on Google and Facebook, and what the future looks like. We show that Facebook’s gains can be meaningful without becoming a large headwind to Google, which will remain the most important digital tool to drive clicks and bookings given the clear commercial intent of a Google search.
We also explore how messaging is being used to improve the customer experience and, while still more in the test-and-learn phase, facilitate bookings. Some believe that Messenger and WhatsApp are going to revolutionize the travel industry and become key tools to drive bookings where they follow China’s WeChat app within an app commerce model.
We take a more conservative view where messaging and chatbots become valuable tools to engage with consumers before booking, during travel, in-destination, and marketing after the trip. For Facebook, monetization will likely eventually come through advertising and commissions. Additionally, we expect data to be shared amongst Facebook’s products and lead to better ad targeting and higher conversions over time.
Subscribe to Skift Research Reports
This is the latest in a series of twice-monthly reports aimed at analyzing the fault lines of disruption in travel. These reports are intended for the busy travel industry decision maker. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 100 hours of desk research, data collection, and/or analysis goes into each report.
After you subscribe, you will gain access to our entire vault of reports conducted on topics ranging from technology to marketing strategy to deep-dives on key travel brands. Reports are available online in a responsive design format, or you can also buy each report a la carte at a higher price.