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Fresh off returning to U.S. national TV advertising after a two-year sabbatical, TripAdvisor has been outspent by hotel-search rival Trivago over the last two weeks by a margin of nearly three to one.
That’s according to an estimate by TV advertising analytics firm iSpot.tv, which pegs Trivago’s spend at some $18 million in the U.S. from June 21 to July 4 compared with the second-largest spender, TripAdvisor, at nearly $6.8 million.
In contrast to TripAdvisor’s bathrobe-clad owl as its central character, the alternating Trivago Guy and Trivago Woman are drawing more attention with an average view rate during the period that’s some 7 points higher than the owl’s.
As you can see from the following chart, which depicts iSpot.tv’s top 10 booking-site spenders on U.S. national TV advertising, TripAdvisor’s three ads are running about one-third as often as Trivago’s 26 commercials.
Trivago’s 26 spots seemingly have an advantage over TripAdvisor’s trio of ads because viewers may get tired of so few spots running repeatedly. On the other hand, Trivago is airing its advertisements so frequently that Trivago is likely alienating some viewers, too.
Top 10 Booking Sites in U.S. TV Advertising Spend 6/21/2017 to 7/4/2017
|Brand||Spots||Airings||TV Ad Impressions||Average View Rate||Estimated Spend|
TripAdvisor wouldn’t comment about the iSpot.tv numbers.
A Trivago spokeswoman says the company isn’t feeling any heat from TripAdvisor’s new ad campaign.
“So far we have not seen impact on our side,” the Trivago spokeswoman said.
As for strategy regarding its competitors, the Trivago spokeswoman said, “Trivago’s marketing approaches are data-driven, proof-based, and our actions are motivated by outcomes. Our focus comes from within the company rather than comparing ourselves to others.”
Trivago seems to have increased its advertising spend in the last couple of months, but it’s unclear whether that is a response to TripAdvisor’s return to TV or just the advent of summer travel season.
In the past, TripAdvisor has stated that it wouldn’t need to spend as much on TV advertising as its competitors because TripAdvisor’s brand recognition is greater than most, and it already is attracting huge consumer traffic to its sites for a variety of reasons, everything from reading hotel and restaurant reviews to booking tours and reserving hotels and vacation rentals.
Not everyone is buying that argument.
“Honestly I think that’s the old school mentality of ‘We’re on the throne and nothing’s going to change that,'” said one advertising analyst who declined to be identified. “Look at someone like BlackBerry. They had huge marketshare that got cannibalized by a sexier brand because they thought they could keep up the status quo. Times change, and to win you need to reach new consumers, not just survive with what you’ve got.”
One TripAdvisor shareholder, who requested anonymity, said the larger question should be how TripAdvisor’s return to TV advertising might impact Trivago.
“I think the story should be, will TripAdvisor’s return to TV hurt Trivago’s return on advertising spend and blistering growth rate?” the TripAdvisor investor said. “If Trivago’s return on advertising spend deteriorates and they dial back TV spending, what will that do to their growth?
“I suspect Trivago is the one to worry about long term,” he added. “They have no compelling organic reason to drive traffic to their site, and are totally reliant on TV spending. TripAdvisor is in a far better position with all that traffic, their app, and now ramping up TV, in my opinion.”
One company that doesn’t appear in iSpot.tv’s top 10 is Kayak.
“We don’t buy a lot of national broadcast right now, said Kayak co-founder and CEO Steve Hafner. “YouTube, online video, and local TV are a different beast though. We’re well-known for flights, so neither Trivago nor TripAdvisor’s spending hurts.”
Several months ago, Hafner said Kayak’s pending acquisition of the Momondo Group wouldn’t help Kayak in its hotel competition with Trivago, but now that Kayak’s sister company Booking.com has added Kayak’s flights to its homepage, Kayak’s emphasis appears to be changing toward airplanes.
TripAdvisor has committed to spending some $70 million on global TV advertising in 2017.
Hafner believes TripAdvisor has a chance to make some gains with its campaign.
“TripAdvisor has a chance or they wouldn’t be spending,” Hafner said. “But they’re probably going to have to commit more money and dig a much bigger EBITDA (earnings before interest, taxes, depreciation, and amortization) hole in the next few years.”
TripAdvisor’s increased ad spending is part of a quest to let consumers know that they can search and/or book hotels on its sites, not just leave reviews. And the competitive field is wider than up-and-coming Trivago.
The Priceline Group’s Booking.com spent nearly $6 million in U.S. national TV advertising over the last two weeks — within shouting distance of TripAdvisor’s spend, according to iSpot.tv.
Google’s hotel metasearch product isn’t on TV at all, but Google is taking marketshare in part because of its near-monopoly in search.
The TV advertising space, though, is fairly crowded.
In fact, among iSpot.tv’s top 22 booking sites in terms of U.S. TV spend over the past two weeks, Expedia Inc. brands — including Trivago, Expedia.com, Hotels.com, Travelocity, HomeAway and Orbitz.com — spent some $25 million, and Priceline Group brands, including Booking.com and Priceline.com, shelled out about $8 million.
Trivago was Expedia Inc.’s biggest spender at $18 million over the past two weeks, while Booking.com, at $5.9 million, carried the smaller load for the Priceline Group.
Of course, TV is only one element of booking sites’ overall advertising mix.
Following are three TV spots from Trivago, TripAdvisor and Booking.com.