The Priceline Group, which accounted for 43 percent of hotel-search site Trivago’s revenue in the first nine months of 2016 — might be pulling back on digital advertising in such hotel-metasearch platforms.

Trivago recently appears to have suffered a relative loss in advertising spend by Priceline Group-owned Booking.com, in particular.

Trivago’s share of Booking.com referral of users dropped about 23 percent across its various subdomains, according to Skift’s analysis of data from digital analytics firm SimilarWeb.

When you look country-by-country, the pattern varies by market. In August, the flagship Trivago.com site and Trivago’s Russian site each sent a third fewer user referrals to Booking.com than they did in July, says the SimilarWeb data.

Yet Trivago’s French site only saw a 12 percent decline, and the Italian site only saw a negligible 5 percent decline, month-over-month.

During the same period, TripAdvisor’s U.S., British, French, and Russian domains saw double-digit increases in referrals to Booking.com.

A caveat: Like any third-party service without access to Trivago’s raw data, SimilarWeb’s estimates are rough. But many in the industry consider its data to be valuable in indicating the general direction of trends.

August Surprise

Related to these points, a new survey shows that Priceline brands are not appearing in Trivago search results as prominently as they once did.

Last week, Jake Fuller, a managing director and senior Internet analyst in New York at investment advisory firm Guggenheim Partners, surveyed Trivago’s advertising and saw a notable change. Over time, Fuller has looked at which companies are placing ads on Trivago for hotel search results in 16 cities.

In Fuller’s most recent survey, Priceline brands — including Booking.com, Agoda, and Priceline.com — are no longer as prominent in Trivago’s results as they used to be.

Priceline brands appeared on only 13 percent of the top slots on Trivago on September 12, while Expedia brands nabbed 79 percent of the top placements on Trivago. “Top slot” means the first result in a list of results, which is the most heavily bid placement.

Overall, Priceline brands were only visible in 15 percent of all ad slots on Trivago.

In comparison, Trivago’s rival TripAdvisor hosted a larger overall advertising presence from Priceline brands, which appeared in a quarter of its ad slots overall in the U.S. and internationally — a pattern Fuller said has been consistent for many months.

Fuller said that Priceline might be de-emphasizing hotel metasearch in general and not just against Trivago in particular.

He bases that view on seeing that Priceline’s visibility in the top slots of TripAdvisor’s search has dropped from 63 percent in June, to 39 percent in August, to 10 percent in September. Many surveys have shown that consumers tend not to shop much beyond the first 10 placements in a typical hotel search.

Definitive statements on Priceline’s advertising spend must await its quarterly investment call — if the company chooses to provide some detail. (The company declined to comment for this story.)

But the trend is a suggestive sign that the U.S.-based conglomerate’s largest brand, Booking.com, has at least modestly pulled back its spending on Trivago.

Booking.com’s pullback may help explain a decline in traffic to Trivago.

Trivago saw a drop of about 23 percent in August, versus July, across its various country-level subdomains, according to SimilarWeb data.

Its flagship Trivago.com site saw a decline in the pace of traffic growth, too.

In July, growth in traffic was up a meager 10 percent. In August, it was down, year-over-year.

The performance in both of those months was significantly under trend. Between January and June 2017, Trivago.com saw monthly desktop and mobile Web traffic increases of 40 percent to 57 percent, year-over-year, according to SimilarWeb.

Trivago executives reduced spending on TV advertising to cope with the reduced income from advertisers, which may account for some of an August traffic drop, too.

The Backstory

Earlier this month, Trivago lowered its forecast for revenue and profit for the second half of the year. Revenue dropped because of less ad spending coming from (an unnamed) one of its two main advertisers — Priceline or Expedia.

In early September, executives described the event as most likely being a one-off drop. Last winter they introduced a “relevance assessment” that had the effect of temporarily costing brands like Priceline-owned Booking.com more to get the same number of customer leads from Trivago until they could adapt to the change.

By this summer, that temporary period effectively ended for its two largest advertisers. Yet advertising spending did not rebound to the level projected based on spending patterns prior to the change.

Trivago’s recent move to prod its advertisers to spend money on user experience improvements may have irritated Priceline Group.

Priceline may have wanted to send a message to the rest of the metasearch industry not to take on moves that force Booking.com’s hand.

Trivago itself is definitely in a TV spend and branding battle with consumers in the U.S. and abroad, and new Priceline CEO Glenn Fogel may be asking himself, “Why underwrite your competitors?”

Priceline’s Puzzling Gameplan

People not interested in such conspiracy talk may instead raise the idea that Priceline may just think brand advertising, i.e., TV., is a better way to compete against big brand spenders like Trivago and TripAdvisor, both of which have spent aggressively on TV ad spending in the U.S. this year versus last year.

Fuller of Guggenheim had his own take on the implication. He saw it as a pragmatic move, not a competitive one against an arch-rival.

Fuller told investors that Priceline may have raised its financial expectations for hotel metasearch as a marketing channel generally.

He speculated that Booking.com is setting a higher profit target for its ad spending on Trivago. If Trivago isn’t measuring up, Booking.com may prefer to acquire customers through other avenues that use more overall cost-effective commission models, such as cost per click.

Fuller didn’t say this, but the Priceline strategy shift he discerns as possibly existing could be explained through the lens of Priceline’s lower growth rates as it gets larger and has tougher benchmarks to beat.

In the big picture, Priceline and its rival Expedia are still spending huge budgets on performance advertisements on Trivago and elsewhere. This month Trivago said its downward revision in revenue means that sales are no longer expected to increase 45 percent to around 1.1 billion euros ($1.2 billion) in 2017. That’s still not a shabby growth rate.

This mystery story is interesting not because Trivago is in danger but because it demonstrates the large ripple effects that can happen when only two conglomerates have an outsized influence on the industry.

To recap: Assuming Priceline modestly pulled back its spending in hotel metasearch, investors are wondering whether the company, under new CEO Glenn Fogel, is de-emphasizing Trivago, controlled by its rival Expedia, in particular.

Or is Fogel de-emphasizing hotel price-comparison marketplaces as a general strategy?

The answers are a work in progress.

Photo Credit: Trivago reported a 67 percent rise in its revenue for the first half of 2017. It is heavily dependent on Expedia and Priceline for its revenue. Pictured is a Trivago ad for Hong Kong. Trivago