Booking's Ad Play on Trivago Shows How to Create Opportunity From Crisis
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Trivago was glad to see that Booking Holdings kept on advertising, however modestly, and upped its bidding in Trivago auctions while many other partners went silent. If Booking is gaining a bit of market share, it is far from seeing a clear path to recovery as travel demand's trajectory remains a crapshoot.
The adage to never waste opportunities in a crisis seems to be working for Booking Holdings when it came to its strategy for advertising in lodging search company Trivago during the second quarter.
During Trivago's earnings call Wednesday, Chief Financial Officer Matthias Tillmann said during March and April, some of its partners ceased advertising with the company, and others significantly reduced their campaigns.
"Booking Holdings and their sub-brands (like Booking.com and Agoda) have kept all of their campaigns live throughout the quarter, and have been actually one of the first to adjust the bids upwards when they felt that cancellation rates were under more control and volumes were picking up," Tillmann said.
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He said that has helped Booking Holdings increase its "overall share." Tillmann was referring to Booking's overall share of advertising spend in Trivago, but it's not a giant leap to believe this spending would equate to some modest market share gains, as well. The following chart shows how Booking Holdings increased its share of Trivago's total referral revenue — the money Trivago generates when travelers click on an advertisement — to 54 percent in the three months ending June 30, up from 39 percent a year earlier. Using the same lens, Trivago's second largest advertiser, parent company Expedia Group, has seen its shar