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When the pandemic started and travel was immediately put on pause last year, marketing budget was among the first to undergo drastic reduction in travel companies around the world. Skift Research conducted a survey in late April last year to gauge the damage to the marketing team. Out of the 756 companies participating in the survey, 90 percent had already cut marketing spending.

As the year went by, there were patches of recovery across different sectors and regions, determined by virus case numbers, and levels of government lockdowns and restrictions. Marketers were scrambling to find new data sources to capture the fleeting and fluid demand, sending the appropriate messages, all with much tighter budgets and a lack of a playbook to fall back on.

With the unprecedented disruption behind us, what marketing leaders have in front of them are tough jobs of recalibrating still-limited resources and helping steer their companies in the right direction through their knowledge of consumers and actions to reach consumers. Where do marketing teams stand now in terms of budget allocation and marketing priorities? What has changed in the media mix and what should be the new balance and media objectives?

To help address these questions, Skift Research conducted a survey of marketing professionals across major travel sectors and interviewed four senior executives, representing hospitality, metasearch and destinations.

In Skift Research’s Digital Advertising in Travel 2021, launched last week, we present key findings from the survey and insights from these executives, and discusses focal areas in using media and marketing to drive recovery and long-term growth.

Last week, we published our latest Skift Research report, Digital Advertising in Travel 2021. Below, we share a snippet of the report.

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Media and Third-Party Services Lost Bigger Budgets Than Other Areas in 2020. But Overall Mix Will Be Back to the Pre-Pandemic Level in 2021.

Marketing mix has been in flux for the last few years as marketers shift focus to digital channels, with the increasing investment in marketing technology being the leading trend. Skift Research conducted a survey of travel marketers in 2018 to gauge the levels of investment across all marketing areas and media channels. Discounting in-house employee payrolls, we found that advertising and media accounted for nearly 50 percent of all marketing budgets.

Marketing technology was the second largest spending category, making up 25 percent of marketing spending, four percentage points higher than what travel marketers spent with agencies, PR, and other third-party services. For 2019, 48 percent of travel marketers surveyed planned to increase their budgets for MarTech, the highest of all three categories.

We asked the question again in our 2021 survey, only this time adding in-house payroll to the mix as it is a crucial element to track during the pandemic. Even with staffing in the mix, media still made up the largest share of marketing spending in 2019, with 36 percent of all marketing budgets going to paid media. In-house payroll came in as the second spending category, accounting for a quarter of marketing budgets. MarTech and third-party services each accounted for 18 percent and 15 percent of total budgets, respectively. In 2020, while all areas of marketing functions underwent reduction, paid media and third-party services had bigger cuts than the other two major areas, with paid media losing 6 percentage points in budget share and third-party services losing 2 percentage points in share. Marketers expect to see a return to the 2019 mix in 2021 as they bring back media investment and agencies to capture demand recovery.

It’s worth noting that if we exclude in-house payroll from the budget count, the spending shares of the other three major areas were very much in line with what we captured in our 2018 survey.

MarTech will continue to establish its central role in the next few years as data and analytics capabilities, marketing automation, and infrastructure building continue to shape how marketing teams and campaigns are operated and measured. Of the surveyed travel marketers, 76 percent expect to increase MarTech investment in the next five years, the highest of all areas. Advertising and media is the second biggest investment area in the next few years. However, it also stands out as the area where the most companies plan to cut spending, indicating bifurcated attitude on ad investment.

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This is the latest in a series of reports and data products that Skift Research puts out to help you understand the trends in the travel industry. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 200 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. You will also be able to access our proprietary Skift Recovery Index and Skift Health Score data and reports.

Photo Credit: In Skift Research’s Digital Advertising in Travel 2021, launched last week, we present key findings from the survey and insights from these executives, and discusses focal areas in using media and marketing to drive recovery and long-term growth. Artem Podrez / Photo by Artem Podrez from Pexels