The Digital Ad News You Haven’t Read (And What You Miss As A Result)

In 2022, as the digital marketing world shook over Twitter’s recent ad implosion, Microsoft regained prominence in ad tech, and Apple continued its stealthy foray into advertising as everyone in the media value chain complained about the deprecation of cookies, the demise of Facebook and the finale wondered deathblows for “TV” as we knew it, there were also many other important and momentous digital advertising stories that slipped under the radar because there is just so much going on.

Two of the most overlooked stories, particularly in recent all-Twitter/all-the-time news, that may have the most important implications over the long term are the dramatic increase in the speed of search fragmentation and, in partial correlation to that, the growth spurt of travel apps, websites and intermediaries as the world dares again to hop on planes to visit far flung destinations.

Native search is up for grabs as more young people experience the web through social or entertainment apps — and naturally stay there to conduct their searches.

In fact, I think this is the “digital discovery” era, with independent search engines somewhat of a relic of the past, apart from a decreasing number of consumers wanting to use the open web.

“Almost 40 percent of young people do not go to Google Maps or Google Search when looking for a place to have lunch. They go to TikTok or Instagram,” said Prabhakar Raghavan, Google’s senior vice president, at Fortune Brainstorm Tech 2022 in July. Or as the New York Times points out: “Although Google remains the world’s dominant search engine, people are turning to Amazon to browse products, to Instagram to keep up with trends, and to Snapchat’s Snap Maps to find local businesses.” A recent survey in the UK even showed that TikTok is the fastest-growing news source ( !!) is for adults.

In other words, search is fragmented and no longer solely to guide competitors as the pace of change increases. Google lost its product search lead to Amazon years ago, where most searches really start: 61% of online shoppers in the US start their product search on Amazon. Interestingly, retailers are catching up too, with 32% starting their search on Walmart, and platforms are also taking their share of the search pie at 15% on Instagram and 11% on TikTok. (We’ve said this before, but we’ll say it again, the Internet is perhaps the most competitive sector of the economy and needs no intervention to be dynamic.)

Similarly, as travel apps and websites have flourished, so has the consumer habit of using them as search platforms as well.

For years, even before the “earlier days” of 2018, studies have shown that travelers prefer in-app or in-aggregator searches for their trip planning – or maybe just for their dreams.

That long ago, an eternity in digital years, Travelport Digital surveyed 955 travelers and already “58% of people prefer[red] Apps for finding flights and 53% preferred apps for finding accommodation.” The switch from web browser search to in-app search was a result of perceived benefits in “speed, additional functionality and better overall UX”. Anyone who’s tried planning trips knows that once you’re in the app, or at least the web version of a third-party travel aggregator, you tend to follow the paths within those choices and never go back to general web browsing.

Google has responded by announcing that it will redesign Google search for the TikTok generation to highlight map sections, products, images and even videos in new ways.

This coincides with the way the The post-pandemic travel boom is changing service advertising, which follows where consumers are.

You can see why things are in flux. That travel search mostly takes place in apps or at third parties has become such a truism that Frommer’s, once one of the few travel experts in the days of print, now compiles an annual list of which apps and sites and aggregators produce the best search results. Booking.com, FlightNetwork, Skiplagged, Momondo, TripAdvisor, Kayak, Hopper, Google, Kiwi and Skyscanner are all on the list of places where travelers take their search journey. DuckDuckGo and Neeva not..

Of course, all of this search means consumer eyeballs, which means advertisers. While many of the travel-specific sites and apps don’t break down their ad revenue per se, or the industry is sorely lacking in research on the subject, one can see some salient trends that are being overlooked in the industry.

Booking Holdings, the global leader in online travel and related services, which owns Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK and OpenTable, to name a few, reported total revenue for the second quarter of 2022 of 4, $3 billion, a 99% increase over the same quarter last year, and advertising is an important part of that revenue stream. TripAdvisor (which also has a portfolio of travel media brands, apps, and businesses) is up 77% over the same period. Expedia Group’s second quarter lodging bookings were the highest in the company’s history, while revenue and adjusted EBITDA ($3.2 billion) were the highest of any second quarter (Expedia also owns a number of travel apps and -Brands). And as consumer behavior has shifted to third-party travel agents, all of this is being fueled by advertising and a way to redirect traditional search.

Overall, downloads of the top US airline, hotel and online travel agency apps are up 45% year over year, and airline apps are up a staggering 70% in both April and May.

There is also increasing cross-platform integration between travel industry players, including Booking.com, which is testing Snap’s dynamic travel ads. And then there’s Marriott, which in May launched a retail media network (aka a programmatic advertising platform) to target consumers, in part using the hotel chain’s data about its guests to serve them ads on places like the hotel’s websites and finally to bring the televisions in their rooms. According to research firm Insider Intelligence, net advertising revenue from retail media advertising in the US will grow from $41 billion this year to more than $60 billion in 2024.

And all while Google is at least partially exiting the travel business. The search giant announced it would be ending Book on Google for flights for users outside the US at the end of September and ending the feature in the US sometime after March 31. A similar feature for hotel bookings was discontinued earlier this year. The reason? Despite the platform’s supposedly unassailable weight, Google couldn’t get enough people to use it, even though travel advertising was a $4 billion business in 2022.

Brian King is President of Marriott International’s Caribbean and Latin America Division and has been in the hotel business for over 30 years. He has seen the evolution of travel from a unique angle. As a former brand, sales, marketing and digital leader, and now the income statement owner for one of the company’s fastest-growing divisions, he has witnessed firsthand how consumer behavior has changed over time.

“At the beginning of my career, consumers only had three options to make a booking: our toll-free 800 number, a direct call to the hotel, or working with their travel agent. Today the market is awash with choices to secure travel across a range of platforms,” says King. “But again and again, customers who are loyal to a brand find the convenience of booking directly on the brand’s website. And in return, brands reward these consumers with valuable tangible and intangible benefits like discounts, loyalty programs, and hassle-free changes or modifications. That being said, we always want to be in front of consumers no matter where they shop and book, so our partnership with other travel platforms will remain part of our strategy. In today’s digital world, you really can’t win new customers on your own, but once consumers fall in love with your brand, their buying behavior fundamentally shifts to brand direct. As any business leader will tell you, we are all looking for the lowest acquisition cost with the highest revenue per transaction. And that will never change.”

The key point is that consumers are now steering their search to optimize their own experiences, and not relying on “search engines” to dominate their digital journeys, but rather adapting to the nearly limitless search possibilities – whether in apps , in retail media, while traveling or on the open web. It’s less about the search itself and more about discoveries.

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