In 2022, as the digital marketing world reels from Twitter’s recent advertising implosion, Microsoft acquires renewed prominence in advertising technology and Apple continues its stealth advance in advertising, as everyone across the media value chain questioned abandoning cookies, Facebook decline and the final deathblows to “TV” as we knew it, there were also many other important and consequential digital advertising stories that slipped under the radar because there is so much going on.
Two of the most overlooked stories, particularly in recent/all time Twitter news, that may have the most significant long-term implications are the dramatic increase in the speed of search fragmentation and, partially correlated with this, the growth spurt of travel apps, sites and intermediaries as the world dares to cram onto planes again to visit faraway destinations.
Native search is up for grabs as more and more young people discover the internet through social or entertainment apps and naturally stay there to do their research.
In fact, I consider this the era of “digital discovery”, with independent search engines as something of a relic of the past, except for a dwindling number of consumers who want to use the open web .
“Nearly 40% of young people, when looking for a place to have lunch, do not use Google Maps or search. They go to TikTok or Instagram,” said Prabhakar Raghavan, senior vice president of Google, at Fortune Brainstorm Tech 2022 in July. Or like the New York Times pointed out, “While Google remains the dominant search engine globally, people turn to Amazon to research products, Instagram to stay up to date on trends, and Snapchat’s Snap Maps to find local businesses.” A recent UK survey even showed that TikTok is the fastest growing (!!) news source for adults.
In other words, research has become fragmented and no longer just to lead competitors as the pace of change accelerates. Google years ago lost his mind in product searches at Amazon, where the majority of searches actually begin: 61% of online shoppers in the United States begin their search for products on Amazon. Interestingly, retailers are also closing in: 32% start their search on Walmart, and platforms also take their slice of the search pie, with 15% on Instagram and 11% on TikTok. (We’ve said it before but we’ll say it again, the internet is perhaps the most competitive sector of the economy and needs no intervention to be vibrant.)
Relatedly, as travel apps and sites have blossomed, consumers have also grown accustomed to using them as search platforms.
For years, from the ‘before days’ of 2018, studies have shown that travelers prefer in-app or aggregator searches to open web searches for their trip planning – or just for their dream can -be.
So long ago, an eternity in digital years, Digital Travel Port surveyed 955 travelers and already “58% of people prefer[red] apps for finding flights and 53% of favorite apps for finding accommodation. The shift from web-browser to in-app search was the result of perceived benefits in terms of “speed, additional functionality, and overall better UX.” Anyone who’s looked to plan a trip knows that once you’re in the app, or at least the web version of a third-party trip aggregator, you tend to follow the paths of those choices and not come back. to general web browsing.
Google reacted by announcing that it is redesign of Google search for the TikTok generation to highlight map snippets, products, images and even videos in new ways.
This coincides with how the The post-pandemic travel boom is reshaping service advertising, which tracks where consumers are.
We can see why things are moving. It has become such a truism that travel research is mostly done in apps or third parties that Frommer’s, once among the few travel experts, at the time of printing, now compiles an annual list of the apps, sites and aggregators that 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 search for travel. DuckDuckGo and Neeva have no..
Of course, all that research means consumer eyeballs, which means advertisers. While many travel-specific sites and apps don’t break down their ad revenue per se, or the industry is sorely lacking in research on this topic, one can see some mind-boggling trends that are being overlooked in the industry.
Booking Holdings, the world’s leading provider of online travel and related services that owns Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK and OpenTable to name a few, saw its total revenue for the second quarter of 2022 reach $4.3 billion, a 99% increase over the prior year quarter and advertising is a significant part of this revenue stream. TripAdvisor (which also owns a portfolio of brands, apps and travel media companies) grew 77% over the same period. Expedia Group’s accommodation bookings in the second quarter were the highest in the company’s history, while revenue and adjusted EBITDA ($3.2 billion) were the highest ever second trimesters (Expedia also has a host of travel apps and brands). And as consumer behaviors have shifted to third-party travel intermediaries, all of these are fueled by advertising and all a way to redirect traditional search.
Overall, downloads of leading airline, hotel and online travel agency apps in the US were up 45% year over year and airline apps were up 70 % in April and May.
There is also an increase in cross-platform integration between travel industry players, including Booking.com Snap’s beta testing Dynamic Travel Ads. And then there is Marriott which introduces retail media network (aka programmatic advertising platform) in May to target consumers, in part by using the hotel chain’s data about its guests, to bring them ads on places like the hotel’s websites and, eventually, on their in-room TVs. Net advertising revenue from retail media advertising in the United States will reach more than 60 billion dollars in 2024 $41 billion this year, according to research firm Insider Intelligence.
And all of this comes as Google is pulling out of the travel business, at least in part. The search giant announcement it will shut down booking on Google for flights for users outside the US at the end of September and end the feature in the US some time after March 31. It has already ended a similar feature for hotel reservations earlier this year. The reason? Despite the platform’s supposedly unassailable clout, Google has failed to convince enough people to use it, although travel advertising is a $4 billion business in 2022.
Brian King is President of the Caribbean and Latin America Division of Marriott International and a veteran of more than 30 years in the hospitality industry. He saw the evolution of travel from a unique perspective. As the former head of brand, sales, marketing and digital, and now head of the bottom line of one of the company’s fastest growing divisions, he has seen firsthand the changes in consumer behavior over time.
“Early in my career, consumers had only three ways to make a reservation, our toll-free 800# number, by calling the hotel directly or by working with their travel agent. Today the market is flooded choice for securing travel across an array of platforms,” says King. “But time and time again, brand-loyal customers find convenience booking directly on the brand’s site. reward those consumers with valuable tangible and intangible benefits like discounts, loyalty programs, and hassle-free changes or changes.That being said, we want to be in front of consumers’ eyes no matter where they shop and book, that’s why partnering with other travel platforms will continue to be part of our strategy.In today’s digital world, you really can’t go it alone to acquire new to customers, but once consumers fall in love with your brand, their buying behavior basically shifts to brand direct. As any business leader will tell you, we all seek the lowest cost of acquisition with the highest revenue per transaction. And that will never change.
The bottom line is that consumers are now conducting their searches in a way that optimizes their own experiences and are not relying on “search engines” to dominate their digital wanderings, but are adapting to the nearly limitless search possibilities that either in applications. , in retail media, in travel, or on the open web. It is less a question of searching in oneself than of discoveries.