According to a report by ad network Dentsu, travel will spend 7.5% more on advertising this year compared to 2023. This outstrips industries such as automotive (at 3.6%), telecommunications (3.4%) and even technology (7.1%). Of course, travel is starting from a lower base after the dramatic cuts of the Pandemic, but it reflects a buoyant mood as companies build back.
Where that ad spend is going is interesting. In terms of digital, all other industries spend the majority of their ad dollars on display – creative formats allowing companies to reach audiences in their chosen environments, targetable by context, audience demographic, or previous browsing behaviour. Meanwhile, travel (and just one other category – pharma) spends the majority of its advertising on search. A channel that is proven to be effective, and is highly accountable, but one that relies on reaching customers when they are expressing intent.
Search can deliver cost effective conversions, but only from people who are approaching the end of their purchase journey and are expressing intent to buy. Meanwhile the playing field of search is becoming more of a bunfight than ever – increasing competition has pushed the average cost per click up by 10% this year, and Google flooding the listings with AI results has muddied the pitch.
So, is the media channel that is traditionally thought of as guaranteed to perform, actually more of a risk?
In our view, the opportunity (and necessity) for companies in travel is to stimulate demand higher up the purchase funnel. Find your brand’s distinctive position and get it in front of customers using video, animation, creative display. And for the smart travel company, maybe it’s less of a risk to take that approach now, while everyone else is busy scrapping it out in the search engine bearpit.
