Priceline CEO Darren Huston has recently commented that social media advertisement on Twitter and Facebook does not deliver satisfying results for the company. According to Bloomberg Hauser said that “for Facebook and Twitter, we have endless amounts of money, but we haven’t found anything there.” This comment is only the most recent addition to a debate over which forms of digital marketing are most effective in travel and tourism.
PRICELINE’S AD SPENDING BEHAVIOUR
With annual online marketing costs of $1.8m, Priceline is one of the biggest spenders in digital advertising. Especially for online travel agencies it is vital to generate traffic of users to drive their sales. For Priceline, Google seems to offer the best value, as up to 90% of their advertisement budget is spent on Google search ads. While social media ads are a good way to start communicating with fans and followers, and can be used to target individual market segments, based on specific socio-demographic data (location, age, who they follow, etc.); they have not resulted in significant bookings for Priceline and its associated brands. This does not come as a big surprise. Social networks are not set out as conversion driving channels. While performing extremely well as an awareness channel, the likes of Facebook fall consistently short in driving transactions.
DIVERSIFICATION OF ADD SPENDING
OTAs and major travel brands are continuously looking for alternatives to Google search ads. However, as it seems, social media has difficulties to keep up with the expectations. An increasingly important alternative for travel brands are metasearch sites, such as Trivago, Kayak and TripAdvisor. Priceline’s acquisition of Kayak for $1.8bn and Expedia’s acquisition of Trivago for $564m cash and additional shares, reflect the major OTA’s search for an advertisement hedge against Google.
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