Paid Search and Travel 2013

From Gregg Hamilton, SVP of Research & Analytics and Business Development at AdGooroo.
With Memorial Day and the traditional start of the summer travel season just a few days away, it’s a great time to look at the Travel industry and Paid Search. Specifically, how are things faring and what might we expect to happen this summer?

Travel’s Down — What’s Up?

Paid search spend in the Travel category on U.S. AdWords is down in 2013. At $238 million for the months of January through April, it’s actually down 19% from 2012’s $295 million during the same period, which was down 17% from 2011.

Travel Blog 1 - Spend chart

Clearly, there’s a downward trend starting in 2011. And the trend holds throughout the summer months as well, with spend from May through August 2012 down 15% from the same period 2011. If the trend continues, then we estimate the spend this summer will total only $242 million, more than $100 million less than two years ago.

Have travel marketers en masse decided to pull back on their paid search spend? Not according to our data. For instance, we found 217 advertisers in the travel category on U.S. AdWords in Q1 2012 and 228 in Q1 2013.

Another possible explanation could be the so-called “stickiness” of travel sites, which may be better retaining users that have had a previous good experience.

However, a more plausible explanation is that Google has been cannibalizing its advertisers’ clickthroughs and spend with their own travel marketing efforts. After all, the decline in PPC spend began in 2011, a year in which Google Flight Search and Google Hotel Finder launched (in September and August, respectively). It would not be a stretch to conclude that the presence of these new Google features in the first SERP results–the travel equivalent of their Product Listing Ads in that they display a provider AND a price–may be poaching large amounts of clickthrough traffic (and thus PPC spend) from the paid ads on the page.

Travel Blog 2 - Google shots

Top Travel PPC Advertisers of 2012

With the vast majority of travel bookings now taking place online, Travel is a highly competitive category for paid search. Based on PPC-generated impressions, the Top 10 paid search advertisers on U.S. AdWords in the Travel category in 2012 were:

  1. – 883 million impressions
  2. – 699 million impressions
  3. – 670 million impressions
  4. – 663 million impressions
  5. – 629 million impressions
  6. – 595 million impressions
  7. – 538 million impressions
  8. – 469 million impressions
  9. – 353 million impressions
  10. – 349 million impressions

Interestingly, the category is led by, a company that just a few short years ago seemed to occupy the status of ‘best kept secret’ among those in the know on travel deals. Also of note, the better known brands (Priceline, Orbitz, Expedia) are competing not just with each other but with lesser known sites such as and Perhaps in a few years these brands will occupy a similar position to today?

Enterprise Boldly Goes Where No Travel Keyword Has Gone (This Year)

The following chart shows the Top 25 Travel keyword terms in 2013 based on January to March clickthroughs and their change in click-through rank from the same period last year:

Travel Blog 3 - Top 25 chart

In a surprise, it appears that this summer’s new Star Trek film is not the only place to find a popular ‘Enterprise’. The car rental giant’s branded keyword term leads the entire Travel category in 2013 clickthroughs, moving up from the number 4 position in 2012. What’s more, our research showed that the Enterprise keyword enjoys a remarkable 12.1% clickthrough rate. The leader on this metric was Expedia, with a 29.5% CTR, meaning that almost one third of the time that a paid ad for Expedia appeared on a Google SERP, that ad was clicked on.

Overall, navigational/branded keywords (search terms for a specific site, which signal the desired site destination as opposed to a search for information) tended to perform well in 2013. Other navigational keyword search terms that excelled in 2013 include: “Travelocity”, up 7 positions; “US Airways”, up 15 positions, “Trip Advisor”, up 8 positions as well as“” and “Best Western”. A notable exception were the keywords “Southwest” and “Southwest Airlines”, which both slipped in the ranking.
Among non-navigational keywords, big gainers include “rental cars” (up 20 positions) and “cheap hotels” (up 17 positions) while those losing ground included “Disney”, down 12 positions (though “Disney World” climbed slightly).

Noteworthy Observations on the Top 100

The following insights were derived from examining the Top 100 Most Clicked Keywords:

  • The growing popularity of the keyword “vrbo” (vacation rental by owner), which rose to position 51 in 2013 from 78 in 2012, may indicate a new trend in consumer travel habits and a threat to the hotel business
  • Average clickthrough rate was 8.1%, with navigational terms posting much higher rates and generic terms yielding much lower clickthroughs (“flight” was lowest at 1.4%)
  • Queries on “Airlines” yielded the most paid ads: 10.6 per SERP, while searches on “Greyhound” yielded less than 1, on average
  • “Hyatt” got the highest ad coverage (appearing 95.2% of the time) while “United Airlines” got the lowest (37.7%)
  • “Vacation packages” was the term with the most bidders, with 259 advertisers gaining first SERP impressions during the first quarter of the year. “Greyhound” had the fewest bidders (4).

Consumer Searches

Returning to a subject we covered last year the word cloud below depicts consumer search activity on US AdWords during the months of January to March 2013, when many individuals are starting their travel planning for the summer. The size of a keyword is in proportion to the number of paid search ad impressions (Top 25 keyword terms based on resulting ad impressions) which were served on Google’s first SERPs during that period.

Travel Blog 4 - Word Cloud

Evidently, travel searches are equally dominated by informational searches (particularly by people seeking low cost lodging and transportation options) and navigational searches (people using Google to get to a specific carrier or operator’s website). Searches on generic terms trigger ads from multiple competitors, which explains the relative size of “hotels”, “flights”, “cruises” and “cheap tickets” and “cheap flights”, each of which provoked tens of millions of ads (literally) during that period. The navigational searches on branded terms like “Disney”, “Travelocity”, “Enterprise”, “Southwest” and “Royal Caribbean” trigger many fewer ad impressions since Google discourages bidding on competing brands, and so the number of ads per SERP is much lower than for generic terms.