In recent years the online travel booking industry has largely consolidated into a battle between two behemoths, Expedia, Inc. and The Priceline Group.
Including their own namesake sites, each of these companies owns some of the biggest brands in travel. Priceline, for instance, counts KAYAK and Booking.com in its stable of brands while Expedia has Hotels.com, Hotwire.com and Trivago.
What’s more, Expedia recently upped the ante with its January acquisition of Travelocity and February announcement that it will acquire Orbitz Worldwide Inc.
These latest moves by Expedia prompted us to take a look at competition between Expedia, Inc. and The Priceline Group in the U.S. Paid Search market.
Although The Priceline Group is the larger of the two companies, with $50.3 billion in travel bookings in 2014 compared to $43 billion for Expedia, Inc., Expedia is the leader in Paid Search, at least for 2014.
Based on estimated spend data by AdGooroo, Expedia, Inc. spent $103 million on U.S. Google AdWords for desktop/tablet text ads (not including mobile) across all of its brand sites in 2014 compared to $92 million spent by Priceline’s travel brand sites. This marks a reversal from 2013, when Priceline led over Expedia according to analysis of AdGooroo data by Advertising Age.
As a percentage, the combined spend of the two companies made up more than 20% of the market last year. Expedia’s 2014 expenditure, for instance, accounted for 10.9% of the total $943 million spent on desktop/tablet text ads on U.S. Google by the Travel industry in 2014. Priceline’s expenditure made up 9.75% of total spend by the industry.
Were 2014 spending trends to continue in 2015, Expedia’s acquisition of Travelocity and Orbitz Worldwide would add an additional $31 million in spend, bringing its total to more than 14% of the Paid Search market. (Travelocity sites accounted for nearly $6 million in desktop/tablet spend on U.S. Google in 2014, while Orbitz-owned sites spent $25 million, according to AdGooroo data.)
Looking at category leadership in a different way, Priceline-owned sites generated 1.52 billion desktop/tablet text ad impressions in 2014 or nearly 10% of all impressions in the Travel category compared to Expedia sites’ 1.47 billion impressions. However, Expedia-owned sites generated 15 million more clicks than Priceline sites during the year (91 million vs. 76 million), suggesting Expedia’s campaigns were more effective.