INNOVATION REPORT 2015 ROUND-TABLE DEBATE
ROUND-TABLE DEBATE
COUNTING THE COST OF CLICKS
THE TRAVEL INDUSTRY OFTEN FACES CLAIMS THAT IT LACKS TRUE INNOVATION, BUT ONE AREA WHERE THERE SEEMS TO BE CONSTANT CHANGE IS ONLINE MARKETING
Intent Media, sponsor of this Innovation Report, last month hosted senior executives at a round-table event to discuss how travel is coping with channel proliferation in the big data age
T
he increasing cost of online customer acquisition in travel has seen firms place an emphasis on driving greater efficiency in their marketing budgets. What one panellist dubbed the ‘Google tax’ – the
unavoidable requirement to keep up with rising paid search costs – was an issue shared by all travel retailers on the panel.
DIVERSIFYING FROMGOOGLE Industry sources estimate some firms are spending as much as 70% of their margin on Google advertising, which was 20% more expensive this January than in the same month last year. Google figures show that globally $2.4 billion of the travel sector’s wealth went to the dominant search engine in 2011. Panellists agreed there was a requirement to innovate to
find new cost-effective sources of leads, although Google would remain dominant. Chris Roche, former Travel Republic commercial director, likened Google Search Engine Results Pages to real estate to explain why costs have been rising so dramatically. “Google’s an auction and the landing
page is like real estate because there’s a finite amount of space on page one and no one wants to go to page two,” he says.
“Over the years Google has brought in its own products,
which has reduced advertising space, so if demand stays the same but land’s being taken away the price of the remaining land goes up and that’s what everyone is seeing. “What that means is Google goes up and up and up and
you’ve seen search engines built on top of Google – Kayak and Trivago etc – but eventually they become saturated so you need to find another solution for search because you’ve got to mitigate that cost.” Roche argued there is a question mark about search as a
channel in general and warned against an over-reliance on Google. “Does it really build brand and retention? My
36 — FEBRUARY 2015 —
TRAVOLUTION.CO.UK
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