While many industries were hit hard by COVID-19, causing marketers to test new solutions, innovate with new messaging, and do more with less, the hardest hit industry was undoubtedly travel. However, with the distribution and administration of vaccines on the rise, many are forecasting the rebound in ad spending in the industry, with the prospect of real growth in 2022. In fact, earlier this week we reported that searches to destinations to Germany grew close to 10 times in Singapore, compared to the average of the last seven days for travel search industry players such as Expedia. The spike came after a vaccinated travel lane between the two countries was announced on 19 August.
Tapping on the evolving industry trends, a recent survey done by Sojern with 300 travel decision makers across Europe, Asia Pacific, North America, and Middle East and Africa, also found that advertisers are starting to realign their budgets with consumer travel behaviour to guarantee their presence wherever the traveller may be. Bernstein analysts at CNBC also predict that in 2021, travel and hospitality firms are expected to spend a larger share of their digital ad budgets on search, rather than display.
In APAC, 44% of respondents are currently dedicating 26% to 49% of their overall marketing budget to digital advertising spend, while 32% of organisations there are dedicating roughly 50% of their budgets to digital. However many marketers are citing cyber threats, a drop in demand, tight budgets, and the unpredictability of the current situation as the most common pain points to optimising their online advertising performance.
Lack of insights into the key performance indicators, customers being unresponsive, and being unable to target with personalisation were other major obstacles. Globally, “Time spent on ads” was the most commonly used metric for measuring campaign success, cited by 23% of respondents in Europe, 22% in Asia Pacific, 28% in North America and 27% in Middle East, and “Number of viewers” was also highly important for 25% of respondents in Europe, 20% in Asia Pacific, 23% in North America, and 23% in Middle East.
An increase in focus on branding
Trust and loyalty were the most common reasons travel marketers invest more heavily in branding rather than performance campaigns. For them, loyalty is better when the focus is on branding. It is easier for customers to remember the organisation, and they are more attentive to advertising content when they see the brand name.
Generally, the focus on branding instills more trust, said the brand marketers. There is more awareness about the range of services that specific brands offer, and customers can make a swift decision about purchasing because they already trust the brand. Branding also helps in differentiation. With social media marketing having already replaced a large section of traditional communication, travel marketers in 2021 will be taking advantage of social media networking tools to promote their businesses at low cost and generate public interest.
Emerging techniques such as live streaming and interactive social commerce tools will be key investment areas.
The report stated that many travel organisations have also shifted video away from an ancillary aspect of marketing, to a core advertising channel. They are also now putting more compelling visuals as a centre-piece to digital marketing strategies. Video optimisation for mobile viewing is also key, given the reliance on smartphones and tablets for travel shopping and planning by so many consumers, said the report. Spend on mobile advertising has also been scaling to meet demand.
According to the report quoting Digital Vidya, more than 78% of business travellers use a smartphone during the trip planning process, and around two thirds (67%) of travellers do online research before making any decision relating to travel.
One of the biggest areas of anticipated digital ad spend growth in the coming years will be programmatic. This growth is partly being driven by the increasing use of retargeting by travel and hospitality firms. Brands are also incorporating more of their own data into programmatic advertising strategies. Insights gathered from first-party data are informing travel advertisers on their best targeting options for programmatic buying.
In addition, with the programmatic media ecosystem operating on various levels of auction, bidding for connected TV advertising takes place in a private marketplace, which sits just one level above the open exchange. This position favours marketers seeking targeted placement in an auction with fewer bidders, affording them a higher chance of offering a winning bid.