Research reveals opportunity in paid search ads for US travel and tourism
17 October 2018

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Source: David|17 October 2018

A new report by search competitive intelligence provider Adthena benchmarks search advertising spend between January 2017 and May 2018 in the USA, UK and Australia, based on data from over 140M paid search ads.

The full report across all industries and 3 countries (behind the External Article link, below) is well worth reading. But in this post I'm going to limit discussion largely to travel and tourism in the USA.

Highlights - global:

  • Across categories and markets:
    • Clickthrough rates on paid search ads are rising, especially on mobile: up 10% in 4Q2017.
    • Paid search ad spend increased by 10.4% in 2017.
    • Advertisers shifted ad spend from desktop to mobile.
    • The number of advertisers competing for first-page ad position increased 13.1% in 2017 vs. 2016.
  • Travel and tourism:
    • Very large numbers of advertisers competing for first-page paid ad positions make the travel and tourism vertical one of the most competitive.
    • There is surprisingly little range in CPC between top-of-page and bottom-of-page ad positions.

Highlights - USA:

  • Across categories:
    • There was a 59% increase in number of paid clicks in 2017 vs. 2016, reassuring advertisers and investors as to the continued growth of consumer engagement with paid search ads.
    • Search ad spend was $40.6B.
    • Google Ads expanded text ads format is similar to that of organic listings, resulting in some shift from organic to paid clicks..
    • Google's switch to 4 top-of-page ads, and resultant displacement of organic SERPs to below the fold, is a key driver in growth of text-ad CTRs.
    • Google's use of machine learning has increased the relevance of search ads.
    • And specific to mobile ads:
      • Limited screen space on mobile devices requires users to take 2-3 actions in order to reach organic listings.
      • Top-of-page ads on mobile are largely indiscernible from organic listings.
      • Ad blockers aren't commonly available for mobile browsers.
      • Mobile ad spend exceeded desktop spend for the first time in 2017, producing 54% of ad revenues.
      • Mobile ad spending returns higher click/spend ratios vs. desktop.
  • Travel and tourism:
    • More advertisers compete for positions 2 and 3 on page 1 than for position 1, which likely means they're seeing higher ROI from ads in those positions.
    • Clickthrough rates from first-page SERPs were 2% above all-search average.
    • Numbers of competitors for first-page ad positions far exceeded all-search average.
    • Desktop clicks made up 64.7% of total ad spend but produced only 51.4% of clicks.
    • But mobile clicks made up 48.6% of total clicks from only 35.3% of total spend - so this category has the largest opportunity profitably to shift more spend to mobile.
    • CPCs on generic ads are comparatively high, which may indicate lower brand awareness and more price-driven search intent.
    • Branded ads performed exceptionally well on mobile, with CTRs 4% higher than industry average.

COMMENT: Yet more evidence that high visibility and well-crafted ads for mobile search are must-haves for travel and tourism businesses in 2018 and going forward.

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David Boggs    - David
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