Is Google Poaching Clicks From Travel Advertisers? Spend Trends Down Even As Advertisers Increase (Study)

On the cusp of the summer travel season, AdGooroo has taken a look at the state of paid search in the travel sector in the U.S. The company has found that, on the whole, paid search expenditures have been trending down since 2011. Spend fell 19% from January through April of this year compared to last year. That follows an 11% drop during the same period from 2012 to 2011. The downward trends hold through the summer months.

AdGooroo suspects the decline in ad spend since 2011 is due in large part to the launches of Google Flight Search and Google Hotel Finder that year. The actual number of advertisers in the travel category on AdWords in the U.S. increased from 217 in Q1 2012 to 228 in Q1 2013. However, AdGooroo believes that the presence of Google Flight Search and Google Hotel Finder has led to a cannibalization of clicks and ad spend from those AdWords advertisers.

Google Flight Search and Google Hotel Search tend to appear on SERPs for generic search terms like “cheap flights” and “hotels” which also trigger ads from multiple advertisers. As AdGooroo’s keyword cloud from Q1 below illustrates, there are huge number of ad impressions (tens of millions) generated on these generic searches. Yet it seems Google’s paid inclusion verticals are eating into paid search ad traffic on these searches.

Travel Keywords Trends

Looking at keyword clickthroughs, “Southwest” and “Southwest Airlines” both saw drops in Click Rank in Q1 2013 compared to last year. The keyword “Disney” fell 12 positions to number 20 on the list of top clickthrough keywords.

Enterprise rental car’s branded keyword jumped four spots to the claim the top position on the list. AdGooroo found that “enterprise” has a strong clickthrough rate of 12.1%. Expedia had the highest clickthrough rate on its branded keyword at 29.5%.

The average clickthrough rate was 8.1%, with directional and branded searches showing much higher CTRs than generic terms. The term “vacation packages” had the highest number of bidders with a whopping 259 advertisers appearing on the first page of results during Q1 2013.

Top Travel Sites on U.S. AdWords

Kayak.com has come to lead the competitive travel category on AdWords in 2012. The top ten travel advertisers on AdWords last year were:

Cheapoair, Booking.com and Bookingbuddy have come on strong this year to compete with travel industry heavy weights like Orbitz and Priceline.