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Direct-Response Spending Flying High in US Travel Industry

Three-quarters of the travel sector’s digital ad dollars will go toward direct response

May 21, 2014 | Travel

Digital ad spending by the US travel industry will reach $4.15 billion in 2014, a sharp increase over 2013 that reflects the improving health of the overall US economy and rising profits in the industry, according to a new eMarketer report, “The US Travel Industry 2014: Digital Ad Spending Forecast and Trends,” part of our new report series, “2014 Digital Ad Spending Benchmarks by Industry.”

US Travel Industry Digital Ad Spending, 2012-2018 (billions, % of total digital ad spending and % change)

In 2014, the majority of the US travel industry’s digital ad spending will come from a handful of online travel agencies (OTAs). These agencies’ focus on direct-response tactics will drive trends for the industry as a whole.

eMarketer estimates that nearly three-quarters of the US travel industry’s digital spending in 2014 will be devoted to direct-response objectives, as opposed to branding efforts.

US Travel Industry Digital Ad Spending, by Objective, 2014 (billions and % of total)

OTAs’ emphasis on direct response is a function of advertiser familiarity and the format’s effectiveness. Direct-response advertising has proven successful in creating online bookings, and the OTAs that spend the bulk of travel industry ad dollars have years of experience perfecting this approach. Because of the model’s success and the travel market’s intense competition, there is little incentive for adjustment.

US Travel Industry Digital Ad Spending, by Channel, 2014 (billions and % of total)

eMarketer estimates that mobile spending will make up 35.5% of the US travel sector’s $4.15 billion in digital ad investments in 2014 as travel marketers make changes to deal with high mobile device usage. Because of the relative newness of mobile compared with other digital advertising formats, marketers will experiment with a variety of mobile ad units in 2014, including search, mobile video and mobile app advertising.



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