US travel industry on the leading edge of digital ad spending growth
According to eMarketer’s digital ad spending forecast, which encompasses both online and mobile advertising, travel advertisers will dedicate $4.7 billion to digital in 2016, nearly double the $2.4 billion they spent in 2011.
This growth is underpinned by the natural influx of new advertisers coming to the digital marketplace and increasing their spend over time, as well as established digital advertisers focusing on emerging channels. Advertiser trends, newer online ad formats and mobile advertising in general are collectively driving rapid growth through 2014. By 2015, year-over-year growth for digital travel advertising will continue, but it will begin to show signs of maturation, dipping into the high single-digit percentages.
To put these numbers in context, travel is increasing digital ad spending faster than almost all other US industries. During eMarketer’s forecast period, travel will steadily gain market share, rising from 7% of all US digital advertising in 2010 to 8.5% by 2014, when it will level off as the market shows its first signs of maturity. Travel’s 8.5% share puts it squarely in the middle of US digital ad spending by industry, but aside from media, whose share of all digital advertising will increase 1.9 percentage points during the forecast period, travel leads all other industries in market share growth.
Travel’s 14.4% compound annual growth rate (CAGR) between 2010 and 2016 also reflects the industry’s dedication to digital. According to eMarketer’s estimates, travel will have the third-highest CAGR of all US industries during the forecast period.
Reading between the lines, travel is spending considerably more than the two industries it trails in CAGR, as both media and entertainment’s growth rates are reflective of a smaller spending base.
Overall, travel’s ad and marketing executives were right in line with their counterparts from other US industries, according to Advertiser Perceptions’ “Advertiser Optimism Index: AIR Wave 17 Spring 2012,” sharing similar optimism for spending across all digital channels. Optimism in this case was measured by the difference in the percentage of respondents increasing and decreasing ad budgets in these areas.
The one outlier in ad spending for travel, notably, was its optimism index for magazine advertising. Travel advertisers were just barely on the optimistic side, with 9% more advertisers planning to increase spend on magazines compared to those who planned to decrease spend. However, all of travel’s counterparts were squarely pessimistic about magazine advertising.
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Check out today’s other articles, “Retailers Make Strides in Mobile to Enhance In-Store Experience” and “SMBs Pour Money into Mobile.”