Despite an 11.6% decline in investments, Amazon continues to lead as the largest paid-search advertiser, sequentially, spending $35.1 million in Q1. AT&T followed with $34.6 million; State Farm, $28.7 million; Capital One. $28.1 million; Expedia, $24.3 million; Progressive, $22.9 million; Geico; $20.9 million; Chase, $20.8 million; Verizon, $18.8 million; and Scottrade, $17.5 million.
Also, Expedia, Orbitz and Travelocity stepped up the aggressive push to become one-stop shopping sites for booking travel reservations online. In January, Expedia and Travelocity outspent Orbitz. Expedia spent 93.8% of its $10.7 million budget on search, compared with Travelocity's 51.8% of $8 million; and Orbitz's 72.7% of its $2.1 million budget.
It's not clear if the higher investments in search marketing aim to drive more traffic directly to the respective company's Web site in opposition to Google's $700 million acquisition of ITA, which provides third-party agencies travel-related information on airline ticket pricing, seats and flights.
Travel marketing and travel advertising remained soft in Q1 2010 coming out of the recession, according to Jon Swallen, SVP of research for Kantar Media. "Ad spending on travel in Q1 2010 declined 7% vs. the prior year, while the ad market as a whole rose 5%," Swallen said. "Both leisure and business travel picked up as 2010 progressed, and this brought travel marketers back into the ad market. The gains of Q1 2011 are in comparison to below-normal levels of travel advertising in Q1 2010."
Among the three advertisers, Expedia accounted for 64% of the combined search spend, but only 49% of total keyword clicks generated in January 2011. This shows a higher average cost per click across the set of keywords analyzed, compared with Orbitz and Travelocity. Orbitz achieved a more efficient return with an almost 2:1 ratio of click share (19.5%) versus spend share (9.8%), according to the report.
The findings point to branded names in the top keywordx as driving the highest traffic to each advertiser's Web site. Spelling variants also ranked high. Generic terms appear high on each list, indicating that advertisers bought the same common keyword terms.
Kantar analysts grouped keywords into search terms by geographic destination, and any generic or branded keyword referring to hotels. Although it was possible for a keyword to qualify for both groups, analysts tabulated the number of clicks by advertiser and expressed this as a percent share of total clicks for all of their keywords in our database.
For destination keywords in January 2011, the share of clicks ranged from 21% to 4%. For hotel keywords, two advertisers -- Expedia and Orbitz -- had more than two times the share of clicks as Travelocity. For Expedia in January, 21% of clicks came from terms associated with a destination and 30% from terms indicating a hotel search. Analysis shows that Expedia used targeted keywords that combined destinations and hotels such as Las Vegas hotels. It's interesting to note that 42% of its hotel keyword clicks were from terms that also included a destination term.
For Orbitz, which had a much lower search budget in January compared with Expedia and Travelocity, the company's strategy to purchase keywords targeted at niche segments of travelers paid off. The travel site targeted keywords related to gays, students and/or their parents, planning spring break trips, people looking for specialty bed and breakfast lodging and Broadway ticket buyers. Unique to Orbitz, none of these keywords appeared on the list for Expedia or Travelocity.