The Travelocity–Preview Travel merger and Microsoft’s spinoff of Expedia have refocused attention on the online travel market.
The new Travelocity is projected to have sales of $1 billion this year, and travel is one of the best commercial applications for the Internet. However, online advertising for travel services is lagging.
Travel Ads Lag
The Strategis Group’s Net Presence Survey recently revealed that travel was only the 12th most advertised category online, with a Net Presence rating of only 44, compared to a Net Presence of 130 for books, 99 for credit cards, and 56 for music.
Net Presence is a composite measure of online advertising visibility based on an April-June survey of 6,972 banners and buttons on 50 top sites, as presented in the larger Advertising on the Internet: 1999 study. The study noted the advertising presence of 35 travel-related companies among these 6,972 ads.
So who is advertising online? Like most other categories, it’s the new online players.
Lowestfare.com was soaring in the survey and it took 11th place in The Strategis Group’s ranking of most visible advertisers overall. Lowestfare.com snared 38 percent of the Net Presence share of travel advertisers, while Preview Travel and Trip.com took second and third place with 12 percent and 7 percent shares, respectively. Other companies with a solid online presence included Travelscape, Travelocity, Best Western, and several cruise lines. Click here to see a pie chart of the top travel advertisers on the Internet.
The entire airline industry had a combined Net Presence of only 3.5, compared to 16.5 for Lowestfare.com and 4.6 for Preview Travel.
Virgin Atlantic and Continental were the top airline advertisers and minor advertising for Aer Lingus, Delta, and American Airlines was observed. Northwest, United, TWA, Southwest, AirTran, and America West are still waiting to board.
Hotels fared even worse than the airlines.
Online Booking Popular
About one in four web users has purchased an airline ticket online in the last three months, according to The Strategis Group’s soon-to-be-released Internet User Trends: Mid-Year 1999, and travel is one of the four most frequently purchased items online. As mentioned in last week’s column, travel also came in first in a survey of most popular topics for commercial opt-in emails.
And dollars spent? Well, let’s just say that the average San Francisco-Boston flight costs a little more than your average Stephen King novel. The Travel Industry Association is forecasting $4.7 billion in online travel revenues next year.
Travel is a Killer App
I’ve argued in the past that products that have easy logistics, are information intensive and homogenous, and are a planned purchase, are good candidates for e-commerce. Thanks to e-tickets, logistics are no problem.
Travel is obviously information intensive. Most aspects of travel booking are homogenous, as travel booking is usually done with well-known airlines and hotel chains. Finally, travel is generally something planned in advance, and rarely is it done on impulse.
In other words, online travel is not a fad. It’s a major industry, and the online advertising potential is enormous. Sellers of advertising have been dealt a winning hand and should focus significant effort to attract these dollars.
Travel firms, airlines, hotels, and others would be wise to make sure that they have a presence at the point of purchase – which increasingly means the web.
As David Spade might put it, failing to recognize the potential of travel advertising on the Internet means saying “buh-bye” to profits.