Digital spending in the travel industry to surpass CPG next year: Emarketer

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Digital ad spending in the travel industry will surge past what is spent by consumer packaged goods brands next year as competition heats up among hotels and airlines, according to a new report from eMarketer. The firm projects nearly $13 billion in digital outlays in travel, making it the fifth-largest vertical overall, replacing CPG ($12.8 billion). 

The firm also projects that financial services will spend $18.25 billion on digital, surpassing automotive ($18 billion) for the No. 2 spot. Retail will retain the top spot with $33 billion spent on digital.

A combination of factors is pushing travel brands to spend more on digital. 

“Travel has historically been big on TV – we’ve seen that with the likes of Expedia and Travelocity – but what we are now seeing is a move from TV storytelling to digital storytelling,” VP of forecasting Monica Peart at eMarketer, says. “We are also seeing hotels competing in getting a traveler to book a hotel lodging.” 

Other factors include companies such as Airbnb, Google and Facebook vying for a slice of what stalwarts like Expedia and Priceline have historically had all to themselves. Also at work is renewed competition from hotel chains using data garnered from rewards programs to offer tailored travel experiences to customers is also another factor. Peart adds that search advertising is also fueling travel’s rise in ad spend. Google, for example, now provides prices of airline tickets when consumer’s search for a trip, which in turn is making major airlines spend more on to appear at the top of the results, Peart says. 

“There’s more attention being paid from airlines to aggregators like Google that didn't exist before,” Peart says. “Google Flights took a while to get off the ground, but it’s now one of the prominent flight aggregators and airlines are paying more than before to be included.” 

In the financial services industry, brands are spending more on apps that help consumers manage their money. “Financial services is shifting more ad dollars to mobile even though it’s historically spent most on TV advertising,” Peart says. “This new shift is starting to displace auto as it trends down.” 

Ad spend in auto is also falling because manufacturers are investing large amounts in new technologies and stricter emission standards, all of which are being prioritized over advertising, according to eMarketer.

 



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