Google has begun issuing advertising credit to small businesses as part of its COVID-19 ad credit initiative to support small and medium-sized businesses.
The impact it is having with operators of tours, activities and attractions is laughable, yet completely unfunny. Digital agencies managing ad spend for operators report underwhelming credits for clients.
“The smallest amount was $300 and the max was $750 in ad credit dollars for our largest clients, who spent more than $200,000 in 2019,” says Tom Kratsch, president and CEO of Activities & Tours Marketing. “I think the industry as a whole was expecting more from Google.”
Chris Torres, founder and director of Tourism Marketing Agency, agrees: “The amounts [operators] are receiving are disproportionate and would not even scratch the surface. We all know how competitive Google Ad campaigns are in our industry, in part because of OTAs, so the credits we are seeing would not cover a day’s worth of advertising for most of them.”
How the program utterly fails travel
The pandemic and global travel lockdown could not have come at a worse time for tour and activity operators. Many, dependent on the spring and summer high season to see them through the winter, invest heavily in advertising in the first half of the year to drive bookings for the high season.
Virtually 100% of the ad spend on those bookings resulted in cancellations. Operators had to refund most if not all of the money for those bookings. Google, meanwhile, gets to keep 100% of the money spent on ads to acquire those bookings.
Google has capped the ad credits at $1,000 per business, which barely makes a dent in the online ad spend of even small tour and activity operators.
Jared Broach, owner/operator of Nightly Spirits, which runs ghost tours and food and drink experiences across 17 U.S. cities, says his credit came out to about two days worth of ad spend.
“The volume of cancellations for us was 100%,” he adds. “[The credit was] fractions of pennies on the dollar of what we spent with [Google] that generated conversions.”
What Google should do
Of the ad credit program, Google writes: “We focused on reaching our small business customers broadly with an ad credit as a gesture to show our support and solidarity with these businesses as they continue to engage with their customers.”
Operators, however, are feeling neither support nor solidarity. Google can and should do more to support this industry. As we have previously outlined in our online petition, here’s what it should do:
- Credit the accounts of all tour and activity operators, attractions, experience hosts, ground transfer providers, and all third-party resellers for advertising spend on their platforms for the period of January 15 to March 15 2020.
- Waive the condition that a business must have advertised with Google for 10 of 12 months in 2019. Many tour and attraction businesses are extremely seasonal, operating for less than eight months in a year, and may not engage in performance marketing all year round.
- Extend the credits through 2021. Currently they must be used by the end of 2020. For the piddly amounts currently credited, most will probably be used by the time this is published. But Google should increase the credit amounts and extend them into next year. For many operators, the spring and summer seasons may be all but lost.
In short, give real credits that will actually help businesses, and let them use it when it will help them most.
Google is one of the greatest companies of all time
Google has come under heavy criticism in travel for many of its initiatives, and with good reason. The issues and points of view have been well explored over the years by Phocuswright and PhocusWire (here's a recent point of view on a potential antitrust probe, for example).
But no one can deny that Google’s accomplishments are astounding, its impact on travel and tourism tremendous. Everyone in our industry should read Steven Levy’s In the Plex (details here)
In 2019 Google advertising revenue was nearly $135 billion and net income exceeded $34 billion. The company’s valuation has grown considerably during the pandemic, its share price bringing the company closer to its previously reached $1 trillion market cap. Meanwhile, travel and tourism, a major contributor to Google’s growth, languishes in a lost year. Many will not survive.
A leader that fails to lead
Yes, this company can do more, and it should.
By comparison, Airbnb, whose valuation has reportedly been shaved to $18 billion due to the pandemic’s impact on its business, set up a program to issue $250 million in payments (not credits) to hosts affected by coronavirus-related cancellations.
Think about that: an $18 billion company issues $250 million in payments, and a nearly $1 trillion company issues $340 million in credits.
“Yes, it's very disappointing,” says Peter Ross, co-founder of 829studios, a digital marketing agency serving travel and tourism. “Many were holding out hope that they would provide more significant support but that doesn't seem to have materialized.“
There’s still time. For all of those amazing people who work at Google, you know how hard the pandemic is affecting your travel industry customers, your travel industry friends.
You know about the many people losing not just jobs, but livelihoods – businesses they have built and devoted their lives to. There is still time to raise your voice for our industry.