As markets around the world reel from
the turmoil of the COVID-19 coronavirus, companies of all sizes are feeling the
effects - perhaps none more so than those in and adjacent to the travel industry.
The crisis is forcing companies to
reevaluate many aspects of their financial plans for the foreseeable future and - particularly for those operating in the B2C space - to reassess their digital marketing strategies such as paid search.
After all, does it make sense to pay
for traffic if consumers aren’t buying travel?
Analysts are anticipating the impact
on publishers: Loop Capital Markets’ Rob
Sanderson told Seeking Alpha Tuesday he expects Google parent company
Alphabet to suffer a 15% year-over-year decline in travel ad revenue in the
first quarter of this year and a 20% drop in Q2.
And multiple media outlets reported on a note from Needham & Company's Laura Martin and Dan Medina on Friday that said the analysts have lowered their Facebook revenue and earnings-per-share estimates in part because ad revenue is down in travel, retail, consumer packaged goods and entertainment, which together represent 30 to 45% of the company’s total revenue.
Digital marketing strategy has always
required a mix of art and science, and the difficulties - and pressure - to get
that mix right is heightened in times of uncertainty such as during the coronavirus outbreak.
According to Craig Paddock, director of
search at travel and hospitality marketing firm MMGY Global, most clients are
only “moderately reducing paid search budgets with the expectation of being
able to spend those dollars better at a later date.” The exception to that, he
says, are international paid search efforts for United States-based clients, which are
One of the factors impacting the
decision to keep campaigns going: MMGY’s data indicates consumers are, in
fact, still buying travel.
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“If you were to read the front page
of the newspaper today you would think absolutely nobody is booking hotel
rooms. We are not seeing that yet,” Paddock says.
For the two-week period of February 25
through March 9, while website traffic for MMGY’s clients dropped about 14%
from anticipated levels, Paddock says conversion rates were only down a few
But to say this is a rapidly changing
environment is an understatement, and Paddock says the traffic decline in the
past three days has been closer to 20% - meaning the impact is becoming more pronounced.
One audience that may have the most potential
for conversion right now for hotel marketers is people within a driving
“[Marketers should] create appealing offers for people
that might have had vacations out of town to get them to take the vacation in
that driving distance range,” says Erik Newton, vice president of marketing at
Milestone, a digital marketing agency that works in multiple verticals,
“The paid search will allow you to do
that type of hyper-targeting, and combining that with messaging and offers that
are appealing to local people could be an opportunity.”
Paddock agrees and says MMGY has been creating “staycation” landing pages for clients that did not already have
On the flight side, Sojern reports
travel intent, as measured by searches on airline websites, online travel
agencies and metasearch, has varied widely by region and whether travel restrictions
are in place.
During the period from about
mid-January through the first week of March, as compared to 2019, flight searches
to China and East and Southeast Asian countries took a sharp drop in late
January. In recent weeks, however, searches to Southeast Asia, China and Australia
and New Zealand have shown an uptick, while the trend is still downward for
flight searches to Western Europe and the U.S. - although less dramatically in
the case of the latter.
“That pool of consumers that are expressing intent may definitely shrink,
however the value of those consumers exponentially goes up as far as the
advertiser is concerned,” says Parag Vohra, vice president of the Americas at
If you were to read the front page of the newspaper today you would think absolutely nobody is booking hotel rooms. We are not seeing that yet.
Craig Paddock - MMGY Global
For digital marketers, this may mean having to spend more from an
incremental standpoint to get that business. And it puts even higher value on a
great online experience.
“If you talk to me on any given day, I will say that your website
experience is like your retail storefront. It should be good quality, it should
have a smooth path to purchase, the shopping capability should be robust and
there should be ease of conversion. This is a standard best practice,” Vohra
“Having said that, that standard best practice goes from being a
best practice to becoming absolutely critical in an emergency. If you take care
of this in peace time you are better prepared for war time."
On the topic of broader brand advertising, Vohra says it’s
important for companies to maintain their recall in the minds of consumers, but
travel marketers need to stay vigilant about brand safety – not pausing ads
completely but ensuring they are placed in context and not on sites dealing
with the outbreak.
What can also become more important, says Newton, are creative
strategies to create differentiation while still holding price – for example a
hotel bundling room service – or creating added value for loyalty members.
“Maybe it’s accelerated member status. This is something we’ve
seen the airlines do – book and fly in this time, get double miles the rest of
the year,” Newton says.
“Do hotels have an opportunity to come up with an idea that allows
them to use that currency essentially that they have to attract people to book
Another bit of advice from experts regarding digital
marketing strategies during a crisis is fairly elementary: Provide clear,
up-to-date information on how your company is dealing with the impacts of the
“Our first recommendation is to update your FAQs. It’s really
obvious, but so important to be fresh and current maybe every couple of days. What’s
the status? What are people asking when they call? What fears can you allay up
front in writing and make them findable in search on your website,” Newton
“FAQs are a particularly good way to do content marketing and to
do organic [marketing].”