Last year, in a survey of more than 600 travel marketers, digital marketing company Sojern found that personalization and social media were primary areas of focus for advertisers in 2019.
For the second edition of the report - The Future of Travel Advertising: 2020 State of the Industry Report - Sojern nearly doubled the sample size to more than 1,100 travel marketers from 26 countries to understand their priorities and challenges for 2020.
Similar to last year, personalization and social media are again key areas of investment for advertisers, though additional themes are popping up for this year, as well.
According to the report, there’s a three-way tie at 29% among travel advertisers for their top global marketing challenges in 2020: targeting travelers during a specific point along their path to purchase, keeping up with the fast-paced advertising and technology landscape and proving ROI for their digital advertising strategies.
Advertisers rank ensuring brand safety (21%) and ensuring compliance with stricter data privacy laws (23%) as lowest on their list of challenges.
These findings hold true across regions, with the exception of North America – where marketers count driving direct bookings at an ROI that matched or surpassed their OTA partners among their top five challenges – and the Middle East, where 45% of marketers say delivering personalized ads and offers in real-time is a top challenge.
Sojern vice president of marketing Jackie Lamping says the desire to drive direct bookings, which 27% of global respondents cite as a top challenge, is largely coming from the enterprise segment, which uses digital channels as performance vehicles as well as to build brands.
"You're seeing them start to invest in testing connected TV because they want people to say, 'OK, rather than going to Expedia and Priceline and Booking.com, I'm going to go to Hilton,” Lamping says.
In fact, 36% of marketers say they plan to advertise on
connected TV, which is a television connected to the internet, in the next five
years; last year, just 18% of respondents said they would advertise via
connected TV in 2020.
Marketers say the main reasons they’re shifting their budgets to connected TV - which ultimately accounted for 5% of digital ad spend and 11% of digital video ad spend in 2019 - include the ability to target viewers across multiple streaming devices, apps or channels (56%) and implement granular targeting (35%) and the ease of producing professional video content without the high cost (34%).
Lamping says where connected TV advertising gets tricky is understanding who in the company controls the budget. “Traditionally at these large companies, the TV budget is controlled by a different organization [than digital],” she says.
“So when you’re suddenly trying to buy digital TV, which team is buying that and how is it coordinated?”
In-house and always-on
The report also reveals that more advertisers are looking to bring programmatic advertising in-house as privacy concerns grow and new regulations come into play.
Some 48% of large advertisers (those with an annual budget of $1 million or more) say they’re looking to bring programmatic in-house, and 34% say they already have in-house capabilities.
Marketers say they want this in order to have more control over their data (51%), improve ROI (46%) and have the ability to react to campaign insights faster (44%).
However, they cite securing the necessary buy-in, budget and resources (47%), becoming experts in using data (41%) and hiring the right talent (41%) as challenges to bringing programmatic in-house.
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"I think there are a lot of enterprise customers that have tried to go down that path, then discover that actually, it's not really worth it. They're moving back to agencies,” Lamping says. “They just have to be a big enough company to where they can make those investments. An Airbnb would be a good example."
Additionally, the survey shows that travel marketers are adapting their strategies to reach always-on consumers, with almost half (47%) of advertisers saying they maintain a continuous digital presence.
Advertisers say the benefits of an always-on strategy include the ability to continuously test and learn and optimize their efforts (43%), ensure they don’t miss the moments travelers start planning a trip (39%), receive an ongoing view of performance (39%) and build customer loyalty (35%).
In 2019, the digital channel accounted for the majority of global ad spend at 45%, followed by print (21%), TV (12%) and out of home (11%).
In the digital channel, marketers last year spent 28% of their budgets on social media, while 17% went to paid search, 12% to online travel agencies and just 4% to testing and innovation.
Interestingly, in 2020, advertisers say they plan to devote 21% of their budgets to testing and innovation, though social media and paid search will still receive the lion’s share of budget allocation at 39% and 32%, respectively.
Compared to programmatic and search advertising, which marketers more or less have a handle on, Lamping says Facebook and Instagram are viewed as “constantly evolving platforms.”
“[Marketers] are trying to figure out how to make this stuff work and how to keep it fresh because with Facebook and Instagram, if your creative isn't great, you'll get optimized out of showing your ad," she says. "You have to constantly tweak and figure out what works in those channels.”
Looking ahead in the next five years, 54% of travel marketers say they intend on using interactive video advertising (just 16% used the technology in 2019), 47% plan on using machine-learned generated audiences and 45% plan to use smart speakers or voice search.
Some 51% of respondents believe augmented and virtual reality have the most potential to disrupt travel marketing in the future, followed by messaging apps or SMS (43%) and smart speakers or voice search (39%).
And of course, the Amazon question: About 32% of marketers believe Amazon will emerge as a valid advertising solution by the end of 2020, while 51% anticipate it making a move before 2025 and 17% think its arrival will come after 2025.