A substantial survey of more than 600 travel marketers from 46 different countries has identified personalization and social media as two key areas top of mind for advertisers as they start off 2019.
Sojern’s State of the Industry: The 2019 Report on Travel Advertising - which the digital marketing company is billing as the largest-ever survey of global travel marketers - surveyed travel marketers across various verticals, regions and sizes to assess their challenges, how they allocate budgets, their use of technology and more.
The findings reveal some consistencies in concerns and practices across the board for advertisers as well as clear differences among certain categories.
Confronting challenges
Overall, the top challenge travel marketers say they face, at 46%, is delivering personalized ads and offers in real time.
Respondents also cite achieving ROI and profitability targets for their investments, targeting travelers at specific points during their paths to purchase and keeping up with the fast-paced advertising and technology landscape as challenges at 45% each.
Global top marketing challenges
“Personalization [as number one], I think, is really interesting because I thought driving direct bookings would be the number-one challenge, or measuring ROI,” says Jackie Lamping, Sojern’s vice president of marketing.
“It’s also interesting to see personalization toward the top of the list pretty consistently from small- to medium- to large-size [businesses].”
Indeed, for large advertisers (with annual budgets of more than $1 million), 58% say personalization is their number-one challenge. About 43% of mid-size advertisers (with budgets between $50,000 and $1 million) believe the fast-paced tech and ad landscape is their biggest hurdle, while 51% of small advertisers (with budgets of less than $50,000) - which typically have fewer resources - say achieving ROI is their top concern.
Regionally, 46% of marketers in North America and 49% of marketers in the Middle East and Africa say keeping pace with the ad and tech landscape is their main challenge, which Lamping says could be a result of startups - many looking to optimize the customer experience or booking process or in-destination experience - cropping up in the travel tech space.
Marketers in Europe, meanwhile, say understanding how to use customer data more effectively is their biggest challenge, which is “reflective of the climate of GDPR” in the region, she says.
“[In Europe], it’s unclear how can I use customer data, and where does the gray line fall? A lot has to be fleshed out from an industry perspective.”
Show (Facebook and Instagram) the money
Globally, marketers allocated the majority of their advertising dollars to digital advertising compared to other mediums in 2018 at 47%. According to Sojern’s report, two out of three respondents say they intend to increase digital ad spend in 2019.
The biggest chunk of those advertising dollars is going toward social media (i.e., Facebook and Instagram). In 2018, social media accounted for 23% of digital ad spend, followed by paid search (19%), private marketplace (12%) and programmatic display (10%).
This year, 55% of marketers say they plan to increase spend on Facebook and Instagram, 46% intend to spend more on video and 45% will dedicate dollars toward paid search.
“A big chunk of budget is already going toward social media, which means people are seeing results and wanting to move more budget there,” Lamping says.
“What’s driving that: Facebook and Instagram have been working hard on rolling out new ad formats that are working for travel brands that are very tailored to their needs.”
Instagram Stories, for example, “are the hot ad format,” she says, “so it’s interesting to see, as part of the growth of budget that’s planned for 2019, that video is also a huge component.”
Small advertisers actually dedicated more ad dollars from their budgets to Facebook and Instagram than large advertisers in 2018, the study finds. Lamping says this is likely because it’s harder for small advertisers to compete with online travel agency-size budgets on things like paid search, so social media “is sort of a white space for them to plan.”
2018 digital ad spend, by size of advertising budget
“Facebook and Instagram used to be viewed as a pure branding play because they weren’t very sophisticated marketing mechanisms … but over the past several years, they’ve both come out with such fantastic targeting capabilities,” she says.
Search, on the other hand, “is a more mature medium,” she continues. “It’s not going to be the channel to get you to the next frontier.”
What's next?
Connected television (CTV) is another digital advertising medium ready to “pop,” Lamping says. Though only 20% of travel marketers say they used CTV advertising in 2018, about one in three plans to use it in 2019, which represents a 70% increase year-over-year.
Subscribe to our newsletter below
One in three also intends on using streaming audio, chatbots and voice search to engage with consumers, though augmented reality and virtual reality are less of a priority, with one in four marketers saying they have no plans to invest in the technologies until 2020 or later.
That said, 20% of travel marketers believe AR and VR have the biggest potential to disrupt travel marketing over the next five years, followed by real-time travel audience data (17%) and smart speakers or voice search (13%).
Of course, no talk of disruption would be complete without acknowledging the major tech players: Advertisers view Facebook and Instagram as the biggest potential disruptors over the next five years (49%), followed by Amazon (46%) and Google Ads (41%).