- Travel Report provides leading economic indicators as Travel Advertisers compensate for changing consumer behaviour to increase profitability -

As the recession continues, Travel Advertisers have begun to successfully adjust their search marketing strategies by mapping to recent changes in consumer behaviour to increase profitability. Additionally, Return on Investment (ROI) in Search Engine Marketing (SEM) in the Travel sector has shown a significant increase, a testament to the continued strength of the channel, according to the Efficient Frontier UK Travel Report: Q1 2009. The report, developed by Efficient Frontier, the worldwide leader in Search Engine Marketing technology and services, is based on an analysis of 4.9 billion impressions and 65.7 million clicks across a portion of Efficient Frontier’s travel clients.

The results of the Travel Report show that Advertisers in the sector are continuing to invest in Search Marketing as a way of maximising revenues. Despite the economic downturn, impression volume increased by 32% from Q1 2008 to Q1 2009. There are two main reasons for this.

Firstly, in an attempt to offset the overall decline of CPCs, Google have been able to optimise their unused inventory by removing minimum bids which brought a large number of previously inactive keywords into play. By using Efficient Frontier’s portfolio bid optimisation techniques, Advertisers have been able to effectively mine this longer tail of keywords and generate significant volume and ROI. Although search spend in the travel sector dropped a mere 1% Y/Y, ROI actually increased for Advertisers by 11% Y/Y.

Secondly, the recession has caused cost conscious consumers to search longer and more carefully for a better deal online. This has not only triggered impressions to increase, but it has also caused a decrease in click-through-rates (CTRs) by 28%. In a separate study, Efficient Frontier analysed the most popular keyword search terms in the Travel sector. ‘Cheap’ and ‘discount’ related keywords have seen big jumps in impression volume and are delivering higher returns for Advertisers. This demonstrates that consumers are trending towards bargains and deals, and are comparison shopping, thus using search as a means to find the best rates and cheapest deals. However, ‘hotel’ and ‘cruise’ related keywords have not fared well. At a more granular level, the ‘hotel’ set includes several thousand combinations of hotel with location names and hotel brand names. This finding indicates a shift in consumer thought patterns and search behaviour as consumers become less brand focused and more value conscious (See Graphs: http://blog.efrontier.com/insights/2009/04/consumers-embrace-frugality.html).

What’s more, although the Efficient Frontier Q1 Search Engine Performance Report for all sectors (17 April) saw cost-per-clicks (CPCs) drop as the overall market deflated, CPCs in the travel sector have actually increased by 4% Y/Y indicating there is still a high level of competition amongst advertisers.

Jonathan Beeston, Client Services Director of Efficient Frontier, says, “There is an interesting anomaly we see in Travel when compared to the overall market. On the one hand, overall Advertisers are cutting budgets resulting in cheaper clicks, on the other hand Travel Advertisers are seeing CPC inflation as competition in the space heats up. This situation indicates Travel is very much reliant on search. In the current economic environment, ROI will continue to be a priority as Travel Advertisers trend towards the efficiency model in an effort to reach a higher ROI as a buffer against economic uncertainty.”

About Efficient Frontier
Efficient Frontier is the worldwide leader in providing search engine marketing solutions for large advertisers and agencies. Founded in 2002, Efficient Frontier pioneered the application of modern portfolio theory to SEM and today combines its core predictive modeling algorithms and bidding technology with comprehensive strategic and tactical value-added services to manage more than $750 million in annual search spend globally. The largest and most sophisticated advertisers and agencies partner with Efficient Frontier to achieve and sustain optimal campaign performance and growth in highly complex and competitive search marketplaces. The company is headquartered in Sunnyvale, CA with offices in New York, the United Kingdom, France, Germany, and India, and technology licensing partnerships in Japan, Hong Kong and Australia. Efficient Frontier is a privately held company with funding from Redpoint Ventures and Cambrian Ventures. For more information, please visit www.efrontier.com and subscribe to the Efficient Frontier blog at blog.efrontier.com.

For More Information, Please Contact:
Merinda Peppard
European Marketing Manager
t: +44(0)20 7166 5220

Published on: 11:23AM on 29th June 2009