MarketingCovid-19 has impacted budget, ad spend, allocation by channel and how advertisers are thinking about the future of ad tech.

A bold new future of digital advertising in travel

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If there’s one thing travel marketers have learned throughout the COVID-19 pandemic, it’s how to do more with less.
If there’s one thing travel marketers have learned throughout the COVID-19 pandemic, it’s how to do more with less. Photo Credit: GettyImages/NicoElNino

Travel marketers had to learn how to do more with less. Slashed budgets, reductions in staffing and the unpredictable nature of the Covid-19 virus have left travel marketers with fewer resources, yet they’ve still been charged with testing new solutions and innovating on messaging.

However, with the distribution of vaccines on the rise, many travel decision makers are forecasting a rebound in ad spending with the prospect of real growth in 2022, according to a new study from Sojern.

The study surveyed more than 300 senior travel decision makers across Europe, Asia Pacific, North America and the Middle East and Africa to understand how Covid-19 has impacted budget, ad spend, allocation by channel and how advertisers are thinking about the future of ad tech.

Spending Strategy

According to the report, 56% of travel marketers agree that the current online environment is ideal for direct response campaigns.

Travellers are booking directly with providers because they can find clear cancellation and refund policies. With online travel agencies though, travellers get confused with cancellation policies amid the pandemic.

Overall, 88% of companies have increased or kept their digital advertising strategy budget the same since Covid-19, and 87% of companies tightened spending on brand campaigns and increased spending on performance campaigns in 2020.

In Asia Pacific, 44% of travel brands are dedicating from 26% to 49% of their overall marketing budget to digital advertising.

As for their digital advertising performance, 56% of respondents say they are “satisfied,” while 40% say they are “highly satisfied.”

Travel marketers who expressed dissatisfaction with their digital advertising performance cite a number of challenges including developing unique content, gathering and using customer insights, measuring advertising effectiveness and improving personalisation.

Meanwhile, challenges to performance optimization include fraud, cyber threats, a drop in demand, tight budgets and lack of insights into key performance indicators.

“Time spent on ads” is the most commonly used metric for measuring campaign success, cited by 22% of Asia Pacific respondents. “Number of views” was also highly important to marketers from all regions.

Although marketers are tightening spend on brand advertising, they still find value in branding as a way to build trust and loyalty with consumers. According to the report, 13% of travel marketers say they spend the majority of their budget on branding, or that their budget is evenly split between branding and performance.

Future tech

According to Sojern vice president of product Dave Goulden says, connected TV (CTV) “is a great option for brands trying to reach engaged travellers with video advertising.

“Streaming services are becoming increasingly popular and, as more consumers cut the cord, CTV has become the industry’s answer to increasing brand awareness and driving consumer engagement.”

Of those surveyed, 14% agree that marketers have an unprecedented opportunity to reach new customers at a lower cost and with more control than they could expect from traditional broadcast television.

Yet despite the benefits of CTV and video, uptake remains relatively low. In Asia Pacific, 43% of marketers allocate 10% or less of their budget for CTV and video.

Looking ahead, travel marketers say they plan to increase their usage of machine learning and artificial intelligence technology in 2021 and 2022.

In fact, 84% of respondents say machine learning and AI for personalisation is a high or very high priority across channels in their company.

However, using machine learning and AI for personalisation comes with unique challenges, including the high costs of maintaining records, technology risks and spending on technology upgrades.

Many travel brands are delaying implementation of the technology and are instead focusing on increasing sales through traditional marketing techniques.

Source: PhocusWire

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