Google’s Travel Business Is Already Twice the Size of Expedia’s – Skift

Source: Google’s Travel Business Is Already Twice the Size of Expedia’s – Skift

If publicly traded companies such as Google are bound by fiduciary duties to shareholders, then Google, which already has one of the largest travel businesses in the world, larger than the Priceline Group, TripAdvisor and Ctrip combined, would be foolhardy to shoot its advertising business in the foot to become an online travel agency.

— Dennis Schaal

When is Google finally going to tie all of its travel products together and become an online travel agency to rival Expedia, the Priceline Group and, increasingly, Ctrip?

Not anytime soon or even in the foreseeable future. We’ve been saying this for awhile — for years, actually — but now we can use some dollar estimates to back our theory and fine-tune it with comments on the subject that a Google executive made at the Skift Global Forum in Manhattan in September.

Why would Google want to become an online travel agency when its existing travel-advertising business — including all of those paid links that dominate its search-results pages — likely produces more revenue than the Priceline Group, TripAdvisor, and Ctrip combined? 

One investor group dissected publicly available information, made some educated guesses, and confidentially shared its rough estimates with Skift on the scope of Google’s existing travel-advertising business. Google would probably generate at least about$12.2 billion ≈ cost of 1972 Hurricane Agnes

“>[≈ cost of 2005 Hurricane Rita] in revenue from travel advertisers in 2016, with about $6.2 billion ≈ Suez Canal annual receipts

≈ San Francisco Bay Bridge span replacement, 2002-2013

“>[≈ K-12 annual book sales revenue, 2010] of that coming from just four travel advertisers, namely the Priceline Group, Expedia Inc., TripAdvisor and Airbnb. [See the end of this story for how the $12.2 billion ≈ cost of 1972 Hurricane Agnes”>[≈ cost of 2005 Hurricane Rita] estimate of Google’s estimated2016 travel-advertising revenue was arrived at.]

To get an idea of the scope of Google’s projected $12.2 billion ≈ cost of 1972 Hurricane Agnes”>[≈ cost of 2005 Hurricane Rita] in travel revenue for 2016, you can compare it with the actual 2015 revenue of the four leading, publicly traded online travel companies: The Priceline Group ($9.2 billion), Expedia ($6.7 billion), Ctrip ($1.6 billion) and TripAdvisor ($1.5 billion)

So Google’s existing revenue from travel advertisers is already considerably larger than that of the Priceline Group; is roughly twice the size of Expedia’s, and Google generates more travel-advertising revenue than that of Expedia, Ctrip, and TripAdvisor combined, according to this analysis.

And Google undoubtably takes that travel-advertising revenue and achieves a much higher profit margin on it than do the roster of its online travel, airline, hotel, car rental, and cruise partners, most of which are much more dependent on lower-margin transaction revenue.

So the next time people tell you that Google’s launch of a new travel app means the world’s largest search engine is finally getting into the travel business — you can laugh in their faces because Google’s travel business is bigger than online travel behemoth Priceline’s.

BUT WHAT ABOUT BECOMING AN ONLINE TRAVEL AGENCY?

If Google indeed became an online travel agency, it would further alienate its largest travel advertisers, namely the Priceline Group and Expedia, and up-and-coming ones such as Airbnb, and jeopardize a chunk of its travel revenue. TripAdvisor and Yelp are already very miffed at Google but they really have no choice but to use Google for advertising. Likewise, the largest travel companies would have to continue using Google for advertising for awhile because Google is the most important game in town but some companies, including Expedia, are fervently trying to diversify their spend into Facebook and other social media platforms.

The fear that Google could start to do travel transactions on its own is perennially on the minds of rivals because Google has most of the pieces –minus the customer support staff — to assemble a full-service online travel agency. Google’s travel portfolio already includes Google Flights; Google Hotel Ads; Book on Google for a handful of airlines and hotels; Google Maps; hotel and restaurant reviews and content acquired from Frommer’s and Zagat; the Android mobile operating system; a “Plan a trip” and travel guide feature on desktop and the mobile Web, as well as the new Google Trips app for itinerary management of flights and hotels plus tours and activities recommendations.

Speaking at the Skift Global Forum in September, Google’s Oliver Heckmann [video here and embedded below], who heads up its travel products, was candid about Google’s master plan, arguing that Google sees itself as an “answer engine” and “connector” to the right partner at the correct time, whether through free or paid links, rather than becoming a trip-planning site or booking engine.

In fact, Heckmann said, although Google wants consumers to begin their travel planning in the earliest stages through its search engine and associated products, it does not seek to become a trip-planning site.

“We don’t have plans right now to make this a travel-planning app,” Heckmann said, referring to Google Trips and acknowledging that doing bookings is a top request. “That’s a very different thing. We believe Google is the best place to start your travel planning.”

The Google Trips app seeks to be an “assistant” and “a good guide” and that’s why it includes information and recommendations about tours and activities, Heckmann said, adding that Google is not planning to sell flights on its own, although it is doing facilitated bookings for Lufthansa, Virgin America, WestJet and hotels as a way to optimize the mobile experience.

Google does not want to sell flights on its own or become an online travel agency, Heckmann said.

As we’ve pointed out above, Google’s becoming an online travel agency in its own right would jeopardize the largest travel advertising business in the world — and one of the largest travel businesses in its own right.

BOOK ON GOOGLE IS MISUNDERSTOOD

Heckmann said that Book on Google should probably have been named something else because it is widely misunderstood.

With Book on Google, the airline or hotel is the merchant of record, although the booking is processed on Google. Google shares data with the partner, which handles the customer service.

Heckmann said one of the reasons Google launched Book on Google, which it uses in verticals beyond travel, as well, is because of the widely varying quality of partners’ mobile sites, and the desire to optimize the mobile experience. For example, Google recently found that the duration of user sessions on mobile are decreasing as consumers are increasingly bombarded or distracted by so much digital noise, and this hurt conversion.

It’s not, he said, because Google wants to become a booker in its own right.

All of this doesn’t preclude Google from one day — if circumstances change — becoming an online travel agency. It just isn’t in the cards now or in the next few years.

As one investor told Skift: “The Google app won’t add booking. They want to keep the robust auction between Priceline and Expedia. Google already makes a killing in travel [maybe more than $6 billion ≈ K-12 annual book sales revenue, 2010

≈ San Francisco Bay Bridge span replacement, 2002-2013

“>[≈ Suez Canal annual receipts] from just Priceline and Expedia] so why screw that up?”

See the following video of Heckmann’s talk at the Skift Global Forum in September 2016 and below that how the estimate of Google’s travel revenue was calculated.

 A Rough Estimate of Google’s 2016 Travel-Advertising Revenue

  • The Priceline Group and Expedia Inc., including their wide array of brands, spent around $4.9 billion ≈ Construction cost for Nimitz-class aircraft carrier”>[≈ Higher education annual book sales revenue, 2010] for total online advertising in 2015 and are on pace in 2016 to bring that total to around$6.8 billion [≈ San Francisco Bay Bridge span replacement, 2002-2013]. If roughly 90 percent of the total goes to Google, then Google would attract some $6.1 billion ≈ K-12 annual book sales revenue, 2010
    ≈ San Francisco Bay Bridge span replacement, 2002-2013

    “>[≈ Suez Canal annual receipts] in revenue from just these two companies.

  • TripAdvisor would conceivably spend around $500 million [≈ net worth of Jay-Z, rapper, 2011] on Google in 2016; TripAdvisor’s total online spend in 2015 was $507 million [≈ net worth of Jay-Z, rapper, 2011]. Airbnb’s spend on Google, based on public rumors and educated guesses, might total some $300 million in 2016.
  • That means Google would take in $6.2 billion ≈ Suez Canal annual receipts
    ≈ San Francisco Bay Bridge span replacement, 2002-2013

    “>[≈ K-12 annual book sales revenue, 2010] in 2016 from just these four advertisers — Priceline, Expedia, TripAdvisor and Airbnb.

  • Roughly around half of Google’s travel advertising is considered to come from suppliers, namely airlines, hotels, car rental companies, cruise line and destination marketers.
  • Adding the spend of its largest online travel agency partners plus suppliers, Google’s travel advertising business, which is said to be its largest vertical, could then easily be around $12.2 billion ≈ cost of 1972 Hurricane Agnes”>[≈ cost of 2005 Hurricane Rita] or more.

Death of the Industrial Advertising Complex

Ajoutée le 22 juil. 2016

In his talk at L2’s Digital Leadership Academy, Scott Galloway argues that advertising is becoming less essential to brand building as consumers are discovering products with tools like Google, Amazon, and TripAdvisor. The brand is no longer on the tip of the tongue, it’s what Google says it is.

Furthermore, wealthy shoppers are paying to avoid advertising altogether.

However, it is not all bad news for brands even though it might be for traditional ad men (appearing less and less often on the cover of BusinessWeek). Winners in this new age are not always the biggest spenders on ads, but innovators in product, supply chain, and influencers.

Combining multichannel and programmatic advertising will give brands richer audience insights for more relevant marketing – Smarter With Gartner

Advertising and multichannel marketing efforts must unite to give brands richer audience insights for more relevant marketing.

Source: It’s Time to Unite Advertising With Multichannel Marketing – Smarter With Gartner

Many customers today encounter the great divide between Madison Avenue and multichannel marketing. They may be served an ad based on their persona and then receive an email based on an alternate segmentation. However, what if a brand coordinates first-party data from their email database and third party data from the advertiser to send a customized email in the morning and an advertisement in the afternoon to visitors from a “Stranger” segment who abandoned a lead generation form? The customer experience becomes more connected and relevant.

In a marketplace where customer experience is a crucial differentiator, advertising and multichannel efforts must unite to give brands richer audience insights for more relevant marketing, noted Andrew Frank and Adam Sarnerduring the Gartner Digital Marketing Conference 2016. The mutually-shared desire for profitable engagement drives the coordination between advertising and multichannel marketing.

Why a merger makes sense

“Advertising is already part of the multichannel continuum,” noted Mr. Sarner. Customers don’t want separate experiences that mirror marketing’s silos. They see one brand and want one experience.

According to Gartner’s Strategic Planning Assumption, by 2018, over 40% of marketers from global organizations will have insourced programmatic advertising capabilities, up from about 10% today.

Customers don’t want separate experiences that mirror marketing’s silos.

When marketers combine the dynamic creative possibilities of advertising with the personalization of multichannel marketing they better serve their audiences. This richness of customer insight allows marketers to profitably engage customers throughout the various stages of a customer’s buying journey.

Furthermore, programmatic tactics match multichannel tactics and highlight overlapping interests. Both efforts use forms of real-time decision-making. For example, advertisers use real-time bidding and multichannel marketers use real-time engagement. Both seek to make course corrections on the fly. Marrying advertising’s third-party data with multichannel’s first-party data provides a rich behavioral/ demographic mosaic of audience needs and opportunities.

Bring the two sides together with the Action-Value Model

Use a three step Action-Value model focused on audience, action and attribution to operationalize the linkage of advertising and multichannel marketing. Start by identifying the audience and execute disciplined segmentation. Develop segments such as Loyads (loyal advocates), Churners, First timers or Strangers and set marketing goals for each.

See related article: The Secrets to Marketing Segmentation.

Then clarify valuable actions for those segments and set specific values for the actions. Example actions include rating an app, joining a loyalty program, or watching a video. Clarify how much the action is worth and how much it costs. Once you’ve crystallized the actions that matter to your business, set attribution by channel and by action to answer key questions. Did the campaign do anything? Were the results worth it? Were profits maximized?

Pay attention to skill differences

While interests overlap, the skills found in an advertising team are different from those in multichannel. Beyond just the hard skills gaps, there are real and significant cultural differences. Creative, media placement and a host of acronyms – DMP, TMS and DSPs are central to advertising while multichannel focuses on direct mail, email and database marketing. Be mindful of these differences when uniting the two disciplines.

Get help with your multichannel efforts by finding the right partner with research by Jay Wilson.

Gartner for Marketing Leaders clients can read more in How to Unite Advertising with Multichannel Marketing by Andrew Frank.

Learn more about digital marketing trends at the Gartner Digital Marketing Conference. Follow news and updates from the event on Twitter using#GartnerDMC.

Amazon offers nationwide discount on back of Havas Meaningful Brands survey, as it launches John Lewis-style ad | The Drum

Amazon offers nationwide discount on back of Havas Meaningful Brands survey, as it launches John Lewis-style ad | The Drum.

Amazon is offering Brits a £10 discount on any order over £50 on the back of a Havas Media survey, amid wider marketing activity to promote its Prime service which kicked off over the weekend (31 July).

The results of Havas’ ‘Meaningful Brands’ global study, which involved over 20,000 people in the UK, were revealed earlier this year but only recently received wider industry recognition.

https://www.youtube.com/watch?v=Ez3o7L0R3rg

The Meaningful Brands metric was related to how consumers’ quality of life and wellbeing connects with brands at both a human and business level. Specifically, it looked at the role brands play in communities, how they impact self-esteem, healthy lifestyles, connectivity with friends and family, making lives easier, fitness and happiness as well as marketplace factors such as quality and price of goods.

Amazon topped the list in the UK, with 64 per cent of people saying they would care if the retailer disappeared. M&S and John Lewis – viewed as ‘ethical’ heritage brands – followed Amazon, with discount retailer Aldi and Sainsbury’s rounding off the top five.

To say thank you, Amazon has rolled out the £10 off promotion.

“We are grateful to customers for ranking Amazon #1 across Britain’s retailers,” said Christopher North, managing director at Amazon UK.  “You can count on us to continue working hard to set ever-higher standards for customer experience.”

The ‘BIGTHANKS’ promotion coincides with the roll out of a UK marketing campaign to bolster uptake of its Prime service.

The ad takes a different approach to previous Amazon activity, which has previously relied on consumer testimoials to woo new shoppers. Instead, the brand has followed the likes of John Lewis and Nationwide in running more emotive led creative in order to showcase what their services mean to customers rather than focus on the more funcitonal benefits.

To that end, Amazon’s latest ad follows the story of a little boy on the first day of nursery.He is showen nervously trying to fit in, as his anxious father watches through a window. His dad is then seen buying something via the Amazon mobile app, before the ad cuts to the next day when the little boy arrives at nursery wearing a superman costume.

It ends on the line: ‘Millions of ways to save the day, delivered in one day’.

Prime is Amazon’s key asset in its ambitious plan to create an ecosystem where users will spend more time and money. Over the past six-months it has ramped up its strategy to sign up new members, namely with the launch of the Prime Day last month.

Open only to Prime members, it offered discounts across thousands of goods for 24 hours. Amazon has not yet offered data on how many new members it attracted, but claims that global order growth increased 18 per cent on Prime Day versus the same day last year

Shazam compagnon idéal de la pub via la réalité augmentée et les objets connectés

Shazam a de grandes ambitions, et elles dépassent largement le simple domaine de la reconnaissance musicale. Le service cherche à devenir en effet le compagnon « idéal » de certaines publicités et se rapprocher davantage des commerçants, en proposant par exemple des expériences de réalité augmentée.

De la musique à la publicité

Tout le monde ou presque connait Shazam, une petite application pratique permettant de reconnaitre facilement quelle musique est en train d’être écoutée. Si vous êtes par exemple dans un magasin et qu’une chanson sort des haut-parleurs, Shazam vous en donnera le titre, l’artiste, l’album dont elle est extraite et ainsi de suite. Le résultat est toujours accompagné de liens vers iTunes et autres boutiques, ainsi que quelques services de streaming comme Spotify et Rdio. Et le succès serait au rendez-vous puisque Shazam compterait pour 10 % de la musique achetée selon l’entreprise. Toutefois, en l’absence de détails sur la manière dont le chiffre a été calculé, on le prendra avec les pincettes de rigueur.

Mais elle ne compte justement pas s’arrêter là. Elle tient à faire de son service une porte vers des contenus supplémentaires en fonction d’un contexte particulier, essentiellement pour compléter la publicité. Certaines sociétés se sont déjà associées à Shazam et il suffit par exemple de dégainer l’application pendant que la publicité passe à la télévision pour obtenir des informations, à la manière finalement d’un QR-code audio. Il s’agirait donc d’un renforcement de cette activité puisque des essais ont déjà été faits dans ce domaine, notamment la publicité pour La Halle avec Jenifer.

The Next Web a pu interroger Rich Riley, PDG de Shazam, à ce sujet.  Les projets de l’entreprise sont nombreux pour cette année mais concernent avant tout le renforcement du service autour de la publicité. Les développeurs travaillent par exemple sur un « Shazam visuel » permettant de relier l’application à une expérience de vente dans des boutiques physiques, pour obtenir des coupons de réductions ou autres.

Fournir un contenu en fonction du contexte

Même la réalité augmentée est au programme. Au CES de Las Vegas, le PDG a ainsi fait la démonstration d’une publicité pour une Jaguar dans un magazine papier. En scannant la page, Shazam reconnait le contenu et propose automatiquement une expérience 3D à 360°. Il suffit alors de déplacer son téléphone pour observer l’habitacle du véhicule, comme si l’on se trouvait à la place du pilote.

On notera que ce type d’interaction existe déjà, comme Ikea l’a montré avec son catalogue depuis août 2013. La différence ici est que Shazam cherche à fédérer autour de sa plateforme les sociétés qui pourraient être intéressées par ce type d’expérience, en offrant un accès via l’une des applications mobiles les plus utilisées.

Shazam a également des ambitions dans le domaine des objets connectés et des « wearables ». Idéalement, l’application serait assez petite et économe en ressources pour pouvoir être utilisée sur des montres et autres, afin par exemple de pouvoir accéder à des contenus par simple pilotage vocal. Une fonctionnalité que l’on retrouve déjà avec Siri, Google Now et Cortana et il faudra voir comment Shazam compte se démarquer. De même, l’entreprise travaille sur des balises, nommées Shazam-In-Store, capables de fournir du contenu Shazam en fonction de l’endroit où l’utilisateur se tient dans un magasin.

Tout cela suppose évidemment des transferts de données et un stockage d’informations concernant l’utilisateur, même si elles ne sont pas nominales. À la lumière de toutes les attaques sur les deux dernières années, on peut donc se poser la question de savoir comment Shazam compte gérer la sécurité de l’ensemble. Rich Riley n’a cependant pas été prolixe sur le sujet, indiquant simplement que des mesures de protection avaient été prises, et que les données n’avaient pas vocation à transiter vers d’autres entreprises.

Top 3 Mobile Advertising US (2014): Google (37%) Facebook (18%) Twitter (4%)

Publicité mobile : Yahoo ! dépassera Twitter en 2016 aux Etats-Unis.

En 2014, Google trustera aux Etats-Unis plus du tiers (37,2%) des revenus publicitaires sur mobile, devant Facebook (17,62%) et, bien plus loin, Twitter (3,56%), selon une étude réalisée par eMarketer. Derrière un intouchable duo de tête, Yahoo! se positionne à quelques encâblures de Twitter, avec 3,18% des revenus pubs mobiles outre-Atlantique. A l’horizon 2016, Facebook et Twitter devraient perdre un peu de terrain, avec respectivement 33,21% et 14,64% du marché, alors que Yahoo dépasseraient cette fois Twitter (4,19% vs 3,77%).

Toujours selon l’étude eMarketer, LinkedIN devrait enregistrer aux Etats-Unis une croissance de ses revenus pubs mobiles de plus de 800% en 2014 vs 2013 quand Amazon afficherait plus de 600%, Facebook 118,4% et Twitter 111,4%. Google devrait quant à lui se « contenter » de +75,8%. Si en 2015 LinkedIN poursuivra sa progression (+111,3%), Amazon ne serait pas en reste en 2015 et 2016 (+85,1% et +62,6%) quand Facebook et Twitter montreraient un ralentissement dans la progression de ces revenus pubs mobiles.

Havas launches the world’s first “Meta DSP”

Affiperf, Havas’ programmatic pure player, extends boundaries of programmatic buying with the introduction of the world’s first real time, agnostic system to work across multiple Demand Side Platforms

Today, Affiperf, Havas’ programmatic pure player, became the first company in the world to offer brands the opportunity to operate seamlessly across multiple demand side platforms with one single point of contact with the launch of its “Affiperf Meta DSP” solution. This represents a significant leap forward in what is now called “the age of programmatic” as the topic continues to dominate the agendas of events such as this week’s Advertising Week in NYC.
As technology, data and algorithmic complexity have increased; automation in the media industry has become the new norm. Despite this, the potential of automated programmatic methods for real-time buying have been limited by the fact that until now, agencies were limited to using inventory from different Demand Side Platforms (known as DSPs) in parallel. As the number of DSPs in the market exploded, this added a rather frustrating and inefficient complexity to the process of optimisation and data collection in programmatic buying.Algorithms data and advertising

Following 3 years of research from Affiperf, a Fields Medal holder and renowned data scientists MFG Labs, the Affiperf Meta DSP solution offers for the first time, a way to unify and make sense of data sets across multiple platforms. It aggregates multiple assets using their APIs, i.e. data inventory, features and algorithms from a number of DSPs. It then uses modelling and decision engines to allow traders to recommend wider, more sophisticated strategic options and monitor them.

Pierre-Louis Lions, MFG Labs co-founder and Fields Medal holder 1994 comments: “Thanks to three years of extensive R & D we have been able to bring technical neutrality to the conception, implementation and optimisation of campaigns. This works both in the real-time bidding process as well as the design for even more integrated approaches that will enable us before the end of the year, to start managing our Affiperf Meta DSP solution for online and offline data and media.”

A unique answer to growing complexity

The Affiperf Meta DSP is powered by enhanced proprietary algorithms that offer clients fluid digitalisation, optimisation and addressability across formats. This ability to collate results and information into one unified marketing statistic marks the end to complexity in this critical area. Although increasing in size, the competitive landscape is not dominated by one DSP, but a fragmented ecosystem of DSP display, mobile and video, rich media DSPs, each of them having different rules, inventories and features. This makes it increasingly difficult for brands to get consistent answers and to see the bigger picture. Technologically agnostic, this is the first solution that is open to all DSPs and all technologies. Through this platform brands can therefore take advantage of the best technology available to reach out to and relate to people with greater speed in a more tailored environment than ever before.

Dominique Delport, Global Managing Director, Havas Media Group and Chairman of Havas

Media Group France and UK comments: “In today’s world, media is code and digital campaigns are like software. The idea behind programmatic when it first started was to secure instant contact between traders and brands that would enable our clients to benefit from an infinite number of connections with consumers in real-time. The explosion of data and the significant rise in the number of DSPs on the market has meant that this promise of programmatic was lost to complexity and silos.

Affiperf Meta DSP disrupts the market with the creation of one single tool that enables our clients to optimise choice across multiple platforms. As a result, our industry can finally take programmatic buying to the next level to help brands generate more tailored, more effective and more meaningful connections with people. This is programmatic without compromise.”

A worldwide roll-out

The initial roll out of the Affiperf Meta DSP includes, amongst others, the recently launched ONE by AOL, onto one open infrastructure. Accessible in over 102 markets, Affiperf will continue to develop the product in the coming months to increase the number of DSP platforms that can be analysed at the same time.

The Meta DSP was launched at the AOL Annual Programmatic Upfront in NYC during the first day of Advertising Week 2014