The travel industry has unmistakably evolved over the last decade due to the development of the web and impact of digital marketing, with many people acting as their own travel agent. The web makes it convenient to research, compare deals, and book your own travel, especially while on the go with a smartphone or tablet.
Digital has spurred a complete overhaul in our approach to travel. Globally, internet travel booking revenue has grown by more than 73 per cent over the past five years to reach a staggering 57 per cent of all travel bookings. A holiday overseas is no longer a once-in-a-lifetime opportunity, with multiple trips and “gap years” now the norm. The average traveller is now more discerning and travel hungry than ever.
Furthermore, research published by leading travel site Expedia, found that Millennials were more likely to blend work trips with leisure, adding on a few days for tourism on to business trips. This trend creates a whole new type of semi-business tourism, spurred on by connected consumers quickly finding hotels, flights, and tourist information sometimes on the same day.
As marketers, it is becoming increasingly difficult to keep up with the spontaneity and movement of the average traveller. These are issues covered in a paper from Kenshoo called “Digital Travel Transformation Improving Your Marketing in Southeast Asia’s Travel and Leisure Landscape”.
Southeast Asia in particular has become a tourism superpower over the last ten years, transforming from what many believed was an alternate destination for budget back-packers, to a major destination for serious international travellers. The region recently dominated MasterCard’s 2015 top 10 Global Destination Cities Index, which tracks airline ticket purchases and other travel spending data, with four Southeast Asian countries making the top ten.
Southeast Asia is extremely well connected, with TechinAsia reporting 42 per cent of the world’s internet users reside in Asia. This high concentration of web users has been instrumental in opening up the region to tourism. Take Singapore for example, where almost 50 per cent of web users regularly access travel services on the web, more than the worldwide average of 35 per cent.
eMarketer research also reveals that digital travel sales in Asia-Pacific rose by almost 20 per cent to $US139 billion in 2015, with the region set to outpace Western Europe and North America by 2018. Indonesia is leading the pack with an estimated 33 per cent growth for 2016.
With the region showing no signs of slowing down, marketers need to embrace the power of digital marketing in order to keep up with today’s gallivanting consumers — remaining nimble and adapting to change to build a loyal brand and profitable business.
Kenshoo global data with Asia Pacific and Southeast Asia breakouts reveal some key insights into the digital marketing trends for search, social, and mobile advertising. The research highlights the key engagement metrics that are driving the growth in the travel industry.
Across the travel industry globally, search is still very strong, with year-on-year (YOY) growth for spend, clicks, and clickthrough rate (CTR), while cost per click (CPC) was down 18 per cent. The decrease in the quarterly metrics reflect the seasonal drop in Q1 after a busy Q4 period.
Global mobile spend has more than doubled YOY from ten per cent to over 20 per cent, but still has room for growth. Clicks from mobile devices reached over 30 per cent share in Q3 and Q4 in 2015, indicating the rate of consumer adoption versus advertising spend growth and the lower cost of mobile clicks.
Social has also seen some solid gains YOY with the global data revealing an increase of 83 per cent in spend and a 56 per cent increase in clicks. The increase in CPC is reflective of the increasing competition on social platforms.
Cost per click in Asia Pacific and Japan reflects closely to what is happening globally, with CPC decreasing ten per cent last quarter in the region, compared to nine per cent globally. YOY CPC data also mirrored what is happening globally with a 26 per cent decrease in APJ, compared to an 18 per cent decrease globally. This indicates that, as a whole, campaigns are becoming more optimised over time.
Spend in APJ was up 24 per cent year on year compared to 12 per cent globally, showing strong growth and confidence in paid search advertising with travel marketers in the region.
In APJ, travel marketers are increasing mobile investments more with these devices accounting for 29 per cent share of paid search spend in Q4 2015, compared to 23 per cent globally. Clicks from a mobile device steadily increased throughout the year from 32 per cent in Q4 2014 to an impressive 46 per cent in Q3 and Q4 2015.
The standout metric in APJ was click-through rate, with a substantial 85 per cent YOY increase compared to -6 per cent globally, potentially driven by both impression-to-click ratios and an increased focus on engagement by travel marketers in the region.
While the overall spend levels are not stable enough for proper analysis, we can see that mobile search is booming in SEA, with the first two quarters in 2015 revealing over 50 per cent of clicks from a mobile device. This reflects the mobile-first landscape in the region and exceeds the share of clicks from a mobile device in both Asia Pacific and globally.
Cost per click in SEA averaged $US0.25 in 2015, with a seasonal peak in Q2 of $US0.35, reflecting the competitive time for travel bookings. The SEA region has lower average CPCs than Asia Pacific (averaging $US0.41) and globally (averaging $US0.55). Click-through rates are also remarkably high in SEA averaging 8.1 per cent over the five quarters, compared to 3.5 per cent in APJ and 3.2 per cent globally. This is reflective of highly engaged audiences and efficient paid search advertising campaigns in the region.
About the Authors
Lauren Evans is the Regional Marketing Partner, APJ, Kenshoo which is a corporate member of the Which-50 Digital Intelligence Unit. Andrew Birmingham is the director of the Which-50 Digital Intelligence Unit. Members contribute their expertise and insights to Which-50 for the benefit of our senior executive audience. Membership fees apply.