As the recession continues, 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, 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 above 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%.
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.
This 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.
The Efficient Frontier Q2 Search Engine Performance Report for all sectors will be released July 13th.
Jonathan Beeston
Client Service Director - Europe
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