Priceline and Expedia gain in paid advertising efficiency
Priceline and Expedia have their overall ad budgets in control and can continue to grow without spiraling costs.
A key metric for online travel agencies (OTAs) is advertising efficiency, or ad expenditure divided by room nights booked.
On this score, the data for 2012 was impressive. Expedia Inc and Priceline Inc, in particular, are converting hotel shoppers’ clicks into overall revenue growth without sacrificing net margins.
That efficiency is important because the largest chunk of the OTAs’ ad spend is still variable marketing, primarily by buying links on Google search results, at the top and on the right-hand side of a results page.