Online travel agency giants spent $10.6 billion on marketing in 2018
Expedia Group accounted for the highest amount at $5.68 billion, Booking Holdings came in at $4.96 billion.
The power of the platforms is huge: Expedia Group and Booking Holdings splashed out a record amount on customer acquisition during 2018.
The pair spent $10.6 billion on what they loosely term "performance advertising and brand advertising" in the case of Booking Holdings and "selling and marketing" at Expedia Group.
Expedia Group, the umbrella over Brand Expedia, Hotels.com and others, accounted for the highest amount at $5.68 billion.
Booking Holdings, owner of Booking.com, OpenTable and Kayak, came in at $4.96 billion.
This marked an increase of 8% by the two organizations on their marketing activity in 2017, when they collectively spent some $9.8 billion.
The figures remain as jaw-dropping as they do each year, not least to those that seek to compete against them - whether they are hotels or airlines looking for direct bookings or other online travel agencies.
It's worth noting that both groups have happily invested these multibillion-dollar levels for many years, seeing the outlay as the most efficient and data-driven way of getting eyeballs on their hotels, air tickets and other travel products.
But murmurings of discontent among the companies about how much they spend with Google (the vast majority of their respective performance marketing spend) have surfaced in recent years, as they see how the brand that helps them get customers is working harder each year to effectively compete against them.
Glenn Fogel, president CEO of Booking Holdings, referenced that dilemma during part of an interview with PhocusWire at The Phocuswright Conference 2018 in Los Angeles.
A change in strategy has clearly started to happen at both companies, figures from the past four years of financial reports have illustrated.
The year-on-year increase in marketing spend has slowed considerably for both Expedia Group and Booking Holdings.
Expedia Group, for example, spent an additional 9% between 2017 and 2018. Its arch rival (unless Airbnb gets its way) Booking Holdings came in lower at 7%.
The single-digit growth in marketing outlay in 2018 was the lowest figure for at least three years.
The increase for Booking Holdings between 2016 and 2017 was 17%, and between 2015 and 2016, it was 20%.
The scaling back in marketing behavior is being mirrored at Expedia Group - with a 21% increase between 2016 and 2017 and a 29% increase between 2015 and 2016.
In short: Both companies are spending more on marketing each year-over-year, but their enthusiasm for doing so has been clipped.
Whether this has to do directly with Google's activities is still unclear.
Booking Holdings is clearly attempting to push its brand marketing efforts (its latest campaign is here and here is how the company did it) and spent $509 million during 2018, compared to $435 million in 2017.
It paid $295 million in 2016 and $273 million during the year before.
Talk at Booking Holdings is that it is also spending more - and will do so during 2019 - on direct marketing, which will be more integrated and optimized for what are known as "locally relevant channels" and, crucially, not Google.
Expedia Group's president and CEO, Mark Okerstrom, also spoke recently about a shift in its approach to marketing activities.
A "marketing rationalization" is being introduced across the business, he says.
Speaking during the company's recent earnings call for its full-year 2018 results, he says: "What we've done is essentially been able to get much more sophisticated in our ability to understand what type of marketing is truly incremental versus just shifting bookings from one channel to another.
"And also, trying to get much more granular, essentially by marketing, not only in performance marketing channels, but also in other channels like television and digital video."
There is a lot of thinking, it appears, around being even more efficient with its marketing spend, at the expense of former tactics.
This is especially the case where it is attempting to build in countries with obvious room for high growth.
He says: "So the strategy going forward, again, is to build a great product in all of these focus markets [learning from decisions taken in the U.S. and give some focus to brand activity] and then follow up that with exactly the same strategy: performance marketing, again, in prudent levels to support the strategy and to support the growth."
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