Is Priceline de-emphasizing hotel metasearch?
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The Priceline Group, which accounted for 43% of hotel-search site Trivago’s revenue in the first nine months of 2016 — might be pulling back on digital advertising in such hotel-metasearch platforms.
Trivago recently appears to have suffered a relative loss in advertising spend by Priceline Group-owned Booking.com, in particular.
Trivago’s share of Booking.com referral of users dropped about 23% across its various subdomains.
Priceline brands are not appearing in Trivago search results as prominently as they once did.
Priceline might be de-emphasizing hotel metasearch in general and not just against Trivago in particular.
Priceline’s visibility in the top slots of TripAdvisor’s search has dropped from 63% in June, to 39% in August, to 10% in September.
The trend is a suggestive sign that the U.S.-based conglomerate’s largest brand, Booking.com, has at least modestly pulled back its spending on Trivago.
Trivago executives reduced spending on TV advertising to cope with the reduced income from advertisers.
Earlier this month, Trivago lowered its forecast for revenue and profit for the second half of the year. Revenue dropped because of less ad spending coming from (an unnamed) one of its two main advertisers — Priceline or Expedia.
Priceline may have raised its financial expectations for hotel metasearch as a marketing channel generally, setting a higher profit target for its ad spending on Trivago. If Trivago isn’t measuring up, Booking.com may prefer to acquire customers through other avenues.
This story is interesting not because Trivago is in danger but because it demonstrates the large ripple effects that can happen when only two conglomerates have an outsized influence on the industry.