Travel recovery insights€¦ · Consequently, Advertisers have adjusted their marketing strategy,...

Travel recovery insights Paid vs. organic trends in clicks and performance

on the Microsoft Advertising Network

Markets: UK, Germany (DE), France (FR)

January 2020 – August 2020

Microsoft Advertising. Intelligent connections.

Methodology, search categories and initial hypothesis

Methodology

Search

categories

Markets: United Kingdom, Germany and France

Period: January to August 2020 (monthly grain)

Network: Bing and Yahoo! Sites, traffic across all devices

Advertisers: we have included all the advertisers active in the relevant auctions

The analysis is based on the following search categories, identified by the categorization of the

query search traffic seen in the Microsoft Search Network:

▪ Online travel agenies (OTAs): search queries containing mention of OTAs brand (Expedia, Kayak,

eDreams, Odigeo etc)

▪ Airlines: queries containing mentions of an airline brand, including all airlines of the world (BA,

Iberia, Lufthansa, Ryanair, Easyjet, Air France, etc.)

▪ Flights: all queries containing a generic reference to flight products (Flight, airline ticket, etc.) and

not including any mention of an airline brand or OTA

Since lockdown restrictions have taken place across Europe, users were forced to stay indoors.

Consequently, Advertisers have adjusted their marketing strategy, accordingly, redistributing

resources between organic & paid in order to engage more with users online.

• Is the advertising activity in the marketplace showing normalization trends?

• Is organic gaining momentum as advertising activity decreased during COVID-19 days?

• Is paid back on track to full recovery?

Research

hyphothesis

France

OTAs, Airlines and Flights

OTAs: Paid clicks are recovering at fast pace despite small fluctuations

* Auction Competitiveness: is an indicative 1-10 measure of the level of competition on the auctions. The higher the value the more advertisers are active in the auctions.

Source: Microsoft internal data, Jan 2020-Aug 2020, France, based on a sample of 3,000 users

27% 23%33%

74%60% 64%

46% 44%

73% 77%67%

26%40% 36%

53% 56%

Jan Feb Mar Apr May Jun Jul Aug

Monthly clicks distribution

Organic Paid

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.1

$0.2

$0.2

$0.3


Cost-per click (CPC) & Auction

competitiveness*CPC Auction competitiveness

As the market is approaching normality with paid clicks outperforming organic, competition is rising.

However, cost has remained stable and still low compared to pre-COVID-19 time.

OTAs: Conversion paths are normalizing with a heavy weight of paid clicks

0% 2% 2%

56%

22%

6% 6% 9%

94%

53%67%

44%

78%

94%

77% 66%

6%

45%31%

17%25%


Monthly conversion distribution

Organic Only Paid & Organic Paid Only

0%

10%

20%

30%

40%

50%

60%

70%


Conversion rate trend

Microsoft internal data, Jan 2020-Aug 2020, based on a sample of 3,000 users

Based on Users URLs path that touched upon organic only, paid & organic or paid only

Conversion is counted when a consumer registered a payment.

Conversion paths driven by organic gained momentum during COVID-19 as auction competitiveness reduced.

By contrast, the quick normalization of advertising activity has fueled a fast recovery for paid conversion paths

during the recent months. As a result, conversion rate is also regaining momentum despite small fluctuations.

45% 41%

61%

83%95%

89% 86% 84%

55% 59%

39%

17%5%

11% 14% 16%



Organic Paid

Airlines: Paid clicks are on a gradual upward trend but still far from normal

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.1

$0.2

$0.2

$0.3

$0.3

$0.4


CPC & Auction competitiveness

CPC Auction competitiveness

Cost and competition are still low compared to January, however, they are moving towards normalization


Source: Microsoft internal data, Jan 2020-Aug 2020, France, based on a sample of 3,000 users

Airlines: Paid conversion paths jumped significantly in August

0%12%

22% 20%

50%

32%

2%

21%

83%

87% 63%

73%

50%

68%

89%48%

17%12%

22%

1%

32%




0%

2%

4%

6%

8%

10%

12%

14%






Conversion paths driven by organic gained momentum during COVID-19 as auction competitiveness

reduced. However, paid paths gained strength as numbers skyrocketed in August during holiday season.

Furthermore, the gradual increment in conversion rate is indicating a normalization phase.

Flights: After a strong positive momentum, paid clicks slowed down

43%

58%

95% 99%

84%70%

84% 89%

57%

42%

5% 1%

16%30%

16% 11%


Monthly clicks distribution Organic Paid

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.2

$0.3

$0.4

$0.5

$0.6





Source: Microsoft internal data, Jan 2020- Aug 2020, France, based on a sample of 3,000 users

Cost and competition are still low compared to January; however, they are also slowly increasing as the

market moves towards normalization

20%

38%

2%9% 6%

100%

84%

100%

80%62%

95%

18%35%

16%8%

73%59%




Flights: Conversion paths are normalizing with a heavy weight of paid clicks

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%






Since June we are seeing a normalization of advertising activity with the weight of paid and conversions

rate going back to normal levels

FRANCE

Main takeaways

KEY FINDINGS

The advertising activity and market competitiveness in OTAs and

Airlines are showing signs of recovery with OTAs comeback

being more significant.

▪ OTAs: Category is showing strong recovery signs. Paid clicks

are on a normalization path, CPCs and competition are still

low but improving. Conversion paths are normalizing with a

heavy weight of paid clicks.

▪ Airlines: Normalization has accelerated with paid clicks re-

gaining momentum and paid conversion paths peaking in

August.

▪ Flights: Despite an initial positive momentum, the recovery

slowed down with paid clicks slightly dropping. However,

paid still plays a pivotal role in conversions with more than

73% conversion captured in July and 59% in August.

RECOMMENDED ACTIONS

With the activity in the marketplace under a normalization

trend, there are strong advertiser opportunities in the

categories undergoing normalization.

We strongly advise our partners to:

▪ Monitor the market to identify profitable traffic buckets

where pricing and competition are still low.

▪ Re-activate campaigns in all those categories that are

showing momentum and normalization ahead of their

competition to gather clicks and conversion at low price.

▪ Drive conversions by leveraging both their presence in

the organic and paid space.

Germany


39% 41%

55%

85%74%

62%48% 49%

61% 59%

44%

15%26%

38%52% 50%



Organic Paid

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.1

$0.2

$0.2

$0.3

$0.3

$0.4





Source: Microsoft internal data, Jan 2020-Aug 2020, Germany, based on a sample of 3,000 users

OTAs: Paid clicks experienced a fast normalization trendThe market is recording significant signs of normalization with paid clicks weight moving

towards a full recovery. Cost and competition were still low compared to January, however, they

are also moving towards normalization.

7% 2% 0%

35%26%

13% 9%2%

91% 96% 100%

65%

56%87%

47%

78%

8% 3%18%

45%

20%




0%

2%

4%

6%

8%

10%

12%

14%

16%






OTAs: Conversion paths in recovery and heavily influenced by paid clicksConversion paths in April, May and June saw an influence of organic-only clicks in correspondence to the impact of

COVID-19 and reduced competition in the auctions. However, conversions driven by paid clicks regained traction during

July and August. Similarly, the gradual growth in conversion rate was a strong indication of a normalization phase.

Airlines: Paid clicks decreased with COVID-19 and reduced auction activity

52% 50%

67% 65%

80% 79%91% 86%

48% 50%

33% 35%

20% 21%9% 14%



Organic Paid

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.1

$0.2

$0.2

$0.3

$0.3

$0.4

$0.4






Market si not yet showing strong signs of normalization with paid clicks weight still low compared to pre-

COVID-19 months. With decreased competition in the auction, also CPC went down to its year-to-date

(YTD) minimum.

Airlines: Paid clicks still playing a major role in driving conversions

4% 9% 14%25%

10% 11%

36%

7%

96% 88%86%

75%

90% 89%

56%

78%

2% 7%15%




0%

1%

2%

3%

4%

5%

6%

7%



CVR

Microsoft internal data, Jan 2020- Aug 2020, based on a sample of 3,000 users



Despite the heavy reduction seen in total paid clicks since COVID-19 (see previous slide), paid does

play a major role in driving airlines conversions in combination with organic and recently with paid

conversions paths only.

45% 46%

80%91% 89% 84%

75% 79%

56% 54%

20%11% 15% 16%

25% 21%



Organic Paid

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.2

$0.3

$0.4

$0.5

$0.6

$0.7

$0.8

$0.9

$1.0






Flights: Paid clicks showed sign of a gradual recoveryAfter a big hit seen in March, paid clicks have quickly re-gained some weight with a peak reached in July.

Both average CPC and competitiveness have risen since May, underlying a normalization phase.

31%17%

8% 6%

50%

34%

82%

100%

67%84%

92% 94%

50%

66%

18%




0%

2%

4%

6%

8%

10%

12%

14%

16%






Flights: Paid clicks still playing a major role in driving conversions Despite the heavy reduction seen in total paid clicks since COVID-19 (see previous slide), paid does play a

major role in driving flights conversions, especially in combination with organic.

GERMANY

Main takeaways

KEY FINDINGS

The advertising activity and market competitiveness in OTAs and

Flights categories are showing some strong recovery signs.

Conversely, Airlines is still lagging behind.



low, however, improving. Conversion paths are normalizing

with a heavy weight of paid clicks.

▪ Airlines: Normalization dropped in the most recent months.

However, paid still plays a role in combination with organic

when it comes to conversions.

▪ Flights: This category has witnessed a positive momentum

as paid clicks have gradually increased, leading the way for

signs of recovery. Paid was also able to influence

conversions, especially in combination with organic.

RECOMMENDED ACTIONS

With the activity in the marketplace under normalization

trends, the opportunity lies in gaining ad space and visibility

at low price ahead of your competition.

We advise our partners to:

▪ Monitor the market to identify and anticipate the

recovery as soon as possible with help from our team.

▪ Re-activate campaigns in all those categories in which

your strategy is heavily focused on awareness and visibility

taking advantage of the low prices.

▪ Drive conversions by leveraging both your presence in

the organic and paid space, especially in Flights and

Airlines categories where paid does still play a very heavy

role in driving conversions.

United Kingdom


51% 49%59%

88% 90% 87%

64% 60%

49% 51%41%

12% 10% 13%

36% 40%



Organic Paid

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.1

$0.2

$0.2

$0.3

$0.3

$0.4





Source: Microsoft internal data, Jan 2020-Aug 2020, UK, based on a sample of 3,000 users

OTAs: Paid clicks are recovering at fast pace, more than doubling June levelThe market recorded significant signs of normalization with paid clicks weight moving towards a

full recovery. Cost and competition were still low compared to January, however, also moving

towards normalization.

8% 9%3%

22%

41% 44%31%

15%

92% 91%96%

78%

59% 56%

39%

22%

31%

62%




0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%






OTAs: Paid Conversion paths skyrocketed during recent monthsAs the market has approached normality, paid conversion paths have re-gained strength during July-

August. Indeed, almost 62% of the total conversion paths in August can be attributed to paid only.

46% 51%

78%85% 90% 87% 88% 83%

53% 49%

22%15% 10% 13% 12% 17%



Organic Paid

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.2

$0.3

$0.4

$0.5

$0.6

$0.7

$0.8

$0.9


CPC & Auction competitivenessCPC Auction competitiveness


Source: Microsoft internal data, Jan 2020-Aug 2020, UK, based on a sample of 3,000 users

Airlines: Paid clicks remained flat during the recent monthsOrganic clicks still plays a crucial role, as it accounts for most of the Airline clicks. However, small signs of

recovery and normalization seen so far, with cost and competitiveness slightly increasing.

1%7%

28% 33%

0% 5%

99%92%

87% 93%

69% 64%

78%

43%

8% 2% 3% 4%

22%

52%




0%

5%

10%

15%

20%

25%






Airlines: Paid conversion paths have risen significantly during July-August.Despite little sign of recovery (see previous slide), paid conversion paths skyrocketed during July-August.

However, conversion rate is not showing no sign of recovery yet.

17% 22%

62%

96% 99% 94%83%

67%

83% 78%

38%

4% 1% 6%17%

33%



Organic Paid

$0.80

$0.70 $0.70

$0.30

$0.20

$0.30$0.36 $0.34

0

1

2

3

4

5

6

7

8

9

10

$0.0

$0.1

$0.2

$0.3

$0.4

$0.5

$0.6

$0.7

$0.8

$0.9





Source: Microsoft internal data, Jan 2020- Aug 2020, UK, based on a sample of 3,000 users

Flights: Paid clicks witnessing a significant decrease in the last monthsThe market recorded significant signs of normalization with paid clicks weight moving towards a

full recovery. Cost and competition were still low compared to January, however, also moving

towards normalization.

13% 11% 16%

67%

0% 0%

76% 75%90%

100%

84%

33%

80%

61%

11% 14%20%

39%




0%

5%

10%

15%

20%

25%

30%

35%

40%






Flights: Conversion paths heavy influenced by organic-only clicksOrganic influence dropped after June, boosting paid conversion paths, especially in August. Along similar

lines, conversions rate is rapidly gaining traction as market conditions are bouncing back to normality.

UNITED KINGDOM

Main takeaways

KEY FINDINGS

The advertising activity and market competitiveness in all

categories is showing signs of recovery with different paces



low, however, improving. Conversion paths are normalizing

with a heavy weight of paid clicks.

▪ Airlines: Normalization is slower but present as seen by

gradual increment in paid clicks. Despite this, conversion

paths are normalizing with a heavy weight of paid clicks.

▪ Flights: Category is showing significant recovery signs with

paid clicks on a normalization path, low but increased CPCs,

competition and conversion rates

RECOMMENDED ACTIONS

With the activity in the marketplace under a slow

normalization trend, the opportunity lies in gaining ad space

and visibility at very low price ahead of your competition

We advise our partners to:

▪ Monitor the market to identify and anticipate the

recovery as soon as possible with help from our team

▪ Re-activate campaigns in all those categories in which

your strategy is heavily focused on awareness and visibility

taking advantage of the low prices

▪ Drive conversions by leveraging both your presence in

the organic and paid space

Strategies and recommendations

Learn immediate and recovery-phase strategies, and how to approach new

opportunities and optimize account health in the Digital Advertiser’s Guide to

COVID-19

https://advertiseonbing-blob.azureedge.net/blob/bingads/media/insight/co/apr6/microsoft-advertising-covid19-guide-en.pdf

Travel recovery insights€¦ · Consequently, Advertisers have adjusted their marketing strategy,...

Documents

Transcript of Travel recovery insights€¦ · Consequently, Advertisers have adjusted their marketing strategy,...