travel recovery insights€¦ · consequently, advertisers have adjusted their marketing strategy,...
TRANSCRIPT
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
Jan Feb Mar Apr May Jun Jul Aug
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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
10%
20%
30%
40%
50%
60%
70%
Jan Feb Mar Apr May Jun Jul Aug
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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly clicks distribution
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
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitiveness
CPC Auction competitiveness
Cost and competition are still low compared to January, however, they are moving towards normalization
* 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
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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
2%
4%
6%
8%
10%
12%
14%
Jan Feb Mar Apr May Jun Jul Aug
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. 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%
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
$0.2
$0.3
$0.4
$0.5
$0.6
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitiveness
CPC Auction competitiveness
* 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
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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
Flights: Conversion paths are normalizing with a heavy weight of paid clicks
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Jan Feb Mar Apr May Jun Jul Aug
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.
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
OTAs, Airlines and Flights
39% 41%
55%
85%74%
62%48% 49%
61% 59%
44%
15%26%
38%52% 50%
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
$0.3
$0.4
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitiveness
CPC Auction competitiveness
* 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, 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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
2%
4%
6%
8%
10%
12%
14%
16%
Jan Feb Mar Apr May Jun Jul Aug
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.
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%
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
$0.3
$0.4
$0.4
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitiveness
CPC Auction competitiveness
* 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, Germany, based on a sample of 3,000 users
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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
1%
2%
3%
4%
5%
6%
7%
Jan Feb Mar Apr May Jun Jul Aug
Conversion rate trend
CVR
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.
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%
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
$0.2
$0.3
$0.4
$0.5
$0.6
$0.7
$0.8
$0.9
$1.0
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitiveness
CPC Auction competitiveness
* 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, Germany, based on a sample of 3,000 users
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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
2%
4%
6%
8%
10%
12%
14%
16%
Jan Feb Mar Apr May Jun Jul Aug
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.
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.
▪ OTAs: Category is showing strong recovery signs. Paid clicks
are on a normalization path, CPCs and competition are still
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
OTAs, Airlines and Flights
51% 49%59%
88% 90% 87%
64% 60%
49% 51%41%
12% 10% 13%
36% 40%
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
$0.3
$0.4
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitiveness
CPC Auction competitiveness
* 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, 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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Jan Feb Mar Apr May Jun Jul Aug
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.
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%
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
$0.2
$0.3
$0.4
$0.5
$0.6
$0.7
$0.8
$0.9
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitivenessCPC Auction competitiveness
* 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, 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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
5%
10%
15%
20%
25%
Jan Feb Mar Apr May Jun Jul Aug
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.
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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly clicks distribution
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
Jan Feb Mar Apr May Jun Jul Aug
CPC & Auction competitiveness
CPC Auction competitiveness
* 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, 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%
Jan Feb Mar Apr May Jun Jul Aug
Monthly conversion distribution
Organic Only Paid & Organic Paid Only
0%
5%
10%
15%
20%
25%
30%
35%
40%
Jan Feb Mar Apr May Jun Jul Aug
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.
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
▪ OTAs: Category is showing strong recovery signs. Paid clicks
are on a normalization path, CPCs and competition are still
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