You may not know it, but in 2011 Google launched a service galled Google Flights to help people book plane tickets. It’s not a particular threat to Priceline or Expedia, the companies that currently dominate that market, nor is it expected to become a threat. In 2012 the company bought out Frommer’s, the well-known travel guide publisher, and in 2016 it launched Google Trips, which helps people organize their reservations.
While Google has an obvious interest in the travel industry, the company doesn’t seem interested in trying to make a serious attempt at being a booking company.
In 2015 Google launched an ad program called Google Hotel Ads, which is where the real money has been for them. Reinhardt Krause recently wrote in Investor’s Business Daily that Google accounted for 90 percent of the digital travel advertising market in 2016, which earned them a whipping $12 billion in revenue. Their biggest customers? Priceline, Expedia, and TripAdvisor.
“We and [research agency] Skift do not believe Google will ever become an online travel agency,” wrote Mark Mahaney, a capital analyst with RBC, in a research report. “We have long been of the belief that Google has never had an interest in travel fulfillment—in the travel market, yes, but not in fulfillment, distribution, customer service. Not Google’s thing.”
Even so, Google is a big player in the travel industry.
Which is why Facebook’s new dynamic travel ads are an interesting development. Designed to “retarget potential customers across devices,” they have the potential to bring in large amounts of revenue, but it’s unlikely that Facebook’s new ad program will really challenge Google.
“We’re skeptical as to whether Facebook will be a real threat to Google in digital travel ad dollars, because Facebook is just not able to capture commercial/travel intent in the way that Google is,” Mahaney wrote.
While Facebook does have a lot of users, Google certainly dominates the market and has millions more users. And with that domination comes that $12 billion in travel ad revenue. Facebook is going to have a very hard time cracking into that, and convincing companies to advertise with them instead.
Luckily for Facebook, travel advertising isn’t a zero sum game, and companies like Expedia can, and likely will, advertise on both services.
Photo: dennizn / Shutterstock, Inc.