The Interactive Advertising Bureau has released the results of First Half 2011 industry performance report for the US market. The research was conducted by PwC. I’d like to share some highlights.

First Half Industry highlights:

  • Internet advertising in the US increased 23% in the First Half 2011 vs. 2010 and totaled $14.9 billion. FYI – the 2002 total was less than $3 billion.
  • 72% of all Internet advertising revenue is concentrated in just 10 companies. Where do you think Google fits in? (hint – see next bullet)
  • Search remains the #1 advertising format and accounts for 49% of all revenue – up from 47% last year.
  • Retail advertisers are the biggest spenders and account for nearly one-quarter (23%) of all Internet ad spending.
  • Performance based pricing (PPC) grew from 61% of all advertising to 64% in First Half 2011. Impressions based pricing (CPM) declined from 35% to 31%.
  • Here are the percentage increases for the top spending industries vs. First Half 2010:
    • Retail +40%
    • Telecom +24%
    • Financial +27%
    • Automotive +27%
    • Computing + 25%
    • Leisure Travel +43%
    • Package Goods -12%
    • Entertainment +1%
    • Media +25%
    • Health Care +1%

First Half Leisure Travel highlights:

  • Leisure Travel (including airfare, hotels and resorts) accounts for 8% of all Internet ad spending – up from 7% last year.
  • Leisure Travel spending increased a whopping 43% – nearly double the rate of the industry as a whole.
  • Leisure Travel breached the $1 billion mark in the first half, jumping from $841 million in 2010 to $1.2 billion in 2011.

Implications for Hotels

  • With marketing budgets remaining relatively flat it is obvious Leisure Travel companies are continuing to divert funds from traditional advertising to the Internet.
  • Marketers are increasingly interested in measuring the performance of their advertising and the Internet does this better than traditional advertising.
  • Internet marketing (advertising, social media, SEO, etc.) is becoming an increasingly important and complex marketing environment. Hotels need access to state-of-the art Internet thinking to succeed in this ever changing marketplace.

How has the allocation of funds between traditional and Internet advertising changed in your marketing budget? What are you planning for next year?

Hoteliers can receive a copy of the Interactive Advertising Bureau research report by sending an email to me with full signature/contact information.

Safe travels – Madigan Pratt

AUTHOR: Madigan Pratt

Madigan Pratt is President of MP&A Digital & Advertising, an award-winning agency helping luxury hotels attract and retain profitable customers. Principals with over 60 years of collective experience at some of the world's largest advertising and direct marketing companies lead the agency's team of marketing, creative, public relations, Internet and social media professionals.

  • Marketing and sales budgets have been in constant decline over the past 3 years. However working in a medium sized hotel outside of a major city that is very reliant on local trade as well as national customers makes for a difficult transition from traditional marketing such as advertising to online marketing.
    Although a social media strategy has been implemented to promote local events many consumers still like the idea of traditional marketing which we use from an awareness point. In order to grow revenue we will be forced to move to the majority of our budgets being spent online. This will mean that we will miss those consumers who are not proficient in social media however our research does suggest that the majority of our consumers would have some type of online activity.

    October 1, 2011

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