A paper of two halves

Summer insights 2010 - Taking advantage of seasonal opportunities Jonathan Cranmer, Industry Analyst, jcranmer@google.com Insight
Query and click growth accelerates in 2010

Facts
   Travel queries have grown 20% YoY in 2010 (YTD). Air related queries: +24% YoY. Clicks on Travel ads +13% YoY in 2010 (YTD).

Opportunities/Actions/Conclusions
   Micromanagement of campaign budgets to exploit the continued uplifts in query volumes Understand the dynamics and changing volumes of keywords and product demand. Attribute value to generative keywords throughout the purchase funnel. Use the cheaper CPCs to your advantage. It is more affordable to increase bids to drive greater volume to your site than it was last year. Adopt an ‘always on’ policy to capture this cost effective traffic Prepare for negative growth whilst England compete in the world cup. An opportunity exists to capture traffic when England exit the tournament. In 2006 travel queries increased by 11% after England were knocked out in the quarter finals stages. Prepare accounts in anticipation of large query volumes during the end of June & start of July Query peaks observed in 2010 are similar to 2007 & 2008 patterns, rather than 2009. Queries were kept artificially high after Easter Monday due to the effect of the ash cloud. Structure campaigns to capture early traffic, with an emphasis on covering generative research type keywords. Prepare seasonal campaigns to capture generic bank holiday related queries. Keyword examples could include: ‘Short break’, ‘weekend minibreaks’, ‘bank holiday deals’. Remember that demand for short breaks/long weekends is still strong for one-off seasonal holidays; highlighted by strong year-to-date query growth for European city break destinations. Allocate budgets accordingly for these periods.

CPCs have fallen

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CPCs on travel ads have fallen by an average of 4% YoY (YTD). Hotel and car related CPCs have fallen by an average of 7% YoY (YTD). Historical data shows that the world cup has a direct impact on travel query volumes. In 2006 queries dropped by 6% during the world cup, before growing strongly the following month to compensate.

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Keep an eye on the world cup

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Changes in 2010 search seasonality

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So far in 2010 travel queries have peaked earlier before public holidays, than observed in 2009. In 2010 travel queries peaked 11 days before the May bank holiday, in 2009 they were at their highest 4 days before. There was no spiked query rise before the August bank holiday in 2009. We believe this was due to the 2009 lates market, which altered traditional user search habits. Expect query volumes before the August bank holiday to behave more like those observed in 2007 & 2008.

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Capitalize on seasonal holidays

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Top Summer destinations

Of the holiday types, most popular destinations for Summer are:  City Breaks: Paris.  Short Haul Sun: Turkey & Spain.  Long Haul: New York, Australia, Las Vegas.

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Continued strong growth of US destinations. Eurozone destinations have seen continued YoY query growth. A return in growth for European city break destinations indicates an increase in the volume of short breaks YoY.

Summer 2010
This paper focuses on the opportunities presented to travel advertisers in the run up to Summer. A continued increase in queries during the first five months of the year points toward increased demand for travel products. With this in mind, we anticipate some shifts in query traffic leading into the summer months of 2010. The ash cloud has already had an effect on queries & anecdotal evidence suggests the world cup may have too. Thanks to recent data, we have also observed a reversal of the late booking patterns observed throughout 2009, & a return to the search seasonality’s of 2007 & 2008.

General market dynamics
2010: Travel query growth in 2010 remains strong, YoY queries are up 20% year-to-date in 2010. Click volumes also continued to grow, 13% year-to-date (YoY). Positive 2010 market dynamics have largely been driven by renewed consumer confidence a year on from the start of the recession. The return of confidence in 2010 is further highlighted by travel queries peaking earlier before public holidays than observed in 2009, marking the departure of reliance on the lates market. 2010 1. Demand continues to rise: Changes in seasonality due to the ash cloud & world cup  Total travel queries have increased by an average of 20% year-to-date in 2010. Of the individual product categories, air queries have seen 24% YoY year to date growth. Some of this growth should be attributed to ash cloud related searches. WoW data shows that travel query volumes declined 6% at the end of May (purple circle, Fig.1). We believe this could be due to the world cup. For the same time period during the tournament (Germany 2006) queries declined by 5%. We will talk about the relationship between travel queries & the world cup later in the paper. YoY average click volumes for 2010 have increased by 12%. Note that this click growth is 1 percentage point lower than stated in the previous whitepaper. This is because of the unexpected surge of ash-cloud related queries in April 2010, which were not appealing to travel product advertisers. Of the individual products categories, air has grown 9% YoY, hotels 5% & car 11%.

Easter Monday

1st May bank holiday

Weekly travel query volumes

2nd May bank holiday

Figure 1: Total travel queries Jan 2007 to date

2. 2010: Less of a lates market & CPCs are still low • Figure 1 shows the weekly seasonality of travel queries 2007-2010 to date. In 2010 travel queries peaked 20 days before the Easter bank holiday. In 2009 they peaked exactly two weeks before st Good Friday. Before the 1 May bank holiday travel queries peaked 11 days before in 2010, & nd only 4 days before in 2009; and before the 2 May bank holiday 2010 queries peaked 12 days before vs. 4 days in 2009. Travel queries therefore have peaked earlier in 2010, which is more in line with search observed st in 2007 & 2008. (As an average of 2007 & 2008, travel queries peaked 12 days before the 1 nd May bank holiday & 11 days before the 2 long weekend). Figure 1 also highlights British Q2 public holidays. Queries after Easter Monday in 2010 grew for two consecutive weeks. WoW growth for the first week was 14% & for the second it was 3%. This was very strong when compared to the same time period in 2009, where queries grew by only 1% week one & then declined 3% week two. This strong query growth observed can be attributed to the effect of the ash cloud, which closed th nd UK air space from 15 -22 April. Much of the search volume here was driven by air queries which grew by a staggering 47% WoW after Easter Monday. After the first May bank holiday in 2010 travel queries increased by 9% WoW, which was less than 2009 where they increased 11%. The lower WoW growth in 2010 was caused by the return rd th of the ash cloud (May 3 – May 6 ) & the great weather enjoyed over that bank holiday weekend.

CPCs for travel ads have fallen by an average of 4% YoY for the first five months of this year. Car and hotel CPCs have fallen by the greatest amount – an average of 7% YoY. It is likely that CPC’s have continued to fall as fares and rates are slower to recover than capacity. The drop in CPCs reflects the fact that the auctions are less competitive as advertiser depth* has declined by an average of 2% YoY for travel.

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Recommendations    Micromanagement of campaign budgets to exploit the continued uplifts in query volumes. When allocating budgets, consider that demand for certain travel products are affected by weather patterns more than others. Assess you campaign broad match strategy, keyword coverage and max CPCs during this period to drive incremental traffic from world cup traffic which might not otherwise have your ad served against it.

*Definition ‘advertiser depth’: The number of impressions per matched query . It is a measure of how well queries are covered by sponsored links and gives an indication as to how competitive the auction was at that moment in time.

World cup fever
As we know the football world cup takes place in South Africa this summer. As mentioned previously, we believe this event has already had an effect on travel queries. The duration & scale of this effect will depend heavily on England’s performance during the tournament. Chart 2 below shows month-on-month query growth leading up to the world-cup for the last 6 years.

Start of football world cup

Month-on-month query growth

Greater MoM increase to compensate for drop in queries during June

Figure 2: Month-on-month travel query growth for world cup months over the last 6 years

Observations • From May to June average month-on-month query growth rates have been between 2 and 5%. We saw an exception in the previous world cup year (2006), where queries declined by 6%. In 2010 we have seen May travel queries drop 3% month-on-month. As mentioned earlier in the paper we know the bulk of this drop can be attributed to end of the month, where travel queries declined by 6% in the last week (WoW). This year’s March to April data is affected by the spike in ash cloud related queries. If we normalize this data, we are seeing similar patterns to previous years. This does not follow the same seasonality as the last world cup year (2006), where queries increased by 15% in May.

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Recommendations Prepare for query volume drops whilst England compete in the world cup. Allocate budgets for query spikes when group stages end and knock out-games begin

Changes in search seasonality Pre-school holidays
Figure 3 shows daily travel query volumes in the run up to the school summer holidays for the past three years. The absolute peaks in travel queries are represented on the graph by the coloured circles for each respective year.
Start of school summer holidays

Rolling 7 day average query volumes

27 July 7 July 2nd July
th

th

Figure 3: Daily travel query volumes through July & August 2007 – 2009

Observations The peak in travel queries before schools break for their summer holidays has happened later each year. In 2007 queries peaked on July 2nd & in 2008, on July 7th (blue and red circles, Fig. 2). However in 2009 th travel queries peaked 2 days after the schools broke up, 27 July. (green circle Fig. 2). In three years of data, 2009 marks the first time that travel queries have peaked after the start of the school summer holidays. A closer look at these queries reveals that on average UK domestic travel searches were up 13% YoY (June & July 2009). For the same time period in 2008 this growth was only 3%. The table below shows a selection of top searched for holiday destinations (2008, 2009, 2010). During 2009 extremely strong growth was observed for domestic destinations, this growth has been maintained in 2010 & continues from a strong base (highlighted in red below).

Individual travel product type trends
Figure 4 takes a more granular look at how travel queries behaved before the school summer holidays. Here we have charted the indexed growth of individual travel products.

Hotel WoW: Queries: 4% Car WoW: Queries: 9% Queries

Indexed query growth

Clicks: 4%

Start of school summer holidays

Figure 4: Indexed travel product growth through June & July 2009

Observations During this time period car queries peaked the earliest, on June 23 . WoW this represented a 9% increase in query volumes and 4% in click volumes. As it can seen, individual travel products behaved differently during July. Both air and hotel queries peaked after the schools broke up for the summer, at the end of the month. In 2009 hotel & air queries peaked on July 30 . In 2008 queries for these two product types reached their highest search volumes much earlier, by an average of 20 days. Car related queries behaved differently st in 2008 by peaking later on 1 July.
th rd

Recommendations    Micromanage campaign budgets to exploit earlier query volumes, last seen in 2008 & 2007. Monitor your CPC bids to achieve your desired position in the context of rising queries. Prepare seasonal campaigns to capture generic pre-School summer related queries. Keyword examples could include: ‘Family breaks’, ‘family friendly hotels’, and ‘holidays for children’.

August bank holiday
Figure 5 shows daily travel query volumes in the run up to the August bank holiday for the past three years. The absolute peaks in travel queries are represented on the graph by the coloured circles for each respective year.

a) Hotel queries
Indexed query growth
August BH

b) Air queries
August BH

c) Car queries

Indexed query growth
August BH

Figure 5: Daily travel query volumes for travel products in July & August 2007 – 2009

Observations As an average total travel queries peaked exactly 10 days prior to the long weekend in 2007 & 2008. In 2009 total daily travel queries peaked much earlier, some 30 days before the bank holiday. This falls at th the same time when queries were at their highest for the ‘lates school summer holiday period’ (27 July). The ‘school holiday lates market’ altered normal bank holiday search activity. The pre-long weekend query peak we expected to see was accounted for in travel searches made at the beginning of the month. This trend has not been observed previously. It is normal for travel queries to rise immediately before public holidays. Before the August long weekend in 2007 & 2008 they did, with WoW growth of 2% & 3% respectively. However in 2009 WoW query volumes declined by 3%; this enforces the point that value conscious users in 2009 searched for travel queries relating to ‘late family breaks’ & bank holiday ‘mini get aways’ equally throughout the month of August.

Indexed query growth

When looking at individual travel products and their search seasonality in the run up to the August 2009 bank holiday, differing trends can be observed. Hotel and air queries typically peaked on the first Monday before the long weekend in 2007 & 2008. However in 2009 these peaks took place much earlier in August. We expect 2010 query seasonality to behave more like patterns seen in 2007 & 2008. Consumer confidence today is stronger than it was a year ago. Sterling forex rates have improved therefore user research into Euro zone & US based holiday destinations is growing YoY (Florida +31% & Greece +23%). Expect users to search earlier for travel products and allocate budgets for pre and post seasonal holiday peaks.

Recommendations  Ensure adequate budgets are available in the run up to seasonal holidays to avoid missing out on your ads appearing against relevant search queries. Monitor your bids to achieve your desired position in the context of rising queries and also increased advertiser competition. Prepare seasonal campaigns to capture generic bank holiday related queries. Keyword examples could include: ‘Short breaks’, ‘weekend mini-breaks’, ‘bank holiday deals’. Remember that demand for short breaks/long weekends is still strong for one-off seasonal holidays

After the bank holiday
Figure 6 shows indexed query volumes at the end of both the school & August bank holidays, split down by product type.
End of school summer holidays holidays

Indexed query growth

August bank holiday

Figure 6: Indexed travel query volumes split by product type through September 2009

Observations All product types saw query uplift after the bank holiday & then again, once the schools holidays ended. WoW growth immediately after the long weekend was strongest for air queries (11%), then car (9%) & hotels (6%). Prominent airline seat sales might account for spiking growth in flight queries. Popular September holiday destinations last year included: Istanbul (46% YoY), Kenya (19%), Tel Aviv (17%), Tunisia (13%), Jamaica (12%), Australia (8%), Croatia (6%), and Mauritius (6%).

Recommendations   Build in budget to capture the extra demand for travel products after the summer holidays. Flights are an important purchase consideration for travellers during this period: Increase bids to maximise your chances of consumers seeing your creative’s. Reassess your match type strategies to increase the chance of your ads appearing against all relevant queries during this period.

Top summer destinations
In Figures 6-8 we take a look at three types of holiday destinations and compare the relative indexed query volumes of each in four weeks leading up to: i) ii) The start of the school summer holidays (blue bars) The August bank holiday (yellow bars)

The percentages above each destination indicate the YoY query growth in the year to date. City Breaks

23%

Indexed query growth

32%

1% 3% 26%

Figure 7: Indexed query volumes for city break destinations in 4 weeks prior summer holidays 2009

Observations  Paris was the most popular city break destination in the build up to both holidays last year, followed by Barcelona & Amsterdam. Strong YoY query growth for all city break destinations in the year to date, with the exception of Barcelona (1%). City breaks saw the largest cut backs of all holiday types during the recession. This increased interest in city break destinations in 2010 seems to suggest an increase in consumer confidence.

Short Haul Sun

34%
Indexed query growth

29% 44% 27% 0.5% 39% 31%

Figure 8: Indexed query volumes for short hauls sun destinations in 4 weeks prior to summer holidays 2010

Observations  Turkey was the most popular destination in terms of queries for short haul sun locations. Spain was popular, receiving more queries pre-school holidays than before the August bank holiday. Eurozone destinations such as Spain, Greece, and Portugal have seen 27-31% YoY query growth. This continues to shows great improvement on last year’s query growth, which is aided by recovery of the pound against the Euro, making European holidays more affordable than in 2009. N.B. Growth for Euro zone destinations was at a higher rate in the summer lates market in 2009. This demand was partly driven by over capacity and distress product flooding the market with late price led demand.

Long Haul

43%

Indexed query growth

17% 17% 42% 37% 52% 16%

Figure 9: Indexed query volumes for long haul destinations in 4 weeks prior to summer holidays 2010

Observations • New York topped the long haul destinations. It received more queries before the August bank holiday than it did before school holidays. Australia, Florida and Las Vegas experienced volumes around 55% of New York queries. US destinations in particular are showing strong YoY growth, notably Las Vegas (52%). This increase in queries is likely to be influenced by the continued recovery of the pound against the US dollar. Of the non-US destinations, Thailand is experiencing the largest YoY query growth (42%), whereas queries for Australia have some of the highest volumes, likely to be affected by visiting friends and relatives. N.B. Some of Thailand’s strong YoY growth can be linked to recent political unrest in this country. Queries such as, ‘foreign office advice Thailand’ &, ‘Thailand travel advice’ have seen strong growth year-to-date.

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