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All you want for Christmas

Capture customers before the January sales

Michael Wicks, Industry Analyst, michaelwicks@google.com

Insight Facts Opportunities/ Actions/ Conclusions

December is increasingly important for December continues to grow in Advertisers should keep their budgets
online Travel importance in the online travel market on in December. Not appearing during
and advertisers are failing to capitalise. this period means not being in the
Queries dropped 12% from November consideration set when searchers come
to December in 2009, whilst budgets to make a purchase.
dropped by 16%.

Searchers are more inclined to research The mix of queries during December Creatives should be tailored to research
and plan in the lead up to Christmas suggests that searchers are and planning. Keyword lists should be
predominantly researching at this time, monitored constantly in order to account
as there are more generic and for niche queries.
destination queries. The long tail also
grows in importance during December.

Advertisers aren’t keeping up with Auction intensity falls more sharply than Contact your local Google team for up to
searchers in December queries in the lead up to Christmas. In date keyword lists to ensure you are
2009, there was only a 10% drop in visible to potential customers.
queries from September to December. Opportunity to capture cheaper traffic.

The path to purchase is getting longer in Searchers are more discerning and Use more sophisticated attribution
online Travel perform more research. As part of the models to calculate the value of generic
extended research phase, there is a terms in the purchase cycle. Be aware
greater emphasis on generic search that searchers use different types of
terms. keywords in any given purchase event.
Those who use sponsored links are 1.5 Consider Search Funnels, a free tool
times more likely to purchase. within the Adwords interface which
shows the proper attribution and path to
conversion.

The January peak has extended The January peak is now a plateau Be prepared for a surge in demand after
which extends all the way into February. Christmas, but ensure your budgets take
While queries still peak in January, they into account the continued demand
do not begin to tail off after the first two throughout Q1.
weeks of the year. Ensure your keyword lists are aligned to
Advertisers are not keeping up with what searchers are looking for in Q1.
searchers and there remain
opportunities to capture cost effective
traffic in the long tail.

Searchers begin to plan around specific Queries for Christmas breaks began to Create separate campaigns for key
events and seasonal activity very early rise in July and demand for the 2011 ski seasonal events and ensure your
season is already on the rise. keyword lists are constantly monitored.
Historically as demand peaks, auction Prepare early in order to capture as
intensity often dips, presenting an much demand as possible.
opportunity to capture cost effective
traffic at the time of greatest purchase
intent.

Euro-zone and US destinations continue Query growth for Amsterdam (+23%) Use Google Insights for Search to keep
to see a recovery in demand as we come and Berlin (+20%) suggest a recovery abreast of changes in demand for
out of the recession and the pound has for the European city break category. particular destinations. Monitor rising
become stronger searches and keep your keyword lists up
to date.
This paper focuses on the opportunities in December 2010 and beyond, for the online travel market.

December is important
Last year we looked at December’s increasing importance to the online travel industry, as customers’
research and purchase behaviour has changed. Historically, Travel queries – a good barometer of
demand – fell sharply between November and December, before rising dramatically in January. This
phenomenon has become less pronounced every year, as December rises in importance. The table
below shows that advertisers are not attributing the same value to traffic in December.

November – December December – January

Date Queries Budgets Queries Budgets


2005/06 -19% -12% +81% +118%

2006/07 -18% -15% +75% +108%

2007/08 -16% -19% +80% +115%

2008/09 -10% -18% +60% +98%

2009/10 -12% -16% +56% +101%

Table 1: Month on month travel query growth and average travel advertiser budget growth

The November – December ‘drop’ in queries has gone from -19% in 2005, to -10% in 2008 and -12% in
2009. The December – January ‘recovery’ has gone from +118% in 2005, to a ‘mere’ 101% in 2010.
Clearly people are searching more in December, but it is also important to understand what kind of
searches people are making and whether these have changed over time.

December is for research and building brand awareness

The types of queries that people search for suggest that December is a month for research. The most
notable difference between the query mix in September, December and January is that in December
there is a fall in searches for branded queries (42%, versus 46% in September and 47% in January).
There are more generic searches in December (23%, versus 20% and 19%) and also more destination
searches (21%, versus 18% and 19%).

September December January


20%

20% 19%
23%
3%
2% 46%
2%
3% 42%
46% 2%
2% 47%
2%
2%
18%
19%
18%
21%
11%
11% 10% 11%

Brand Cheap Destination Cheap & Destination Lates / Last minute Generic

Figure 1: Travel queries split by type of query September 20009, December 2009, January 2010
This change suggests that searchers use December to research their travel plans for the coming year, as
they start from a broad base of generic and destination searches, before narrowing their focus as they
come to make a purchase in January.
1
The mix of head and long tail queries also changes in December. In September 2009, 67% of total
Travel queries were in the long tail. This rises to 68% in December, before falling back to 64% in
January. Again, this implies that consumers cast their net wider in December as they research and plan
their travel plans for the following year, before searching with a much narrower focus in January.

September December January

Queries

33% 32% 36%

67% 68% 64%

Clicks

46% 49% 49%


33%
54% 51% 51%

67%

Head Tail

Figure 2: Percentage of head and tail queries and clicks in the Travel category September 20009, December 2009, January 2010.
*Head terms are the top 20,000 queries for any given period, tail terms represent the remainder

However, the picture is slightly different for clicks. The first thing to note is that clicks from queries in the
long tail account for only about half of total clicks. Long tail clicks account for 54% of total clicks in
September and only 51% in both December and January. The discrepancy between long tail queries and
clicks suggests that advertisers are not enticing consumers enough on more niche searches.

The second observation to make is that there is no change in the percentage of long tail clicks from
December to January (as opposed to queries). This suggests that while searchers are using a wider
array of search queries, they don’t always find what they’re looking for.

1
Head queries are defined as the top 20,000 queries by query volume over a given time period, tail queries represent
the remainder
Conclusions

December continues to grow in importance in the online travel market and advertisers are failing
to capitalise. Queries dropped 12% from November to December in 2009, whilst budgets
dropped by 16%.

The mix of queries during December suggests that searchers are predominantly researching at
this time, as there are more generic and destination queries. The long tail also grows in
importance during December.

Key Recommendations:

Advertisers should ensure their budgets capture all opportunities in December. Not appearing
during this period may mean not being in the brand consideration set when searchers come to
make a purchase.

Creatives should be tailored to research and planning. Keyword lists should be monitored
constantly in order to account for niche queries.

Opportunities in December
Travel queries begin a seasonal decline from the beginning of September, falling at a steady rate before a
big dip in the last week before Christmas. Last year, the decline from the first week in September to the
first week in December was only -10%, compared to -18% in 2008. The drop in queries in the final week
before Christmas was also slightly less in 2009; -6% compared to -7% in 2008.
Travel Queries

2008 2009 2010

Figure 3: Rolling average of Travel queries 1 September – 31 December 2008 - 2010

Auction intensity (measured by the average number of ads appearing against a query) actually sees a
sharper drop in the lead up to December. Given that search volume remains relatively high through
December, this implies that advertisers are not keeping up. On the flip side, this presents an opportunity
for advertisers to potentially capture cheaper traffic, in a less competitive auction. Advertisers should
ensure their messaging is in line with what searchers are looking for, which in December means more of
a focus on research and planning.

6.2

6.1

5.9
Travel Auction Intensity

5.8

5.7

5.6

5.5

5.4

5.3

5.2

5.1

2008 2009 2010

Figure 4: Travel auction intensity 1 September – 31 December 2008 – 2010

Conclusions

Advertisers are not keeping up with queries in December. Auction intensity falls more sharply
than queries in the lead up to Christmas. In 2009, there was only a 10% drop in queries from
September to December.

Key Recommendations:

Contact your local Google team for up to date keyword lists to ensure you are visible to potential
customers.

The path to purchase is getting longer in online Travel

Google have recently commissioned Nielsen to perform a click stream study for the Travel market in the
UK. The full study will be released shortly, but here are some of the highlights:

There were over 28.7 million people in the Travel Market between January and March 2010
Search is an important part of the customer journey. 22.2m or 77% use search at anytime
throughout their journey, increasing to 92% of those that purchase.
Based on those that use search, those that purchased searched an average of 55 times during
the research period. There were on average 24 searches per person up to the first purchase
event. This has doubled from 2007, when a similar study found that there were on average 12
searches per person up to the first purchase event.
90% of searchers that purchased used Generic terms.
People who click on sponsored links are 1.5 times more likely to make a purchase
Conclusions

The path to purchase is getting marginally longer as searchers become more discerning and
perform more research. Due to the extended research phase, there is a greater emphasis on
generic search terms.

Paid search signals purchase intent as those who use sponsored links are 1.5 times more likely
to purchase.

Key Recommendations:

Use more sophisticated attribution models to calculate the value of generic terms in the purchase
cycle. Be aware that searchers use different types of keywords in any given purchase event.

Understand full value of search, in terms of how it can also support offline sales and brand
recognition.

Consider Search Funnels, a free tool within the Adwords interface which shows the proper
attribution and path to conversion. Conversion tracking must be in place.
The extended January peak

The January peak has long been a recognized phenomenon in the online Travel market. Traditionally the
peak booking season for many Travel companies, query volumes and site visits have always backed this
up. In recent years, however, we have seen a prolonging of this peak as searchers become savvy and
hold out for what they hope to be the best possible deal.

The chart below shows a rolling average of Travel queries for 2008/09 and 2009/10. It is clear that the
first week after Christmas is important, as queries rise from their lowest point in the year. In 2008/09 the
week on week growth was 14% and in 2009/10 it was 12%. But advertisers should be wise to the fact
th
that in the last two years, the peak day for queries was well into January. In 2009 it wasn’t until the 29
th
January that we saw the peak of queries for Q1. This came a little earlier in 2010, on the 13 January,
although adverse weather conditions contributed to this. Nonetheless, although the peak was earlier in
2010, the period of high query volume extended all the way into February.
Travel Queries

2008/09 2009/10

Figure 5: Rolling average of Travel queries 1 December – 28 February 2008 - 2010

In both 2009 and 2010, the peak of queries did not coincide with the period of greatest auction intensity.
Again it is important to mention the mitigating circumstances of weather related disruption in 2010.
Notwithstanding that, there are still opportunities for advertisers to enter less competitive and thus
potentially better value auctions during the peak period. Advertisers who keep their creatives fresh and
their keywords up to date will have a better chance to capture more efficient traffic.
6.40

6.20

6.00
Travel Auction Intensity

5.80

5.60

5.40

5.20

5.00

2008/09 2009/10

Figure 6: Travel auction intensity 1 December – 28 February 2008 – 2010

Conclusions

The January peak is now a plateau which extends all the way into February. While queries still
peak in January, they do not begin to tail off after the first two weeks of the year.

As is the case in December, advertisers are not keeping up with searchers and there remain
opportunities to capture cost effective traffic in the long tail.

Key Recommendations:

Be prepared for a surge in demand after Christmas, but ensure your budgets take into account
the continued demand throughout Q1.

Ensure your keyword lists are aligned to what searchers are looking for in Q1. Contact your local
Google account manager for recommendations and use Google’s free planning tools to enhance
your campaigns.

Create urgency in ad text, include price guarantees where they apply.

When do queries pick up for specific events?


Recent research shows that searchers begin to plan around specific events and seasonal activity very
early. For instance, searches for Christmas related travel begin to gather momentum in July, rising
steadily before peaking at Christmas.
The chart below looks at the average number of Christmas related queries over the last three years (e.g.
christmas flights, christmas markets, christmas holidays, xmas flights, christmas travel etc) and the
average depth (auction intensity) from 2009. Queries begin to rise sharply after around week 27 (July)
and by week 40 (October) are almost at their highest point. Queries peak in week 46 (mid November).
Curiously, at the same point, auction intensity begins to tail off. This is a common phenomenon, where
auctions become less competitive on average as queries increase, due to the increased number of
unique queries. Nonetheless, this presents an opportunity for advertisers as searchers who make more
niche queries often have greater purchase intent. Advertisers are able to capture these searchers in a
less competitive auction.

1,600 12.0

1,400
10.0

1,200

Average depth
8.0
Query volume

1,000

800 6.0

600
4.0

400

2.0
200

- -
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W16

W25
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W27
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W36
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W48
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W17
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W29
W30
W31
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W41
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W44
W45
W46
W47
Avg Queries 2009 Depth

Figure 7: Query volume and auction intensity for Christmas related travel searches 2009

There is a similar phenomenon for ski related queries. Queries begin to pick up from around week 29 but
there rise is slower, gradually building throughout the year, before a surge in the first couple of weeks in
January. There is a second mini-peak in week 6 (early February), before a decline. As with the previous
example, when queries reach their absolute peak, there is a slight fall in auction intensity.

120 10.0

9.0
100
8.0

7.0
Average depth
Query volume

80
6.0

60 5.0

4.0
40
3.0

2.0
20
1.0

- -
W10
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W25
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W27
W28
W29
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W41
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W14
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W31
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W39
W40

W48
W49
W50
W51
W52

Avg Queries 2009 Depth

Figure 8: Query volume and auction intensity for ski related travel searches 2009
Conclusions

Searchers begin to plan around specific events and seasonal activity very early, often months in
advance. Queries for Christmas breaks began to rise in July and demand for the 2011 ski
season is already on the rise.

As demand peaks, auction intensity dips, presenting an opportunity to capture cost effective
traffic at the time of greatest purchase intent.

Key Recommendations:

Create separate campaigns for key seasonal events and ensure your keyword lists are constantly
monitored. Prepare early in order to capture as much demand as possible.

The return of the city break

The following section looks at year to date query growth for destinations across a number of categories.
There has been a continued recovery for European city breaks, one of the most affected categories
during the recession. Sun and beach Euro-zone destinations also continue to recover, even when set
against their non-Euro-zone equivalents. Long haul travel demand is also recovering, with a particular
emphasis on the US which went through a period of slow growth in 2009.

European city breaks

City breaks were one of the most affected categories during the recession. Being many people’s
secondary or tertiary holiday, it was often the first to be cut back. In 2010 we have seen a recovery for
many traditional European city break destinations, such as Amsterdam (+23% YTD query growth) and
Berlin (+20%). Both of these destinations are growing faster than the average of all travel terms, which is
18%. Whilst queries for Rome are growing at +5% YTD, it should be noted that the UEFA Champions
League Final was held there in 2009.

25%
23%
20%
20%
YoY Query Growth YTD

15%
13%

10%

5%
5%
2%

0%
Amsterdam Barcelona Berlin Paris Rome

18%: Average YoY query growth of all travel terms

Figure 9: Year-on-year query growth for city break destinations (YTD: October 2010)
Short haul sun

Short haul sun is an interesting category because it compares a group of destinations which serve a
similar purpose, but with one distinction: some destinations are in the Euro-zone. Euro-zone destinations
in general were hurt by the falling strength of the pound in 2009, particularly in the short haul sun
category, with destinations such as Turkey and Egypt growing in popularity. In 2010, Greece (+13%
YTD) and Portugal (+25%) have rebounded strongly. Portugal has grown faster than Turkey, Egypt and
Croatia.

30%

25% 25%
25%
YoY Query Growth YTD

20% 18%

14%
15% 13%

10%

5% 3%
1%
0%
Turkey Morocco Egypt Croatia Spain Greece Portugal

18%: Average YoY query growth of all travel terms

Figure 10: Comparison of year-on-year query growth (YTD: October 2010) of traditional European beach holiday destinations with
Eastern European/ North African alternatives

Long haul

The long haul category also sees a recovery from destinations which were affected in 2009, in this case
US destinations. The weakening of the pound against the dollar made the US less attractive to travelers
from the UK. In 2010 however, New York and Las Vegas have seen YTD growth that outpaces the
Travel average. They are also growing faster than the non-US destinations in the category, with the
exception of South Africa which has seen a bumper year due to the FIFA World Cup.
60%
51%
50%
YoY Query Growth YTD

40%

30% 27%

17% 18%
20%

9%
10% 5%
4%

0%
Dubai Thailand Australia South New York Las Vegas Florida
Africa

18%: Average YoY query growth of all travel terms

Figure 11: Comparison of year-on-year query growth (YTD: October 2010) of popular holiday destinations in the USA with other
long-haul destinations

Conclusions

Query growth for Amsterdam (+23%) and Berlin (+20%) suggest a recovery for the European city
break category as we continue to emerge from the recession.

Travellers are increasingly looking to return to Euro and Dollar areas after a period of falling
demand.

Key Recommendations:

Use Google Insights for Search to keep abreast of changes in demand for particular destinations.
Monitor rising searches and keep your keyword lists up to date.

Create separate campaigns for individual destinations to allow you to react quickly to changes in
demand.