A while back, we shared studies on average CPMs paid by various categories of advertisers. Interestingly, travel ad CPMs were the highest, and new evidence suggests travel advertisers may still pay a premium – even to advertise on social platforms which profit from user-generated [read: not always professional/premium/brand-friendly] content.
Travel Ad CPMs: The Data
A study analyzed the average CPMs paid by various vertical categories of advertisers. The travel industry, which generates 8.5 Billion image-based ad impressions per year, is both a highly competitive category and reliable source of ad dollars for ad networks and major publishers. Unsurprisingly, travel ad rates were the highest, with an avg. CPM paid of $19.89.
The study’s data set pooled roughly 12,000 medium-traffic sites (receiving roughly less than 1M impressions monthly) served by Adify, making the data less indicative of average CPMs paid for full-scale campaigns, which generally incorporate higher-traffic – and higher-ticket – online media sources. Still, the findings seem sound. Categories with high-ticket items that sell to a more qualified audiences are expected to pay a premium for advertising, particularly in competitive sectors like auto, tech, and, of course travel.
Travel Advertising Cost-Drivers
Further supporting this trend, data published by Wordstream show travel and tourism ad spending as the Google’s third most lucrative category of advertiser, generating $2.4B in advertising on Google alone. The highest cost keyword? New York hotels, at a nearly $7.50 CPC back in 2011.
Without strategy to capture user attention, paired with aggressive targeting, travel advertisers fall prey to platforms whose self-service systems are designed to spend their budget – as quickly as possible.
The dominance of OTAs in the travel industry is a huge cost-driver inflating travel ad CPMs. Advertising for customer acquisition is OTA’s #1, and arguably only cost. Hotels, airlines, cruise and car rental brands have enormous upfront costs, including property maintenance, labour, commodity pricing, depreciation, and much much more. Of the 5 top advertisers cited in the Wordstream analysis, 4 were OTAs. This asymmetry in the market drives up costs on a CPM and CPA basis for direct travel advertisers, such as hotels, airlines, cruises and rental car brands.
MyCube compiled CPMs paid on Facebook, examined by demographic, and CPMs paid on YouTube, itemized by video subject. On YouTube, travel videos command the highest CPMs.
Who wins?
Facebook and YouTube, who are aggressively looking to monetize users’ content.
Who loses? Most likely, travel brands seeking advertising adjacent to home videos of an Alaskan cruise – essentially, those travel advertisers paying such high travel ad CPMs. Without strategy to capture user attention, paired with aggressive targeting, travel advertisers fall prey to platforms whose self-service systems are designed to spend their budget – as quickly as possible.
These studies underscores the benefit of working with a media buying agency that represents clients across various sectors, whose negotiations would be informed by a category-neutral assessment of what one should pay for a given placement.
Criterion Global has engineered strategies to boost ROI and reduce travel ad CPMs in clever ways for global travel and hospitality brands. For case studies of our experience, or to field questions on how to advertise on Meta and YouTube without wasting your budget, contact us!
