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TripAdvisor sees ‘huge’ opportunity to boost ad revenue

In the company’s latest earnings statement, TripAdvisor called its opportunity in media advertising “huge.” In the second quarter, its branded display and platform revenue increased 5%, but the company said its growth potential in that space is larger.

“We believe our long-term prospects in this area are extremely underappreciated,” TripAdvisor said, pointing to forecasts that the digital advertising market will grow by 14% a year, reaching $479 billion by 2022.

At $153 million last year, TripAdvisor said, its ad revenue has a lot of growth potential relative to its audience size. It cited some of its internet platform peers as examples. At the low end was Spotify, whose ad revenue was $622 million. At the high end was Twitter, which had $2.62 billion.

TripAdvisor pointed to several trends in its favor: Media dollars are increasingly moving to digital spaces instead of to print; advertisers are looking for platforms outside of Google and Facebook, especially in attractive areas like retail, technology, music and travel; and TripAdvisor offers a “high-intent, global travel audience, enabling [advertisers] to target and optimize campaigns and improve ad performance.”

By introducing a modern advertising suite, TripAdvisor said it hopes to double its display and platform revenue in the next three to five years.

In an interview, Christine Maguire, vice president of global advertising revenue, who joined TripAdvisor from Conde Nast in April, outlined some of the company’s ad initiatives.

The company recently introduced a destination sponsorship offering for destination marketing organizations (DMOs). It includes a cover photo with the destination’s branding placed at the top of a destination-specific travel feed page (TripAdvisor’s new format); the ability to curate the first 10 photos on that page; ad placement within the travel feed; and a shelf of content to promote the destination through articles, trips and videos.

Additionally, TripAdvisor is beta-testing an ad product called TripAdvisor Lure. On its app, users can type a location in the “Where to?” search box. A DMO can place an ad right below that to suggest its destination when travelers are researching where to go.

TripAdvisor is also sitting on a “huge” amount of data, Maguire said, which can help it better target users with ads and create custom segments for its clients.

In addition, she said, TripAdvisor is extending its reach beyond the travel and tourism space and into off-platform sites like Instagram and Facebook. That diversification of revenue is a good long-term strategy for TripAdvisor, she said.

“The tourism business has been the bread and butter of TripAdvisor, but there is so much opportunity for us to super-serve other businesses, marketers, categories, and that’s untapped right now,” Maguire said.

As an example, Maguire said, TripAdvisor research found that two-thirds of its travelers were planning to take a road trip this summer, presenting ad opportunities to companies in the automotive space.

TripAdvisor can also serve ads to travelers who are in a destination — for example, sunscreen at sun-and-sand locations.

“Most marketers and agencies are not thinking of TripAdvisor as a platform beyond tourism,” Maguire said. “There are just unbelievable opportunities for marketers to partner with us in new and different ways across the new products that we’re rolling out, right through to the data capabilities that we can partner with them on.”