Travel Payments

Expedia To Slash Ad Spending

Expedia Slashes Ad Spending Due To Pandemic

Expedia Group is looking to cut its budget for ad revenues this year, according to Chairman and Senior Executive Barry Diller.

Diller told CNBC that the company usually spends around $5 billion in ads, but is unlikely to crack even $1 billion this year due to the market uncertainty surrounding the coronavirus pandemic.

A survey by the Interactive Advertising Bureau of near 400 media planners, buyers and other related firms last month found that 74 percent of them believed the coronavirus would have a substantial effect on their incomes, even exceeding that of the 2008-09 financial crisis. Around a quarter of them said they had paused all advertising ventures for the time being.

Expedia's umbrella includes companies like Expedia, Hotels.com, Trivago, Orbitz and others. Shares in Expedia were down 1 percent as of Thursday morning (April 16).

With its high contagion rate, the coronavirus spelled trouble almost immediately for travel-based industries. In March, U.S. President Donald Trump barred travel to several countries to help stave off the virus, and cruise lines saw viral infections on their vessels and cut back activity. That, along with customers' understandable declines in almost any kind of travel, had dire effects of Expedia's stock prices and business dealings.

Expedia and other similar companies like Booking Holdings are known for heavy ad spending on Google, as many travelers use the search engine for travel planning. But in February, Diller signaled that Expedia was looking to branch out from Google, aiming to establish a more direct relationship with customers without relying too heavily on online search.

That could have something to do with Expedia's revelation last November that changes to Google's algorithms had resulted in historic year-to-date lows for the company, making the search terms less viable than they once had been.

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