Journey big Reserving spent $1 billion on Google adverts within the …


Online travel giant Booking Holdings spent upwards of $1 billion on Google ads in the past quarter, according to its earnings report and analyst estimates.

Booking, which owns Europe’s Booking.com and U.S. businesses including Priceline and Kayak, said on Monday that it shelled out $1.3 billion on “performance marketing” in the quarter, up from $1.2 billion a year earlier. That spending was “primarily related to the use of online search engines (primarily Google),” and other online services, according to Booking.

Google is such a critical piece of Booking’s advertising budget because so many travelers search for trips with terms like “flight to New York” or “hotel in London.” Booking is competing for that highly valued traffic with Expedia, TripAdvisor, Trivago and even Google’s own services.

Mark Mahaney, an analyst at RBC Capital Markets, estimates that “north of 80%” of Booking’s performance marketing expense goes to Google. That would equal over $1 billion and account for more than 3.6 percent of Google’s total third-quarter advertising revenue.

Mahaney, who has a “buy” rating on Booking, said in an email that, “I’m sure they are one of Google’s top five direct customers worldwide.”

But it’s a complicated relationship.

As Booking has continued to bolster its yearly spend with Google, it’s increasingly found itself in the position of being both a big customer and a competitor.

For example, Booking is vying for traffic with Google Flights and Google Hotels, which are known as metasearch products, meaning they aggregate data from online travel agencies like Priceline or Expedia, and then direct users to those and other sites to book their trips. A Google search for “flight from San Francisco to Chicago,” brings up another Google page that lets the user type in dates and times.

In its most recent quarterly report, Booking mentions Google 52 times and highlights the risk of relying on Google for a “significant portion” of its traffic and bookings.



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