Excerpt from CNBC
- Travel giant Booking Holdings spent $1.3 billion on 'performance' marketing in the third quarter.
- RBC analyst Mark Mahaney estimates that 'north of 80%' goes to Google.
- Booking is increasingly finding itself in the position of being both a customer and competitor to Google.
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.†
Click here to read complete article at CNBC.
Logos, product and company names mentioned are the property of their respective owners.