Blackstone Executive Vice Chairman Tony James says he's less optimistic now than before that the U.S.-China trade war could be resolved, but even a smaller deal could help...World Economyread more
The massive market transformation this month that some on Wall Street called a "once in a decade opportunity" might have just been a one-off technical move because of taxes.Marketsread more
The Pentagon will deploy U.S. forces to the Middle East on the heels of the attack on Saudi Arabian oil facilities, United States Secretary of Defense Mark Esper announced...Defenseread more
CNBC did a deep dive through the most recent Wall Street research to find stocks that analysts say are underappreciated.Marketsread more
Shares of MasterCard are up 46% this year, and 1120% since 2011, getting a boost from the strong U.S. consumer.Investingread more
CNBC sat in on an "empathy training" at Amazon PillPack's Somerville offices, which is part of new hire orientation.Technologyread more
Trade with China is the 'big unknown' for the Federal Reserve as it decides how best to support the U.S. economy, says Council on Foreign Relations Director of International...Futures Nowread more
Lobbying experts said the visit is likely an attempt to be in lawmakers' ears as they consider legislation that would impact Facebook.Technologyread more
Yardeni Research's Edward Yardeni believes the U.S. economy is picking up steam.Trading Nationread more
Iran's audacious drone and cruise missile attack on Saudi Arabia's oil producing facilities has provided a critical test yet for the Trump administration's foreign policy. A...Politicsread more
Booking Holdings, the parent of Booking.com, Priceline and Kayak, has long counted on Google for traffic, spending billions of dollars a year on ads and search engine optimization. But the company is trying to diversify away from Google as it looks to build its brand through TV commercials and online videos.
In its earnings release on Wednesday, Booking said it spent $1.19 billion on so-called performance marketing in the second quarter, which primarily goes to Google. While that was an increase from $1.14 billion a year earlier, it represents a declining percentage of revenue — 31% down from 32.3%.
Booking's historical reliance on Google reflects how effective search has been for a dominant travel site. Type in "hotel in San Francisco" or "flight to Las Vegas" and one of Booking's properties would almost always show up near the top. However, Google has changed its approach in recent years, competing with Booking in various categories and making it easier to book travel directly from search results. That's made it more difficult for Booking to get the same kind of economic returns on its search spending.
"We have observed a long-term trend of decreasing performance marketing returns on investment ('ROIs'), a trend we expect to continue," Booking said in its quarterly filing. The term "performance marketing" refers to ads that have a measurable rate of effectiveness, such as clicks or sales conversions, and includes search.
"The rate of decrease may fluctuate and there may be periods of stable or increasing ROIs from time to time."
Search is what drives Alphabet, Google's parent company, and gives it the earnings power to invest in so many other areas, like cloud computing, driverless cars and anti-aging technologies. Ad revenue growth has been slowing for Google, and some companies like Booking are spelling out the problem. ANGI Homeservices, the IAC unit that owns Angie's List and HomeAdvisor, said in a shareholder letter on Wednesday that it saw an unanticipated increase in the cost of customers from Google, its largest source of traffic.
Google didn't immediately respond to a request for comment.
Booking said that it's taking a "disciplined" approach to performance marketing spend, and has seen slowing growth across some of its channels, which include metasearch and travel research services. While search is still very important to get customers into Booking's virtual doors, Chief Financial Officer David Goulden said on the earnings call that the company is investing in brand marketing to try and drive traffic directly to its sites.
For example, Booking.com debuted a new campaign in February called "Be a Booker" with ad agency Anomaly. The campaign "celebrates bookers who turn their travel dreams into actions instead of just pinning, posting and swiping, while inspiring travelers to be bold and press the confirmation button," Booking.com said in a release.
Spending on brand marketing, which includes TV ads, online video and online display ads as well as sponsorships and trade shows, surged 41% in the second quarter to $175 million, climbing to 4.5% of revenue from 3.5% a year ago.
Booking shares jumped 6.6% on Thursday after the company reported revenue and profit that topped analysts' estimates. Even with the optimistic results, CEO Glenn Fogel said that the shifting ad strategy has hit some snags.
"The short-term return on our brand spending is running below our expectations," Fogel said on the call. He added that the company will be "refining" spending in the second half of the year.
Executives were asked if brand advertising just doesn't work particularly well for online travel companies. Fogel responded by saying that others in the travel space have seen positive results from it.
"In terms of when do you say, oh, it's not working, let's stop doing it, I don't think that's ever going to happen," Fogel said. "I think brand advertising is always going to be important for anybody who's in the retail business. I do believe that we need to continue to work on this and improve upon it. And I'm looking forward to us doing that."
Analysts also wanted to know about Booking's social media strategy and how it views the efforts of apps like Instagram, which is owned by Facebook, to go deeper in location-based advertising. Fogel said many of those platforms aren't yet providing the kind of return the company gets from Google.
"We do see more and more people using social as a way to make decisions for travel, and we meet with all the key players in different parts of social, whether the people at Instagram, Facebook, Snap, even Twitter," he said. "The ROIs are not as effective and it's not as easy to scale yet as some of our other long-term use channels like Google, for example."
Finding other ways to generate traffic is still a priority.
"We're going to continue to work with all these different companies because we do believe that this will be an important leg down the road to bring in demand," Fogel said.