Booking.com introduces “native ads”
For many hotels, the line between “distribution” and “marketing” has always been quite blurry. Mistakenly or not, commissions paid to OTAs have traditionally been considered a “distribution” cost, whereas it’s arguable that a big chunk of that is “marketing”. Curiously, “marketing” actions have traditionally been a separate line in the P&L named “marketing fees/investment” and have rarely been identified as “distribution” costs, when they might have.
Revenue models of OTAs and marketing platforms haven’t helped much either. On the one hand, OTAs work with commission models, a concept that is deeply rooted in the hoteliers’ DNA as a “distribution” cost. On the other hand, marketing platforms such as Google mainly work on CPC (cost per click) or CPM (cost per 1,000 impressions) models that are paid upfront. For hotels, that is either a cost or an investment, but rarely a distribution cost.
A few years ago, Expedia launched the TravelAds program aiming to give hotels a “marketing tool” within a “distribution platform”. Booking.com now follows suit, with differences though, and introduces native ads, a “marketing” program on top of their “distribution” platform.
