Travel firms ramped up spending on online ads ahead of projected coronavirus slump, data show

SAN FRANCISCO (Reuters) - The U.S. travel sector doubled down on online ads in the last month, joining healthcare and food delivery providers in pushing deals even as the coronavirus pandemic caused mass cancellations and deterred many travelers.

Airlines increased spending to $23.4 million between Feb. 10 and Mar. 10, up from $8.3 million in the same period last year, according to data provided by Pathmatics, which develops software to track online ads.

Cruise operators, which have been particularly hard hit by fears over virus transmission, bought $27.6 million worth of digital ads, five times the $5.5 million they spent a year ago.

Overall, the travel sector’s top ten spenders increased online ad buys this past month to $40.5 million, 7.7% higher than during the same period last year. Other sectors like healthcare and food delivery have also seen a bump.

Salad chain Sweetgreen has run ads on Facebook touting its delivery service for when consumers “are staying in.” Courier service Uber Eats is using Facebook to advertise the waiving of activation fees for restaurants, compared to the usual $350, to incentivize them to offer delivery through its app.

Matt Mierzejewski, senior vice president at Merkle, which offers ad-buying services, said he also saw an uptick in search queries around healthcare coverage and co-pays for coronavirus testing, as well as around life insurance for the elderly, signals for insurance companies to increase ad budgets.

Those ad pushes may be a last hurrah for some time at online ad giants, Alphabet’s Google and Facebook, which command more than half of the global $330 billion online advertising business. As shops, performances, and sporting events shut down to slow the spread of the virus, financial analysts expect the companies’ revenues to slide.

Google and Facebook did not respond to requests for comment on sales trends.

Facebook Chief Executive Mark Zuckerberg said this month that he expected use of the company’s apps to increase as people staying in try to stay connected to friends and family.

But digital ad sales, which make up nearly all of Facebook’s revenue, will not necessarily increase, said Brian Wieser, global president of business intelligence at ad agency GroupM.

“If nobody is buying anything, it doesn’t matter how much time people are spending on social media,” he said.

Guidance from Chinese ad giants like Alibaba, Weibo and Baidu, which experienced coronavirus effects earlier than Google and Facebook, shows revenue likely fell 20% in the last few months compared with a year ago, he said.

Reporting by Katie Paul and Paresh Dave; Additional reporting by Brenda Goh; Editing by Greg Mitchell and Rosalba O’Brien