Strong growth in click-based ad revenue enabled TripAdvisor to put a positive spin on its fairly modest figures for the second quarter of 2014.
The travel review site fell short of expectations on Wall Street by reporting adjusted earnings of $0.55 per share, below trader estimates of $0.62. This marks only the second time that TripAdvisor has failed to live up to the stock market’s consensus since 2012.
Progress may have been even slower for the travel portal had it not recorded a hefty increase in ad revenue from click-based campaigns. Returns from the channel rose 28% year on year to hit $235 million, while display ad earnings grew by 19% to $37 million.
Company CFO Julie Bradley has attributed the success to attractive click-per-commission prices for meta search leads.
Clicks map achievements
Q2 readings indicate that money generated from advertising continues to define success and failure for TripAdvisor, whose user-generated reviews on accommodation, restaurants and attractions help millions of holidaymakers plan their future trips.
Total earnings for the site rose to $323 million, a year-on-year increase of 31% from Q2 2013, with click-based advertising making up 73% of all money generated.
Part of the company’s success in driving clicks has been pinned to its introduction of a “meta-search” offering. TripAdvisor’s old engine was linked to a “pop-under” system, which produced mini advertisements at the foot of a page whenever the user executed their search for travel services.
In the new system, the site can integrate all search query results and display advertisements within a core page once the user submits their request for information.
This less intrusive approach, the company believes, has led to a notable improvement in its advertising business.
Mobile shows promise
As with so many online publishers, mobile is also helping TripAdvisor drive its business forward.
Smartphones and tablets are contributing half of the site’s traffic, with mobile accounting for 140 million of its 280 million monthly visits.
Downloads for the company’s app also rose during Q2, up 160% year on year to 128 million.
CEO Steve Kaufer states that holidaymakers are seeing TripAdvisor mainly as a planning resource and, given the popularity of mobiles for conducting research, the company will hope it can link the two trends in 2014 and beyond.