The travel booking site’s overall profits came in far below estimates. But ad revenue was a bright spot for TripAdvisor, which saw an increase in both click-based and display ad revenue this quarter.
Click-based ad revenue increased year over year to $235 million, up 28%, while display revenue grew 19% to $37 million.
The company’s CFO Julie Bradley attributed the uptick in click-based revenue to “strong CPC pricing for meta search leads.” (In February of last year, TripAdvisor had rolled out what it refers to as “meta-search,” a Google-inspired feature that eschews the “pop-under” ad format in favor of serving search and display results with the hope of raising both the quality and prices of its display ad offerings.)
Total revenue for Q2 2014 was $323 million, a year-over-year increase of 31%, meaning click-based revenue accounted for 73% of its total second-quarter revenue. Interestingly, that percentage was down just a smidgen from Q2 last year, when click-based revenue represented 74% of total revenue.
The same was true on the display side. Display-based ad revenue comprised 11% of total revenue this year versus 19% last year.
TripAdvisor saw success with a TV ad campaign which launched back in May, noting an increase in Google search referrals. TripAdvisor president and CEO Stephen Kaufer said the company spent $10 million on the campaign this quarter. The spots will likely run through October.
Also noteworthy, TripAdvisor saw an increase in its mobile audience, which grew to comprise 50% of all traffic. TripAdvisor also rolled out its Instant Booking feature at the beginning of June to allow iOS and Android users to make direct bookings with hotel and travel agencies via its mobile apps and mobile site.
“On the product side, we’re leveraging our understanding of the traveler on every device,” Kaufer said. “Our Instant Booking partner drives value, converting at a higher rate than meta search.”
Although Kaufer didn’t get too deeply into specifics when it came to Instant Booking, he did say he expects revenue to grow in coming quarters as TripAdvisor onboards partners and adds new features.
As for monetization opportunities down the line, Kaufer pointed to TripAdvisor’s recent acquisition of online restaurant booking platform LaFourchette, which has a network of more than 12,000 restaurants partners across Europe.
“Restaurants was a pretty big move for us. While we had the page views and we always sold on CPM and sponsorships against it, we think the opportunity in the restaurant space is phenomenal,” Kaufer said. “It’s hard for us not to see a time when huge numbers of travelers and local won’t be making their restaurant reservations on their smartphones in increasing numbers globally.”
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