Technology

Barry Diller: Expedia normally spends $5 billion on ads but probably 'won't spend $1 billion' this year


Expedia Group chairman and senior executive Barry Diller told CNBC’s Squawk Box on Thursday morning that Expedia will slash ad spending this year, joining a chorus of advertisers that are putting campaigns on hold or cancelling spend altogether. 

“At Expedia, for instance, we spend $5 billion a year on advertising. We won’t spend $1 billion on advertising probably this year,” Diller said. “You just rip that across everything.” He noted that advertising spend across the board would be hit in the second quarter. 

Advertisers have pulled back significantly because of budget uncertainty in the months ahead. Companies in the travel space, for example, have little reason to buy ads when much of the globe is under stay-at-home orders.

Shares in Expedia Group, whose brands include Expedia, Hotels.com, Trivago, Orbitz and more, were down roughly 1% Thursday morning.

Expedia Group and its peers, like Booking Holdings, spend heavily on Google, since so many travelers search for trips with terms like “flight to London” or “hotel in San Francisco.” On the company’s February fourth-quarter earnings call, Diller mentioned Expedia is one of Google’s biggest advertisers and that Expedia is trying to move away from its “reliance on Google and Metasearch” to grow more direct relationships with its customers. 

That came after shares of Expedia reached new year-to-date lows in November when the company said changes in Google’s search algorithm has lessened its visibility on search results, resulting in a heavier reliance on paid advertising. 

MediaRadar in a March research report called the deceleration in ad spend in the travel industry “like a car hitting the brakes in advance of an oncoming accident.” 

In a survey last month, the Interactive Advertising Bureau surveyed nearly 400 media planners, buyers and brands responsible for U.S. ad spend, and found that 74% of them believe the coronavirus will have a greater impact on ad spend in the country than the 2008-09 financial crisis. Nearly a quarter of respondents said they have paused all ad spend for the rest of the first and second financial quarters. 



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