Video now accounts for a third of the budget tourism group TUI spends on paid social, specifically on Facebook and Instagram.
That’s because the travel brand has found that paid social delivers more immediately reportable returns than other channels, even search, according to Nicolas Elshout, head of programmatic media buying at TUI Benelux, though he wouldn’t reveal specifically how it has reallocated search budget to paid social. “A third of our paid social budget is now on video, and a big part of that is based on dynamic ads for retargeting and reaching broad audiences,” he said.
That share of spend is set to grow over the coming months, according to Elshout. For now, the amount the travel brand spends on video is evenly spread across ads in the feeds for Facebook and Instagram, said Elshout. The remaining two-thirds are spent on dynamic ads targeting people who have looked at a TUI holiday but not booked, for example. Elshout wouldn’t reveal the total amount the advertiser spends on paid social but said that 80% of the money is on mobile rather than desktop.
Video ads have grown quickly over the past few years, with more advertisers spending more on platforms like Facebook and Instagram. As more video ads are bought on social media platforms, the amount of display ads with videos embedded has declined, with advertisers like TUI recalibrating where they buy their ads from. While display video accounted for 82.7% of online video ad spending in 2018, the pace of growth for social video is fast, with a 20.8% annual growth rate through to 2023, per Forrester.
Video continues to lead the way in paid social with advertisers like Deliveroo and Lastminute.com reporting that it is the most effective social ad format when it comes to hitting both brand and performance goals. TUI’s decision to buy more video was predicated on the discovery that ads on Facebook and Instagram drive more traffic to its site and deliver more sales at a cheaper cost than they have done before.
The discovery was reinforced by TUI’s alternative approach to optimizing campaigns. Instead of running a series of smaller test campaigns, which can often increase costs due to the data needed for all the different variations, the advertiser found a way to automate the way it finds the best combinations for video ads to deliver specific goals, such as clicks, to special offers as well as broader reach targets. Working with martech business Smartly.io, TUI’s marketers use algorithms to determine what parts of a video, such as the call-to-action or the end screen, deliver the best results. It’s a more modular approach to optimizing TUI’s paid social campaigns, said Elshout.
Since the advertiser first tested the approach at the start of the year, the cost-per-action has dropped as much as 36% for some campaigns versus what it would’ve been without the modular approach, said Elshout. He believes the CPA could be even lower given tests to date have been for shorter, tactical campaigns. The longer the campaign, the more time TUI has to test the different combinations that make up a video ad. The cost per initiated checkout dropped by 72%, said Elshout.
“We want to expand the modular approach to creating video ads so that it’s more like an always-on tool for us. It’s good to test,” said Elshout. “In some ways, we can iterate even more over longer periods.” For instance, a campaign earlier in the summer ran for two and a half months, which meant there was a longer period to test different combinations of the same video ad. Some of those combinations were based on previous learnings as Elshout and his team had found some assets from older campaigns were working on the more current one.
There’s no hard correlation between the best-performing ads and whether they run on Facebook or Instagram, said Elshout. There are signs, however, that the type of format used could be more important than the social network for the advertiser. Ads focused on peddling price-orientated messages tend to perform best in the feeds for Facebook and Instagram, while those that have more of an inspirational slant tend to do well on Stories. Indeed, ads in Stories are becoming a staple in all Facebook campaigns. “We’re spending more on Stories,” said Elshout. “When we promote our less price-orientated comms, then that’s where Stories tend to perform better than the other formats.”
Decisions on what ads to buy are made from TUI’s in-house team, which consists of two search specialists, one display manager, a video specialist, a digital marketing manager and Elshout. The team has been built over the last two years and is being replicated in the advertiser’s other markets, like the Netherlands.