An Empirical Analysis Of The Impact Of Paid Advertising On OTA Sales Performance

With a variety of e-commerce companies emerging and entering the traditional industries in recent years, the tourism industry is no exception. Online travel booking market is booming and this industry chain grows clear gradually, in which, the OTA pattern been the most distinctive one. OTA is not a travel services provider, with its main revenue depending on commissions or spreads by means of agents or distributors. So sale growth is vital for OTA. In general, OTA’s sales depend on site visits, which coming from direct channel, organic search channel, referral channel and network channels. OTA is not a travel services provider, with its main revenue depending on commissions or spreads by means of agents or distributors. So sale growth is vital for OTA. In general, OTA’s sales depend on site visits, which coming from direct channel, organic search channel, referral channel and network channels.So far, research on the relationship between online advertising, website traffic and sales is very limited. Most studies emphasis on theoretical or qualitative phase and others may have limitations since their method relies on questionnaire or experiment. Companies care for online advertising effects and management, but lack of scientific approaches, using subjective feeling and experience as an instead. In this paper, the data comes from KT Travel site with its 14,945 visits and sales data recorded by Google Analytics. First we encode the date based on four dimensions: Search/Navigation/Comprehensive/Specified, then summarize them in daily basis; taking records of the visits, transactions and revenues coming from direct, organic, referral and online advertising separately and taking records of the visits, transactions and revenues coming from search engine/navigation and comprehensive/specified, final calculation of the overall number of transactions and the revenues. Using Eviews software to analyze above data after statistical it, we naturally come to the conclusion that:Direct visits have significant impact on transactions and revenues, followed in online advertising and referral visits, the effect of organic search visits are insignificant.(1) The visits of online advertising have a significant influence on the transactions and revenue form direct and referral. The effect of paid visits on transactions from organic is insignificant while paid visits have significant negative impact on the revenue coming from organic.(2) The visits of search from online advertising have the most significant effect on transactions and revenues, it’s not significant on navigation, the effect of visits of comprehensive significant on the transactions but is opposite to revenues, the effect of visits of specified is not significant on the transactions but is opposite to revenues.(3) Finally, according to the above conclusion, this paper gives KT Travel site, which as the representative of OTA and its practitioners of advertising management advices about daily network behavior, meanwhile, the future development direction and countermeasures of the partner selection of online advertising media is presented.