Freda Duan@FredaDuan
$Googl vs. the OTAs/marketplaces - Unit Economics of “Top of the Funnel” & the Concept of "Effective Take Rate"
Roughly half of OTA's bookings and traffic are direct, and the other half indirect (mostly through $Googl).
For the indirect portion, the companies basically just break even, given the high CPCs they pay $Google.
Unit economics-wise: assume a $300/night hotel, a 15% take rate, CPC of $1–3, and a click-to-book conversion rate of 3–4%. That implies ~$50 in marketing expense per completed booking — essentially breakeven on indirect traffic.
Direct traffic, by contrast, is gold. It’s profitable and monetizable via paid placements (ads account for ~10% of $EXPE revenue, ~5% for $BKNG; about 25% of EBITDA).
$ETSY (and most marketplaces) is similar. Marketing runs ~30% of revenue - best guess is the indirect portion is barely profitable.
🔴The lesson: indirect traffic is an expensive squeeze. $GOOGL extracted more total profit from travel than all the OTAs combined - let that sink in.
🔴An important concept, "Effective Take rate":
In the OTA example above, the effective take rate on indirect traffic is 0–5%, even though the headline rate is 15% for both direct and indirect.
That means if ChatGPT (or if any other top of the funnel) were to charge $BKNG $EXPE a take rate (as opposed to ads rev), a 10–15% take rate = breakeven vs. getting traffic from $GOOGL.
Ads expense and take rate are interchangeable forms of digital tax.
We can’t really discuss agentic commerce’s impact without first understanding how $GOOGL — the OG “top of the funnel” — reshaped OTAs and other consumer internet platforms.
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Agentic Commerce | Deep Dive (II): open.substack.com/pub/robonomics…
