Monday, April 17, 2006

A classic romance…beautifully told

This was the strapline on a poster, seen just yards along from a restaurant where the boss of booming travel website predicted the love affair between the industry and the search engines was coming to an end.

The film tells the story of a couple who, predictably, battle the outside world in a desire to let their love blossom (you know the format for these tales by now).

But, inevitably, it all ends in disaster.

This is a rough translation for a theory, put forward by at least half a dozen or so senior figures in recent weeks and argued so passionately over lunch last week by another company chief, about where the industry’s obsession with search engines will lead.

The reason for these recent forecasts is this: the search engine model for reaching out to travel consumers is primarily an advertising medium.

It is estimated that the amount of money spent by travel-related companies on advertising on search engines stood at around $3 billion globally during 2005.

The relentless growth of online advertising through search is good for the sector as a whole but it is an inefficient means for the travel industry, where inventory (estimated at around $35 billion) needs to be shifted.

So what better way to shift stock than by the direct method, either through price comparison sites (Meta search) or straight to the consumer via registered special offer emails

In short, the most reliable method for shifting travel products is to target consumers when they actually want to make a purchase, rather through the lottery system – as some call it – of the search engine model.

[It is worth pointing out that last week’s forecaster was NOT from a price comparison site]

And so at some point in the next year or two the love affair between travel companies and search engines will apparently come to an end.

It’s a wild prediction and one that doesn’t take into account the muscle and ingenuity of the likes of Google and MSN (Yahoo! already has its own Kelkoo Meta search brand) to hit back.

But the Wild-Eyed Few – as we shall now call them – are so confident of this theory that they are willing to bet that the industry will eventually move this way, primarily as users grow increasingly frustrated at not finding the right product through the hundreds of pages of search results.

Kevin May, editor, Travolution

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