Posted by: Catherine Holahan on May 22, 2008
The US travel industry is facing a terrible year, thanks to credit crunched consumers and a weak US dollar. But Google sees an online opportunity in the struggling industry.
The search giant plans to expand its travel offering, which currently seems to be confined to one-off videos and ads from tourism boards. In the future, the site will have marketer-sponsored pages where would-be vacationers can learn tons about a destination and see related user-generated content. Check out this link to a YouTube New Zealand channel for an idea of the kinds of videos destined for such pages.
I journeyed to the NYC Googleplex May 21 to learn more about Google’s plans. There, I spoke with Rob Torres, Google’s managing director for Travel, over a lunch of beet salad and raspberry-garnished crepes. (I’ll save discussion of Google’s omnipresent cafeterias for another post).
Torres says that the goal of Google’s travel division—aside from tapping into the $90+ billion global travel ad and sales market—is to give users a destination where they can research travel plans, read user reviews, and see user uploaded videos and photos. Already, about 50% of travelers use some sort of online social media site to research their plans, says Torres. Why not give them a one-stop shop for travel information? “We are already so highly searched for travel,” says Torres.
Fueling Google’s travel plans is consumers move to researching and booking vacations online. In 2007, more travel sales were booked online than in person, says Torres. That means travel marketers, many of whom already spend millions on search ads and the like, will likely shift more of their budgets to the Web.
Also spurring Google’s interest is some early success with sponsored travel offerings. Nearly 900,000 people have watched a New Zealand tourism board’s video ad since it was uploaded to YouTube last September. That kind of traffic is bound to draw marketers.
Travel pages, or a full-fledged travel channel, also promise to help Google make more money from YouTube. Rather than try to convince travel marketers to advertise on user-generated videos, they can sell sponsored destination pages on YouTube where travel marketers can post their own videos and influence or control what types of content users upload. Then Google can also sell other forms of advertising, such as search ads, to drive traffic to the site.
All that advertising may seem like it would turn users off. But I agree with Torres that travel is one of those funny areas where the ads really are more like content. When I’m looking for a plane fare or a hotel, I typically don’t mind seeing an ad for a hotel or discounted plane fare. Just like when I’m reading Vogue, I don’t mind seeing clothing ads. I do mind, however, seeing ads for dating services or t-shirts when I’m on MySpace or Facebook or on any other site on the Web. Go fig.
Torres was quiet as to when Google’s expanded travel offerings would roll out. And he wouldn’t confirm that Google was planning a full-on travel site, and not just sponsored pages or a channel on YouTube. But with nearly a billion in marketing dollars on the table, I wouldn’t put it past Google to go after it aggressively.
It’s worth noting one thing that any future Google offering won’t have—airline fares or hotel bookings. Even Google is unwilling to try its hand at the part of the beleaguered industry’s business. The customer service investment is huge, explains Torres. Moreover, travel sites and airlines are some of Google’s largest advertisers.