• by Mark Walsh  @markfwal, October 8, 2008

With the travel industry already feeling the pain of the economic downturn, Google on Wednesday convened more than a hundred travel marketing executives at TravelThink 2008 to offer strategies for boosting business, as well as to get feedback.

As one of the industries to embrace search early on, travel has become a key business category for Google, and the search giant plays a big role in driving business to travel companies large and small. Penry Price, vice president for advertising sales, North America for Google, described how search is a core consumer behavior in the travel industry, and how new technologies can create new ways to reach customers.

In survey findings presented by JupiterResearch at Google's TravelThink event in New York, 94% of travel executives said online advertising would provide the strongest return on investment compared to other media in the next 12 months. Some 20% of travel advertisers will spend more than $10 million in online marketing this year, and more than half will spend $1 million or more.

Search engine optimization was the top marketing tactic along with e-mail, according to the study commissioned by Google. "Search is like your Yellow Pages, billboard--everything all wrapped up in one," said Emily Riley, a senior analyst at Jupiter.

But it can't necessarily turn around a weakening economy. By a show of hands, travel executives gathered at the Google event indicated that business was already getting worse and would likely get continue to downtrend in the next six to 12 months as a result of the weakening economy reducing consumer spending.

A New York Times article earlier this week reported sharp declines in airline passenger traffic and increasing cancellations at hotels in just the last few weeks.

In terms of ad spending, the Interactive Advertising Bureau report released Tuesday showed that leisure travel-related ad dollars during the first six months were essentially flat, dropping from $687 million to $667 million, or from 7% to 6% of total spending.

To cope with the harsher economic climate, Riley and Google ad executives discussed ways to improve online marketing efforts, including--not surprisingly--using Google tools to better snag travel customers via search.

One theme was to encourage the use of behavioral targeting to reach customers. "I do see behavioral targeting becoming extremely important in the next two years," said Riley. She pointed to companies such as BlueKai, which partners with data sellers to aggregate anonymous shopping and research behaviors, and auctions that data to drive monetization.

While Google hasn't yet ventured into behavioral targeting, the company may start to explore a limited form of BT in the next six months that would allow targeting of different audience segments, according to Tim Armstrong, president of the Americas for Google. "It may not be full-blown behavior targeting," he said.

He added that Google in the next year would also work to more tightly integrate search and display advertising and demonstrate the value of using both together. Through its acquisition of DoubleClick last year, Google made clear its intention to become a bigger player in display advertising. "(DoubleClick) understands conversions through display and we know about conversions through search," he said.

Asked about Google's paid search deal with Yahoo--which the company last week put on hold while the Justice Department completes its investigation--Armstrong said Google expected to have some resolution of the issue by year's end.

Among the software that Google is rolling out to help travel advertisers is a tool that suggests appropriate keywords based on spikes in certain search terms. By spotting a rising search term early such as "staycation," a travel company can develop marketing programs suited to emerging industry trends.

"For the travel industry this would be a perfect term for them to use," said Google's Price. The tool could also be used to detect upticks in more specific searches like "four-star hotels with glass bathroom doors," he added. Even if keywords tied to such terms yield only a few extra conversions a month, that's valuable, said Price.

Another new Google tool that could benefit travel marketers seeks to cross-match surges around certain search terms with terms used on a company's site to come up with new keywords. The technology could yield 50 to 100 new keywords may not have recognized before to generate conversions, said Price.

Price and other speakers also highlighted the benefits of cross-media marketing. To that end, he pointed to a United Airlines television campaign promoting its business-class service during the summer Olympics that led to a 54% jump in search terms on Google around "United Business Class."

"You very rarely today see even a TV spot that doesn't have some call to action," said Price, noting the blurring lines between brand and direct-response advertising. And with Google pushing into other media including TV, radio and print, such distinctions may become even less pronounced.