Trip Advisor: Search and Word of Mouth

Thanks to a whole lot of ad dollars spent on offline ads, Travelocity and Expedia are perched on the very top of the online travel totem pole. What does it take to break into the club? Word of mouth and search marketing.

That's the approach that has paid off for Trip Advisor, a Needham, Mass.-based company that was founded in February of 2000 and in a few short years has grown to not only 5 million uniques a month, but also profitability. The company continuously ranks near the top of the comScore charts and has also recently been named to Forbes' Best of the Web 2003 General Travel and PC Magazine's Top 100 Undiscovered Websites.

Stephen Kaufer, President and CEO of this vertical search engine, which provides visitors with everything they might need to research their travel plans, says the success of the company lies in that "we love being in contextual advertising, with a slant on direct response. We're measured by our clients on how many sales we produce for them."

The company's major partners are the Expedias, Travelocitys, Orbitzs, as well as major hotel chains of the world, Kaufer says, and while the approach to serving each client category differ slightly, the principle is the same - cost per click advertising.

Kaufer explains that when a potential advertiser comes to him for help, Trip Advisor begins by automatically spidering the client's site and picks out all the different travel inventory they're looking to advertise and creates text teaser links that will take website users deep into the client's site to that offer page. "We will put those links onto corresponding pages within Trip Advisor, and ask for a small upfront commitment" from the client, he says, as a test buy of $5-$10K. "Visitors come, look around, read reviews, click on the sponsored link - at that point we've charged [the client] on whatever the price point might be. At the end of 30 days, the client says you've sent us so many leads and we've got 500 bookings from that. They go through the math, come back and say, 'that worked for us at $.75 cents per click, so let's continue and this time don't cap it at $10K, just let it run.'"

The site, although it's a fairly basic CPC model and boasts click-through rates of 6% on average, is built on the contextual search premise, Kaufer says. "If you're on our pages about Boston, you won't see teasers to take a trip to New York or Jamaica or Aruba. You'll see booking opportunities in Boston."

The company is on track to break $20 million in revenue this year, Kaufer says, and what is interesting about those dollars is that Trip Advisor is not competing against a TV spot or a full page ad in a travel magazine, in terms of advertising budget. "We're a cost of sales to them."

What's more, the company does no offline advertising and still manages to come up ahead of the pack of other travel information sites, like Yahoo Travel, AOL Travel and various guidebook sites on some levels. And Kaufer isn't about to start producing TV spots touting the benefits of his company to consumers at least for another 6 months, if ever. "We will definitely continue search engine marketing and will be expanding online advertising quite a bit - we love the fact the it's trackable, " he says.

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