• by Gavin O'Malley  @mp_gavin, July 25, 2008

Within the travel category, niche online promotions can achieve broad success, according to new data from research company Compete.

"Smaller, targeted promotions and offers within the travel category can be highly effective, even if they do not appeal to a large and widespread audience," explained Jack Drew, sales strategy manager at Compete. "These smaller promotions can be less expensive to execute and generate strong returns."

Compete studied the effectiveness of Priceline.com's "Sunshine Guaranteed Promotion," which is deemed to be a success.

In the Sunshine promotion, an online banner promises money back in the event that there is excessive rain. About 12% of site visitors tend to click on the promotion, and of those, 24% ultimately booked a trip; this is twice the average rate for visitors to the site--only 12% of the site's overall visitors book a trip.

"Less than 1% of Priceline's promotional clickers viewed the Sunshine Guaranteed promotion, but for those who did click, the promotion's appeal was excellent," said Drew.

Separately, online travel community TripAdvisor has shown momentum as it has grown and evolved over the past year, according to Compete. Along with its 2008 site redesign, consumer written reviews have continued to flow in at a leading rate, and several hundred thousand monthly leads are delivered to TripAdvisor advertising partners.

An average of 1.08% of site visitors has written a review over the past year--a significant volume considering that TripAdvisor.com averaged over 6 million U.S. unique visitors since May 2007. In May 2008, 1.33% of site traffic posted a review, the highest activity level in the timeframe studied.

By comparison, Yahoo Travel Guides, a direct competitor of TripAdvisor, engaged an average of 0.7% of visitors to write a review over the past year. Unlike the upward trend at TripAdvisor.com, just 0.59% of Travel Guides visitors posted a review in May 2008, a 13-month low.

As such, many online travel agencies now depend upon the hundreds of thousands of referrals generated by TripAdvisor each month. Analyzing referrals from TripAdvisor's hotel search results page in April 2008 shows Expedia, Inc. (TripAdvisor's parent company) capturing 59% of the activity. Other OTA's, such as Orbitz and Travelocity, have managed to capture 16% and 19% of referrals, respectively.

TripAdvisor has become a powerful site embedded in the online travel consideration process, and is poised to remain there as long the steady flow of user-generated content continues. This volume of content, combined with effective marketing placements that its partners are eager to own, has left TripAdvisor in an enviable position. While other content and review sites such as Yahoo Travel Guides are meaningful in size, TripAdvisor remains the one to beat.