Following a recent move of Expedia, which is trialling using Google’s adwords’ sponsored links next to their travel search results, other major online travel agents are considering their options to further monetize their websites. According to Travolution, online travel agents have not ruled out following Expedia’s example but are also not sure of allowing competitors to advertise through their own website.

There is doubt whether sponsored links will result in increased revenues or instead result in higher exit percentages. In reality, these sponsored links have strict exclusions for competitors and thus these sponsored links will have low relevance, resulting in lower click through percentages.

Several executives from large United Kingdom based online travel agents responded to Travolution’s question whether Expedia has set an example for other travel agents and this might be the future standard or whether Expedia’s effort are missing it’s purpose.

One of the respondents, commercial director Andrew Wilson from Opodo said the company is not selling advertisements or links and Opodo is not changing their business model as working with Google would not support them in their core businesses. Instead, Opodo is looking for other ways which support their business and increase revenue at the same time.

Teletext Holidays’ Matt Cheevers, who previously used an Adsense programme said: “The reality of using Google ads in this way is that there will usually be a long list of exclusions. for example I’d suspect that lastminute.com won’t be on the Expedia ads or Opodo.”

If indeed these sponsored links have so many exclusions, this will also result in many irrelevant advertisements. In in the end these advertisements will have low click-through rates and thus will proof ineffective. Online travel agents might ask themselves whether it is worth displaying such advertisements.

However, if online travel agents are willing to limit the amount of exclusions it might be successful to redirect customers to competitors, something customers would also be capable of without displaying these advertisements. Displaying these advertisements at least enables online travel agents to get revenue from price-comparing visitors.

Expedia’s move to include sponsored links on their search result pages illustrate the need for online travel agents to further monetize their operations. Due to the nature of travel meta search engines such as Kayak consumers are more aware of the competitive nature of the travel industry, enabling them to compare rates and fares andbeing less likely to stick to a single travel agent. Instead, customers are crawling different online travel agents themselves looking for the best rates and fares.

Sponsored links could be an effective way for online travel agents to assist consumers and at the same time gain revenue due to consumers clicking sponsored links. As Expedia is currently only using these sponsored links on the United Kingdom website, the future will turn out whether sponsored links are effective for Expedia and whether they will roll out advertisements for other websites too.

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