The Next Chapter in the Convergence of Booking Sites and Metasearch

The distinctions between online travel agencies such as Expedia, Priceline and Orbitz, and travel metasearch sites such as Kayak, TripAdvisor and Hipmunk are getting really blurry.

Metasearch sites such as Kayak, TripAdvisor and Hipmunk, which traditionally shuttled users to online travel agency or hotel/air/car rental sites when it came time to complete their bookings, over the last couple of years have optionally let travelers book online travel agency-like without leaving the metasearch app.

With travel metasearch the fastest growing channel in travel, until now online travel agencies could be divided into the haves and have-nots in terms of owning a metasearch site or not — Expedia Inc. controls Trivago and the Priceline Group owns Kayak.

But, if you consider it a valuable asset to own such a metasearch site, online travel agencies Orbitz Worldwide, Travelocity/LastMinute.com, CheapOair and eDreams Odigeo are metasearch paupers.

Although Orbitz Worldwide CEO Barney Harford doest see it precisely that way. Last year, Harford boasted that he didn’t need to make a speculative investment and acquire a travel metasearch site.

Harford’s Orbitz Worldwide still doesn’t own a travel metasearch site, but Orbitz.com, sister site Cheaptickets.com, and Travelocity’s LastMinute.com have done the next best thing.

With an assist from advertising solutions’ provider Intent Media, which today announces it secured $22.7 million in a Series C financing round, the three online travel agency sites have now integrated metasearch-like hotel pricing from competitors’ sites right beneath some of their own hotel displays.

A user can click on one of the competitors’ links and navigate away to that site to make a hotel booking.

Intent Media co-founder and CEO Richard Harris says the logic behind these property price ads are that only about 5% of lookers may book something on an online travel agency site, and these metasearch-like ads with hotel rates enable the OTAs to monetize the users who want to comparison shop and would likely book elsewhere anyway.

In the above screenshot of Orbitz.com, what’s new is that Orbitz displays the Intent Media ad (shown at the very bottom of the screenshot) with actual hotel prices from competitors, including Priceline, Hotels.com, Travelocity and Orbitz sister site CheapTickets.

In this case, the lowest rate in the ad, $207 from CheaptTckets, matches the lowest price on Obitz.com in the display, a room for $207 from The Night Hotel in Manhattan. Intent Media officials state the ads would show competitors’ rates even if they are lower than the online travel agencies’ rates.

Online travel agencies have displayed similar ads from competitors sites’ before — but usually without showing the competitors’ rates. If they displayed links to competitors, they would usually do so opening one browser at a time and without first showing any pricing.

But, displaying compteitors’ rates, while somewhat risky or seemingly counter-intuitive for the publishing site, earns a higher cost per click than not showing the rates because lookers are more likely to book.

Travelocity’s LastMinute.com, too, is showing these ads, which Intent Media co-founder and chief product officer Josh Feuerstein calls “instant meta,” but in the example below the pricing from Getaroom, Hotels.com and Booking.com is considerably higher than some of the properties available through LastMinute.com itself. (Perhaps users get the feeling of comparison-shopping, but in this example they can feel assured that LastMinute.com has the lowest rates.)

True to the words of Harford of Orbitz, the online travel agency hasn’t gone out and acquired a metasearch site, but now Orbitz.com and Cheaptickets, as well as LastMinute.com, are running metasearch-like ads interspersed within their hotel displays.

Chris Stevens, vice president of merchandising at Orbitz Worldwide, says Intent Media sets itself apart because it respects “publisher interests.”

Along those lines, Harris of Intent Media says the company uses predictive analytics to display certain advertising products only to those travelers who are considered low value from an online travel agency’s perspective. In other words, these prospects may like to peruse the online travel agency site, but they are likely to book elsewhere.

Our risk-mitigation ad decisioning and segmentation service isn’t only for one product,” says Derek Kuhl, Intent Media’s vice president, advertising sales. “It’s a part of our full publisher product suite.”

Other publishers using the service include Expedia, Hotwire, Travelocity, Ebookers.com, Hotel Club, Travelport and Hipmunk.

“How we deploy it per publisher varies,” Kuhl says. “We work in partnership with the publisher to determine their media monetization goals and what, if any, ad decisioning is required to effectively balance media monetization versus their core transaction business.”

Intent Media’s $22.7 million Series C financing round was led by Insight Venture Partners with participation from existing investors Matrix Partners and Redpoint Ventures. With the round, which brings Intent Media’s total funding to $50.7 million, Insight Venture Partners’ Bradley Twohig joins the Intent Media board.

Co-founded by Travelocity and Site59 alumni Harris, Feuerstein and Damon Tassone in 2007, the 80-employee Intent Media, based in New York City, plans to use the funding to accelerate international expansion, including opening a London office; expand its team, products and sales, and to enter into verticals beyond travel.