Travel firms that take a more sophisticated, strategic approach to their online marketing can insulate themselves from CPC inflation, particularly for top ranking positions, says Google.
Dan Robb, Google travel industry head, said an old-fashioned scatter gun approach to marketing was becoming less efficient due to increased competition.
He said the UK e-commerce sector was mature and so bidding on keywords in the Google auction means click rates are increasing.
“We have to be honest that we are seeing more traffic being driven through the top positions within the auction.
“Therefore strategies for travel business have to be to question whether they have the power within the auctions they are currently present in.
“If travel businesses analyse their value and their USP for the consumer that will tell them where they should be appearing in auctions.
“There are some notable exceptions like Booking.com which has huge strength and depth in terms of the USPs they have. The booking path is extremely good and clean and they are very consumer friendly.
“We will happily help advertisers try to uncover the sweetest spots within their marketing strategies.”
Robb said all businesses should constantly review their CPAs through all the channels they operate in and to ensure they are optimising conversions to keep costs down.
“What are effectively technology companies that sell travel have always had higher conversion rates mainly because they were built with the booking path in mind and were unrestricted by product.
“Everybody is making strides towards better conversions but the nature of travel purchases is its high in terms of research therefore conversions are very difficult to enhance.
“Key to conversions is the ability to analyse regularly and apply the big data accumulated by hundreds of travel business but which is relatively underutilised.
“People need to understand attribution; when people interact with you on mobile or website and do not book, what is the value of that interaction when they do book 12 days later?
Robb, who was speaking to Travolution during a filming day ahead of the Barclays Corporate Travel Forum later this month, also urged firms to get more out of their third party technology providers.
“They need to spend time understanding the fallibility of third party’s technology. No technology is ever a one size fits all for every circumstance.”
Robb said mobile was becoming an increasing factor in online marketing.
He said it has added a new dimension to search in terms of location and firms that do not embrace it now risk losing out.
“Globally more people own a mobile now than own a toothbrush or have electricity or running water.
“Just this week smartphone sales have overtaken feature phones in the UK for the first time ever. Within that there is a multi-screen consumer who is interacting with all sort of business.
“The mobile phone will become more important within that purchase path and journey and travel business have got to understand that to future proof their marketing strategies.”
In June Google will make a key change to the way advertisers can target specific devices through Adwords campaigns by allowing them to operate just one campaign.
As a result, what Robb described as “a small sacrifice”, from next month they will no longer be able to target tablets and desktops separately.
Robb said that the performance of desktop and tablet had been converging rapidly with the average CPC on the latter now 70 cents and on tablet 71 cents.
Whereas smartphone behaviour remains very different from tablet, according to Robb who added the old assumption that tablets were only for affluent was no longer true.
“There will be one homogenised bid for tablet and desktop. You do not have to advertise on mobile.
“However, I would argue very strongly that irrespective of what your business model is or product you are selling there are consumers who are doing to vast majority of their interactions with your business on mobile phones.”
“On mobile the length of query is much shorter on mobile phone because of the difficulty you have in typing on a phone and there is more geo-specific activity around mapping and timetabling because people are on the move. They are not particularly commercial travel queries.”
Robb said travel sector searches are still in double digit growth although it has slowed but all the growth currently being seen is from mobile and tablet.