the search is over

The easiest way for Priceline to get rid of competition from Kayak was to buy it

September 18, 2013
September 18, 2013

Right around the time that Priceline closed on its $1.8 billion acquisition of Kayak in May, Kayak sort of went away.

Or at least its digital ad spending in the US apparently did as the travel metasearch player turned off its SEM (search engine marketing) spigots stateside.

Competitors have noticed, and you can see it unmistakenly for yourself in Google’s sponsored search results, where Kayak, once prominent, now often goes missing.

These things change minute by minute, but I did a Google search this morning for “Los Angeles hotels” and found sponsored results from Hyatt, Expedia, Google, Booking.com, Morgans Hotel Group, Trivago, Choice Hotels, Hotelscombined, and others.

But, no Kayak.

The same held true on a Google search for “Las Vegas flights.”

skift las vegas

CheapOair, JetBlue, Delta, Google, Expedia, Southwest, United, Travelzoo, Orbitz, TripAdvisor, and Cheapflights are all there.

But, no Kayak.

And, various tracking sites from Compete to Quantcast, however unreliable they may be, show a clear drop-off in Kayak’s unique monthly visitors starting around that time, and they’ve yet to recover from higher marks earlier this year.

Theories Abound

Kayak declined to comment on the development, and industry pundits have offered all kinds of theories as to what’s going on.

The knee-jerk theory is that parent Priceline doesn’t like inefficient digital marketing spend, and has dispatched Kayak to go to school at Booking.com university, the acknowledged valedictorian in SEM.

Digital marketing is a dark science, very complex, and there is certainly lots to learn as Google plays havoc with its customers through ever-changing updates and features.

For example, Google’s Knowledge Graph carousel has wreaked some havoc with digital advertising, pushing sponsored results down the page and out of view.

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And, Google Hotel Finder and Google Flights often grab prime real estate in the search results page to the detriment of competitors.

Priceline is renowned for giving its brands, including Booking.com, Agoda, Rentalcars.com and now Kayak, relative autonomy so it would be surprising, and not particularly sustainable, if the parent simply told Kayak to stop spending on digital marketing on an ongoing basis.

And, Kayak is doing SEM in other parts of the world. Just do a search for “Paris hotels,” and you’ll find Kayak in the right-hand column of Google’s sponsored results.

Some argue, without much credence, that Kayak simply wants to focus on offline, TV brand advertising, or that Priceline and Booking.com don’t want competition from Kayak in bidding for keywords. But Kayak’s presence in competing on keywords wouldn’t tip the balance given the number of competitors involved, and Kayak will have to re-up its spending on digital ads in the U.S. eventually.

Kayak, the new kid in the Priceline Group, indeed is likely getting its SEM strategy together, and taking some lessons from — or sharing best practices with — Booking.com. Not that this would be a one-way street as assuredly Kayak is sharing some of its expertise in mobile across the Priceline Group, too.

Kayak’s SEM spend will undoubtedly get ratcheted back up at some point.

Other Changes 

There are other noticeable changes at Kayak since Priceline gobbled it up. You can now commonly see Priceline advertising in Kayak’s mobile apps, and there will be lots of cross-promotions going on.

In addition, Kayak was a prominent member of the FairSearch coalition, with members including Expedia and Microsoft, that spearheaded opposition to Google’s acquisition of ITA Software.

But Kayak has quietly dropped out of the coalition, which now focuses on Google’s broader search practices, and when you consider that Priceline is probably Google’s best customer on the globe, or right up there, you can see a logic to it.

By the end of 2013, Kayak will face a key milestone: Its contract with Google’s ITA Software for flight search is due to expire.

Given Priceline’s relationship with Google, it would be shocking if a Kayak-ITA contract extension isn’t in the offing.

This post originally appeared on Skift.comMore from our partner site:

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