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TechFuture of Work

How This Advertising Firm Plans to Compete With Google for Travel Ad Sales

By
Reuters
Reuters
By
Reuters
Reuters
June 21, 2016, 1:53 PM ET
Courtesy of Airbnb

Intent Media, a provider of advertising tools for online travel agencies, is buying software company Voyat in a bid to take ad dollars from search engines such as Alphabet‘s Google, the startup firms said on Tuesday.

Financial details were not disclosed in a statement by the New York-based firms.

Intent Media, founded in 2009 by former executives of travel agency site Travelocity, has raised about $50 million in venture capital funding. Its investors include New York-based private and growth equity firm Insight Ventures.

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Voyat has raised $3 million since it was founded in 2012 by Chief Executive Benjamin Habbel and Bob Lund, a former partner at a startup incubator. Habbel had served as chief of staff for Yahoo CEO Marissa Mayer when she worked at Google (GOOGL).

The deal is aimed at giving Intent Media a better foothold in the hotel industry, company Chief Executive Richard Harris said in an interview. Voyat makes software that helps hotels retain and book more guests though loyalty programs and personalized offers.

Harris said that most consumers abandon dozens of travel searches when planning a trip, and usually toggle between websites using Google.

Google is a major platform for online ads for travel, with search capabilities that enable it to collect data on consumer interests and habits valued by marketers, airlines, cruise companies and other travel sellers. Google also owns ITA software, a flight information provider, and has a hotel price ad program that routes consumers to hotel websites for booking.

To help steer users away from Google, Intent Media shows ads with prices for hotel rooms and flights on competing travel websites, so consumers feel like they are comparison shopping without going through Google. Online travel websites then get to keep a bigger slice of advertising revenue and dollars from clicking on the offers, Harris said.

“We want to keep revenue inside the travel sector rather than leaking out in the billions to Google,” Harris said.

Harris estimated that Priceline Group spends about $2 billion per year to access search traffic on Google. Priceline and Google declined to comment.

For more, read: Priceline Founder Launches New Company Aimed at Business Travelers

The online travel industry has been undergoing a sweeping consolidation, with Expedia and larger rival Priceline (PCLN) embarking on acquisition sprees to dominate the business.

Intent Media has a valuation in the “hundreds of millions” but below $500 million, Harris said, adding the company does not anticipate raising any more funding.

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