Another report, released by PhoCusWright, states that next year – for the first time – transactions on the Internet will account for over half (54 percent) of all U.S. travel bookings. Other findings from the report include:

• While the U.S. represented just one third of total online and offline travel bookings of the combined North America, Western Europe and Asia Pacific markets in 2005, the U.S. share of online bookings was over 60 percent of all online bookings.
• Growth of dynamic packaging — the ability of consumers to easily combine airline, hotel, rental car and other product purchases online — is projected to slow significantly from 51 percent in 2005 to 18 percent in 2008. This trend is partly attributable to the current tight supply of bulk airfares and merchant hotel rates available for packages, thanks to higher load factors and occupancy as suppliers enjoyed strong sales during the recent robust economy.
• Hotels will be the fastest growing segment online, surpassing air travel, which until 2006 had long been the fastest growing product segment.
• The advanced level of the U.S. online travel market creates an atmosphere in which many innovations such as dynamic packaging, metasearch and user-generated content incubate in the U.S. before expanding to other global markets. Many of these innovations include the new online capabilities that PhoCusWright has termed Travel 2.0 — the travel industry’s application of Web 2.0 practices empowering the online consumer.
• The tipping point of the travel market, with the online channel becoming the norm for travel purchases, is going to further shape consumer behavior that utilizes Travel 2.0 tools and applications.

I have to somewhat disagree with these statements on “Travel 2.0″ though. I think they may be a bit premature. I’m not sure that anyone has figured out how to bring value to the consumer, using 2.0 elements, that translates into revenue. Until that happens, what good is it to a bread and butter company that’s trying to sell travel – not trying to impress investors (we all know how well that’s worked out in the past)?

So, how do you go about standing out in a sea of affiliate sites, rising CPCs and product commodification? And, will 2.0 be the answer?

Zagat Survey Coverage

PhoCusWrigt Press Release

Just to review, Google has always used a combination of click-through-rate (CTR) and your maximum cost-per-click (CPC) when determining your rank in the paid listings section of their results page. If your CTR wasn’t high enough, your CPC was too low or some combination of those factors, your ads will be inactivated by Google until you raise the CPC to a new “minimum.” The logic here is that only ads with high CTRs make it to the top of the results. Makes sense.

Now, Google is also inspecting the landing page that the ads point to to make sure it’s relevant to the ad with the goal of providing a more positive experience for the Google user, oh AND helping Google’s bottom line, I’m sure. From Google:

“Although it is counter-intuitive to some who hear it, we’d rather show one less ad than to show an ad which leads to a poor user experience — since long-term user trust in AdWords is of overarching importance.”

In true Google fashion, however, the change has been dramatic, without adequate warning to advertisers or its own employees, and is causing lots of heartburn among many advertisers. Minimum CPCs have gone through the roof making them unrealistic for most advertisers. Again, from Google:

“We realize that some minimum bids may be too high to be cost-effective — indeed, these high minimum bids are our way of motivating advertisers to either improve their landing pages or to simply stop using AdWords for those pages, while still giving some control over which keywords to advertise on.”

Even though Google states that, “that the vast majority of advertisers will not be affected at all by this change,” there is a lot of talk on the blogs and forums since the changes took place at the end of last week (nearly 30 pages of posts on Webmaster World) making me doubt that it’s that isolated among larger advertisers. One person I spoke to who manages several Adwords accounts said that for one account nearly 90% of their terms have been deactivated. That’s enough for anyone to lose lots of sleep over.

Here are some posts, discussions and insights on the matter:

• WebMaster World Discussion: Open letter to Google Regarding Changes to The Ad Words Program

• SEOBook – Google AdWords Landing Page Quality Scores

• ClickZ – Google Advertisers Upset Over Landing Page Scoring

• Google – Landing page quality update

• SearchEngineWatch – Many Advertisers Are Frustrated With Google’s New Quality Score & Pricing

• Search Engine Roundtable – AdWords Landing Page Quality Score Causing Epidemic

• JenSense – New landing page quality score could affect click aribtrage publishers

It seems that Google Adwords is setting itself up to be usable only by advertising agencies or companies large enough to employ dedicated PPC staff, which is unfortunate. One of the great things about advertising on PPC networks has been that a company doing business out of the garage could always compete head-to-head with major corporations and suppliers…

1. Write landing pages to your best prospect. Don’t try to be everything to everybody; you’ll abandon your best prospects. Write to the top of the curve and you’ll capture the largest qualified audience. – Ted Ulle
2. Write about the reader, not the product. To do this you must also know your target audience. Make sure you do. – Ted Ulle
3. When exploring new affiliate opportunities, look for emerging markets. Pay close attention to tech research, demographic studies and market evolution. – Jeff Liebert
4. When buying keywords (PPC), target your keywords to customers who are actively looking to buy. Do this with words like “buy” or “send.” Target for seasonal trends (holidays, tax season, etc.) – when people need to buy – or specific model numbers or price points. – Adam Jewell
5. Maximize any coupons, discounts, etc. that you can pass to your users from your merchant. – Adam Jewell
6. Informational, comparison and product review sites are hot and a great opportunity for affiliates. It’s a lot of work though, the site has to be valuable are REAL!
7. Understand your customer’s lifetime value and look for opportunities with cross and up-selling possibilities. − Ziv Dascalu
8. Always talk to the merchant’s affiliate manager directly and close special deals. Look for something more than the standard deal. − Ziv Dascalu
9. Look for unique ways to promote expensive products with very specific keywords. Big commissions coupled with low cost PPC is a winning strategy. – Adam Jewell
10. Use emotions to appeal to your target customer. Tie those emotions directly to your product. This can be done with images and words that paint a picture for the reader.