SideStep Takes a Walk on the Web Side

Who’s afraid of a little download?

Lots of folks, in this age of worms, spyware and identity theft. So when travel metasearch engine SideStep realized that millions of potential users were passing up its travel search toolbar application for reasons of security or just technical ham-handedness, the company decided to bring the search to them. Last January, SideStep—a pioneer in the rapidly growing travel search sector-- debuted a Web-based version of the software at its SideStep.com site.

More than 7.5 million people have downloaded SideStep’s software since it launched in the fall of 2000. But the company’s research revealed that its future growth was being held back by the download requirement.

“Our desire was to serve those consumers who either wouldn’t or couldn’t download the toolbar,” says chief travel officer Phil Carpenter. “Maybe they were behind a corporate firewall in a company that was very picky about what got downloaded. Maybe they were Mac users, and the toolbar didn’t work for them. Or maybe they just weren’t tech-y enough to feel comfortable with the download. For a variety of reasons, there were a number of people who couldn’t get the original product, and we knew that in the aggregate, they represented a sizeable pool of prospects for us.”

The two search options are designed to produce different results. The toolbar shows comparison pricing for flights, hotels and rental cars, and in fact can be set to pop up when a user is surfing a site from the big online travel agencies. But the Web-based SideStep is aimed more at finding travel that fits a range of parameters, not just price. A “smart sort” feature lets customers narrow the list of results down by selecting the flight features that are most important to them—general price range, time of day, number of stops, etc. The Web site also spotlights special offers and timely packages.

“SideStep.com represents the easy place to start with travel search,” Carpenter says. “You can try it without any downloads and get a taste of what it delivers.” Consumers who like what they find can then opt to get more functionality—specifically the side-by-side comparison capability—with the toolbar download.

While it’s too early to draw contrasts between SideStep’s Web users versus those who choose the toolbar, Carpenter says the company has a hypothesis about that segmentation. “We would expect that the toolbar users will be the pretty hardcore travelers, and particularly those who are bargain-hunters by nature. But we might find a more straight-ahead traveler on the SideStep Web site—someone who trusts the brand and isn’t gong to be running around the Web comparison shopping.”

SideStep also sends regular e-mail newsletters to two million users: a weekly one on special deals on flights or hotel packages, and a monthly one offering more regional or seasonal travel options. Both the newsletters and the search products carry advertising, which the company can target geographically, so that a user looking for a flight to New Zealand won’t see an ad for airfares to Brussels.

According to Carpenter, SideStep has four million product users a month and two million opt-in e-mail registrants. “That gives travel advertisers a number of ways to reach different types of consumers at different points in the buying process,” he says. “If you want impulse buyers or those who haven’t made firm travel plans, the newsletters can drive incremental sales-- can get an interesting offer in front of someone and spark them to take action. The toolbar and the Web site give advertisers the opportunity to reach consumers when they’re focused on the travel search, they know where they’re going and they want to know who’ll get them there cheapest or most conveniently.”

The new Web site serves up pay-per-click ads from Overture, plus pay-per-click and display ads sold directly by SideStep

As for promoting the SideStep search engine itself, the company relies heavily on search engine marketing. Carpenter says SideStep tried using an outside agency for SEM and tested that outsourced service while running its own SEM program. “We actually found that we were able to do it better for ourselves,” he says. “We have a very strong internal competency, and we just like the do-it-yourself approach best.” He wouldn’t say how much of the annual marketing budget goes toward search marketing SideStep, but said it goes to bidding on “tens of thousands” of keywords, from broad terms to very price- and destination-specific keywords.

Online travel has long been dominated by Expedia, Travelocity and Orbitz, sponsored Internet travel agencies which book hotel rooms and airline flights directly and spend heavily on branding ads to keep their name in front of the public. Still, the last few years have seen the birth of a number of technology-oriented travel search companies like SideStep that find travel results on the Web, collate them, and then hand searchers over to the hotels, airlines and car rental companies. Most of this new generation makes its revenue both through paid ad placements and through deals with the providers to whom they steer customers. Mobissimo, Kayak.com and FareChase all operate in this space.

But the portion of online travel bookings that comes through search engines is still a pretty small slice of the pie: Research by Hitwise suggests that it may be about 2% of the volume of the top five online travel agencies. Still, with the total online travel market expected to increase by 69% from 2004’s $54 billion, a small slice of a rapidly growing pie is attractive.

And the second half of 2004 saw evidence that some big Web search names are showing interest in travel search. Yahoo acquired FareChase in August 2004, while in November America Online announced an investment stake of undisclosed size in Kayak.com, whose Web site was then still in beta. It’s not yet certain how that deal may impact AOL’s travel service offering, which Travelocity is under contract to supply until 2006. But on Feb. 7, 2005, Kayak.com left beta and went into full consumer operation on the Web. The company also announced a distribution deal with USAToday Travel and the beta launch of a self-service ad bidding platform.

Carpenter says the travel search industry in general has benefited from the growing public usage of Web search. “The rapid growth of generic search engines has done us all an extraordinary amount of good,” he says. “Companies like yahoo and Google have evangelized the value of the search engine for both finding information and buying products and services. Now many of them are prepared to go beyond generic search to something specifically focused on a vertical industry—in this case travel. That’s becoming an easy leap for the public to make.”

As far as competition from other travel search engines, Carpenter says SideStep will rely on the advantage of deeper online experience and better technology than either FareChase or Kayak.com can lay claim to. The company’s 2004 bookings grew 130% from the previous year to reach close to $500,000,000 in travel for its suppliers. “We created this category, we’ve already got a really strong presence, and we believe that we will be one of the handful of travel search brands that continues to thrive years from now,” he says.