When considering an online travel startup you tend to think about three approaches:
- taking on an incumbent at their own game, but executing better
- creating a whole new category that you can dominate, as long as you can make that category desirable (no point dominating a category that no one is interested in)
- assume that the market must be massive so if you can only capture 1% you will be fine
All three approaches require consideration of barriers to entry. If you are startup up you have to consider what barriers competitors or incumbents have put in place - e.g. do they have a bigger consumer brand, do they have more data, do they have mature technology partnerships with lock out clauses etc.
If you are the company that is currently in a dominant position you look at the equation the other way around. On every project you look to make it harder and harder for new entrants to come and take a piece of your pie.
Hence a great deal of an entrepreneur's time is taken by active consideration of building or bypassing barriers to entry.
So, take TripAdvisor's primary barrier to entry.
TripAdvisor has a mammoth website (approx 60 million pages in the Google index featuring 25 million reviews). That is a significant barrier to entry for any new review based travel startup.
You would have thought with such a grip on the review market as TripAdvisor has that they don't need too much help to maintain their position. However it now comes to light that Google are assisting TripAdvisor to maintain the status quo.
The Google Adsense API is only available to websites with over 100,000 daily page views. Whilst this doesn't sound a particularly high number it does mean that the API is only available to the top few thousand websites. Startups need not apply (and will have to be content using Google Adsense via the omnipresent JavaScript widget).
But what is the Google Adsense API and how does it affect all this?
The Google Adense API permits API consumers to return an HTML snippet of Google advertising (Adwords) that can be manipulated prior to serving onto the final browser consumer. It can also be stored for later analysis.
e.g. this advert box on TripAdvisor comes from Google Adsense API:
Unfortunately, when this text is displayed as in page content it also appears on Google search results. Here you can see TripAdvisor ranking higher than Viator, but with the two TripAdvisor results using Viator advert text:
You can see the Viator advert text appearing as part of the TripAdvisor results.
Viator have blogged about their reaction to uncovering this problem.
So are we all happy that TripAdvisor has access to this API from Google but other startups don't? Is there a real benefit here or are people overreacting? What do we think about text from adverts being used as snippets within the main search results?
- Daniele Beccari (VP Isango, a Viator competitor) tweeted from a personal standpoint: "I stand with Viator against TripAdvisor"
- Scott McNeely (director: consumer & affiliate web at Viator) called it "highly annoying and, at the extreme, not the Internet we signed up for"
Me, I think TripAdvisor are being astute in how they use the Google Adsense API and business is business. However I do consider it unhelpful that Viator's advertising text should appear in the snippet shown on the Google main search results as if it were TripAdvisor's text. Google should address this in order to keep their advertisers happy.