Kayak.com Launches Beta of Ad Bidding Engine

Travel-search player Kayak.com is expected to launch a beta of its self-service auction-based bidding environment for hotel and airline advertisers today. The debut of the CPC (define) ad tool comes in conjunction with the official consumer launch of the site itself.

Hotel chains and individual hoteliers can bid to appear higher in results when Kayak users search for accommodations options. Paid results are displayed with a “K” symbol to inform users the hotel displayed is an advertiser. Hotel marketers can tailor bids so their results appear higher for certain stays, lengths of stays, particular markets, or specific hotel brands.

“A hotel can say, ‘I need demand for the following stays,'” said Steve Hafner, cofounder and CEO of Kayak.

Additionally, Kayak is offering contextually targeted text advertisements that appear adjacent to search results. Both hotel and airline advertisers can buy these slots. If a user searches for flights to New York, for example, the ads could be for hotels in the Big Apple. Currently, ads Kayak has sold are augmented with ads from Google’s AdSense program.

Kayak has been testing its advertising offerings with a “handpicked” group of 30 advertisers but is now opening its system more widely.

Though Kayak doesn’t yet command a high volume of traffic, the company hopes to change that through a combination of marketing and distribution deals. It recently signed a deal for its listings to appear on CNN.com and is building a site with America Online. Company execs say they will announce additional affiliate relationships in the coming weeks.

“Today we have [25,000] to 30,000 unique visitors a day,” said Paul English, cofounder and CTO of Kayak. “Our goal is to take that number to well over 10 million visitors a month.”

Kayak’s helps hotel advertisers drive traffic to their own sites and booking engines, bypassing more costly distribution methods, such as online travel agents.