Google Hotel Ads bidmanagement
Metasearch is one of the most important marketing channels in the travel industry today. When a few years ago, in 2013 to be precise, we were suddenly able to compare prices of hotels via providers such as Trivago and Tripadvisor, nobody could have predicted their success of the following years.
The introduction of Google Hotel Ads has further expanded the share of metasearch in the customer journey. This metasearch platform has since grown into one of the largest price comparison sites.
Unlike other metaseach engines, travellers use Google’s Hotel Ads without realising that Google has subtly integrated it into search results.
Adchieve is an official Google Hotel Ads integration partner. This means that we can help Hotels, Online Travel Agencies (OTAs), Holiday Parks and other accommodation providers to start with Google Hotel Ads. In addition to the integration, we have years of experience with Google Ads and we successfully support advertisers with campaign and bid management for Google Hotel Ads.
In this article, we’ll take a closer look at bid management for Google Hotel Ads. For example, do we look at which different bid strategies there are and what the advantages and disadvantages of these bid strategies are.
The bidding strategy commission (per conversion & per stay)
This strategy is the most automated bidding strategy and can be divided into 2 separate bidding strategies:
- The commission per conversion
- The commission per stay
The difference between the above bidding strategies relates mostly to the cancellation policy.
Google’s commission per stay bid strategy was created as a result of Covid-19 and means that no commission will be charged in the event of a cancellation. This is the case with the commission per conversion bid strategy.
With both bid strategies, Google automatically sets the bids, and as a user, you have no control over the minimum or maximum height of these bids.
As a user you only have control over 3 parameters;
- The commission percentage
- The daily budget of the campaign
- The ability to apply bid adjustments of (only) -100% to devices.
The commission percentage is the percentage of the total price of the stay that you are willing to pay for a conversion or visit.
When the price of a hotel night for a particular night is $100 and the commission percentage is set to 10%, this means that at the time the traveller converts, the CPA of this conversion will be 10% * $100 = $10.
The daily budget speaks for itself. Per month you do not pay more than the set daily budget multiplied by the average number of days in a month. The daily budget can therefore be exceeded per day.
The big advantage of the commission per conversion bid strategy is that you only have to pay when a traveller has actually booked. So, you only pay a percentage on the conversions. Clicks that have not resulted in conversions are not billed.
The big advantage of the commission per stay bid strategy is that you only incur costs when the stay has actually taken place. There is therefore no need to pay for travellers who have booked but cancel later on. So, you only pay a percentage of the total realised room price. Clicks that have not resulted in a stay are not billed.
The disadvantage of these strategies is that you, as an online marketer, only have a few buttons to play with.
For example, it is not possible to bid or cancel for devices or target groups. As a result, you cannot distinguish between travellers who have already visited your website and new website visitors.
Finally, setting a commission percentage that is too low for auctions with high competition can ensure that you as a provider are not visible in the Hotel Ads environment.
The CPC-% bidding strategy
With the CPC-% bidding strategy, you set a percentage of the total booking price (including tourist taxes and other surcharges) as the bid.
As an example; If the total price for 1 night is €100 and the CPC-% bid is 1%, the max CPC for this ad is €1 (excluding any bid modifiers). If the price for 1 night is €200 and the CPC-% bid is 1%, the max CPC for this auction is €2 (excluding any bid modifiers).
At first glance, this strategy looks a lot like the commission bid strategy. However, there are several differences. For example, with this strategy you pay per click, while with the other strategy you pay per conversion or stay.
Another difference is the degree of control. With this strategy you can be more in control as an online marketer. For example, you can add a max CPC. In addition, you can add extra bid modifiers, such as bid adjustments per location, and bid adjustments on the target group lists.
In addition to the ‘standard’ Google Ads bid modifiers, you can also add Google Hotel Ads specific bid modifiers to this bidding strategy. These can be found in the campaign under ‘Itineraries’.
The following Hotel Ads specific bid modifiers can be added:
- Check-in day (which day of the week)
- Length of stay (number of nights)
- Number of days before arrival.
- Has the traveller adjusted or not the date within the Hotel Ads environment before clicking.
The above bid modifiers give you, the online marketer, more optimisation options. For example, if there are often still rooms available on a Wednesday, you could increase the bid for searches for an overnight stay on that Wednesday.
Furthermore, within this bidding strategy, there is also the possibility to use the improved CPC. By enabling enhanced CPC, Google will adjust its bids for clicks that are likely to convert or not.
As an online marketer, if you want to keep more control over the bids yourself, this bidding strategy may be the right choice. The disadvantage compared to the commission bid strategy is that you do have to pay for the clicks, even if they have not converted or did result in a stay.
Manual CPC & Improved CPC Bidding Strategy
Finally, there are also manual CPC & improved CPC bidding strategies. With these strategies, you as an online marketer determine the max CPC (excluding bid modifiers). It is also possible to enable the improved CPC option. As a result, Google will adjust its bids for clicks that may or may not result in a conversion.
Furthermore, the same bid modifiers can be used with these strategies as with the CPC-% bidding strategy. In fact, this bidding strategy is very similar to the CPC-% bidding strategy. The main difference is in the max CPC per click. With the manual CPC the maximum bid per click is a fixed amount (excluding bid modifiers), with the CPC-% bidding strategy the max bid per click depends on the booking value (excluding bid modifiers and a possible max CPC).
If you prefer to pay a fixed percentage per stay/conversion, and want to automate bid management as much as possible, the commission percentage bid strategy is the most logical choice. In case you prefer to keep more control over the bids, the CPC-% bidding strategy, the manual CPC & improved CPC bidding strategies are good choices.
In addition, at Adchieve we also create customer-specific bidding algorithms for Google Hotel Ads. We can use customer-specific data from multiple channels as an input to calculate bids and bid modifiers for the CPC-% bidding strategy & manual CPC bidding strategy. The advantage of this bidding strategy is that automated bidding suggestions are calculated, but, on the other hand, you keep a lot of insight and control. In this algorithm we can consider company-specific data such as margins, booking-arrival windows, and availability.