How does the use of pay per click (PPC) for vacation rental managers compare and contrast to that of hotels? With the proliferation by OTA’s using PPC to attract visitors searching for vacation rentals, the difference in strategy between vacation rental managers and hotels is decreasing.
The following article is written by hotel marketing expert Vikram Singh, who specializes in booking engines, search engine marketing, and online distribution strategy. The article outlines why PPC is important as a component of the overall search engine marketing strategy for hotels and provides vacation rental managers advice for their own PPC strategy.
by Vikram Singh
I have had a front row seat to the hotel pay per click (PPC) world for the past decade. PPC is not new, but it’s rapidly changing. One thing that hasn’t changed: hotel marketers and owners are still caught up in debates about its effectiveness and viability. As a result, a lot of hotels are still not embracing the power of pay per click.
Google’s Golden Goose
Time for a reality check: Since its inception in October 2000, pay per click advertising, aka Google Adwords, has been Google’s nonstop money-making Golden Goose. Here are some powerful statistics highlighting its power:
- In 2013, Google officially surpassed $50 billion in total advertising revenue. This comprised 85% of their total revenues for 2013.
- Google reported $12.9 billion in net income for 2013.
- Total paid clicks on Google and Google Display Network sites were up 31% over the prior year, and up 13% over the third quarter of 2013.
All the actions (algorithm updates, layout changes, etc.) that Google implements every few months have a clear goal, which is to make sure that Google can sell more ads. Google cares very much about pay per click, because billions in revenue depends on it. They need it to work for you.
Hotel marketers and owners simply cannot overlook or ignore PPC. Unscrupulous marketing “experts” love to trash PPC as a waste of funds. You should run from those who advise using search engine optimization (SEO) as a replacement for PPC. SEO is important, but only PPC can explicitly guarantee you placement in exchange for your investment. Every time someone starts talking about how they are not doing pay per click marketing because they are focusing on SEO, an angel in revenue heaven dies.
Brand Name PPC Is Not Optional
There are a lot of things that your hotel can save money on. Opting out of PPC is an axe to the foot, which you do not need. PPC is exponentially important when it comes to someone looking for your brand name on Google, i.e., someone “googling” your hotel by name. Look at this example:
When someone looks for you by name, one of these three things might have happened:
- They researched you on any of the hundreds of travel sites (TripAdvisor, Booking.com, Expedia, etc.) and are now ready to have a direct conversation with you.
- They received a personal recommendation from a friend.
- They saw your offline marketing somewhere, and now they want to learn more.
These are the searchers that are lowest on the conversion funnel. In simpler terms, they are the people who are most likely to buy something from you right now.
There are only two scenarios that happen when people look for you by name:
- You are showing an PPC ad for your hotel along the lines of “Official Site, Book Direct, Learn More.” You get the click and convert them on your site.
- The OTAs and resellers have no competition from you (woohoo!) for their ads offering “Best Rate Guaranteed, No Cancellation Fee, Learn more!” They get the click and sell your room, making a handsome 10-20% commission.
It does not take rocket science to figure out that hotels participating in PPC for their brand name terms are harvesting those clicks into direct revenue, instead of giving them away to the OTAs. Please keep this in mind when the next budget meeting comes around. Pay per click can always be beefed up and fine tuned.
Pro tip: Do not waste time hating on OTAs. In the world of Google, it definitely takes money to make money. Own your brand on Google.
Be There or… Lose Revenue
I often observe a clear and present disconnect between hotel marketing/revenue goals, and setting budgets for PPC advertising. It’s strictly a pay to play party. Budget is generally a function of your location and how much competition there is in your market. You should spend enough to get optimal ROI. This amount will be different for each hotel.
Brand Name Keywords
You must aggressively bid on your brand name. This might run you anywhere from $100 to $300 per month. You can quote me when I say, “it will be the best money you have ever spent on online marketing.” As I mentioned earlier, these searchers are specifically looking for you. Make sure they find you.
Pro Tip: No matter how many OTAs are bidding on your brand name, you as the hotel will always get preferential placement, a lower cost per click, and higher conversion from these keywords.
Once you are doing a smashing job of showing up and converting for your brand name, it’s time to take your campaign to the next level. This is where you target broader location-based keywords like “hotels near Wrigley Field,” and “hotels in downtown Chicago.” These keywords are much more expensive than buying your brand name, so you have to make sure you are paying close attention to your website and conversions. Quality counts. The quality of your website and booking engine can make all the difference is conversions. The quality of your PPC advertising team affects your placement and cost per click.
Pro Tip: Avoid automation at this level of spending. See below.
Look Beyond Automation
Automation is one of the key differentiators between hotels running effective PPC and those who are struggling. If you’re using a big agency, your campaign is probably automated. Once an agency has signed up hundreds of clients, its biggest goal becomes creating efficiency for its own department. Your hotel campaign’s performance is not top of mind for an intern clicking away on software that manages hundreds of hotels without any unique strategy.
Using automated software is so 2005. Active management, such as testing ads, running specials, and adjusting bid strategy, is what makes a campaign successful. If you’re worried about overspending on PPC, put some thought into who you are hiring to spend money on your behalf in Google. A slightly higher management fee can often result in thousands more dollars in revenue.
Pro Tip: It’s not the cost that matters; it’s the revenue. Getting a “great deal” on PPC management isn’t always such a great deal.
Don’t trust your most powerful marketing channel to automated software or an overworked/underpaid project manager at an agency with several hundred clients. There are no shortcuts or discounts on the road to hotel pay per click success. But you can tremendously increase your odds of success (and your PPC revenue) by working with the right team.
About Vikram Singh
Vikram is an expert in hotel-specific technology and marketing, with a strong focus on booking engines, search engine marketing, and online distribution strategy. His latest venture, madbooker.com, focuses on the current ecommerce challenges facing the travel and hospitality industry today. His strategies have helped power some of the biggest and most successful hotel equity turnaround deals in the last decade. A thought leader in the hotel/tech realm, Vikram is a frequently requested speaker at industry conferences worldwide. Former hosts include the US Department of Commerce, Travel Distribution World Asia, Arabian Travel Market, and HSMAI. He is a perennial favorite of audience members everywhere because he emphasizes action-oriented strategies. Vikram also writes the popular hotel and travel marketing strategy blog: www.wordsofvikram.com.
Contact: Vikram Singh email@example.com