BrandVerity recently released a study evaluating the paid search activity of online travel agencies (OTAs) and big hotel name brands and the results were revealing: OTAs frequently bid on hotel brand names, and these ads appear multiple times for each search engine result page (SERP).

BrandVerity collected data from over 100,000 unique SEM ads, targeting over 120 keywords spanning 12 hotel brands from 10 US cities, making this one of the most exhaustive studies done on the topic.

Why does this matter?

The study is trying to figure out how often OTAs will bid on branded keywords, like “downtown Chicago Hilton”, and how successful those branded ads are compared to those owned by the actual hotel. This is important for three reasons.

1. When an OTA serves ads targeting hotel brand names, it’s producing more coverage of the SERP for that explicit brand name, potentially blocking out competitors bidding on the hotel’s trademark. This could lead to more revenue for the brand, even if it comes at the expense of having to pay the OTA a commission.

2. However, the glut of OTA ads can choke an individual hotel brand’s ads out of the SERP, making it harder for the hotel to gain direct bookings independent from the OTA.

3. Additionally, guests searching for a hotel by brand name can click on an OTA’s ad, but then find a different hotel on that OTA and book with them. Thus, an OTA bidding on a hotel’s trademark could actually generate more revenue for a competitor.

This is a tricky problem to solve, as the study sums up:

“Determining how to properly balance this is beyond the scope of this study; that equation is left to be worked out by hotel brands and their OTAs.”

That said, hotel marketers can make some conclusions from the observations of this paper that can help optimize their SEM strategy. First, one thing is clear:

“…the data from this study indicates that OTAs bid on hotels’ branded keywords rather extensively.”

Hotel brand ads targeting branded keywords on average appear once per SERP (search engine result page) compared to nearly 2 ads for OTAs per Google SERP. On Bing, there are over 4 OTA ads per 1 brand ad per SERP, and on AOL it’s over 5 OTA to 1 brand. Only Google mobile showed more branded hotel ads per SERP than OTAs. This gives hoteliers a better chance of guests clicking their Google ads, and makes it far more likely guests will click on an OTA’s ad if they use another search engine like Bing or AOL.

As you can see, hotel brands own greater SERP coverage on Google mobile, and then on Google Search.

OTA ads show less often for branded terms on Google, and this is probably due to a combination of Google’s quality score, which prevents low-quality or irrelevant ads from ranking high, and aggressive action on the part of the hotel brand, protecting its trademark. This also demonstrates that consumers probably prefer to book directly from the hotel instead of an OTA, as higher quality ads tend to be more popular, and if branded hotel ads are higher quality, consumers like them best.

A major area for improvement for hotel brands is mobile SEM. OTAs rank #1 on Google mobile 17% of the time�"however, when they have to compete with hotel brands bidding on their own trademarks, this drops to 9%. Thus, hotel brands have an opportunity to take the #1 SEM spot for their hotel brand name on Google mobile.

Take Aways:

• OTAs are aggressively bidding on your hotel’s brand name.
• If you improve the quality score of your ads, you’re more likely to oust an OTA and rank higher.
• Other search engines, like Bing and AOL, are swarming with OTA ads, making it far less likely that your hotel’s ads will get clicks.
• If your hotel has no Google mobile ads running, you may have an opportunity to reclaim bookings from OTAs by starting some.
• You can increase the chance that your direct SEM ads will appear over OTA ads on any search engine if you run ads to multiple domains names, including a hotel group or collection website, along with a property-level website (for example, ads can point to both staypineapple.com and themaxwellhotel.com for the same keywords in the same SERP, pushing out OTAs and competitors).

Read the complete study at BrandVerity.com

About Brandon Dennis
Brandon is the Technical Marketing Manager at buuteeq, the digital marketing system for hotels. He manages buuteeq’s SEO, paid media channels, content creation, and the company blog. You can connect with him on Twitter @buuteeq.