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What Google's Commission Bidding Removal Means for Hotel Marketers
By Kerrigan Flynn
Friday, 23rd February 2024
 

The Future of Metasearch: Google ends commission bids, reshaping hotel ad strategies.

Metasearch platforms have revolutionized how consumers search, compare, and book their travel arrangements. For years, hotel marketers have relied on various bidding strategies, including Google’s popular Commissions (Per Stay) or (Per Conversion), both leveraged by hoteliers as low-risk strategies, designed to make the most of their digital marketing budgets and drive conversions.

However, recent changes from Google are set to upend the status quo, leaving many in the hospitality industry to rethink their metasearch advertising strategies. Google has decided to phase out these bid strategies for its metasearch product, Google Hotel Ads (GHA).

This means that hotel advertisers will no longer have the option to use Google's Commissions (Per Stay) or (Per Conversion) as bidding strategies for their hotel ads. This change is for Google's commission product only and does not affect the ability to buy via commission with Sojern.

Effective April 30, bid strategies based on Commissions (Per Stay) or (Per Conversion) will no longer be supported within Google Hotel Ads. However, active campaigns utilizing these commission-based bid strategies will continue to run until the sunset date. Starting October 31, campaigns relying on Commissions (Per Stay) or (Per Conversion) will no longer be available.

Despite this change, advertisers will retain access to historical reporting data for the affected campaigns. As a result, hotel marketers will need to explore alternative bidding strategies for their hotel ads, as Commissions (Per Stay) or (Per Conversion) will no longer be viable options.

Google's Decision to Remove CPA Bidding for Hotel Ads

Considering the evolving landscape of digital advertising, Google's decision to phase out these commission models on the basis of deprecating third-party cookies marks a strategic realignment. In particular, Google extended commissions (per stay) during the COVID-19 pandemic, which helped to maintain advertiser engagement and support travel industry recovery. This change reflects Google's preference for strategies that enhance its own operational dynamics, like tROAS (target return on ad spend) and Performance Max—both of which enhance their own stability and efficiency as an advertising provider.

With the transition, Google is recommending hotel advertisers consider alternative strategies such as cost-per-click (CPC) or other performance-based bidding models to optimize their campaigns. The shift requires a fundamental reevaluation of advertising budget allocation and potentially significant adjustments to ROI expectations.

Rest assured, if you work with Sojern, there should be no disruptions to your metasearch campaigns or performance. Sojern has proactively developed its algorithms to not only anticipate and adapt to these changes, but also to leverage them to our advantage and ensure continued support for the commission model in the future.

In fact, we are uniquely positioned with the tools to help you thrive amidst these changes and maintain a seamless multichannel experience—especially with metasearch. With our top-tier metasearch product and AI-driven bidding models, our competitive edge lies in our access to billions of travel intent signals like hotel and airline booking data from every corner of the globe. Our commission-based metasearch solutions, including Pay on the Stay, help you use this data to maximize your advertising ROI while minimizing risk. With it, we can provide continued support and solutions that align with your business needs.

The Importance of Metasearch Advertising in Travel

Now, let's talk about why metasearch advertising is crucial to the travel industry. Metasearch engines, like Google Hotel Ads, Tripadvisor, Trivago, and Kayak, have grown from simple aggregators of flight information to powerful platforms that host a significant portion of the customer journey, from destination inspiration to the final booking stage.

This shift in consumer behavior makes metasearch advertising a non-negotiable component of any comprehensive travel marketing strategy. With the ability to reach a highly engaged audience at different stages of the sales funnel, metasearch ads serve as a key driver of direct bookings and brand visibility for travel companies.

Understanding CPC Bidding and the Benefits

CPC bidding offers a dynamic and flexible approach to digital advertising, giving you unparalleled efficiency and control over your ad spend. Unlike commission bidding, which focuses on securing conversions at a predetermined cost, CPC bidding allows advertisers to pay only when a user clicks on their ad, ensuring that every dollar spent is directly tied to engagement.

This level of granularity helps you optimize your campaigns in real-time, adjusting bids and targeting strategies to maximize ROI and drive meaningful results. With CPC bidding, you can navigate the competitive and seasonal nature of the industry with confidence, capitalizing on opportunities to reach your target audience and drive conversions effectively.

With machine learning at the core of our CPC bidding strategy at Sojern, our advanced algorithms analyze vast amounts of data in real-time, including user behavior, market trends, and competitive landscape, to predict the likelihood of conversions for each ad impression. We run over 30,000 campaigns across eight advertising platforms, and our systems make about 70,000 predictions per second. We also run on seven different metasearch engines: Google Hotel Ads, Tripadvisor, Trivago, Kayak, Skyscanner, Bing, and Wego.

By continuously learning and adapting to changing conditions, we can optimize CPC bids to maximize ad visibility and drive clicks while achieving campaign objectives within budget constraints. Our solutions allow for smarter bidding, maximizing visibility to users who have a high intent to book

Maximizing Results Without CPA Bidding

Challenges in Optimizing Campaigns Without CPA Bidding
The removal of CPA bidding poses several challenges. First, the direct correlation between ad spend and conversions may become more unclear, potentially leading to less efficient use of marketing budgets. Second, it complicates the task of honing in on high-value customers and segments, as CPA bidding is adept at optimizing for specific customer actions. Third, it could result in increased acquisition costs, particularly for smaller or less established businesses that rely on the predictability of CPA bidding to compete with industry giants.

Leveraging Data Analysis and Targeting
In the absence of CPA bidding, the value of data to travel marketers cannot be overstated. Savvy marketers will leverage data analysis to identify trends, patterns, and opportunities. By understanding who their most valuable customers are and where to find them, travel companies like Sojern can minimize the impact of the bidding changes and continue to drive business successfully.

Focus on Conversion Tracking and Optimization
Without the crutch of CPA bidding, accurate conversion tracking and continuous conversion rate optimization become a necessity. You must make sure your tracking pixels are properly installed, and landing pages are optimized for performance. A thorough understanding of customer behavior and the conversion journey is essential for adapting and refining strategies in this new landscape.

Moving Forward

For those in the hospitality industry, metasearch is a critical channel to protect your brand. Success with metasearch means you are shifting traffic from OTAS to direct.

As Google takes this step, you need to review your current digital strategies and make the necessary adjustments to ensure your marketing remains effective and delivers a strong return on investment.

Sojern is ready to help you navigate the future of metasearch advertising, by making the most of your digital marketing campaigns. Learn more by contacting our hotel marketing experts today.

Kerrigan Flynn
Content Marketing Manager, Sojern

Kerrigan shares her passion for storytelling, brand development, and strategy as the Content Marketing Manager at Sojern. Throughout her career, she’s been fascinated by communication in all capacities, completing her master’s degree in Integrated Media Communication from the University of Nebraska-Lincoln. Kerrigan explores her love of storytelling while playing DnD with her friends, grinding away at video games, and dominating board games on the weekends.

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