Working from our Hotel Ads Overview article, we will now dive into how the Google Hotel Ads bidding and dynamic ad auction works.
Google Hotel Ads Bidding Overview
As we mentioned earlier, hotels have little to no control over when their property will show up in a “local universal” search box that appears on more generic (non-brand) search queries. And, unlike traditional pay per click ads (provided through Google AdWords), one cannot choose what queries they would like the property ad to appear on via a keyword bid.
This is key: Hotel Ads are not like traditional pay per click ads run through AdWords; one does not bid on keywords for placement.
Instead, Google chooses what non-brand queries are a good match for both the hotel and the searcher and serves properties accordingly. For branded searches, information on the hotel profiles is pulled via the property’s Local Places Page.
The bidding comes into play with the price options that are displayed across the profile.
For each profile, as shown above, you will see two booking options (Booking.com and Priceline.com, in this example) listed and then a “view more rates” selection link that will reveal a few more booking options when selected. Ideally, one will achieve a position within one of the first two positions that are the most prominent within the profile.
Hotel Ads Bidding Structure
As far as what the hotel will actually pay depends on what bidding structure they choose:
- Percentage of room rate (recommended for best return)
- Fixed bid per night (not recommended)
- Budget Optimizer (Google automatically sets the bids to maximize the amount of traffic for the given daily budget.)
Also keep in mind that the actual CPC will vary depending on the number of days searched; a search and click for a weeklong stay will cost more than a search and click for a weekend stay.
The percentage of room rate option is recommended because it ensures that the amount the property pays per click is proportional to the search.
Hoteliers are only charged once a person clicks on the “book now” link and is then redirected to that property or booking engine.
Google Hotel Ad Bid Multipliers
Google ads an additional layer to this bidding process with “bid multipliers” which allow hotels to adjust the bid percentage up or down based on several factors:
- Which Google site a person is coming from (Map results, local universal, places page)
- User country
- Length of Stay
- Device Type
How Google decides what bidding option to show where (also known as “ad rank”) within the search box depends on several factors.
Google Hotel Ads Dynamic Ad Auction
Google ranks booking partners based on two factors:
- Price competitiveness (room rate)
- Bid for that query
From there, Google groups bidders into “buckets” – which are dynamically calculated per search query – and the bidders that fall into the most competitive bucket win the ad position.
Remember: Google only looks at two things to determine where your placement falls – how high (or low) your bid is and how competitive your room rate is.
There are three available placement options and multiple “ad slots” available within those placements. These include:
- Ad Slot A, Position 0 (first visible rate)
- Ad Slot A, Position 1 (second visible rate)
- Ad Slot M, Multiple Positions (“View More” Link that a user must click to see)
- Ad Slot Z (Not Showing)
So what does this mean for your property? Ad slot A is where you want to be.
Sound complicated? Well, it is and it isn’t.
The important things to know to rank competitively include:
- Proper rate management
- Proper bid management
Additionally, hotels can work to improve their unpaid search results by ensuring that their Google+ profile is up to date and accurate.
It is our job at Fuel to monitor Hotel Ads activity and adjust these as needed to ensure the highest return on ad spend and optimal hotel performance.
Be sure to check out our post on why your hotel should be on the Google Hotel Ads program and contact us today to see how our team can help your hotel increase direct bookings via Hotel Ads placement.