TripAdvisor is making waves in the hotel marketing world at the end of 2017 with the roll-out of their Sponsored Placements program. Now, and for the first time, any hotel can bid to be at the top of the listings for any given destination. What does this mean and is it a good choice for every hotel? Before we get to that answer, let’s first dive into what Sponsored Placements are and how you can choose to participate.
What Are TripAdvisor Sponsored Positions?
TripAdvisor has rolled out the entirely new Sponsored Positions for hotels in December 2017. This is the first opportunity for hotels to actually bid on the position of their hotel on the destination page. Previously, users could view the results by ranking, best value, lowest price, or distance, but if a hotel didn’t have the rankings to appear at the top of any of those criteria, they were all but invisible to the TripAdvisor customer. Now, this is not quite as big of a deal if a customer already knows of a property and is simply looking for reviews. In that case, a customer would search for the hotel name. However, for the growing number of users who use TripAdvisor as a shopping platform, if you’re not at the top… you don’t exist.
This is where the Sponsored Positions shine. Just like a search engine PPC campaign, hotels can now bid to be at the top of the listings. The actual click cost depends on the individual destination and competition. In our examples below, we have found the average cost per click for Myrtle Beach, SC. is $1.96. Hotels are not able to set bids, unlike a traditional PPC campaign. Rather, they are only able to choose between three budget levels per day. We expect to see TripAdvisor expand the program as it matures, but for now, it is a very simple platform with minimum options and zero tools for optimization.
Let’s explore an example. If you are the #161 ranked property in London, England, you are doomed to spend eternity languishing on page 6 of the hotel results. However, in the example here, if you are Sunborn London, you can pay to be shown at the very top of the results. Good for Sunborn, they’re getting plenty of visibility now! Specifically, we see three key items in the adjacent screenshot.
- They’re at the top of the hotel results for London
- They have a nifty “sponsored” badge
- Their destination ranking under their reviews count is not shown
That’s right, the top sponsored position no longer shows “#161 of 1077 hotels in London.” This makes sense if you are the hotel and TripAdvisor. The last thing you are going to want to show if you are paying for the top position is that you are not really the top hotel.
Now Sunborn, a resort that was once unknown to casual shoppers looking for a London hotel, is now the top choice.
Unfortunately for Sunborn London, once a visitor decides to click, things start to take a dark turn. In this example, the customer has two click choices. They can either click the property name and go to the Sunborn profile page or they can click the giant “view deal” button. Both of these options raise some red flags that call into question how effective Sponsored Positions can be for this hotel.
Choosing to click on the hotel profile, you see the screenshot here of a typical profile listing on TripAdvisor. From now on, we have left the Sponsored Position program and are in the typical TripAdvisor Experience. What is most concerning here is Sunborn London just paid a very high cost per click to have someone visit their profile, only to be presented with rates from three different OTAs. You will notice that Sunborn is not participating in either TripConnect CPC or InstantBook, meaning that a customer is most likely going to be booking with an OTA. In this example, Agoda, which will be charging the property even more money in commissions as well as keeping the guest information.
Option #2, choosing to click the big “view deal” button, is an even worse option. The customer is directed directly to Agoda’s site where they not only have the ability to book at Sunborn but also competitive London hotels. That is correct, this resort just paid several dollars to drive a potential guest from their brand directly to an OTA and into an entirely new conversion funnel.
Tip: Learn what OTAs are doing right and what your hotel is doing wrong!
Is TripAdvisor’s Sponsored Placements A Good Marketing Investment?
This can be a difficult question and one that must be looked at as part of a holistic TripAdvisor strategy. If used correctly, it appears to be a very effective way of putting an otherwise unknown property onto the customers’ radar. However, if not used correctly, it can be a very expensive way to drive guests to book with OTAs. It is also not a replacement for your existing TripAdvisor campaigns.
Before we can determine if Sponsored Placements are a good thing, let’s look at the cost of other cost per click programs on Trip Advisor. Based on data for Myrtle Beach, SC, Fuel Travel is seeing an approximate cost per click of $0.93 for TripConnect CPC clicks (only $0.51 for mobile). The cost for the Sponsored Placement campaign for this market is on average $1.96/click, regardless of device. This is an obvious concern for us because a hotel would have to pay between 2 and 4 times the cost of a TripConnect CPC click to get a visitor to the hotel profile and then pay again to get the click to the hotel site/engine. This can get very expensive.
The question then becomes:
Can Sponsored Positions drive enough new traffic to a resort profile and then through to the booking to keep the overall ROAS meeting a hotel’s predetermined goals?
Right now, the program is too new to have concrete conversion/ROAS data, though as testing continues we will have more information. Until that time, we look at Sponsored Positions as an early funnel tactic that must be used in conjunction with a strong TripConnect CPC and InstantBook campaign in addition to ensuring the profile page content is optimized. While the data comes in, we will move on to specify how and when the campaign should be implemented.
Goals For TripAdvisor’s Sponsored Placement Campaigns
Goals for a campaign can vary property to property. However, in all cases, the program is designed to drive more visibility for a given hotel. The hotel has no ability to optimize the campaign other than setting one of three bid levels. Therefore, how you use this new found exposure becomes the only foundation for our goals. We have identified how three property types can benefit:
Sponsored Placements appear to be a fantastic tool to immediately begin driving traffic from TripAdvisor. Typically, new properties have a significant problem getting a foothold and reaching new customers on TripAdvisor. Using Sponsored Placements as part of a brand awareness campaign could be very effective. When compared to a typical broad reach destination PPC campaign the budgets may also be very similar. New properties in this scenario should keep a close eye on the ROAS in addition to ensuring their TripAdvisor listing is optimized.
Existing properties will likely benefit from Sponsored Placements as well, though careful monitoring of performance will be critical. For properties that have great customer satisfaction who are in a very competitive market and struggling to get on the 1st page may find the program to be very effective. Campaign tracking does appear to be rather weak to start with though, meaning a property will need to look at the volume and ROAS of their existing TripAdvisor traffic and compare it to the performance post campaign launch.
First and foremost, a troubled property needs to fix their customer issues and start getting four and five dot rankings. Then, and only then, can Sponsored Listings become a great tool to drive more traffic and help bring the property repair a low average ranking or poor destination position. Launching a campaign before fixing on-site issues is the same as filing a bucket with holes. You can dump all the money you want at the problem, but until you fix the issue the return will not exist.
Tip: Learn how to convert OTA guests into direct bookers with our free guide!
Things To Know Before Launching a Sponsored Placement Campaign
Before you kick off a Sponsored Placement campaign on TripAdvisor there are a few things that you need to ensure are in place in order to get the best possible return on investment. We do not recommend launching a Sponsored Placement campaign until these are three items are in place and optimized:
TripConnect CPC and InstantBook Are a Must
If you are considering Sponsored Placements, it is mandatory that you have a successful TripConnect CPC and InstantBook campaign running. If not, you will absolutely be paying your marketing dollars to drive potential direct bookings to an OTA.
Rate Parity Is Required
It goes without saying that a hotel should always offer the best rates to direct bookings. In the case of Sponsored Placements, it is even more important that you are showing your best book-direct rate possible. TripAdvisor does offer excellent tools in their Performance Center as well as monthly emails detailing how a property’s rates compete with others. The example here of one of our Fuel client’s rate report shows that 99.45% of the time the hotel’s direct rate meets or beats the OTAs. Before launching your Sponsored Placement campaign you will absolutely need to ensure you are driving customers with the best rate. Focus your effort here first and then launch your campaign once your rates are in order.
Profile Pages Are Optimized
Sponsored Placements can be risky. A hotel is paying money on TripAdvisor to send traffic within TripAdvisor. This means a hotel will need to ensure their profile listing is as good as it can possibly be before launching a campaign.
- All property details are up to date
- Images are compelling
- Property overviews and descriptions are optimized
- Reviews are being responded to as needed
- All recommendations in your business admin are addressed
Once the above three are in place, we recommend you ABT – always be testing. Start at the lowest of the three bid options and monitor closely. TripAdvisor is the #1 site in the world for travel planning and, when used correctly, can be very effective.
Launching a TripAdvisor Sponsored Position Campaign
Once you have your profile pages optimized, your rates in check, and TripConnect CPC and InstantBook campaigns running, you can dive into the world of Sponsored Positions. Luckily, launching a campaign is effortless; you will only need to decide on which one of three daily budgets and have your credit card ready (or use the card already on file with TA).
When you log in to your business portal, you will likely see a large green alert box letting you know your hotel is on the system, as shown in the adjacent screenshot. From there, it’s only three clicks to launch.
TripAdvisor has definitely made it easy to take your money. Your job once the campaign is launched is to ensure they are Earning your money, not just Taking it.
TIP: Learn how to reduce your reliance on OTAs with our free guide for hoteliers.
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