What Google’s Sunset of Commission Bid Strategies Means for Your Hotel Ads Campaigns

Google recently announced that support for commission-based bid strategies in Google Hotel Ads would be deprecated, and the bid strategy types would be going away in October 2024. 

Historically, Google Hotel Ads campaign types have had access to a few different bid strategies. Commission-based bid strategies are unique to hotel ads campaigns, and they allow hotels to set their bid optimization to be billed based on either pay-per-stay or pay-per-conversion. 

What does this mean for your Google Hotel Ads campaigns?

For hotels that want to run hotel ads campaigns, the ecosystem requires they use a 3rd party connection to access their rates and inventory feed via Google’s Hotel Center. This hotel center feed is then connected via third-party platforms or directly from a hotel’s CRS provider. 

As long as your hotel ads and metasearch provider isn’t relying upon one of these bid strategies, then no change is needed. 

At Metadesk, we rely on advanced bid algorithms and machine learning technologies coupled with ongoing optimization and targeting methods. Although our most popular billing model happens to be a pay-per-stay model, we don’t utilize Google’s pay-per-stay or pay-per-conversion bid strategy type. So, no change is needed to keep the current visibility and success you’re currently experiencing with our metasearch management services.

A Marketer’s Case for Hotel Metasearch

Hotel metasearch channels, like Google Hotel Ads, are great for distribution.  Like other third-party channels, they expand a hotel’s reach to new audiences.  That’s the predominant argument for metasearch in the industry.

And it’s wrong.  

Or, at a minimum, incomplete. Yes, metasearch channels can improve a hotel’s reach to new audiences.  However, they bear little resemblance to OTA’s or other third-party distribution channels.  In fact, when properly understood and managed, they become a marketer’s dream.

Direct reservations through metasearch

Always remember that hotel metasearch marketing drives direct reservations through the property website.  Equally important, the absence of that marketing all but guarantees that travelers looking to stay in your destination will book through OTAs or, worse yet, at one of your competitors.  

Marketers exist to win the battle for share in a competitive market, and Google Hotel Ads and other metasearch channels are ground zero for that combat.  The channels capture customers once they have passed the inspiration portion of their trip planning and are getting down to the selection of their preferred property and actual booking.  To be absent at that critical moment is to forfeit direct revenue.  We often hear from hoteliers who are resigned to letting OTA’s take a booking because it’s easier and still results in net bookings.  Metasearch marketing can be equally streamlined, more profitable, and result in an owned customer.  

Audience targeting techniques

Metasearch management provides marketers with audience tools that will be more familiar to them than to revenue managers. Geographic, demographic, and behavioral targeting are all available through the platforms.  They allow properties to be selective with their media deployment and maximize their return on investment.  

These characteristics are far more aligned with a marketing perspective than distribution.   

First-Party vs Third-Party data

GCommerce was the first lonely voice in the hospitality industry proclaiming the coming extinction of third-party data.  Most properties didn’t fully grasp the implications of the shift at the time.  Today, marketers across the industry are reckoning with the impact.  As cookies go the way of MySpace and AOL, the tools we all have come to rely on to find and attract new customers are vanishing.  You can read here about the impact, but suffice it to say that the results have been catastrophic to unprepared properties.  

In the absence of third-party data, first-party data becomes the lifeblood of marketing.  Every competent marketer is developing strategies around building first-party audiences and how to use those audiences to drive revenue.  

Hospitality metasearch belongs at the heart of those strategies

Customers who select a property through metasearch go on to book at incrementally higher rates - that’s first-party booking data.  Moreso, many enter the booking funnel before abandoning their reservation, also first-party data.  As you may expect, remarketing to that reservation abandonment audience is amongst the most productive campaigns a marketer can run.  

Some savvy marketers are using metasearch as a brilliant tool to increase participation in loyalty programs, one of the ultimate forms of first-party data.  Instead of promoting a property’s best available rate, these properties are leading with Member Rates through hotel metasearch channels.  Travelers see the lower price and often choose to join the program so as to qualify for the promotional rate.  Win/win.  The property receives the reservation and enrollment in the loyalty program, all because of effective marketing through hotel metasearch.

Lifecycle marketing

Marketers know that the depreciation of third-party audiences compels us to harvest the most value out of every interaction available to us.  In the past, our models were focused only on attracting new customers because, frankly, that acquisition was so inexpensive.  Now, we must focus on a full lifecycle approach as we shift our measurement from a single reservation to the lifetime value of a customer.  We know that when a customer is earned for the first time, we must develop strategies to keep them coming back, to upsell them to new room types and experiences, and to turn them into brand advocates.    

Still, we have to feed new audiences into our lifecycle marketing funnel.  As discussed in our article titled “Hacking your marketing budget”, hotel metasearch is the most effective way to target and acquire new audiences.  With Metadesk’s innovative pricing model, a property can run robust acquisition campaigns through metasearch without spending a nickel from the marketing budget.  

Hospitality marketers are starting to understand that metasearch is not a distribution channel but instead a powerful tool in their marketing arsenal.  With the tools and techniques available exclusively through Metadesk, metasearch can become the secret weapon to market dominance. 

Hacking Your Marketing Budget: How to Generate Direct Revenue Without Spending Marketing Dollars

The dust has settled, and most hoteliers are staring at newly minted 2024 budgets. Those budgets likely feature big revenue goals with marginal increases in marketing dollars (if you're lucky). Property owners tend to require herculean feats of performance - meaningful growth in RevPar while starving any marketing channel that could help achieve the goal.  

What's a smart hotelier to do?  

Hack the budget - find ways to drive direct revenue without touching the "marketing expense" line. Win/Win

Budget Allocation

In your 2024 media budget, you've likely allocated money to channels like Paid Search, Display, and Paid Social, which you hope will generate returns of 8-1 or better. With outstanding management, you may be able to improve performance and efficiency, but not enough to make a dent in your new revenue goals.   

But what have you allocated to Metasearch marketing?  

If you're like most hotels, it's a fraction of the amount you are spending on the other channels. That is despite the fact that OTA's and others are spending almost twice as much on Metasearch as they are on Google Paid Search. TWICE. 

We can assume that these multi-billion dollar companies with bottomless advertising budgets know what they're doing. They know that dollars spent on Metasearch generate consistently high returns. Individual hotels with limited budgets should learn from them and put more weight on marketing on metasearch channels.

Let's break it down.

To extrapolate in simplistic terms - if you were to take all of the money you have allocated this year to Paid Search, Display Advertising, and Social Advertising and multiply the amount by 1.8, that would give you a baseline for the amount you should spend on Metasearch.  

Yes, it's too late to ask for more budget, and such a proposal would be dead on arrival for most owners. Time to break out the hack.

Increased Direct Revenue Without Increased Marketing Cost

With Metadesk, hotels can work on a performance-based model whereby Metadesk pays for all media expenses in exchange for a commission on revenue. Put another way, you can generate precious direct revenue without spending a nickel from your marketing budget. And unlike OTA's, you aren't paying a commission to find customers through a third party - these become your customers, in your database, that you can market to forever more. The commission paid to Metadesk is small and coded to the same line as travel agents.  

When was the last time your owner said you were spending too much money on travel agent commissions?  

Outcome

Simply put, the result is a big boost in direct revenue without an increase in marketing expenses.  

How much of a revenue boost?  

For some back-of-the-napkin math, let's go back to your total digital media budget. For the sake of argument, multiply your annual media budget by 1.5. That is the approximate amount Metadesk will spend marketing your property on your behalf. Now assume the platform can generate a 10 - 1 return on ad spend, so multiply the total projected marketing spend by 10..  

Chances are, that's a LOT of incremental direct revenue. Possible enough to exceed your 2024 revenue budget and cement you as a hero in the eyes of your peers and owners. Enough to impress even a Greek god of strength.

Why Metadesk

Metadesk was built by GCommerce, the prestige marketing agency in the hospitality industry. The platform offers improved metasearch performance through strategic targeting and professional campaign optimization. The advantages of Metadesk are numerous:

• Managed by media experts
• Continual campaign optimization
• Easy collaboration
• Custom 1st party audiences
• Real-time parity monitoring
• On-demand access to reports
• Fair pricing model

Most importantly, this program was built by hoteliers with a long legacy of performance. As the above "hack" demonstrates, Metadesk was built to take advantage of hospitality industry nuances and supercharge the performance of a property.