How GCommerce's Programmatic Bidding Strategies Benefit Our Hotel Clients

SHARE:

If there is one thing that is absolute in the hospitality internet marketing world, it’s that we must constantly be testing, analyzing, implementing changes (or not) based on test data, and testing some more.

GCommerce utilizes programmatic bid optimization for paid search marketing, which is now a must in a world of constant changes and bid management. Programmatic bidding allows bid adjustments throughout the day and uses data based on previous days data. For an individual to be able to delve into the performance and history of a specific keyword would take hours to be able to optimize an account of 100+ keywords, multiply this by 10 or more clients a day and there is now no time for other important client optimizations.

Programmatic bidding is not just a set-and-forget machine learning tool. If you use programmatic bid optimization you must make sure that you are making the most of it and getting the best results possible for clients. How do you do this? Test. Analyze. Implement (or not). Test Again.

Earlier this year, I ran a test on a sample of clients using a different bid strategy model to see if client performance could benefit from it. It wasn’t that the current automated bid strategy wasn’t working, it was based on the idea that we always want to improve our results, therefore we test different theories and strategies.

This particular test yielded some pretty significant results:

Due to the seasonality of our clients, the best data to gather is to compare year over year with a significant amount of time. Using a date range of 6 months of data, here is what we found:

  • Average CPC’s increased 1%
  • Reservations increased 89%
  • Revenue increased 100%

When comparing to GCommerce’s entire hospitality paid search marketing portfolio, here is what we found:

  • Average CPC’s increased at a much lower rate
  • Reservations increased at a much higher rate
  • Revenue also increased at a much higher rate
Programmatic bidding strategies performance

Rising CPC’s are a constant battle in the paid search marketing world. At GCommerce Solutions, our hospitality internet marketing teams are constantly optimizing paid search campaigns to help decrease this metric as best as we can. After reviewing performance across GCommerce’s entire portfolio, I found that, on average, GCommerce clients experienced an increase of 4% in average CPC’s during the same time period. This leads to a conclusion that our clients and the hotel industry continue to see ever-increasing rise in CPC’s across the board in order to compete in the SERP. But the fact that we have been able to slow it down while ramping up reservations and revenue is a huge win.

After pulling all of the data and seeing such clear results, it was obvious that it was in our clients’ best interest to switch gears on our overall strategy to best reach our KPI (key performance indicator) goals and maximize their spend. So we did.

What Happens When You Stop Running PPC Ads?

SHARE:

Paid search has become a cornerstone of digital marketing for hotels. It quickly rose to popularity and has remained one of, if not the largest line item on most hotels’ marketing plan budgets. Its popularity is repeatedly justified as it proves its success in driving qualified sessions and substantial revenue for hotels online. But what happens when you turn your paid search off completely? There’s always been the argument of bidding on brand terms (if you were wondering, you should be) but what about turning it all off? Top of funnel campaigns, bottom of funnel campaigns and campaigns to re-engage your audiences?

Has the thought entered your mind? Do you ever wonder if paid search advertising on Google is worth the cost?  With rising cost-per-clicks and more competition entering the marketplace daily, the question is: is it worth it?

This wasn’t a test we planned on purpose. A client was recently forced with the decision to pause all of their paid search campaigns. We knew there would be a negative impact, but how much? We took this opportunity to study the direct impact that turning off paid search campaigns had on the client’s website performance. Let’s take a look at what happens when a business stops running their paid search campaigns.

THE RESULTS:

Overall website sessions dropped 20%

New users dropped 20%

Revenue dropped 30%

Effects-of-Paused-PPC-Ads

One theory we wanted to analyze is: WILL MY ORGANIC REVENUE AND TRAFFIC INCREASE WITHOUT PAID SEARCH? The simple answer is yes.

Organic traffic experienced a 43% increase and organic revenue increased 20% compared to the previous period when paid ads were running. The increase, however, was not enough to make up the difference of the lost revenue from paid search alone. So while it definitely helped to bridge the gap, overall there was a sharp decline in our website KPIs across the board.

Since all other channels remained flat in sessions and revenue, it painted a clear picture that the decline in performance was a direct result of the lack of paid search traffic.

So if you were ever wondering if it was worth paying to play on the search engine results page (SERPS) and theorized that paid search ads were essentially just pulling away from your organic traffic and revenue, this case study should give you some conclusive evidence. While paid search campaigns do cannibalize some traffic and revenue that would have come through organically, overall it exponentially drives sessions and revenue that goes above and beyond what would have come through organically.

Although we can’t say with certainty, another theory related to the impact of turning these paid search campaigns off is that the their competitors traffic went up and their cost-per clicks went down as one less advertiser was competing for those keywords, which probably helped them to pocket more revenue then normal.

So, if you’ve ever contemplated just turning off your paid search campaigns and letting organic pick up the slack, you should probably rethink your decision. Paid search is a key component in your hotel’s digital marketing strategy and proves it’s worth time and again as one of the most powerful ways to drive qualified sessions and revenue. It is definitely worth the extra budget to compete.

How Much Should I Spend on Paid Search for my Hotel?

SHARE:

We get this question all the time from prospective clients and new clients and it’s also something we revisit at least once (or more) every year for current clients. The truth is, there’s a lot more to it than picking a number based on the hotel’s location. It’s a complex answer that can only be determined by deep discovery and understanding of the hotel and its goals, the market the property is located within and historical data from the hotel. At GCommerce, every client’s budget recommendations are customized based on the hotel’s specific goals, historical performance and competitive landscape coupled with data from tools provided by Google, Bing and Doubleclick Ad Services.

7 Key Steps to Determining Paid Search Budget Recommendations for your Hotel

  1. Hotel Discovery & Determining Competitive Advantages - this guides our keyword research which helps us determine the estimated cost per click for qualified keywords. We seek answers to questions such as, What adjectives describe the hotel? What are the nearby attractions that drive visitors to the market? What are the top business drivers for the hotel? What are the hotel’s top competitors? What special amenities, services or events does the hotel support? Then we utilize keyword planner tools from Google and Bing to determine keyword CPC and traffic estimates.
  1. Establish business goals - we work closely with the client to determine their top priorities. Do they have a revenue goal they need to achieve? Does the client want to focus on driving more wedding or meeting business? Are they competing with OTAs to capture reservations? What are some of their biggest challenges and how might paid search help them overcome those hurdles?
  1. Complete Competitive Research - paid search pay per click costs are based on a bidding model. Competitive research factors in how many other advertisers are bidding on the same keywords, whether or not other advertisers are bidding on your brand name and also provides an understanding of highly valuable keywords we should be including in our campaigns.
  1. Analyze Historical Performance - the best way to estimate how specific budget recommendations will impact your bottom line or other business goals is to understand historical performance. GCommerce deep dives into website data, looking back multiple years, to gain insight into traffic, production, conversions, seasonality and other performance trends by month.
  2. Market Research - where is the hotel located? does the market experience any seasonality? We gather information from the client directly and utilize Google Trends to follow keyword popularity trends over time. It is important to allocate budgets as it correlates to business goals and seasonality in the market.
  1. Future Predictions - with a solid understanding of the hotel’s market and their previous performance, we can predict with a degree of confidence how much a specific budget might impact a hotel’s paid search marketing efforts. If they previously spent $Y and saw a return of $X, what kind of results would we expect if we increased or decreased their budget? Using this predictive modeling, we can find the optimal budget to ensure each has a healthy budget that reflects a positive Return On Ad Spend within their stated goals.
  2. Finalization of Target Keywords and Presentation to Client - last, we will prioritize these keywords based on relative competition, traffic, and the hotel’s goals. We will work closely with the client to ensure that all keywords are relevant to their business and end goals. Organizing these keywords into the most relevant Adgroups based on what is most likely to convert provides us with the best opportunity for success in starting with a new budget.


At GCommerce, we believe in a customized approach for every client. This is true for all aspects of the overall marketing strategy and is how we approach each client’s budget recommendations. We utilize the vast amount of historical data and experience we have from working with clients in markets all over the country and combine that with a custom analysis to provide the best hotel paid search budget recommendations possible.

If you’re interested in learning what you should spend on paid search for your hotel, please reach out to your Account Executive or Account Manager today. Not a GCommerce client? Not a problem. Contact us and we can help you get started with strategic paid search marketing solutions today!

KEEP READING