Here is an interesting quandary – if online travel agencies claim to bring incremental business, why do they advertise on hotel brand names?
In fact, shouldn’t they focus on destination searches instead? It seems the larger chains have convinced the OTAs to refrain from this practice.
However, to independent hotels or hotel management groups, they are not showing much consideration. This SEM hijacking or brand keyword robbery needs to stop.
Consumers search for a hotel name, primarily because of a recommendation from a friend or a review they read online – sometimes because of offline advertising by the hotel itself.
By bidding on a hotel’s name in the search engines, OTAs intent is to convert this direct client into an OTA client for that hotel or worse, re-direct them to another hotel.
It seems Marriott and Hilton have successfully managed to clean up the advertising on their trademark, according to a recent study done by HEBS, Max Starkov informed me last week.
“When searching Marriott Hotel + destination you will not see Priceline, Expedia, Orbitz or any other large OTA. The same goes for Hilton.” he says.
These chains appear to have convinced Expedia and other leading OTAs to focus on bringing in incremental revenue.
However if we dig a bit deeper, we see that the affiliate websites of these distributors are still advertising on the chain’s brands.
So, clearly there is still work to be done to clean up SEM Hijacking, as Starkov calls it.
But the OTAs aren’t really paying consideration to their promise to generate incremental bookings when it comes to independent hotels.
They blatantly advertise on brand keywords on Google, Yahoo and Bing. Therefore, how can they allow their own sales pitch to hotels to become so obviously hollow? Surely they should stick to their promise!
It almost looks like the OTAs are becoming just like the flawed franchise model with which hotels have become so disgruntled over the last decade. This game is so old – sign up more hotels so we can use their clients to steer business to other hotels.
In the case of running offline advertising, hotels run the risk of paying twice for the same client. Firstly for the newspaper add and secondly an OTA commission on top.
Here an example of advertising on independent hotels by an OTA:
What are search engines like Google, Yahoo and Bing doing to help protect the brand and trademark of independent hotels?
Not much, as they are generating large revenues from the advertising of course. Instead of a lengthy appeal option, they should provide a flag system through Google Places, allowing businesses to mark unauthorized advertising to be deleted.
The OTAs aren’t the only ones at fault. Hoteliers have to take a good look in the mirror, and take responsibility for their own actions.
In the end they have allowed this to happen, by signing distributor contracts without sufficient understanding of the landscape and market dynamics out there.
We are now getting to the constructive part of this issue. As a solution, hotels should include clauses in their contracts with OTAs to prevent such brand hijacking practices. It is a very important step in controlling distribution costs and production.
For the various independent hotels we have in our own management portfolio, for example, we have opened the discussion with the OTA on this topic.
Initially we were getting some of the standard, evasive answers.
OTAs will always try to justify this practice. A funny explanation is that they are able to bring bookings from countries such as China which we can’t reach with existing hotel marketing efforts. They have websites in local languages, etc.
This excuse is easily overthrown by explaining that it can be done through natural SEO, and not SEM keyword bidding.
Once the OTA sees you know what you are talking about as a hotelier, they usually shift gears.
We informed all our distributors that we will only work with partners that respect the brand and trademarks of our hotels. Clauses and addendums were added to the contracts outlining in which we want to work together with them and their affiliate websites, creating a win-win situation.
We have gotten a very positive response from many, including Booking.com, Lastminute.com, HotelBeds and Transhotel.
One OTA stands out though in its response. Expedia across Europe has basically stated, that they do not work this way with independent hotels.
Having discussed this matter with teams in different countries, the message in essence is that they are not capable of controlling keyword bidding by their various points of sales, especially not for independent hotels.
We have an easy solution for this, simply don’t advertise on hotel brand names, and be a partner as you yourself advertise to hoteliers.
Last week I came across an article, titled The Benefits of Using OTA, in which Melissa Maher, VP of global strategic accounts and industry relations at Expedia, stated: “Why wouldn’t you use an online travel agent?”
“My pitch would be: why exclude them, because there are significant revenue opportunities?”
It seems she is answering her own question here. Hotels are looking for a benefit in working with OTA, a win-win situation in their relationship with distributors. The claim to bring incremental business in sales to hotels, but the actions appear to contradict this.
TripAdvisor, Expedia’s sister company, also perhaps seems unwilling to respect hotel trademarks in this sense. It is simply not willing to cooperate with independent hotels when this issue is raised.
It is time OTAs accept that hotels have woken up, and it is time for change. If they do not stop such advertising on hotel brand names and trademarks, they perhaps stand to lose their product.
As the economic outlook improves, hotels will gain the upper hand in this partnership and look for alternatives. Hotels will find out that direct distribution through effective internet marketing is less costly and new supplier-friendly OTAs will emerge and challenge the status quo.
In the end the hotels have the rooms, which are the real key to this distribution market, and the power of negotiation.
Compare it to an Egyptian or Tunisian revolution. Desperately clinging on to power will only lead to a downfall of the regime. The days of SEM Hijacking or brand keyword robbery are numbered…
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About Patrick Landman
A lot of me wants to agree with this. I completely understand the Hotels point of view for wanting to protect their brand name and funnel the traffic and the higher margin sales directly to their own site.
I’d be miffed at OTAs that bid on our brand terms and make us pay a commission on business that was nearly in the bag for us.
That being said, the search marketer in me wants to bid on any and all relevant brand terms that do not violate any agreements we have with partners.
In the case of one actually selling the product being searched for the brand takes up more valuable SERP real estate from competitors. Is it not better to get a smaller margin on a sale than none at all?
If one does not not sell that product, the reasoning to bid to me is: a potential customer is showing purchasing intent. Just because one searches for a brand name does not mean they are a lock to buy. If someone searches for ‘Coke’ and I am Pepsi, does that person want a Coke or just a soft drink? I’d test it. If the numbers support those activities, then continue. There is *definitely* a risk. If that competitor is not bidding on your terms, I bet you they will start. It is a calculated risk.
This is great analysis by Kevin May and I will take it into consideration in future search marketing efforts.
great post! very insightful to an issue which I often overlook. I like your solution for smaller hotel to leverage their inventory via contract to solicit a change in OTA behavior.
Patrick thanks for the article…and I generally agree that traditional OTAs, such as Expedia provide little incremental value when compared to the margin they take.
Having said that, let’s not confuse where the power lies. It’s not the OTA, but it’s not the hotel either, it’s the customer who is king here
Great post ! I do agree and I would add ther’re not only OTAs but also some IDS that should remember why hotels work with them. But since GM and hotel owners realize that they do not have to accept everything from them, these companies will continue ! Thanks anyway for this post
Hm I think this is pushing it a bit far. There are a couple of ways to fix this. Register your trademark and file a trademark violation complaint to Google, in about 3 weeks Google will block it. In Europe however Google won a case that one can advertise on trademark keywords however the trademark can’t be in the ad. So that reduces the efficiency.
Aside from that booking.com in Europe will stop doing ads on a hotel name if the hotel requests it.
We’ve fixed this for dozens of clients and continue to do it regularly.
Now let’s remember, OTAs aren’t evil, they’re just expensive.
I wrote a post of shifting from OTAs to direct not long ago.
http://www.mirarmedia.com/marketing-tip/how-to-shift-from-ota-to-direct/
@Martin, if you read the article in detail, you will notice that we are challenging hoteliers to manage their relationship with the OTA and take control and responsibility
. We are encouraging them to take steps to avoid an unequal balance in their distribution relationships…
The are a couple angles to this article. I won’t debate the ethics of OTA practices. As a search marketer, let me focus on the search medium.
Here are some recommendations that could help and independent hotel steal search share from OTA’s:
1. Always advertise on your “name terms”. Many would argue that this tactic is a waste of money since a property should display organically. However, upwards of 30% of searchers look to the sponsored listings for their results. I would rather my clients pay for a click instead of give away 25% of their reservation revenue. Also, Google is fair in how they display their ads- properties will pay a lower Cost Per Click and retain a higher placement/position.
2. Paid Search Marketing is an open medium. Advertisers have the ability to create compelling ads that position a direct booking as more valuable than booking through an OTA. OTA’s use a blanket approach to their ad verbiage- its a game of numbers for them. They never really speak to the target audience. Of course, search engines have the final say in what your ad states, but a good search marketer will keep your ad more relevant for your target audience and convert at higher percentages.
Bottom line- search engine marketing is fair game. Whether it be OTA’s or independent properties, the rules are equal across the board. Expedia doesn’t have a “special” relationship with Google. In fact in coming months, it will be quite the opposite. If your marketing firm isn’t leveling the search “playing field”, it’s time to find one that will.
Thanks Will for your recommendations. They will be usefull.
As a search marketer at a large OTA I (not Expedia) I find this article unfair. We maintain a long do not bid list for any Hotels who wish to promote themselves. Moreover you’re blaming the wrong target. We would like nothing more than for Google to remove their self serving brand bidding policy. Google wants companies to bid on each other’s brands in order to inflate their own revenues. We would gladly restrict all hotel name activity to opt in only were Google to restrict trademark bidding again. Until they do, and since our competitors are active here, we have no choice Thursday to participate and try to do this in the most appropriate way by maintaining our bid list.
@ Bob, what is unfair about the fact that hotels do not like distributors to bid on their hotel name? What is unfair about hotels wanting to include a clause in their contract making their relationships with OTA a win-win situation?
The policy might be Google’s, but the execution is with the OTA that are bidding on brand names.
It seems you are making great efforts to be a hotel friendly distributor.
The challenge is of course if every OTA says, but the others are advertising, so are will we. We won’t get anywhere.
As mentioned many OTA are cooperating. There is a few out there that aren’t.
However I think it is important hotels are made aware on how they are loosing out in direct sales…
We believe OTA are a great channel for hotels to distribute their inventory to consumers they might otherwise not be able to reach. But they need to manage and control the distribution realtionship well.
This article is meant for hotels to open up their eyes…
At the risk of repeating myself nothing in hotels wishing to control their own distribution is unfair. I was pointing a finger at you laying the blame on otas particularly someone like us who maintains a do not bid list. Hotels should definely take their marketing into their own hands but their problem exists not because of otas, but because Google allows the practice. In a rational market the otas will play and those of us who find the practice suspect have no choice. Hence I repeat the accusation that your article is unfair and Google should be your target.
@ Bob, read the paragraph on Google, Yahoo and Bing, their role are certainly being questioned here.
As we also comment many OTA have given us positive feedback and are willing to cooperate, on the basis of an equal beneficial relationship that is fair and makes business sense.
Google not willing to mediate in this practice as it makes them advertising money however is not an excuse however for certain OTA’s to advertise on hotels brand names and trademarks. The fact that Google doesn’t enforce it doesn’t make it legal or acceptable
.
You should not be exceeding the speed limit when driving your car, regardless if there is or there isn’t any radar control either…
To cut is short, this article is a wake up call to hotels to make sure they understand better which OTA are more hotel friendly than others… and some are just great with as well
Unfortunately a few are flexing their muscles and want to control the hotel’s rates, inventory and distribution more and more…
Srry for spam. Last post is correct. I blame apple this time!
I’m now not sure whether you’re deliberately ignoring my feedback. However what you’re proposing would result in what i think is the opposite of what you want to achieve. To extend your speeding analogy. If all of us comply with the speed limit except Expedia in their Ferrari then will win the race. Since they have publically stated they will not comply then you’ve handed hotel bidding to the company who most abuses this practice and demands the highest margins. That seems contradictory to your wish.
Regarding rallying cry then had you simply given advice to hotels on promoting their site you would have had my wholeheartedly support. However you chose to take a pot shot at OTAs in general, with minimum reference to Google and you should therefore expect someone to point out the flaws in your thinking.
@ Bob, sorry but hotels have to clean up all to drive more direct business including all OTA. This means we have to start somewhere
. And going left or right down the path, the objective for hotels is the same.
Not starting to clean up the bidding on the brand names because some may not comply at first hardly seems a productive approach.
And hotel should have the choice if and when the bid of their own brand name. It should not be the condition for OTA to refrain from this practice.
Hotels have to include clauses in the OTA contracts to achieve this. Why this route instead of going through Google only? It is more fast and effective and takes care of the problem / challenges at its core.