Here’s how the OTAs are outspending hotel brands on paid search
Expedia, Booking.com, Kayak and Hotels.com are prolific spenders on Google AdWords, regularly logging in the top fifty search engine marketers by spending an average of $67,250 per day. And that’s just on Google.
So how does this ad spend play out across all search engines, including Bing and AOL?
Specifically, the analysis looked at PPC ads that were triggered by hotels’ branded keywords – such as “New York Hyatt.”
The findings show just how much the online travel agencies are outspending hotels, using their breadth of inventory and depth of pockets to deliver more in-bound paid clicks. In short, this study says that OTAs are indeed bidding against hotels in ad auctions – and are paying handsomely to rank concurrently or higher than hotel brands.
- On Google, each page averaged almost two OTA ads – 1.82 per page.
- On Google, Bing and AOL, OTA ads outnumbered branded hotel ads – but not on Google Mobile. Unlike the widely varying OTA ads per SERP, the brands’ own ads appeared at a relatively consistent rate across search engines. This figure hovered around 1 brand ad per SERP, with 0.99 on Google, 1.05 on Bing, 1.03 on AOL, and 0.88 on Google Mobile.
- On Bing, 87.5% of OTA ads included the trademarked name of the searched brand.
- On each search engine, OTAs placed first well over 50% of the time that brands did not appear in that #1 position.
- Actual hotel brands did not appear in the #1 ad position 23.6% of the time on Google Mobile, 15.9% of the time on Google, 17.4% of the time on Bing, and 24.9% of the time on AOL.
As far as the number of ads per results page, the difference between each search engine is indicative of differing amounts of ad inventory:
Paid search listings for hotel brands are clearly eclipsed across all search engines – except for on mobile, which reveals a solid lead for hotel brands.
This is likely due to the instant nature of mobile, where users might be seeking to contact a hotel directly rather than wade through an OTA’s more diluted interface. Hotels might also have an opportunity to deliver direct last-minute bookings via paid search on mobile.
The use of trademarks is a contentious issue that shows no sign of abating – OTAs are aggressively bidding against trademarked hotel terms, most especially on Bing.
Of course, this all makes sense as OTAs generally have lower overhead requirements with larger margins than hotels, and therefore can afford to spend more money on the inbound marketing that drives business.
As the report points out, this is simply an important piece of the marketing puzzle that individual hotel brands must both be aware of and act on as needed with their OTAs.
“In certain situations, brand bidding OTAs can be useful to the brand—ensuring that a potential customer doesn’t book with a competitor. In others, it may be harmful—reducing the brand’s traffic and direct bookings. Determining how to properly balance this is beyond the scope of this study; that equation is left to be worked out by hotel brands and their OTAs. However, the data from this study should help inform hotel brands in particular as they adapt their PPC strategies and optimize their relationships with OTAs.”
The full report can be downloaded here, and includes thoughtful analysis of what ranking differences of specific brands on search mean for hotel brand paid search strategy.
NB: Hotel search image courtesy Shutterstock.
Nick Vivion was a reporter (and later also global events lead) for Tnooz between August 2012 and July 2015. He was the launch co-founder of Booty's, a global street food restaurant in New Orleans and now is AVP Operations, North America at Zomato.