Google has all the tools, including a giant search engine, to make its mark in hotel metasearch and its competitors are starting to really feel it. The only hope for rivals is a hail Mary to regulators — or to focus on being faster and better.
Metasearch competitors such as Kayak and Trivago have been anticipating that Google would almost inevitably be coming on strong to eat their brunch — or take market share, that is — and Google’s surge appears indeed to be taking place.
In a new analysis of metasearchers Google, TripAdvisor, Trivago and HotelsCombined, hotel digital marketer Fastbooking said that Google Hotel Ads has “grown exponentially” annually “in terms of click volume and return on ad spend.”
Fastbooking, acquired in 2015 by Accor, crunches some 1.2 million transactions per year and assists hoteliers in their digital marketing campaigns. Its report is based on its clients’ data.
Fastbooking argued that Google is on the cusp of being one of the globe’s most important metasearch companies.
“Based on click volume, Google’s Hotel Ads matured in 2016, and today the click volume equals or surpasses TripAdvisor while keeping a very profitable return on ad spend,” the Fastbooking analysis said. “As Google is integrating the ads deeper into its search results, maps, and other products, it is poised to become one of the leading hotel metasearch providers in the market.”
For its hotel clients, Fastbooking estimated that their return on advertising spend using Google Hotel Ads has reached 10.1x so far in 2017, just edging out TripAdvisor at 10x.
Google Hotels Ads’ traffic volume is outpacing TripAdvisor hotel metasearch and so is the increase in cost per click.
Fastbooking characterized TripAdvisor as having “held the dominant position in metasearch advertising” over the past five years,” especially in areas of the quality of traffic and the revenue Google generates.
That may raise eyebrows among people who have been watching TripAdvisor struggle over the last few years first with its rollout of metasearch, which started four years ago in 2013, and later with the transition to Instant Booking beginning in August 2014.
Actually, Fastbooking was also taking into account TripAdvisor’s pre-metasearch features, including when it served up pop-under ads that referred users to partner advertisers.
At any rate, Fastbooking noted that “although TripAdvisor remains as one of the key channels on the market and is still one of the best-performing platforms for metasearch, its numbers have recently declined both in traffic volume and return on investment.”
It should be noted that the findings of Fastbooking, which is headquartered in France, might skew a bit toward Europe and Asia Pacific given its client base.
Nicholas Ward, president of U.S.-based digital marketing platform Koddi, which helps companies with their metasearch campaigns, said Fastbooking’s findings “mostly line up” with trends he’s seeing in Europe, Asia Pacific and parts of South America, although there are exceptions.
For example, Ward characterized the growth of Google Hotel Ads as “growing by multiples, not exponents.”
Trivago Effective For Inbound Traffic From Europe
Fastbooking likewise found that the costs per clicks, or CPC, that Trivago charges are “the lowest of the metasearch providers” and fell dramatically from $0.42 (0.39 euros) in 2015 to around $0.25 (0.23 euros) in early 2017.
“The one thing that jumps out at me as not indicative of global activity is the Trivago CPC trend, where I think the overall story is that CPCs are more flat to up based on increased competition in big and expensive markets,” Ward said.
All of those Trivago TV ads trigger lots of traffic for the hotel-search site’s advertising partners, Fastbooking found, but many of those users are not ready to book.
“From a budget management perspective, this is a platform that requires careful observation and management,” Fastbooking states. “We have seen massive traffic increases each time TV ad campaigns are launched. However, the conversion rate is relatively low.
“To ensure that budgets are not depleted, we recommend hotels to make sure that their budgets and bids are properly managed for maximum returns. Small changes in bids (such as a single cent increase) can have a significant impact on impression share and can result in budget over-spend.”
HotelsCombined Is Vital In Attracting Travelers From APAC
HotelsCombined has focused on the business-to-business market over the years, and is increasingly trying to develop its own consumer brand.
Fastbooking characterized HotelsCombined’s click volumes as being stable and its return on advertising spend as around 7.1x in 2017, a slight uptick from the previous two years.
“HotelsCombined is one of the most important metasearch partners for our hotels in this area,” Fastbooking said. “One of the first companies in the hotel metasearch market, HotelsCombined delivers an excellent return on investment for hotels targeting travellers going to Asia Pacific, Australia, and New Zealand demographics.”
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Photo credit: Google Travel's VP of Engineering, Oliver Heckmann (left), spoke with Skift's Dennis Schaal at Skift Forum Europe in London on April 4, 2017. Google's Hotel Ads is growing rapidly, a new report finds. Skift