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TripAdvisor is back as an advertiser in Google Hotels, and so are its user reviews despite the company’s long-standing protests that Google unfairly emphasizes its own travel businesses to the detriment of competitors.
Speaking at a Goldman Sachs technology conference in New York City last month, TripAdvisor CFO Ernst J. Teunissen said the company has been advertising in Google Hotels, and will invest in that marketing channel “as long as the ROIs (returns on investment) are good.”
Teunissen said Google Hotels is a “relatively small channel for us in the grand scheme of things, but one where we have been investing.”
None of this is earth-shattering in terms of business impact, but it opens a window into the sometimes-cantankerous Google-TripAdvisor relationship. It also sheds light on why comparison-shopping sites see opportunity in advertising on competitors’ comparison-shopping sites.
When metas advertise or don’t on other meta sites
Consider some background about this: Google Hotels is largely a metasearch engine, as is TripAdvisor. With some exceptions, online travel agencies and hotels brands advertise their rates in Google Hotels through paid links; consumers select those links on Google, navigate to the advertisers’ sites such as TripAdvisor or Kayak, and then transfer anew to an online travel agency or hotel site to complete their bookings in classic metasearch style.
It’s tiring even to describe that scenario, let alone to hop around from site to site to site if you’re a traveler trying to book a hotel.
Starting in April 2016, Google permitted TripAdvisor to advertise in Google Hotels when TripAdvisor posted hotels rates that could be booked directly on TripAdvisor. Other metasearch sites such as Kayak, Trivago and HotelsCombined, for example, weren’t allowed to participate at that time when they didn’t offer such direct bookings.
TripAdvisor, though, had been allowed to participate in Google Hotels because during this period TripAdvisor was operating as a quasi-online travel agency in processing a lot of hotel bookings on its own site instead of transferring users to third-party advertisers to make their bookings. TripAdvisor, therefore, was only advertising such instant booking links in Google.
But in mid-2017, TripAdvisor scaled back its Book on TripAdvisor feature, putting renewed emphasis on the classic metasearch scenario of referring users to third-party hotel and online travel agency sites for bookings. It apparently went dark on Google Hotels, or if it participated at all it was on a miniscule scale.
But about a year ago, Google modified its approach and decided to allow metasearch sites to advertise in Google Hotels when they offered links that didn’t require users to reenter their dates and the hotel name. So TripAdvisor, Kayak, and Trivago, among others, are now participating in Google Hotels.
Google found that its Google Hotel users reacted positively to having metasearch advertisers such as TripAdvisor, Kayak and Trivago present their rates as long as it was a relatively smooth user experience.
When metasearch engines such as TripAdvisor, Kayak and Trivago advertise in Google Hotels they are playing an arbitrage game in the quest for a positive return on investment. For example, Google might charge TripAdvisor $1.48 when a user clicks on a TripAdvisor link for a Boston hotel. If it turns into an instant booking on TripAdvisor, then the company might collect a 5 percent commission from a hotel, for example. But, in the more common example, if the user navigates from Google Hotels to TripAdvisor and then clicks on an Expedia link there then TripAdvisor might collect $2.10 from Expedia for the referral.
That’s a positive return of 62 cents compared with the $1.48 that TripAdvisor paid Google for the link.
TripAdvisor’s user reviews began running in Google again, as well, about a year ago. Deals to show user reviews on Google are independent of participation in Google Hotels.
So why does TripAdvisor participate in Google Hotels when it has long-standing objections to the way Google does business in terms of funneling consumers into its own products to the detriment of competitors.
“Our concerns about the practices of dominant search engines and their negative impact on consumer choice are widely known,” said Rebecca Southern, a TripAdvisor spokeswoman. “However, we continue to look at all advertising channels to get our brand in front of consumers as a part of our marketing mix.”
Google played up the positive elements of their relationship.
“TripAdvisor is a long-standing and valued partner,” a Google spokesperson said. “We work closely with them through our Hotel Ads program to provide Google users with bookable content, and separately, we work with them to display comprehensive hotel reviews.”
In the above screenshot from Google Hotels, you can see a $61 rate from TripAdvisor for The Mansion Resort Hotel & Spa in Bali for a November 9 stay. This link leads to a potential instant booking on TripAdvisor although many of TripAdvisor’s paid links in Google are for classic metasearch referrals to third-party sites.
Why would metasearch sites such as TripAdvisor, Kayak and Trivago want to subject their customers to such a booking obstacle course? Well, these travelers may not be their loyal customers yet; the hope is for a positive return on investment in the quest to acquire customers on a repeat basis.
All roads lead to Rome
Asked about the user-experience issue when metasearch sites advertise in other metasearch sites such as Google Hotels, Kayak co-founder and CEO Steve Hafner said: “All roads lead to Rome (which is a hotel reservation). Hopefully, some consumers will prefer going directly to Kayak for their next trip. But others prefer a more meandering route.”
TripAdvisor review snippets are also back on Google after a multi-year absence. Reviews from Booking.com users appear on Google, as well.
When a user clicks on a TripAdvisor hotel review in Google hotels, they get transferred to TripAdvisor, and to a calendar to input their dates.
Nicholas Ward, co-founder and president of Koddi, which provides analysis for brands looking to advertise on metasearch sites, said some of his hotel and other clients initially expressed concern when they saw sites such as TripAdvisor, Kayak and Trivago participating in Google Hotels.
“At first we saw a lot of concern from clients, but it doesn’t seem the impact is too large yet,” Ward said. “The trick for them — and all the metas on metas, I think — will be differentiation and value if they want to make a dent long term. Until then, I think we’ll see them all participate with each other at varying levels. If it’s just an arbitrage game, I’m not sure how sustainable that is long term.”