The Power of Brand Campaigns
There are various strategies in advertising on Google. At Influence Society, we define two main ones. Brand campaigns and Conquest campaigns.
Branded Keywords
Brand Campaigns are mostly search-result ads that target brand-related keywords. Brand-related keywords are keywords that include the name of the brand, for example "Ritz Hotel Paris". Targeting these keywords ensures that if potential guests search for your hotel name on Google, your direct website pops up on top. Usually people searching for exactly your hotel name have previously heard about you, and are likely to click to your website link.
Why Paid Keywords Matter
With decent Search Engine Optimisation (SEO), your hotel already ends up on top organically. So why would you pay for branded keywords? Organic search results based on SEO don't change often, as you most probably don't change your website's SEO fundamentals on a daily basis. Paying for the top spot on branded keywords gives you the flexibility of showing adaptive texts based on who's searching. This results in a more personalised showcase of your brand to warm leads, making the results more relevant and appealing to whoever is searching.
Mainly due to the above reasons, the cost per click (CPC) in brand campaigns is traditionally low. However, our data shows an average increase in CPC of +30,59% when comparing February 2024 to February 2023, hinting to increased competition in branded keywords.
Understanding the Surge in CPC Costs
Targeting brand keywords is useful for OTAs as it might put their links above the direct hotel websites in search results, leading guests to book with secondary distributors instead of directly with hotels. The rise in CPCs as illustrated by our data is most likely a result of increased bidding activity on brand keywords by OTAs. To illustrate, in 2021 Booking.com and Expedia together spent 2.9 billion USD on Google performance ads. Their budget is likely to grow, and they use these budgets aggressively in targeting brand-related keywords. This means that competitors like OTAs are 'stealing' views and clicks from searchers that were specifically looking for you, which likely results in bookings going to OTAs instead of you directly.
(Re)claiming the Top Spot
To increase the likelihood of ending on top in search results it is important that your ad is of high quality and relevance. Ad titles should visibly include the keywords you are advertising on, and the landing page should clearly cover those keywords as well. Google gives a metric for this, called "Quality Score" presented on a scale from 1 to 10 (poor to excellent). Keep an eye on this metric and attempt to implement Google's tips on raising the quality score. This is also valid for Conquest campaigns.
Even though your ad and landing page are of good quality, you might still lose clicks to other advertisers on your branded keywords due to budget constraints. Google will show what percentage of searches you didn't appear due to a low budget in the column "Search lost IS (budget)". This is also the case in Conquest campaigns. If OTAs are willing to spend more per click than you are, they might win warm leads. In order to win back some bookings from secondary distribution channels, it is advisable to check the agreements you have with them. If your agreement does not include rate parity clauses you could consider raising room prices on non-direct distribution channels to motivate guests to book directly with you for a competitive price. A minimum length of stay for OTA bookings could also be an effective way to control the quality and profitability of bookings coming from secondary channels. Other basic strategies to make direct booking interesting still apply, more on that later.
Beyond The Brand: Conquest Campaigns
The second type of campaign, Conquest, means targeting keywords that describe (aspects of) your hotel. For instance, keywords could include "5 star hotel paris", "luxury suite paris" or "hotel paris 1". Competition on these keywords is likely to be higher than on your brand keywords, as there is not just one hotel advertising on the keyword "5 star hotel paris". For OTAs conquest campaigns are especially interesting as potential guests who look for such broad keywords are in 'discovery mode', and are looking for information on various hotels. Broad keywords are generally used by searchers who don't know where to stay yet, and might believe famous OTAs like Booking and Expedia will provide them with the best deals.
As a result of rising competition for first place in search results, advertisement costs rise. Google works like an auction, and more demand means they can sell ad places more expensively. Our data shows a considerable rise in Cost Per Click (CPC) since February 2023 (+30.59%), particularly affecting luxury hotels gearing up for the Olympic Games. This means hoteliers might have to reassess their digital marketing budgets, as bigger budgets are required to maintain visibility in search results.
Get Keyword Creative
Besides considering if a higher advertising budget is worth the investment, other more creative Ad strategies could be implemented. For instance, advertising on more specific out-of-the-box keywords. Instead of targeting "hotel Paris" you could target "family hotel with pool Paris". Our data shows promising early results with adding long-tail (multiple word) keywords to the list. Generally they are likely to have lower CPCs as competitors are unlikely to be advertising the exact same combination of words. By trying out creative keywords you might even discover markets you didn't know existed. Regular analysis of campaign performance, search trends, and competitor activities remains crucial. Use Google Analytics and other tools to track the success of your campaigns and website traffic. Be prepared to adapt your strategies based on what the data tells you.
Foundation First: the Value Proposition
Before losing yourself in the details of Google Ads and the different ad campaigns, reconsider your value proposition. Does it match what the target market is looking for? It's important to have the basics in place to optimise direct bookings. What makes direct bookings at your hotel more attractive to your target market, and what should be added or changed? What direct-booking benefits do you have in place (complimentary breakfast, room upgrades, late check-out, …)? Booking directly at your hotel could come with priority access to high-end venues showing the games on the big screen. Arranging VIP transport options to and from Olympic events might also be a great way to add value.
OTAs succeed in making the booking process as comfortable as possible, so you should too. How is the browsing experience on your website? Is the website optimised for mobile? Can key information about your hotel be found quickly? Is there a clear funnel towards check-out, naturally guiding visitors through the booking process? Is your booking process simple and transparent? Competing with OTAs on Google Ads has a much higher chance of success if the basics of your value proposition are in place.
Creative Collaborations: Visibility Beyond Google Ads
Besides Google Ads, hotel marketers should consider other ways to increase the visibility of their product. The current highly competitive advertising environment demands a creative re-evaluation of your marketing strategies. Both on- and offline.
Hotels could work together with other businesses such as event spaces to set up a combined offer. Agreeing on package-bookings with airlines could also place your property in front of the right audience. Collaborative marketing efforts can increase reach and offer guests a more comprehensive experience, from flights, to accommodation, to dining and activities.
Promoting your offer through generally under utilised channels might also be effective. Dust off your email lists and send personalised communications to past guests. Highlight exclusive offers, Olympic-related packages, or events at your hotel. An effective email campaign can re-engage past guests by emphasising the convenience, amenities, and unique experiences your hotel offers during the Olympic period.
Use social media platforms to share stories, special promotions, and behind-the-scenes looks at your preparations for the event. Content that resonates with the Olympic spirit, such as athlete endorsements or guides on enjoying the Games can enhance your visibility and appeal. Engaging influencers or local celebrities to share their experiences at your property before the Games can also amplify your reach. Some hotels are effectively including the Olympic Games as part of their marketing approach. For instance, the Shangri-La hotel in Paris has a dedicated landing page and a humorous marketing campaign. The Lander apartments, also implemented a special mention to the Olympics on their website.
Measuring Success in Google Ads
Let's go back to Google Ads. How do you know they are effective?
Let's assume an average commission rate of 20% on OTAs. If you were to sell a room through Booking for 100€, you would receive €80. This effectively cost you 20€ to 'gain' a 100€ booking: an ROI of 5. When advertising on Google Ads internally, you need to consider operating- and overhead costs related to running the marketing department. When working with an agency, you need to consider agency costs. An ROI of 5 will then only cover the ad spending, but does not take into account peripheral expenses. Therefore, at Influence Society we strive for an ROI of at the very least 8 as it means you made back the investments and costs, with a healthy profit on top. Note: our average ROI in February 2024 was 19.2.
Final Thoughts
In anticipation of the 2024 Olympic Games, visibility in search results becomes fiercely competitive. The substantial Google Ads investments by OTAs like Booking and Expedia make a strategic adaptation of your digital marketing approach crucial.
To conclude, hoteliers should consider a holistic approach to digital marketing, recognizing the intense competition and unique opportunities this event presents. Leveraging both brand and conquest campaigns effectively will require innovative thinking, strategic investment in ad spend, and a keen understanding of the changing digital landscape. Additionally, fostering partnerships, optimising direct booking incentives, and utilising creative ad strategies will be crucial. Ultimately, a focus on delivering personalised guest experiences and maximising visibility on Google Search will not only drive competitiveness but also ensure long-term growth and brand loyalty beyond the Olympic period. This comprehensive approach underscores the importance of agility, strategic planning, and a customer-centric focus in the highly competitive hospitality industry.