Is Metasearch Advertising Worth It?
When TripAdvisor first announced TripConnect, its metasearch advertising platform, it instantly became the buzzword of the year. Though earlier adoption was slow, it pushed Google to be more involved in the travel business. Recently, Google revamped the design for hotel search results, making people take metasearch advertising seriously.
So, the question obviously is this - how do independent and budget hotels benefit from metasearch advertising as part of the overall hotel marketing strategy?
What is Metasearch?
Not different from the usual definition of search engines, metasearch is a consolidation of traditional booking channels, more commonly called Online Travel Agencies (OTAs). The most popular ones are Booking.com, Expedia and HostelBookers.com. The primary difference between a metasearch engine and an OTA is that the latter contract directly with hotels to sell their inventories, while metasearch engines don’t.
Most metasearch engines use certain parameters, such as dates of stay, price, reviews, location and amenities, to display relevant hotels matching a set of preferences. As of now, Trivago, Kayak, Google Hotel Finder and TripAdvisor are the most popular metasearch engines in the travel industry.
How Does Metasearch Work?
Simply put, a metasearch website allows visitors to compare hotel prices from several OTAs and booking websites, in a single place. A hotel may have its prices listed on multiple OTAs, such as Booking.com, Hotels.com, Expedia etc. When a potential guest visits one of these websites to look for a hotel, its prices show up instantly.
However, every OTA also participates with several metasearch providers, such as TripAdvisor, Google Hotel Finder, Trivago and Kayak. When a potential guest visits a metasearch website to look for a hotel, he or she can view prices listed on different OTAs in a single place.
Some metasearch websites also display prices from smaller tour operators, and even official hotel websites. This allows travellers to compare several prices from different websites to make an informed choice. Once the person finds a good deal, he or she can click the link, which leads to the original source (hotel website or OTA). The hotel or OTA pays the metasearch website a Cost per Click or a referral fee.
On TripAdvisor and Google, users can now instantly book a stay. Both TripAdvisor and Google receive a commission from the hotel. Since the user doesn’t have to shuffle between multiple websites, the booking experience is easy and seamless. Metasearch websites have started using revamped marketing strategies and seamless design to get more customers on-board.
What Budget Do You Need?
Budgeting for any revenue channel is a crucial task. How much do you really invest to get a positive ROI? When it comes to metasearch websites, cost depends on your property type, location, competition in the area etc. In order to achieve proper visibility and bookability, you need insights for several parameters. To know more about what might impact your ROI, get in touch with us for a free consultation.
While OTAs are indirect booking channels that build relationships with your guests, metasearch websites aren’t primarily booking channels. Instead, they’re advertising platforms for hotels and OTAs to market inventory.
Since most customers are price-sensitive in a competitive market, metasearch websites have the perceived advantage of being a one-stop-shop, or a way to research hotels available for desired dates. Moreover, potential guests can also compare prices, read reviews and view images to make an informed booking decision.
1. Reduced Cost per Booking
Most OTAs, such as Expedia and Booking.com, are charging booking commissions ranging from 15% to 30%, denting hotel profits to a greater extent. On the other hand, metasearch websites operate on a different business and pricing model. A hotel needs to pay on a Cost per Click or Cost per Acquisition basis. Overall, hotels pay much less per booking, and can keep a greater share of profits. For instance, TripAdvisor works on this model, and charges only 12-15% per booking. In fact, it also guarantees a 25-50% visibility in search listing.
With Google Hotel Ads program, the search engine giant has also jumped on this model. Focusing on hotel ads, Google runs ads deeper in the guests’ hotel search process. As potential guests narrow down their specific requirements, Google gives more visibility to relevant hotels, leading to high ROI and better conversions.
Hotels can choose an OTA-like CPA model or the conventional CPC model. In both cases, the hotel owner receives the contact details of the consumer to build a stronger relationship with the guest.
2. Increased Visibility
Since 2014, traffic to metasearch websites has tripled. Due to the tremendous success of Google’s travel business and heavy spends of websites like TripAdvisor and Trivago, this isn’t likely to slow down in the coming years. With the increasing popularity of metasearch websites, hoteliers should use this hotel marketing strategy to their advantage.
3. Defend Your Interests
In 2016, Priceline Group (parent company of Booking.com) and Expedia spent $5.8 billion on advertising. 23% of this amount was spent on Trivago and TripAdvisor. Simply put, OTAs are focusing on metasearch websites to sell hotels. It’s a good time to claim your own presence on various metasearch websites, pay a lower commission, and also get the contact details of guests.
4. Own Your Guest Data
Using metasearch websites, hotels receive direct bookings, since these websites either integrate directly with the hotel’s booking engine or redirect guests to the hotel’s website. This allows hotels to receive guests’ information and other crucial data. With this data, hotels have the opportunity to market directly to guests, and even provide a better post-booking experience.
5. Diversify Your Marketing Strategy
Advertising cost to generate direct traffic continues to rise. Metasearch hotel marketing is a proven and cost-effective way to diversify your hotel marketing strategy. With rapid fluctuations in Google CPC costs for non-branded and branded keywords in certain markets, using metasearch websites is one of the most economical hotel advertising ideas.
Keys to Success
For beginners, metasearch hotel marketing can be complex to understand. Moreover, OTAs tend to dominate major platforms. However, regardless of the budget, if you choose the right platform, build a strategy, spend wisely, and look for an expert partner metasearch can provide you with better ROI and increased direct bookings.
1. Choose the Right Sites
Some metasearch websites provide better results than others. Depending on your hotel’s location, type of guests who book a stay, and the kind of experience you offer, it’s important to choose a platform that best suits your needs and target audience. Budget or small hotels should closely monitor their return on CPC/CPA spends on each website. This allows you to prioritize the channels you’re working with.
2. Use Technology to Your Advantage
For channel or revenue managers, the thought of managing another distribution channel may seem daunting. It’s even more difficult for hotel owners who don’t have much time or experience with CPC ads. However, using latest technologies and efficient booking engines and/or channel managers, you can easily manage several distribution channels in one place. Easy to navigate dashboards can help you instantly gather information about your return on investment.
3. Different Bidding Models for Different Platforms
Like it goes with all hotel advertising ideas, you can’t take a one-size-fits-all approach with metasearch hotel marketing. Experimentation and research are required to figure out how you need to bid on each website successfully. Contrary to popular belief, bidding for the top spot isn’t always the most effective approach.
While being in the top spot might get you more exposure and clicks, the increased traffic will cost higher per click. This can make a big difference to your overall ROI goals. Sometimes, targeting a slightly lower position can help you get a better return on investment. Similarly, there will be times when bidding for the top spot will make good sense. Hence, you need to constantly test different metasearch websites to discover a balance.
4. Price Parity is Crucial
Metasearch websites function like any other shopping website. People visit these platforms when they’re ready to book a stay. The primary goal is to look for the best deal. Thus, your room rates need to be spot on. Price disparity with competition is often the biggest reason for the failure of a metasearch campaign.
In order to strike a balance, you can either have the same price as everyone else, but rank higher in search results, or you can have a lower price than everyone else. It’s pretty straightforward. Isn’t it? It does take some time to perfect your hotel marketing strategy, and thus, working with experts is the right way to go about it.
6. Seek Professional Help
While channel and revenue managers working with chain hotels can leverage technology, independent hotels may struggle to scale up. It’s a good idea to outsource metasearch hotel marketing to an experienced and trusted consulting agency.
To stay competitive, metasearch is a necessity that you can’t ignore. If you’re not having a presence on metasearch platforms, you’re practically giving away direct bookings to OTAs. When implemented properly, metasearch can provide a good ROI, and can be effectively done within a specified budget.
The key to success is good understanding of multiple platforms, and focusing on utilizing certain metasearch websites that suit your needs and preferences. You also need to know specific geographical areas to target, and have a solid bidding strategy in place. By collaborating with an experienced metasearch partner, the journey can be a lot easier.
Benjamin was born in Lyon, France, with a insatiable thirst for adventure. He fell in love with Ireland and opened his first hotel in Dublin in 2008, experiencing first hand the lack of key in hand professional hospitality services tailored for independant hotels owners. HotelMinder was born not long after.
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