Hotel Price Ads 101

Hotel Price Ads (HPA) is an online hotel booking tool by Google in which travel agencies, hotels, and meta-search sites can advertise their prices and draw traffic to their site for a customer to complete the booking process.  HPA is designed as a pay-per-click auction model, much like AdWords, where bids are placed to compete for traffic.  There are 4 different areas within the Google ecosystem where travelers can enter an advertiser’s site: Hotel Finder (found by clicking on the list of hotels in the search results), a hotel’s Google+ Page, Local Universal (usually found by clicking on the hotel carousel at the top of some search results pages), and Maps.  Hotel Finder was also recently rolled out on mobile.

Hotel Finder:

Google+ Place Page:

Local Universal:

Maps:

The Auction

For each hotel property, Google gathers all advertisers who submit a price, place each advertiser into a price bucket by grouping similar prices, and then ranks advertisers within each bucket by bid to determine the order in which prices are displayed.

It is possible for a slightly more expensive hotel to rank higher if the bid is higher due to the price bucket grouping.  For example, if Advertiser A submits a hotel rate of $100 and a bid of 3% and advertiser B submits a rate of $105 and a bid of 3.5%, then it’s possible that Google would place B above A since the bid is higher and the prices are similar.  The highest ranked advertiser, when clicked on, only pays a price that is incrementally higher than the second highest bid.

The best-priced retailer doesn’t automatically get impressions, so it is very important to develop strategy around that.  Bids can be set by multiplier at the site level, the property level, and even the country of search origination to capture the most qualified traffic.   We expect bid multipliers based on room type and length of stay to roll out in the near future.

The Feed

Prices are submitted to Google by a feed.  The feed contains information such as the hotel ID, address, rates over the next 90 days, and the more sophisticated feeds are taking advantage of the capability to advertise prices based on room type.

This is particularly advantageous because it is possible (for example) to have the best advertised price on a hotel, draw traffic to the site, but for the customer only to find out the advertised price  is a twin bed when the competition was advertising prices for two doubles.   It’s important to offer as much detail as possible before a customer clicks through to the site in order to qualify traffic and minimize wasted spend.

Your feed should be sent to Google every time that there is a price or availability change on a property.  We cannot stress enough how important it is for the feed pricing to match the prices on the site.  Otherwise, it could be disastrous from an optimization standpoint. That’s because the true ROI can’t be determined for a given property when valid clicks can’t be separated from clicks that occurred from stale pricing.

Optimization

The nature of HPA reporting is always next day; real-time reporting doesn’t exist yet.  Google Analytics can be used for directional insight, but we recommend using Koddi to manage HPA campaigns.  You can get more info here:  http://koddi.com.

Hopefully this overview has whetted your appetite and shown you what’s possible with HPA. It’s an exciting program and as Google scales up, it will offer hoteliers and suppliers a great way to generate profitable bookings!