Google Hotel Ads Bidding Made Simple

Google Hotel Ads bidding and optimization can be a bit confusing at first glance because it differs from most biddable channels out there; especially from other metasearch channels.

In this post, we’re going to break down Google HPA bidding and show you strategies to target the guests you want: whether it be by country, device, or even length of stay.

Bid Types and Price Buckets

The first factors that Google uses to determine if your ad will show up are availability and room rate. Google constantly updates a cache of your availability and room rates and factors it into every search. If there is availability in the date range searched, Google then gathers all of the offers and puts them into groups based on their room rate.

In each Hotel Ads occurrence,  participating itineraries are split into four groups based on room rates following the price bucket system. The most competitive prices are in group one while the hotels that do no meet a reserve bid are in group four. Check out this blog post  if you’d like a better understanding of the Price Bucket System and how to use it to optimize your bidding strategy.

The effective bid each hotel has is then used to determine where an ad will rank within each price bucket.  Determining the effective bid for a given search is where things can get a little tricky.

A base bid is applied to each property you have listed in Hotel Price Ads. There are two ways Google allows you to input a base bid: as a flat CPC or as a percentage of the room rate. Flat CPCs are great if controlling costs is your priority, but are often not as competitive and dynamic as percentage based bids since they move up and down with room rate.

Effective bid = base bid (flat or percentage * room rate)  * Bid Multipliers (at least one, up to four)

 

Bid Multipliers

Multipliers are  applied to the base bid to determine their effective bid before they are ranked. You can use these multipliers to either increase or decrease your base bid. This is an invaluable optimization tool and allows for laser focus in your bidding strategy and target the exact users you want to go after.

SearchType

There are four potential Google pages your ad can show on: Hotelfinder, Placepage, Localuniversal, and Mapresults. For an in-depth look at each one, check out our blog post.

User Country Multiplier

The user country multiplier allows you optimize your bid based on the country where the click took place. An important thing to note   here  is that it has nothing to do with the location of the hotel itself, only the country where the click took place.

Stay Length

Thoughtful stay length multipliers are pivotal in reaching your ROI goals.

Because more nights booked equals more revenue for the hotel, the length of stay the user chose in the search is a multiplier in calculating the effective bid. For example, a hotel room with a 5% percentage base bid and a $100 room rate searched for one night would have a $5 effective bid. If the user made the same search for a three night stay, it would have a $15 effective bid.

Google supports searches up to 14 nights; this can lead to very high effective bids, and therefore CPCs. We’ve seen seen a single click cost $250 in an unoptimized account.

One important thing to note is that the longest length of stay multiplier you have set will be applied to all length of stays after that. For example: if your only length of stay multiplier is .75 for two night stays, it will also be .75 for three nights, four nights, five nights, and so on.

Device Type

Google reports on three device types: Desktop, Mobile, and Tablets. However, Google currently supports multipliers for only Desktops and Mobiles. Data shows that users spend and book differently on each device, so having a targeted strategy for each is important.

Example

Joe Travelman lives in Toronto and is searching for a 2-day weekend getaway down in Florida on the big fancy screen of his new iPhone 6 Plus. He searches for “hotels in Miami” on Google and receives a number of great options through the sleek Localuniversal mobile interface. He finds a hotel he likes: Hotel Miami for $149/night.

Let’s break down all of the multipliers that went into  his ad occurrence and how the effective bid was calculated for Hotel Miami.

Hotel Miami Multipliers
Base Bid(percentage) 5
Localuniversal Multiplier 1.5
Canada Multiplier 1.25
Two night stay Multiplier .75
Mobile Multiplier .9

Calculatingeffectivebid

Other Considerations

Second Price Auction

Like Google AdWords, Google Hotel Ads operate under a 2nd price auction model. This means that the winning bidder will only pay a small amount (say,  $0.01) more than the 2nd place bid. And the 2nd place bidder will only pay a cent more than the 3rd place bid, and so on.

Rank Effective Bid Actual CPC Paid
1st $15.00 $8.01
2nd $8.00 $5.01
3rd $5.00 $4.01
4th $4.00 $4.00

 

Promotional Ad Slot

Google recently introduced a promotional ad slot in the Hotel Finder. The promotional slot contains up to two featured hotels with a call to action directly to the Brand.com booking page of the advertiser. These ad slots are not yet biddable and are selected internally by Google to appear there.promotional_ad_slot

Putting It all Together

Taking advantage of the granularity the bid multipliers provide and optimizing down to that level is key to running a strong campaign in Google Hotel Ads. Koddi makes it easy to analyze your return by country, search type, stay length , and device type; making data-driven bidding decisions quick and painless.

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