Joe Roman, head of paid search at agenda21, aggregates Google Search Trends for the travel sector
This year we’re seeing an acceleration in the inevitable shift from desktop to mobile devices. But that’s not the only challenge for travel brands who have traditionally dominated paid search advertising.
OTAs are aggressively targeting the diminishing opportunity. So, is all lost for travel brands advertising directly? Is it time to pack up? Not at all. Travel brands can still offer holidaymakers things the OTAs cannot.
We knew the mobile shift was coming (after all, the Ten Commandments were written on two tablets) so it’s not a surprise that people looking for holidays or travel information are using “portable” devices more and more often during the “journey” towards a booking.
We’ve aggregated the Google Search Trends for the travel sector and you can see that the mobile/tablet share has doubled to nearly 40% of searches in the last 12 months.
As mobile and tablets eat away at desktop search volume, inventory levels are falling which means that desktop Cost-Per-Clicks (CPCs) are only going in one direction, and that is up.
Diminishing numbers of “desktop only” users also means paid search is becoming more difficult to track, and ultimately more difficult to quantify.
That means it’s harder to make the case for investing more in search engine marketing as the channel struggles to meet a brand’s ROI targets.
And into this complex and challenging market have come the Online Travel Agents. OTAs are building their own brands in their own right and their tactics have only added to the issues faced by the independent travel search advertiser.
What are OTAs doing to impact travel brands?
What once were considered friends, OTAs, with their sophisticated, deep-pocketed approach to paid search, are beginning to dominate the generic search space.
Following are the results of a Google search – for “hotels in York” which shows that of the eight results, six are taken by OTAs.
Not only do they dominate generic space, but there is definite leakage into hotel brand space as well:
With OTA ads mimicking the brand advertiser, particularly where the search term combines the brand and the location, hotel brands are losing share in their own brand space.
Part of the problem is with Google, who have effectively washed their hands of the trademark issue here, and you could argue, it’s justifiable, since the OTA probably sells inventory supplied by that hotel brand, or at least offers a selection of relevant alternatives.
Another argument could be that in particularly competitive areas, the OTA potentially helps alleviate competitor bidding by making it more expensive for a competitor to bid in that brand space.
When it comes to price comparison, one example is that the price offered on Booking.com is the same as the price on the Premier Inn website.
For a consumer there is little motivation to buy directly from the brand . Worse, this increases the incentive to explore the choice that an OTA offers, with the ability to directly compare prices between different suppliers.
Some OTAs also offer their own loyalty points scheme. This is a smart move, particularly in a situation where the user has a bad experience with the end supplier. Loyalty to the OTA itself is unlikely to be impacted.
OTAs also have prominent remarketing strategies and are showing their willingness to invest more to safeguard the booking. This is interesting: the OTA will be making a lower margin than the direct advertiser and yet is still prepared to invest additional spend in remarketing.
Although the OTAs will often have larger overall budgets, a booking directly with the hotel would surely be worth more. Travel brands definitely have room to manoeuvre when it comes to focussing their efforts on following up the initial engagement to make sure they get the booking.
What can travel brands do to fight back?
Despite the bleak outlook, all is not lost and there are plenty of options for travel search advertisers. The following five tips will help bolster your paid search effectiveness:
Add Value: When it comes to competing with OTAs, brands must focus on the tangible benefits that the “direct booker” can get their hands on, and make this prominent in their offering. Whether it’s free wifi, a free newspaper in your room or a complimentary drink when you board, test what resonates with customers. These small benefits will help generate repeat buyers.
Remarketing: Travel brands own the inventory. Whilst this brings its own pressures, it also can give brands margin flexibility. The user purchase process in travel can be long and contain several touchpoints, including interaction with both the brand and an OTA. Once the initial click has been paid for, the advertiser should assess the value of that user, and try and win that traffic back through search remarketing. Remarketing Lists for Search Ads (RLSA) can help concentrate budget on engaged audiences, rendering better ROI.
Extended conversion tracking window: The purchase process is generally being longer than it is in other vertical sectors, so it’s worth extending the Adwords conversion by up to 90 days. This will ensure keywords get a greater chance of getting credit for a conversion.
You own the inventory: So tie inventory in with your bidding strategy. Offset an inflated Cost-Per-Ccquisition by shifting soon to be redundant inventory. Lead time between click and conversion can vary, therefore attempting to tie available inventory to a bid strategy can be difficult because you don’t know when the customer is looking to book. Where last minute inventory is available, however, advertisers should be looking to invest more and reduce the opportunity cost of losing that revenue.
Understand the three screens: Start using Adwords Cross Device Tracking. Given the shift in search behaviour, advertisers should be investing more in mobile. However, although users are searching more on mobile devices, the rate of conversion on mobile has not yet caught up. Cross-device tracking uses samples of logged in users, and scales this up to give an idea of what user search behaviour is like across different the devices.
Bonus tip!! Use relevant, focused adcopy: A fairly fundamental tool in the armoury, however focus on what the user has searched for and try and respond with an ad that will provide them a solution to their query, if you can’t do that, you probably shouldn’t be bidding for that keyword. Given that ad extensions, which allow you to show extra information, are now factored in to ad rank, these must also be relevant and up to date.