Google has launched an new ad format called Google Hotel Price Ads.
Hotel Price Ads feature hotel prices and availability next to organic results on Google search results, Google Maps, Hotel Finder and Google+ Local.
The below screenshot shows the search results for “Hilton Sydney” along with Hotel Price Ads on the right-hand side.
A click on the room rate in the ad shows a list of advertisers.
In this case Hilton.com, Priceline.com, Expedia.com and Booking.com are all bidding on the Hilton property.
The position of an advertiser’s listing is based on the room rate. The best rate is featured at the top of the list.
When two partners offer the same room rate their cost per click bids are taken into account to determine the ad position.
The user can select check-in and check-out date and click on the advertiser’s link to reserve a room on the partner site.
Here’s the search result for the same example on Google Maps (“Hilton Sydney”). In this case only the two best room rates were featured, Hilton.com and Priceline.com.
However, a click on the small link “2 more from $163” brings up the other two advertisers.
The bidding model for Google Hotel Price Ads
There are currently two main bidding models that advertisers can choose from, fixed bids and percentage bids.
In the fixed bid model, the advertiser pays a fixed amount per night selected on the form.
If the bid is $1 and the user selected three nights on the check-in form, the cost for this click is $3 (3 nights x $1).
In the percentage bid model, the advertiser pays a percentage of the total potential booking value selected by the visitor.
If the room rate is $100 and the user selects a three-night stay on the form the total booking value would be $300. With a 1% bid the cost for this click would be $3 (1% x $300).
Based on the bidding model and the ad ranking system it is obvious that the room rate is the most important factor for this ad format.
Having the best room rate will show your ads at the top of the list and generate the best click through rate.
Since most people shop by price, having the best rate will also ensure that your clicks convert well into bookings.
Case study
We recently launched a Google Hotel Price Ads campaign for one of our clients. Below is case study of the first three weeks of running the ads.
- Clicks: 698
- Cost Per Click: $3.15
- Cost: $2,199.92
- Bookings: 49
- Cost Per Booking: $44.90
- Total Booking Value: $13,255.00
Overall we generated $13,255 in revenues from an ad budget of $2,199.92. The average conversion rate of the campaign was 7%. Our average cost per click was $3.15.
While we are running other advertising campaigns that are generating a better ROI, the first three weeks of this Google HPA campaign definitely turned out to be a success. We will continue running the campaign for our client.
About the author
Stefan Maescher is an online advertising and CRO expert at Web Profits. He helps clients achieve maximum ROI by optimising advertising campaigns, improving web design performance and running data-driven experiments on every part of the online marketing funnel.
