[Video] What is Target Return on Ad Spend (tROAS)?

With Google moving away from commission-based metasearch models (CPA), you’ll need a new strategy to maximize your hotel’s online visibility and bookings. Target Return on Ad Spend (tROAS) is one of five options available to hotels currently using CPA models. Find out more about all the options here. 

Target Return on Ad Spend focuses on optimizing advertising spend based on the value of conversions. We’ll take you through tROAS in this blog, or you can watch Nigel Haig, Triptease's Performance Marketing Director, walk you through it in the video below.

How does Target Return on Ad Spend (tROAS) work?

You specify a desired return on your advertising spend. This is your ‘target’. For instance, setting a tROAS target of 12X means you aim to generate twelve dollars in revenue for every dollar spent on ads. 

Google uses this target to automatically adjust your bids, aiming to achieve an average return that matches your defined goal.

How effective is tROAS?

tROAS is useful when your conversions from Google Ads are tied to measurable value, ensuring your ad spend directly contributes to your revenue goals.

At Triptease, we've been monitoring how a select group of hotels performed when switching from CPA bidding to tROAS. We saw that the number of bookings stayed roughly the same, but the return on ad spend decreased. This suggests that tROAS may not immediately offer the same level of efficiency that was achievable with CPA models. 

That said, it's important to interpret these findings carefully. This experiment has only been tracked since January and booking patterns can change dramatically over short periods. Additionally, customer booking behaviors are also quite different between January and February. There’s every chance that the performance data could change going forward.

What happens when you increase ad spend?

Our analysis also indicated that the more a hotel spends on ads, the better Google's algorithms might become at meeting your target. Hotels with larger advertising budgets tended to see improved results with tROAS over time. For hotels with smaller budgets, performance has been less consistent. Again it's important to note that this data is a snapshot from an ongoing experiment and as a result can only show current findings. These results may change over time. 

Triptease Metasearch outperforms Google and offers a commission model

Triptease’s industry-leading Metasearch product will continue to offer a CPA model. 
With Triptease Metasearch you get:

• More than five years of experience building AI-powered bidding models.
• Game-changing functionality like Price Match which allows hoteliers to win on metasearch every time by applying small, controlled discounts automatically when they’re being undercut by OTAs.
• The ability to utilize unique hotel data that Google doesn't access allows us to tailor our algorithms based on extensive global hotel data, enabling Triptease Metasearch to consistently outperform Google's algorithms.

Interested in learning more about Triptease Metasearch? Get in touch with the team today via the form below.