There's a massive difference between hotels and OTAs on metasearch

Why does metasearch matter?

That's the question with which we opened our most recent webinar, The New Metasearch: Smart bidding with Google for Guest Acquisition and Conversion. Hotel auction sites have been around for over a decade - so why the recent explosion of interest in the topic?

One word: Google. The search giant recently rolled out its own hotel search site as part of its continuous efforts to surface hotel information and prices to users as early as possible in the booking process. Google's clear focus on metasearch as a growth area has got hotels, OTAs and alternative metasearch providers alike re-assessing their performance and asking how they can make the most of this lucrative opportunity.

Triptease's Product Manager for Acquisitions, Scott Stirling, was joined on our recent webinar by SHR's Chief Product Evangelist Estella Hale to answer some of the most pressing questions we've been asked by hoteliers about Google and metasearch. Scott and Estella focused on explaining Google's recent changes as well as taking a broader look at metasearch's place in the distribution mix, and explaining the factors that combine to drive success in a metasearch auction.

You can watch the full recording of the webinar right here, or keep reading for an in-depth account of what Scott and Estella had to say. We've also been answering the questions we didn't have time for on the webinar - jump to the answers now if you want to find out about bid multipliers, the difference between Adwords and Hotel Ads or how to code CPA vs. CPC spend on your P&L.

How Google is changing the game

"Metasearch is not a new phenomenon but it is definitely very relevant," begins Estella. "Google are in the perfect position to be a metasearch provider for hotels, because they're the metasearch provider for everything else. This matters from a hotel distribution perspective because your guests are there (searching on Google). You have to reach your guest where they are." Referring to Google's recent update to its hotel search interface, Estella suggests that the search giant is "aiming to keep the traveller on the platform for longer."

"It's incredible how often Google is experimenting," continues Scott. "It's useful to remember that their mission statement as a company is 'to make the world's information accessible online' (in full, it's 'to organize the world's information and make it universally accessible and useful'). They're constantly trying new things to optimize the travel journey. They're synthesizing a lot of different data sources and bringing it all together in a really easy-to-use UI."

You can listen to Scott and Estella discussing the new Google interface from 07:50 - 12:20 on the webinar recording, or alternatively check out our analysis of the changes back in March.

Google's new Hotel Ads interface

When we spoke recently with Chetan Patel of ONYX Hospitality about Google Hotel Ads, he suggested that Google Hotel Ads was more supplier-friendly than other metasearch providers thanks to the clear direct website link that forms part of the hotel listing. However, Scott explains, there's no obvious preference of the direct supplier when it comes to how Google treats the metasearch auction itself.

"Google is acting as a marketplace for different vendors to advertise their inventory," Scott explains. "They have to be channel-agnostic. Vendors wouldn't want to participate if they thought the deck was stacked against them.

"The one thing that Google will discriminate on is price accuracy. They're all about the user experience. One of the most damaging things you can do on metasearch is show the user a different price (on your booking engine) to the one they clicked on and were anticipating from the auction. If a supplier does this, Google will penalize them and make it more expensive for them to bid."

We've known for a long time that parity has a significant impact on a hotel's booking engine conversion rate - hotels undercut between 0-10% of the time convert users 34% better than those undercut between 30-40% of the time. For those hotels still not investing in parity management, the impact will be felt even more keenly once metasearch is involved.

"Inherently, if someone is searching on meta, they're price-conscious," Scott explains. "It's really important that you're putting your best foot forward (when it comes to price)."

How to succeed in a metasearch auction

So, parity is key. But what else can a hotel do to maximize their performance on metasearch? Although meta can be complex, Scott says, hotels have to start with the basics.

"I was speak to the head of Google Hotel Ads EMEA recently and he told me that a really surprising amount of hotels don't have the right information on their Google My Business listing," Scott shares. "If there's one thing you do after this call, it should be to go and make sure your listing is up to date! It takes twenty minutes to update but can really make a difference to how your hotel is represented on the most important website in the world."

After that, both Estella and Scott agreed, the most important thing is to actually be present in the metasearch auction.

"We believe OTAs are getting about a quarter of their inbound traffic from metasearch," Scott shares. "For the average hotel, it's 2%. There's a massive difference between how hotels are harnessing the power of meta and what OTAs are doing with it.

"A client of ours once put it to us like this: metasearch is a shopping list, and if you're not in the auction then you're not going to get bought."

And then, as we've seen, there's parity.

"At Triptease we have a market-leading solution in our onsite parity tool, and we're delighted that we can roll that out into metasearch too," says Scott. "We can stop hotels being shown on metasearch when they're undercut on price. It protects your brand and makes a big economic impact.

"You want to make sure you're only showing to high-value guests that are going to convert."

How to succeed in a metasearch auction, according to Triptease

You can listen to Scott giving an in-depth overview of metasearch optimization from 12:20 - 19:15 on the webinar recording.

What are the implications for hotels?

So, we've talked about some of the specifics of metasearch - but it doesn't exist in a vacuum. Metasearch will always form just one part of a hotel's overall distribution strategy and to really see success, argues SHR's Estella, that strategy has to have the guest at its centre.

"We connect hotels to pretty much every channel available," Estella explains. "And what we're seeing is a tiredness of connecting to hundreds of channels - that was the focus a couple of years ago. Now, many hotels are just focusing on their best-producing channels instead. Channels are a means to an end: connecting with the guest is the primary purpose.

"Metasearch and particularly Google is an important channel to have in any distribution mix - but of course, guided by strategy. If you know specific markets and segments you want to target, you can tailor your bidding so you appear for those guests."

But it's not only bidding that can be tailored. The most successful guest acquisition strategies are developed in close tandem with onsite conversion strategies, as Estella goes on to explain.

"This is exciting. Metasearch is a great opportunity for hotels to appear where their guests are looking during their travel planning and then to link them to their own website, where they can tailor the content and offers to optimize for conversion."

"Everyone's heard this a million times but data really is the best asset you have when it comes to digital marketing," Scott continues. "The exciting thing is [how it allows you to] tie up the meta journey to the onsite journey.

"There are things you can think about like how can you use software to personalize the experience and acknowledge the journey the guest has been on before they arrive on your site. Perhaps that means tailoring your content or recognizing the type of search that they've made. There's loads of scope to make sure your website is speaking to the individual, which is ultimately going to boost your website conversion rates and direct booking revenue."

You can hear Scott and Estella discussing acquisition and conversion strategies in full from 19:15 - 28:30 on the recording. If you want to find out more about some of the ways Triptease is joining together offsite and onsite user experience to drive conversion, take a look at our Platform overview or read about it here.

Question time

You can hear Scott and Estella taking questions from our audience on the webinar recording, but inevitably there were questions we didn't quite manage to squeeze in on the day. We've rounded them up here for Scott to answer, but don't hesitate to get in touch with us at content@triptease.com if there's anything else you'd like to know.

Q: Is there a difference in where you code the expense on your P&L for CPC (cost-per-click) vs. CPA (cost-per-acquisition)?

A: Different hotels treat meta spend differently. For some it comes out of their marketing budget, and for others, out of the distribution budget. Historically, hotels have perceived CPA to be analogous to OTA commissions and therefore taken it out of the (often uncapped) distribution budget.

CPC has traditionally been seen as 'more risky' and has therefore come out of the fixed marketing budget. However, we think this philosophy is flawed. Ultimately, if a hotel can attain direct bookings for a lower cost than their OTA commissions, they should be diverting as much capital as possible into that channel until the cost of sale rises to get to the point of economic indifference between meta and OTA bookings. This is only really being done at the moment by more sophisticated, often larger hotels and hotel groups.

To give an example, we have a client with a 20x ROAS (5% commission) that hits their budgeted spend every month. We asked them to increase their budget and they said that the marketing budget is fixed at the start of each year, so they are unable. OTA bookings, however, come out of an unlimited budget even though they cost this hotel 3-4x more!

Q: If we are already using Google Adwords, should we spend more or less on meta (than we do on ads)?

A: Meta works best when combined with Adwords, but ultimately they both need to be managed efficiently. The subtle difference between the two is that meta can only be used to capture intent - the user has to have typed in the name of the hotel for the meta listing to appear. With Adwords, however, advertisers can bid on non-branded terms like 'luxury hotels london,' as well as competitor terms. This can bring in more clicks but be dilutive to ROAS (return on ad spend).

Hotels should have an experimental approach to each platform, putting their spend behind the sources of revenue in a balanced proportion and allocating spend where they're getting return.

However, metasearch is definitely Google's 'golden child' at the moment. They are significantly increasing its prominence, and spend on meta by hotels overtook Adwords in 2017. That spend is still growing at roughly 50% a year. There's a lot more that can be generated from meta than has historically been the case, but only if it is well managed.

Q: Does Triptease utilize bid optimizers for clients on Google Hotel Ads? Have you had clients choose to run only with users who have 'shown intent' rather than users seeing your meta placement with default search dates?

A: Yes, we use bid multipliers religiously. Intent can be expressed in different ways. The first step is whether they have selected a date. These impressions make up around 1/5 of all impressions and have a CTR (click-through rate) that's around 50% higher than generic searches. The second way to filter on intent is to bid more for users that have searched for the hotel previously by placing them into audience lists.