Online Travel Agencies (OTAs) such as Booking.com spend billions on online advertising each year. This can significantly undermine and reduce direct bookings to your hotel website. Here at In1 Solutions, we encourage you to take back your guests! And we give you countless tools to help you achieve just that.
In the current market, it is vitally important to effectively manage your brand and product online. OTAs have begun investing heavily in PPC advertising to increase sales. Unfortunately, most of their sales are coming from these PPC campaigns which include the brand name of the property. As a result, many of the sales delivered by OTAs should have been booked directly on the hotel’s own website. This causes dramatic increase in cost of sale, eating into tight margins and negatively impacting profits for the property. It also allows the OTA to build a direct relationship with your clients and therefore, implement future promotions to retain their custom.
Brand Verity Study
A study by Brand Verity evaluates the paid search activities of OTAs versus hotel brands to determine how their marketing relationships play out in the channel of pay-per-click (PPC) advertising. Specifically, the study is based on PPC advertisements triggered by hotels’ branded keywords. Branded keywords include the brand’s trademark somewhere in their set of search terms (e.g. “Chicago Hilton”) and are often the highest converting keywords for a brand.
Over 100,000 ads were ultimately analysed and some of the most relevant findings include:
- On average, each Google Search Engine Results Page (SERP) included almost two OTA ads (1.82). Bing had considerably more with 4.77.
- OTA ads outnumbered ads put out by the hotel itself.
- 5% of OTA ads on Bing included the trademark of the brand that was searched. That compares to 61.1% on Google and 53.3% on Google Mobile.
- Brands did not appear in the #1 ad position on 23.6% of SERPs on Google Mobile, 15.9% of SERPs on Google, and 17.4% of SERPs on Bing.
- When brands did not appear in the #1 position, OTAs dominated the #1 ad spot, maintaining dominance well over 50% of the time.
Overall the study shows that OTAs target brand names and bid extensively on the brand name and keywords to gain the number one PPC ad position.
Priceline, owner of Booking.com, posted a gross profit of $2.1 billion for the first quarter of 2015, 26% up over the previous year. In addition to a dramatic increase in profits, Booking.com and its close competitor, Expedia, increased their advertising spend in 2014, by 35.4% and 33.3% respectively.
In1 Solutions has over a decade of experience in PPC advertising. Put your trust in us and we won’t let you down. Our campaigns are designed not only to drive more bookings directly to your hotel’s own website, but also to defend the website’s position against aggressive advertising by OTAs.
Why do we consider it important to defend your brand against OTAs?
Hotel margins are tight. The cost of distribution can further erode these margins to have a significant and negative impact on profitability. Thus, PPC advertising is an essential and strategic tool in reducing your cost of sale. Meanwhile, it ensures that you develop a relationship with your guests.
You will not have to commit to long-term, expensive campaigns. After three months, we will produce a financial statement showing the return on your investment through increased direct bookings and reduced cost of sales.
For more information on our Brand Defence Strategies, please do not hesitate to contact us at email@example.com.