Hotels: Get Realistic About Your PPC Investment Strategy & ROI Expectations

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In the competitive landscape of hotel internet marketing, things are changing quickly. Hotels are already late to the party. It's time to start getting proactive and realistic about search engine marketing. Here is a recap of the hotel/PPC story so far, as well some tips on the best way for hotels to stay actively involved with PPC marketing.

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I knew the campaign ROI (2002-2005 era) was going to be nothing short of spectacular for hotels. There was very little competition in major markets, but I resisted selling PPC as the magic pill. I sold it as a great investment in your hotel marketing program. I sold it as a great tool for testing your website and building your hotel brand online. I continue to stick to my approach.

Hotels still have a lot to learn when it comes to pay per click marketing. Here is a recap of the hotel internet marketing story so far, as well some tips from Vikram Singh, CEO of Evision Worldwide, on the best way for hotels to stay actively involved with PPC marketing.

You can read more articles about hotel internet marketing on the Evisionary blog.

History
The early adopter hotels who started doing PPC for themselves in the early part of the decade probably saw some of the best ROI in the industry. The majority of hotels back then were not interested in the whole Google/Yahoo PPC "fad." As a result, those who showed up harvested the clicks and guests at an amazing pace. It was not unusual for hotels to be booking 49 to 59 dollars of revenue per 1 dollar spent on PPC! It was the golden age of PPC marketing for hotels.

Fast forward now to the end of the decade: competition is stiff, OTAs (Expedia, Travelocity, Orbitz) spend huge amounts of cash on PPC, Yahoo has slacked off, free rankings are hard to come by, and booking engines for hotels have not kept up with the times. But it's not all bad news – hotels doing PPC the right way are still doing great.

PPC has also evolved from a revenue gimmick into a brand-building and testing tool which, used properly, can really help you drive online revenue. Hotels that get into PPC as a fad never stay on. It's got to be a long-term strategy. Even if ROI numbers aren't all that golden brown, PPC is something that hotels just have to do. This is especially true now that Google has emerged as the leader in travel search and is making it hard for hotels to rank for free (organically) for a vast array of broad keyword terms.

OTAs rode the PPC wave all the way to the bank and currently run some of the best PPC campaigns out there. Hotel brands have tried to catch up, but they just don't get it. And this is where we are right now. Strong OTA presence, Clueless Hotel Brands, and Independents are duking it out for precious Google clicks.

The Mis-selling of Pay Per Click Marketing
Pay per click traditionally has been sold (and is still sold today) the wrong way by hotel internet marketing agencies. The ROI promises were way too short-sighted; overinflated ROI predictions never work. Hotels were taught to invest in PPC only if they were seeing a 10:1 to 500:1 return per dollar invested. This propagated the 'only invest in PPC if there is a spectacular ROI' culture. With the downturn in ROI and increase in competition over the years, hotels have started to look too hard at their PPC ad spend. Campaigns were slashed and burned at an amazing rate. PPC has become the most frequent first victim of a marketing budget cutback. We have seen hotels pull the plug on many successful PPC campaigns.

In his past life as a sales director for some of those hotel internet marketing agencies, Vikram Singh always resisted the temptation to blurt out “25:1, 1000:1 ROI!” to prospective clients. "I knew the campaign ROI (2002-2005 era) was going to be nothing short of spectacular for hotels. There was very little competition in major markets, but I resisted selling PPC as the magic pill. I sold it as a great investment in your hotel marketing program. I sold it as a great tool for testing your website and building your hotel brand online. I continue to stick to my approach."

Hotel PPC Tracking Blues
Tracking PPC for the hospitality and travel sector has always been a problem. Several factors make it very hard to determine the true ROI of a hotel PPC campaign.

First and foremost, the booking engine technology offered to hotels is primitive and not geared towards PPC tracking. Hotel booking engines have made it notoriously hard for hotels to be able to accurately track conversions from PPC.

The way people use web browsers has also changed over the years. Web browsers are getting privacy conscious. Stealth modes are now offered by all of the leading web browsers, like Firefox, IE8, etc.

Finally, people researching online might discover the hotel via PPC but end up booking their reservations on the phone. Or they may book online several weeks after clicking the PPC ad, making it hard to connect the two events.

Reality Check for Hotel Managers
Hotel managers need to start looking beyond the instant and trackable ROI that they can measure right away. A PPC campaign in today’s extremely competitive environment takes over three months to fully mature and generate traction on the search engine results pages. There is no instant, magical solution to getting a solid campaign in place for your hotels.

PPC is not just an add-on thing to do anymore. It is not just a source of incremental revenue or the magical solution to increasing revenue. It's not expendable. PPC is crucial, as Google is making it harder for your hotel to rank organically (free) for broad keywords. Also, if you are not bidding on your hotel brand name, OTAs like Expedia and Bookings.com are going to do it and happily take away brand name traffic/reservations from your hotel website.

Simple steps for survival in the hotel PPC landscape:

1. If you don’t do any PPC, start today and at least cover the basics (your name, location keywords).

2. Stop losing your mind trying to figure out the 100% exact ROI. PPC is delivering hotel revenue in ways that cannot always be accurately measured.

3. Focus on how you can use PPC to improve your website's performance. Implemented the right way, a campaign will tell you what is good/bad about your website. Use PPC to find out when you are right; learn and correct quickly when you are wrong. Rinse, lather, repeat for online marketing success.

4. Demand better tracking technology from your booking engine providers (brand and independent). They are selling you advertising, not innovations! Then think hard before pulling the plug on your PPC campaign because you didn't see ROI in bookings.

5. Work with the right people. You will know who they are. (Hint: it's not an agency with hundreds of clients or the one with the sales guy shouting: We deliver 1000:1 ROI.

In this competitive landscape, things are changing quickly. Hotels are already late to the party. It's time to start getting proactive and realistic about search engine marketing. Stop getting blindsided by advertising and hype. Use PPC as a billboard and as a testing tool for your marketing initiatives. Use the power of PPC to help your hotel run a solid online marketing program!

Evision Worldwide
Evision Worldwide is an internet marketing firm focused on helping small and mid-sized businesses improve the performance of their web-based efforts. Our services include: updates and improvements to your website; search engine optimization; pay per click marketing; website analytics setup and training. Clients always interact directly with Evision’s principles. We are available for project work, consulting, speaking and on-site training.

Evisionary Blog
The Evisionary blog is written by the owners and key strategists at Evision Worldwide. This is a place for us to share our observations and strategies from the internet marketing world.

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Vikram Singh
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