According to the World Travel and Tourism Council, travel
and tourism generated a direct contribution of $2.3 trillion to global GDPs in
2016 and supported one in 10 jobs in the global economy.
More than three-quarters of that spending - 76.8% - is
attributed to leisure travel. It’s a massive market, and one that often starts
with a blank slate: Many consumers begin the travel planning process with a
simple desire to get away, without a specific idea of where, when and how.
For most travelers, the answers to those questions come
through self-directed online research, which they conduct via the web, apps and
social media.
So it’s no surprise that travel brands are spending big -
very big - on digital marketing as they aim to reach and inspire this receptive
audience.
This month we have been exploring digital marketing from a
variety of angles. We have covered SEO, social media and email marketing and
now for our final installment in this series: paid search.
It’s a strategy that, when done right, can drive relevant
conversions, but when done wrong can quickly rack up huge bills with nothing to
show for the expense.
Background
Paid search
advertising is primary driver of conversions in travel. Brands know that when
consumers are actively searching for hotels, flights and destinations, they are signaling
an intent to buy, and they are willing to allocate substantial portions of
their marketing budgets to ensure they show up at the top of those search
results.
The biggest spenders
are - of course - the major online travel agencies. Expedia spent a record $5.3
billion on marketing in 2017, with much of that presumed to be Google AdWords,
and Booking Holdings spent $4.1 billion on performance advertising.
The challenge for
suppliers - particularly small and independent ones that don’t have the buying
power of a big brand behind them - is how to compete in paid search within the
constraints of a limited budget.
“It is very
easy to lose money with paid search,” says Craig Paddock, director of search
for travel and hospitality marketing firm MMGY Global.
“Not only is it easy to purchase traffic that’s not relevant,
it’s also easy to pay too much for the traffic.”
The benefits
It is difficult, but
not impossible. In fact, Vicki Gore, search director at Addmustard, a digital
marketing agency that works with hotels, tour operators and airlines, says
pay-per-click is consistently one of the main drivers of traffic to her
clients’ websites.
“Even though there are cheaper options and more long-term
options - such as SEO - we will still see pay-per-click as one of the top
performing channels when it comes to driving traffic to the site and also in
terms of conversions,” Gore says.
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Paid search is also highly measurable - brands can see what
keywords are driving referrals and revenue - and it provides data that can be
used to refine future strategy.
“It helps clients understand the demand in the market,” Gore
says.
“People are currently searching for this type of product and if you don’t offer it right now, maybe this is something you should look into. Or
we see more demand for this product so maybe you should change your pricing or
merchandising.”
Best practices
While showing up at
the top of Google’s search is the ultimate goal, experts agree making that
happen requires a deep understanding of site traffic data, brand identity and
target audience.
With all of that in
place, the next requirement is a dose of restraint - and recognition that just
because Google is showing you how much to pay to be at the top doesn’t mean
that is the right strategy for your brand.
“You absolutely
should not be bidding to be at the top of Google when you launch a campaign,”
Paddock says.
“Even though
we’ve been managing paid search as long as anyone, when we launch a campaign we
always launch with conservative bids manually, and then we raise bids as we are
confident that investment is providing positive returns for our clients.”
It is very easy to lose money with paid search.
Vicki Gore - Addmustard
Bidding on keywords functions like an auction, and Paddock
says it can be easy to fall in to the trap of what he calls “ego bidding,” a
stubborn determination that for a particular term the brand deserves to be -and therefore will pay to be - at the top of the search results.
“In many cases you should not be trying to outbid your competitors for key phrases unless you have
data to support that,” he says.
Instead, brands should look to bid on less popular
phrases, for example based on unique characteristics of their brand or
location.
“The OTAs will bid on ‘Denver hotels’ all day, but if
there is a nearby wine festival, the OTAs are probably not going to bid on
‘Denver wine festival,” Paddock says.
“Also around non-lodging terms. The OTAs aren’t going
to be bidding on spa terms, wedding terms and meeting terms.”
Keyword analysis can also provide insight into
competitors’ strategy.
“There are tools that can tell you what terms and
keywords are winning for them that are not winning for you,” says Hunter
Webster, senior vice president of digital marketing for Interstate Hotels &
Resorts.
“That may present opportunities to build your content
or your messaging.”
Google also now makes it easier for brands to segment
their ads, based on filters such age, gender and whether they are in-market.
There is also the option to show ads to “look-alikes” - people who share
characteristics with the brand’s existing customer base.
Filling the funnel vs. ROI
Anil Aggarwal, CEO of Milestone, a digital marketing
agency that works with hotels, says one of the biggest mistakes he sees clients making is
becoming too focused on short-term ROI from their paid search rather than using
it to build their audience for the long-term.
“It’s very sad because they are sort of driving themselves
out of business,” he says.
You absolutely should not be bidding to be at the top of Google when you launch a campaign.
Craig Paddock - MMGY Global
The best conversion rates are driven by bidding on branded
keywords such as a hotel name, but that puts the focus on marketing to
people who know that brand name. In other words, branded terms are not growing
a new audience.
Attracting new customers - filling the top of the funnel - requires bidding on unbranded terms, for example “San Francisco hotels.” However,
these are also the most expensive types of keywords since there is intense competition
from the OTAs.
In addition, on paper it may not look like an investment in
unbranded terms is resulting in conversions. But Aggarwal says it absolutely
does.
“Let’s say you are coming to San Francisco and you search ‘San
Francisco hotels’ and you find a hotel you like. More than likely you’ll go to four
to five more sites to see what else shows up. Now you’ve done your research and
most likely when you are ready to book, you will now type the name of the
property, not ‘San Francisco hotels,’” he says.
“The query that got the consumer familiarized with you, that
initiated the sales process, was unbranded search - ‘San Francisco hotels’ - but
the query that results in revenue will be your name. So a lot of companies are
just focused on ‘only my name is producing money’ and ‘San Francisco hotels -
nobody booked from there so I’m wasting money.’ But they are not wasting money
because that’s creating your sales funnel.”
Rather than looking exclusively at whether those unbranded
terms are driving sales, Aggarwal advises clients to analyze bounce rate, time
on site and other statistics that reflect engagement.
The big picture
Paid search is most effective when its part of a
comprehensive digital marketing campaign, one that includes an optimized
website, email, affiliate channels, retargeting, social media and more.
“Overall the volume of travel search on Google is volatile, and in some areas it has declined as consumers use different channels to search,”
says Lawrence Hunt, chairman and managing director of Addmustard.
“It’s the first time we’ve seen that. But we’ve always said
to our clients you have to build a brand and you have to do that across
multiple channels and yes, search is part of the mix.”