Earlier this month, Google made a big announcement about free advertising. It’s fair to say it shook up the metasearch hotel booking space like a gorilla with a rattle. We all like to have something for free and from an advertising giant like Google, we would surely love it.
But let’s pause for a minute: what is this?
We know that the two major OTAs individually typically spend more than $6 billion a year with Google on advertising. Is Google giving all of this away? No, I’m sure it is not doing that.
So, if it’s not a total giveaway then what is it? What is the free advertising Google is offering and how good is it for accommodation owners? More to the point, WHY has Google done it?
As a Google Hotel Ads feed provider and Ads manager for nearly two years, here at we have seen the progress and have a few insights into the strengths and weaknesses of the Google Hotel Ads as it stands, and, as it might develop alongside its competitors – chiefly, TripAdvisor in this metasearch space.
What is the free bit that Google offer? The new free listing of the rates and availability feed is a section at the foot of the advertising block.
For those of you familiar with search engine terms this new “free” block is analogous to “natural” listings. Natural listings are the opposite of paid listings, they are free and they are ordered based primarily on customer preference. If many customers pick a certain supplier for that property supplier will likely float to the top.
Anyone providing a feed to Google can be listed in the free or natural section and the order they are presented will be a secret algorithm known only to Google which is 100% independent of any payment to Google. No advertising payment can ever influence a natural listing, that is certain.
How "free" is free?
How good is this free “natural” advertising? This is the tricky bit to answer but I think I can. In short, the reality is that it’s as good as Google wish to make it. Google is the universal master of natural listings vs. sponsored or paid listings. Its whole business model has, at its core, the advertising auction to get to the top of the page (where the clicks are) vs. the natural listings that give more authentic content and customer satisfaction.
The answer is probably about 10%. Google is giving away about 10% of the traffic to natural listing. We know this roughly from volumes of bookings and it kind of makes sense as a natural vs. paid split.
It sounds small but to accommodation owners, this is a fantastic opportunity. If you are not currently paying Google to advertise in its feed (and the majority are not) then this 10% is 100% of something you didn’t have before and for free.
If you remember the $6 billion, Google is giving away a chunk of that to massively improve its customer offering and bring in new potential advertisers. Not a bad price and remember Google controls the prominence of natural listings (as it always has), so that 10% might not always be 10%, the structure/visibility of that display will continue to change.
What’s in it for accommodation owners? Our feed to Google, for example, is direct so it shows to the consumer as an “Official Site”, this puts properties at an advantage against the OTAs in the natural listings (free section).
This is because consumers are drawn to the direct channel when everything else is equal. Every a property’s direct feed should by rights be at the top of the natural listings and so you could get the 10% of clicks for free.
But beware! The OTAs are all also in the free feed and if any OTAs were to have a better rate than yours, they would almost certainly come above you in the natural listing. If you are not at the top, you have likely given a special offer to an OTA and your direct rates are higher than the OTA rate.
Now, this is the bit worth paying attention to: here are our tips to being top of the natural listing:
- Have the best rate direct
- Keep the best availability for your direct bookings
- Do not accept OTA virtual cards or they will undercut your direct rate
- Make sure your My Business listing on Google is as unique and rich as it can be with reviews, photos, amenities etc. In other words, if your direct feed is not at the top it is your fault and you need to fix it - which is as easy as A, B, C, D.
So yes, this is a massive opportunity for the direct booking feed, if you are managing your rates properly you will benefit. For the small number of properties that do not list with the OTAs this is even better news because they will have no competition for their direct bookings, a “no-brainer” as they say.
Why is Google doing this?
Lots of good reasons. Google cares about the user experience. You use Google search because it is the best search engine. Google wants you to say you also book via Google metasearch because it is the best place to find the best rates and availability.
- Google can only show the best rates and availability if it has all of the properties in the world on board and feeding it with the best on offer. So, on one level, this is a land grab to get the whole world’s accommodation listed and bookable.
- As a customer on Google you want to find the best rate. In the sponsored listing the best rate is not at the top, the top spot is for the highest bidder. This is sub-optimal as a user, why is the best rate hidden down the list of OTAs? Not a good user experience. The natural listings solve this issue because the most popular link comes to the top (most likely the best rate).
- New advertisers become possible. As google advertising is an auction, these always work better with more bidders. Google would like you to play in the 90% of traffic that isn’t free so they will get you on board with the 10% free and take it from there.
- Great authentic natural listings are what customers ultimately desire. They want to see what the best link is and the only way to do that is to remove the paid side of it.
- Google probably knows that having all the small independent properties (the “longtail”) onboard will increase overall bookings including those with the larger chain hotels. Guests want choice and that’s why the OTAs want to have all properties listed.
- Reviews and content are becoming a bigger part of what Google offers. Having availability next to their accommodation reviews is a very smart move. We have seen the growing importance Google and Facebook place on collecting reviews… another topic in itself.
Google knows how to juggle the supplier’s desire for customers “traffic” with the customer’s desires. It knows that if metasearch is to work it must work for customers - and the most authentic way for it to work is by providing natural listings; what the customer wants at the top of the list.
We know Google has the best tech - it can do the math on advertising bidding better than any other company. It soon will have most of the rates and availability, a very good set of customer reviews and other content, making them the “go-to” place to book a hotel and other travel-related services.
If I was a review website or an OTA I would be looking hard to see how I could keep my revenue. If I was an accommodation provider I’d take advantage of the free offer and see what plays out - Google vs. OTA vs. Big review site.
PS: Where Google goes and makes a success, Facebook and Amazon watch to see how it’s done!