The new ad format in Google Hotel Finder, which pits online travel agencies bidding against hotels for ads about their own properties, is called Promoted Hotels.
The existence of the new ad format was unveiled here on Tnooz a few days ago.
With Promoted Hotels, one or two ad units, labeled as such, appear above organic search results in Google Hotel Finder.
As with AdWords, Google Hotel Finder chooses the ads based on bids plus quality scores, and organic results appear beneath the ads akin to the way they do below paid listings in Google core search results.
Depending on which company wins the bid, when consumers click on the ad, they'll see an OTA or hotel booking link at right with the base rate for the hotel. The total rate, including taxes and fees, appears in a much smaller font size.
The booking link most frequently is for an OTA website, but sometimes hotels win the bid for the premier placement on the page, as InterContinental Hotels did below:
The advertiser pays for the ad on a cost-per-click basis when consumers click on the red button, taking them to the OTA or hotel website. The bids come through Google's Hotel Price Ads program.
When Google Hotel Finder displays a Promoted Hotel the ad is labeled as such, but if consumers think the ad is from the hotel, they would be mistaken because most often it is not. Instead it is frequently from an online travel agency such as Hotels.com, Expedia, Priceline, EasyToBook.com or Getaroom, for example.
The prospect of a bidding war -- OTAs against OTAs and hotels against OTAs -- and the necessity for huge and increased search engine marketing spend if Google Hotel Finder gains traction would be likely scenarios as Google could become even more of a king-maker in the way that Expedia and Hotels.com were in an earlier era.
Do Promoted Hotels ads violate the intellectual property and trademarks of the hotel in the way that some hoteliers used to argue that OTAs' bidding on hotel keywords on Google once did?
That question is very much open to debate.
One argument that it is not a violation is that the hotels in Google Hotel Finder have marketing agreements with the OTAs and likely would welcome these bookings.
It remains unclear, however, if they would welcome the prospect of having to outbid OTAs to run ads on their own properties in Google Hotel Finder.
Google obviously believes it is on safe ground operating Promoted Hotels in this way and details its AdWords policy on trademarks here. It states, in part:
Resale of the trademarked goods or services: The landing page of the ad must sell (or clearly facilitate the sale of) the goods or services corresponding to a trademark term. The landing page must also clearly demonstrate that a user is able to purchase the goods or services corresponding to a trademark.
Hotels don't get any advantages when bidding against OTAs in Google Hotel Finder as Google facilitates its usual level playing field in the auction.
The Promoted Hotels format in Google Hotel Finder is very new and, of course, experimental.
It is an experiment that could have large financial consequences for Google, OTAs and hotels.