A few days ago, Google informed users that it will change the brand-protection policy on its text adverts on Google Ads (what used to be known as AdWords).
This is something which Simone Puorto previously wrote in his post. In practice, it means that any distributor can use the brand name with the same conditions as you.
Let’s remember what that protection meant:
- Only brand owners could use it in the title or descriptive text on ads
- Anyone, however, could use it in the advert’s visible URL
- Anyone, also, could bid for it as a search keyword, including your competition
An ad like this could appear after a user had searched for "Hilton Amsterdam" if NH bid for the keyword "Hilton". "Hilton" would not appear in the title or description but there was nothing stopping NH to put their ad in those search results.
Google granted this privilege to the owner due to a discretionary decision of courtesy with its advertisers. It wasn’t obliged to do it by the law of the countries where it was applied.
For searches which originated from English-speaking countries (Australia, Canada, USA, UK, Ireland and New Zealand), the owner was not the only one with a right to use the brand.
Google allows any distributor, reseller or owner of an informative website on the products of the brand in question to use it. Google calls this the reseller and informative website policy.
What does this change mean?
Since there was no protection in practice, the situation in the aforementioned countries will not change, as we can see below in a search made from the U.S..
From the U.S:
The first Google results page after having searched from a desktop computer currently has four spaces for advertisers in the top part.
In this case, as well as the hotel’s official website, the three remaining spaces are for other advertisers who are using the hotel brand in their ad’s text.
If we do this search from Spain, for example, the results up until now were very different:
Only two paid-search results appear: one from the hotel’s official website and the other from Booking.com (without showing the hotel brand name in the title or ad description but instead showing it in the visible URL).
From Spain:
After this new policy comes into effect, the use of the brand will be as extensive as it is in searches made from English-speaking countries.
So, there are some questions that many will have:
When and in which countries will this modification come into effect?
Google hasn’t given us a specific date and simply says that changes will come into effect in the coming months.
It will come into effect in most countries around the world where Google operates, starting with Japan, Germany, France, Portugal and Spain.
Can OTAs use my brand in their adverts?
Yes, they fully meet the category of distributor or reseller stated in Google’s policy.
How does this affect my adverts from a direct sales point of view?
A hotel protecting its brand in Google Ads has always been synonymous with a CPC DECREASE (cost per click paid on our advert) and a CTR INCREASE (clickthrough rate, which is the number of clicks your ad has received divided by the times the ad was shown).
This policy change will result in the opposite effect in all countries where, up until now, the brand was protected.
In other words, we will pay more for each click and a lower percentage of people will click on our ad with the same number of appearances.
Up until now, it was expensive for OTAs to bid on keywords with brand protection in non-English-speaking countries.
The reason for that was that Google allocated a "quality level" based on three factors:
- Expected clickthrough rate - the probability that your ad will be clicked on
- Ad relevance - level of coincidence between the ad and a user’s search intention
- Landing page experience - your page’s level of relevance, transparency and navigation ease.
A good quality level could have the following advantages:
- Lower cost per click
- Better ad positioning
- Possibility of using ad extensions and other advertising formats
This is why it is not profitable for OTAs to bid on a keyword which is later not shown in the ad.
Google understands that the ad is not relevant in the user search and automatically increases the CPC of the word which is being bid on, which is the hotel brand name.
With the change announced by Google’s legal team, many advertisers are going to start bidding for hotel brands (the smallest and biggest advertisers alike) because their ads can now be more relevant and obtain better results.
Should I stop advertising my hotel on Google Ads?
The answer is a resounding NO. Now more than ever you need to have presence in your paid results on Google. All other advertisers will be there and if you are not, the booking which was meant to be for you will be taken by someone else.
It is a strong possibility that the profitability of your campaigns will be affected but it will still be highly beneficial for your direct-sale costs.
We will no longer be able to rely on our ads to be successful due to having the exclusivity of our brand name.
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Now more than ever, we must place our trust in attractive offers with better prices and in differential values of the direct channel in order to be successful in Google Ads.
Furthermore, if your hotel is still not on Google Ads, now is the time to start. Campaigns take a few months to reach their maximum potential so it is best to start as soon as possible whilst the current situation of lower competition is still in effect.
What else can I do?
Talk to OTAs and demand that they stop bidding for your hotel name on Google Ads. Try it also if you have a direct relationship with metasearch engines or other partners (e.g. affiliation programmes). It is not an easy subject but if you never try you will never know.
If they won’t stop bidding, at least try to agree on a level of bidding which guarantees that you will be in the top two positions in the search results at an acceptable cost.
Does it no longer make sense to request my brand’s protection?
At the moment it still does, at least until the new policy comes into force. As mentioned above, Google has not given a specific date for it so, up until then, we recommend that you continue requesting brand protection like you have been until now.
Conclusions
This modification will not be favourable for the direct sale of owners of hotel registered brands.
It will not result in the loss of an acquired right but rather in the modification of a factual situation which was highly appreciated by hoteliers.
Judicial proceedings will always be an option. Google is obliged to accept court rulings like any other company, although this is not a route we would recommend for independent hotels or small and medium chains.
However, big hotel chains can go down that path since they have greater resources but perhaps they won’t need to due to the direct pressure power they have over their distributors.
Commissions charged for Google Ads campaign brands will probably go up, but this channel can still be highly profitable for your campaigns.
Many Google Ads brand campaigns have commissions averaging 5 or 6%. Even if this commission was to increase by a couple of points due to the policy modification, it would still be within a profitable range for your direct sale.