Meta-on-meta is the case when metasearch sites like TripAdvisor advertise on Google Hotel Finder or take part in Hotel Ads auctions. Let’s take a look at why it’s happening and what it means for hotels.
Why did meta-on-meta happen?
The last few years have seen a decline in TripAdvisor’s website traffic. Following Expedia Group and Booking Holdings’ advertising reset, Tripadvisor’s return-on-ad-spend rates declined and their revenue growth decreased. Tripadvisor has had to adjust to this impaired growth, and it looks like part of that has involved turning to Google.
Google’s return-on-ad-spend rate dominates the meta search landscape – making it a more attractive auction to advertisers – and GHA’s traffic volume is currently outspacing TripAdvisor’s. Advertising on Google is a way for TripAdvisor to keep their brand in front of consumers while potentially siphoning off some of Google’s traffic. But what does this mean for hotels?
Why is TripAdvisor a dangerous GHA bidder?
- TripAdvisor has a stronger brand equity than most hotel chains (and almost all independents). Attributes like ‘preferred website’ and ‘lowest price’ are the most important for consumers online. In GHA’s bidding auction, Tripadvisor could now outshine your hotel in the former and the latter (that is, if your hotel’s direct website is present on GHA at all). Indeed, their logo alone could be enough to distract customers from your site – even though those customers want to stay at your hotel.
- TripAdvisor likely has a higher spending cap than you do. Google’s Hotel Ads Center allows every bidder to define their spending limit. We don’t know exactly how much TripAdvisor are investing in Google – CFO Ernst J. Teunissen claims that Google Hotels is a “relatively small channel for us in the grand scheme of things” – but you can assume that when they are bidding, they’re likely to have a more elastic budget than the average hotel or chain. This results in higher bids, top billing and, ultimately, the best chance to be seen by a potential guest. While that guest might still end up staying on your property, they’re less likely to book through you direct (unless you’re bidding on TripAdvisor too) – meaning a higher cost of acquisition for you to bear.
- Intense auctions mean higher prices to appear in the top three bids. Google Hotel Ads basics: “Ads in higher positions are typically seen first by users, and tend to get more clicks than if the same ad had ranked lower.” With another big player in town, desired listing spots will be harder to get. Even if you participate in that auction and win, you’ll likely pay more for the privilege.
Is it a wise decision for TripAdvisor?
- TripAdvisor’s position on Google Hotel Ads not only adds another player to the long bidding list, it also provides Hotels Ads with another source of data that can be used to better understand the travel market. Google are in theory both earning and learning from one of their biggest competitors.
