It may sound like common sense that when searching for the perfect hotel, price matters, but the rate displayed by a hotel advertiser can have a larger impact than simply attracting a customer.
In addition to making your ads more attractive to potential customers, being price competitive can lead to:
- Improved positioning
- Improved impression share
- Lower CPCs
- Higher CTRs
- A more profitable campaign
From the studies we have done at Koddi, solving price issues and remaining consistently competitive can drive potential incremental revenue increases of 30-40%.
The Causes of Price Non-Competitiveness
Although there are many advertiser-specific nuances that can lead to noncompetitive rates, the causes can generally be bucketed into a few distinct groups:
- Caching Issues – Caching issues can be caused by upstream or connectivity delays that cause the price displayed on the publisher’s site to be different from the actual price displayed once a user clicks through to the advertiser’s website. The ability to solve this issue will depend on the advertiser and the way that they pass rates to the publisher. If an advertiser is using a feed provider, there is a level of latency that will always exist. It is important to determine the acceptable amount of latency compared to the opportunity to improve and achieve potential benefits.
- Rates Issues – Rates issues can be identified when all competitors have the same price for an itinerary while the advertiser is displaying a different price. There are a variety of ways in which a rate can be submitted incorrectly and correctly identifying the root cause can help prevent additional rate issues in the future.
- Competitor Price Cut – This issue occurs when competitors are publishing a deeply discounted offer not available on the advertiser’s site. These issues can be actionable depending on the advertiser’s agreements and the frequency of which the deeply discounted rates are appearing.
Each publisher has its own unique price treatment that not only affects customer perceptions, but also positioning, cost of advertising, and profitability.
Price Competitiveness on Google Hotel Ads
Google provides the most detailed publisher report to help advertisers understand how competitive they are when it comes to price. The price competitiveness report available in the Google Hotel Ads Center provides insights into how competitive an advertiser’s prices are compared to competitors with the same hotel itineraries.