The world of paid search marketing remains hugely competitive for hotels, but understanding the latest industry trends and consumer behavior can make a big difference to how search campaigns perform.
In the recent “Paid Search Benchmark 2018” report by Adthena, there were some fascinating insights that all hotels can use to their advantage. The report compared several industries (including travel) in the US, UK, and Australia. Over 100,000 advertisers were interviewed, and data was collected from over 140 million paid search ads. Suffice to say, the scale of this report offers a lot of invaluable data.
In the following post, we’ll discuss some of the key findings, and highlight how these translate into opportunities for hotels to maximize the impact of their own paid search campaigns.
Paid search is growing
Contrary to industry reports and blog posts, paid search is seeing steady global growth across all sectors. The travel and tourism industry is experiencing a particular boon in first page search engine results page (SERP) click-through rates (CTR), with the sector currently enjoying +2% CTR above the search industry average.
The fight for a first page ad position in this industry is also fierce. The US travel and tourism sector is in the top two most competitive industries, easily outnumbering the overall search average. This intense competition is heavily driven by the OTAs. Their aggressive marketing strategies involve bidding on both branded keywords and generic, broader keywords — such as ‘hotels in X location’.
This represents a major problem for smaller hotel groups and independents. With such huge spending power, OTAs can easily outbid hotels and claim the coveted top spots. As a consequence, hotels frequently lose out on high-value direct bookings. With commission fees averaging 15%, relying on OTAs to bring in bookings cuts sharply into a hotel’s profit margins.
High click-through rates
In US search, average click-through rates in travel and tourism exceed the industry average by over 2% in all segments.
When it comes to mobile, the gap is even greater: average CTRs for brand ads are 4.14% higher than the industry average. This reinforces the potential benefits of investing in paid marketing campaigns, and the absolute necessity of having a mobile-ready website — especially since OTA mobile bookings are growing faster than hotels.
Looking at the UK travel and tourism industry, CTRs for generic terms far exceed the search average, while CTRs for brand terms are below average. This is most likely due to the high OTA dominance in the UK compared to other countries.
