As owners and asset managers struggle to offset the rising costs of debt service, brand fees, energy, staff and insurances, marketing costs have also come under intense scrutiny. For many hoteliers, reducing the cost of guest acquisition is the only way forward to improving margins.
Unfortunately, the cost of one of the most popular marketing tools available to hoteliers continues to rise.
In just a short amount of time, we’ve seen dramatic surges in search engine marketing pay-per-click (PPC) costs (especially on Google), burning holes in hotel marketing budgets around the globe.
PPC is an advertising system where hotel marketers pay only when an online user clicks on the hotel’s ad, regardless of how many times the ad was shown. A search engine, like Google, runs PPC ads using an auction of search phrases. The highest bidder of a search term gets the most prominent position on the SERP (search engine results page).
Incredible benefits… but at what cost?
PPC has become standard for most hotels and often consumes the majority of a hotel’s digital marketing budget. From a small boutique property on Venice Beach to a Hilton in Chicago, branded to independent, hotels across the globe rely on PPC as their default channel to generate traffic from customers whose search activity demonstrates a clear intent to purchase.
Paying only when prospects are taken to your website is a revolutionary concept that’s disrupted the advertising world, destroyed the print media business and made Google one of the most valuable companies in history… but hotel marketers are attracted to it for other reasons as well:
- PPC is focused on guests at the bottom of their purchase funnel journey
- Hotels are charged only when someone clicks… which means their ads appear to relevant searchers for FREE. These repetitive “impressions” also have value
- Each click can be tracked to measure ROI from online bookings and phone calls
- PPC campaigns preserve clicks that might otherwise go to 3rd parties “squatting” on your hotel name. Any OTA or competitor can bid on your keywords and even your hotel brand name. In fact, they most likely already are (just look up your hotel name and see what websites come up on top of the SERPs).
Budget Busting Costs
Unfortunately, these benefits come at a price tag that will continue to climb dramatically.
