Revenue managers and metasearch: An exciting space
If you google “hotel metasearch advertising,” you’ll get over 800,000 results, most of them being articles, whitepapers, or guides to implement, run, and optimize your property’s metasearch strategy. The growing interest in this particular form of advertising is undeniable, and the ever-increasing volume of publications on the topic proves that. Yet, by navigating this ocean of precious information, you can quickly realize how most of these pieces are consistently written from marketers’ sole point of view. That being said, if we can agree -at least to a certain extent- that the very notion of traditional advertising is historically associated with what marketers do, when it comes to metasearch advertising, we feel that this approach may be a limiting factor.
To further support this thesis, here at Meta I/O we’re witnessing a rising interest in our platform coming from different roles inside the hotels we connect. It’s becoming quite common, for example, to receive demo requests from revenue managers, rather than marketers, intrigued by the possible yield applications that metasearch engines have to offer. Thibault Catala, Founder and Managing Director at Catala Consulting, interviewed for this article, confirmed the trend: “the metasearch world,” he stated, “is definitely a very exciting space to watch for hotel revenue optimization. It has grown in importance over the last few years, and it will likely remain at the center of hoteliers’ attention in the future.” This is a complete change of shift, not only fueled by the fact that the boundaries between marketing and revenue management are becoming increasingly blurred, but by the evolution of the metasearch platform themselves. Let’s dig deeper.
The evolution of metasearch engines
The times where you were only able to place your bid on TripAdvisor are, in fact, long gone, and the sophistication of most metasearch engines in terms of bidding, today, opens a whole new world of possibilities to increase both brand awareness and ROI, a shift that requires both the know-how of marketers and, especially, revenue managers.
“A key development in metasearch advertising capabilities,” Jens Egemalm, Distribution Consultant at DDS Digital, stated, “is the upper-funnel marketing options that allow hotels to place ads on destination-search level, as opposed to property-level only.” He continued: “Hotels can now actively invest in driving more business during periods of need.”
According to Egemalm, in fact, while metasearch campaigns used to be predominantly “lower-funnel, channel-shifting oriented,” and, ultimately, simply a means to “reduce distribution costs,” thanks to their increased sophistication, they brought “metasearch marketing one step closer to the revenue management function.” The more appropriate example for this always-increasing array of options is, unsurprisingly, Google Hotel Ads. Among the platform’s many bidding possibilities, Google recently introduced the ability to bid by check-in date. This means that advertisers can now invest more or less aggressively based on variables such as the hotel’s occupancy rate, the events in the area, the local weather, and so on.
All these factors are, historically, the very realm of revenue management, so it comes as no surprise that more and more RMs are becoming interested in the platform. Pablo Torres, CS Consultant at TSA/FPG, thinks that running metasearch advertising should be a team effort: “Revenue managers should manage metasearch ads in conjunction with the Sales & Marketing team. The line dividing both roles is blurrier than ever, and some tasks that historically would purely belong to marketing seem to fit now much better under the revenue umbrella.” According to Torres, there should be a cooperative approach, with the“marketing knowledge” brought by the sales team, together with the “more analytical mindset” of the Revenue Manager.
A sophisticated platform for revenue managers
Check-in date bidding is, however, just the tip of the iceberg and the proverbial icing on the cake for revenue managers. Besides this latest entry, in fact, hoteliers can adjust their visibility on Google based on a large selection of variables.
Here are the most common:
- Length of Stay: advertisers can decide to overbid for users looking for more extended stays, reducing room costs (housekeeping, linens, and bathroom amenities’ replacement, etc.), while increasing the chance of up/cross-selling (food, bar, wellness treatments, etc.);
- Check-in day of the week: advertisers can increase/decrease the bidding for specific day(s) of the week. Leisure hotels can, for example, bid to improve their occupancy rate during working days, when they have lower occupancy, while MICE properties, vice-versa, can become more visible during weekends;
- Booking window: accurate forecasting is crucial for revenue managers, and having a solid bulk of on-the-bookreservations in advance can help revenue managers make better price/distribution decisions.
And, if Google has -by far- the best versatility in terms of possible bidding options, other metasearch engines are indeed keeping up, by expanding their advertising preferences as well. TripAdvisor, for example, now offers its own version of pay-per-stay advertising, with a variable commission rate between 12% and 16% (according to the desired impression share/visibility the advertiser wants to reach). This risk-free approach particularly resonates with revenue managers, as they can implement innovative campaigns with a lighter heart, even during a historical moment in which the average cancellation rate in the hospitality industry is higher than the norm. Trivago also offers a similar choice, with its pay-per-booking module. Advertisers can select between “high” and “low” commissions (the higher the commission, the higher the impression share of the ad) and show their official rates directly on the German metasearch engine. Trivago does not offer any PPS model (meaning commissions are due when the original booking is made, not when the guest arrives at the hotel). In this scenario, unfortunately, the advertisers also pay for possible cancellations, yet, the average commission needed to participate in Trivago’s ads is lower than most search engines, making it a viable option for most accommodation providers trying to increase their reach.
With all these options, it’s not surprising that more and more hotels are integrating metasearch advertising in their revenue management strategies. “As metasearch optimization is very close to Revenue Management principles,” Annemarie Gubanski, Founder and CEO at Taktikon, stated, “it does make sense that a person with a long experience in revenue management would be the best person to handle metasearch.” Gubanski even asks a provocative yet fitting question: “It is time to review the role of the commercial team entirely. Marketing Managers cannot do without Revenue Management knowledge, and Revenue Managers need a good understanding of digital marketing principles and their effect on cost and profit. Should both roles be combined into one person?”
Case in point: metasearch advertising (and Google Hotel Ads in particular) can be a very powerful instrument when in the expert hands of revenue managers. Yet, in order to get it to its full potential, the latter should get to learn the platform and get accustomed to terms and concepts (such as bidding, CPC, multipliers, etc.) that, up until just a few years ago, were only adopted in marketing offices. Even better, revenue managers and marketers should operate together to get the best out of the respective know-how. “Only by focusing on one shared goal,” Silvia Cantarella, Revenue Management Expert and Founder at Revenue Acrobats, stated, “we can move in harmony. Metasearch is a distribution channel and the goal of both marketing and revenue should be to get the most out of it. Marketing can provide great insights on detailed data and ROI concepts, while revenue can help set the right objectives based on the demand patterns, big data, and booking pace.” So, the question is: can metasearch advertising really work if only one of the two parties is on it? Possibly, but definitely not as efficiently and effectively for the best revenue and profit return.
World Independent Hotel Promotion (WIHP) is a leading hotel marketing agency drawing on more than 12 years of experience and tracking. Having built over 4000 hotel websites and tracked the most efficient ones, WIHP now provides hotels from all markets with high-end hotel marketing campaigns designed to increase direct revenues. With their custom tracking system WIHP provide their customers with extensive information on ROI and results. To learn more, visit wihphotels.com, or follow WIHP on Twitter, @WIHPhotel; Facebook; or Google+.