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The bidding strategy commission (per conversion and per stay)
This strategy is the most automated bidding strategy and can be divided into two separate bidding strategies:
- The commission per conversion
- The commission per stay
The difference between the above bidding strategies relates mostly to the cancelation policy. Google’s commission per stay bid strategy was created due to COVID-19 and means that no commission will be charged in the event of a cancelation. This is the case with the commission per conversion bid strategy.
With both bid strategies, Google automatically sets the bids. As a user, you have no control over the minimum or maximum height of these bids.
As a user, you only have control over 3 parameters:
- The commission percentage
- The daily budget of the campaign
- The ability to apply bid adjustments of (only) -100% to devices.
The commission percentage is the percentage of the total price of the stay that you are willing to pay for a conversion or visit.
When the price of a hotel night for a particular night is $100, and the commission percentage is set to 10%, this means that at the time the traveler converts, the CPA of this conversion will be 10% * $100 = $10. Per month you do not pay more than the set daily budget multiplied by the average number of days in a month. The daily budget can therefore be exceeded per day.
Advantages and disadvantages
The big advantage of the commission per conversion bid strategy is that you only have to pay when a traveller has actually booked. So, you only pay a percentage on the conversions. Clicks that have not resulted in conversions are not billed.
The big advantage of the commission per stay bid strategy is that you only incur costs when the stay has actually taken place. Clicks that have not resulted in a stay are not billed.
The disadvantage of these strategies is that you, as an online marketer, only have a few buttons to play with. For example, it is not possible to set different bids for devices or target groups. As a result, you cannot distinguish between travelers who have already visited your website and new website visitors.
Finally, setting a commission percentage that is too low for auctions with high competition can ensure that you, as a provider, are not visible in the Hotel Ads environment.
The CPC-% bidding strategy
With the CPC-% bidding strategy, you set a percentage of the total booking price (including tourist taxes and other surcharges) as the bid.
As an example; If the total price for one night is €100 and the CPC-% bid is 1%, the max CPC for this ad is €1 (excluding any bid modifiers). If the price for one night is €200 and the CPC-% bid is 1%, the max CPC for this auction is €2 (excluding any bid modifiers).
At first glance, this strategy looks a lot like the commission bid strategy. However, there are several differences. For example, with this strategy, you pay per click, while with the other strategy, you pay per conversion or stay.
Another difference is the degree of control. With this strategy, you can be more in control as an online marketer. For example, you can add a max CPC. In addition, you can add extra bid modifiers, such as bid adjustments per location and bid adjustments on the target group lists. In addition to the ‘standard’ Google Ads bid modifiers, you can also add Google Hotel Ads-specific bid modifiers to this bidding strategy. These can be found in the campaign under ‘Itineraries.’
The following Hotel Ads specific bid modifiers can be added:
- Check-in day (which day of the week)
- Length of stay (number of nights)
- Number of days before arrival.
- Whether or not the traveler adjusted the date within the Hotel Ads environment before clicking.
The above bid modifiers give you, the online marketer, more optimization options. For example, if rooms are often still available on a Wednesday, you could increase the bid for searches for an overnight stay on that Wednesday.
Furthermore, there is also the possibility of using the improved CPC within this bidding strategy. By enabling enhanced CPC, Google will adjust its bids for clicks that are more likely to convert or not.
As an online marketer, if you want to keep more control over the bids yourself, this bidding strategy may be the right choice. The disadvantage compared to the commission bid strategy is that you do have to pay for the clicks, even if they have not converted or did not result in a stay.
Manual CPC and Enhanced CPC Bidding Strategy
Finally, there are also manual CPC and enhanced CPC bidding strategies. With these strategies, you, as an online marketer, determine the max CPC (excluding bid modifiers).
Please note that the max CPC you are setting with these strategies is the max CPC per night. If a traveler is searching for three nights, the max CPC you will set will be 3* max CPC. At the enhanced CPC option, Google will adjust its bids itself higher or lower with the goal of realizing a higher conversion rate.
Furthermore, the same bid modifiers can be used with these strategies as with the CPC-% bidding strategy. In fact, this bidding strategy is very similar to the CPC-% bidding strategy. The main difference is in the max CPC per click. With the manual CPC, the maximum bid per click is a fixed amount (excluding bid modifiers). With the CPC-% bidding strategy, the max bid per click depends on the booking value (excluding bid modifiers and a possible max CPC).
Which bidding strategy should you choose?
If you prefer to pay a fixed percentage per stay/conversion and want to automate bid management as much as possible, the commission percentage bid strategy is the most logical choice. However, if you want to keep more control over the bids, the CPC-% bidding strategy, the manual CPC, and improved CPC bidding strategies are good choices.
In addition, Adchieve also creates customer-specific bidding algorithms for Google Hotel Ads. We can use customer-specific data from multiple channels as input to calculate bids and bid modifiers for the CPC-% bidding strategy and manual CPC bidding strategy. The advantage of this bidding strategy is that automated bidding suggestions are calculated. However, on the other hand, you keep a lot of insight and control. In this algorithm, we can consider company-specific data such as margins, booking-arrival windows, and availability.
In the table below, you will find everything at a glance:
Better results through a different bid strategy?
Adchieve is an official Google Hotel Ads integration partner. This means that we help Hotels, Online Travel Agencies (OTAs), Holiday Parks and other accommodation providers to start with or improve their Google Hotel Ads.
Please contact us for more information.