Over the last few days, Google have announced a few changes to how Hotel Ads show up in the search results. We originally spotted this experiment in August and have been paying very close attention ever since.

This experiment has rolled out broadly in the last couple of days, and should be nearing reach to 100% of users. In tracking the impact across clients, we’ve found a few interesting things:

A shift from Hotel Finder to Local Universal

The new search results format eliminates the Hotel Ads commercial unit in favor of the rich list or 3-pack format. This should have the result of of increasing the traffic that flows through “localuniversal” and reducing the traffic that flows through “hotelfinder.” You can see in the graph above, if you focus in on 11/13/2014, this is exactly the trend.

We’re seeing “localuniversal” traffic up 16.7% day over day, and “hotelfinder” traffic down 23.6% day over day.

Total traffic impact is low (so far)

We’re expecting total traffic running through Hotel Ads to increase as a result of this change once everything settles out.  That said, total traffic doesn’t appear to be impacted very much so far, with total clicks coming in about even day over day.

Metrics to watch

We typically see “localuniversal” convert better than “hotelfinder” traffic and cost slightly more as a result. This change should funnel a lot more traffic into the “localuniversal” Search Type, so it will be important to pay attention to the results there specifically. Advertisers that bid aggressively for this search type should pay close attention to their KPIs to ensure they don’t end up overpaying for clicks in the coming weeks.

Any time there is an increase in traffic through one channel, advertisers should expect a decrease in conversion rate. This may not be cause for alarm, though. Because “hotelfinder” traffic typically converts at a much lower rate than “localuniversal,” it’s possible this change could generate a net positive change to conversion rate for Hotel Ads campaigns, while increasing traffic.

What are they thinking?

This change has been experimented with for at least three months, and Google is a company that makes decisions with data. You can expect that this positively impacts the user experience and assume that it will positively impact the bottom line.

The new format creates a lower friction search experience. Instead of dropping users into a product (Hotel Finder) that performs differently than the core experience, the new 3-pack / rich list results allow Google to keep users on task. Hotel Finder had little chance to be a destination on its own… now it is indistinguishable from Google Search to the average user. This gets users to highly valuable, extremely relevant results in less clicks, and should get Hotel Ads in front of more eyes over time.