It may sound like common sense that when searching for the perfect hotel, price matters, but the rate displayed by a hotel advertiser can have a larger impact than simply attracting a customer.

In addition to making your ads more attractive to potential customers, being price competitive can lead to:

• Improved positioning
• Improved impression share
• Lower CPCs
• Higher CTRs
• A more profitable campaign

From the studies we have done at Koddi, solving pricing issues and remaining consistently competitive can drive potential incremental revenue increases of 30-40%.

The Causes of Price Non-Competitiveness

Although there are many advertiser-specific nuances that can lead to noncompetitive rates, the causes can generally be bucketed into a few distinct groups:

• Caching Issues – Caching issues can be caused by upstream or connectivity delays that cause the price displayed on the publisher’s site to be different from the actual price displayed once a user clicks through to the advertiser’s website. The ability to solve this issue will depend on the advertiser and the way that they pass rates to the publisher. If an advertiser is using a feed provider, there is a level of latency that will always exist. It is important to determine the acceptable amount of latency compared to the opportunity to improve and achieve potential benefits.
• Rates Issues – Rates issues can be identified when all competitors have the same price for an itinerary while the advertiser is displaying a different price. There are a variety of ways in which a rate can be submitted incorrectly and correctly identifying the root cause can help prevent additional rate issues in the future.
• Competitor Price Cut – This issue occurs when competitors are publishing a deeply discounted offer not available on the advertiser’s site. These issues can be actionable depending on the advertiser’s agreements and the frequency of which the deeply discounted rates are appearing.

Each publisher has its own unique price treatment that not only affects customer perceptions, but also positioning, cost of advertising, and profitability.

Price Competitiveness on Google Hotel Ads

Google provides the most detailed publisher report to help advertisers understand how competitive they are when it comes to price. The price competitiveness report available in the Google Hotel Ads Center provides insights into how competitive an advertiser’s prices are compared to competitors with the same hotel itineraries.

By examining this report, advertisers can learn if the lowest price for a particular itinerary belonged to an OTA, supplier, both, or neither. The report also includes the delta between the advertiser’s price and the lowest price to gauge competitiveness. You can see a sample of Google’s price competitiveness report from Google’s Prices Help Center below:

The most noticeable display of an advertiser with the lowest price is Google’s deal badge that automatically appears when an advertiser displays a price lower than the average price for that hotel.

With or without the deal badge, there are some significant impacts to having the lowest price on Google. Having a competitive price can improve your click-through rate as customers are more likely to click on a lower rate which can also improve your Google Hotel Ads quality score. This can lead to:

• Increased impression share
• Lower CPCs
• Improved average positioning

The latter two benefits are especially important for large, well-established campaigns with high visibility. The cost benefit of lower CPCs and the lift in average positioning can lead to elusive incremental revenue.

Price Competitiveness on Other Publishers

Because TripAdvisor and Trivago both have a best-price wins auction, the benefit to having the best price is even more pronounced as advertisers can achieve the top position without increasing CPCs to first position levels. Both sites also display “Top Deal” badges to the lowest price advertiser further increasing the potential impact on click-through rate:

Both TripAdvisor and Trivago also provide reports to help advertisers understand how competitive they are on price (although Trivago’s report is currently only available to pixel partners).

If you want to learn more about how competitive your prices are or how to leverage this information to make your campaigns more successful, subscribe to our blog below or send us an email.