Trends in Metasearch Marketing
We sat down with our resident Metasearch Marketing expert, Dean Schmit, to learn more about the trends he sees in 2023.
How Has Metasearch Marketing Baseline Data Changed?
We define the success of our marketing campaigns based on the achievement of specific Key Performance Indicators, or KPIs. These may include factors such as Return on Ad Spend (ROAS) and total revenue. However, reaching these KPIs is dependent upon the performance of several other metrics. The purchase trail for Google alone can be measured from 13 specific KPIs before we even start looking at data associated with the bid levers.
Starting at the very beginning is, afterall, a very good place to start. Nothing happens in metasearch marketing until we have an “Eligible Impression.”
This means a consumer searched for our hotel, we had availability for their dates, and we had an active campaign. Then, if we actually do get visibility, that tracks as an “Impression.” The derivative of Impressions / Eligible Impressions provides us with our “Impression Share.”
Many other factors come into play before we reach final results of Revenue & ROAS. Fluctuations in any or all of these data elements will impact the others. For example, the less Eligible Impressions available, the fewer actual Impressions we can receive. This means we will have fewer clicks, and thus fewer bookings which will ultimately reduce the total revenue.
Even a simple change in Click Through Rates (CTR) will impact many of the other elements both up and down the funnel.
Historical Data traditionally guides our forecasts. Unfortunately, this data has been less than reliable over the past 2 years. That said, let’s take a look at how metasearch marketing campaign performance changed throughout COVID based on fluctuations in just a few simple metrics – Average Daily Rate (ADR), Conversion Rate (CVR) and Cost Per Click (CPC).
First, let’s consider what performance looked like Pre-Covid to help establish some baselines. The challenge to this is said baselines will vary depending upon many factors including type of hotel, price range, location and even campaign strategy.
The information below provides performance examples based on several types of hotels.
You can see that while Airport hotels under $100 had one of the highest CVRs, the ROAS was extremely low due to shorter Length of Stay ( LOS) leading to less revenue per booking.
By way of comparison, hotels with lower conversion rates but higher ADRs returned a much stronger overall ROAS.
How did this evolve through 2020 and 2021 during COVID?
Many variables changed, including a significant drop in ADR and CVR. However, we also saw a major decrease in CPC. Some hotels were seeing better than 85% impression share for as little as $0.25 CPC! The lack of aggressive bid competition provided unseen levels of opportunity to own top ranking. This leads to a strong ROAS in spite of the challenging travel environment.
The data shown above does not account for the overall drop in search volumes, however it does show that the available traffic had an opportunity to show very strong returns.
Finally, how has this data changed in 2022 and as we look ahead to 2023?
The good news is that ADRs have come back and are now as much as 35% ahead of where they stood in 2019. CVRs are still a bit lower, however they have improved significantly since 2021. However, CPCs are also on the rise, showing strong competition from Online Travel Agencies (OTAs) to dominate the ranking order.
These factors have led to a lower ROAS than what we saw in 2020, however they still reflect an excellent revenue opportunity with increasing lower funnel traffic volume.
The challenge with these higher CPCs is it means you no longer have the luxury of experimenting and playing around with your metasearch marketing campaign. Now you need some real historical data to help guide your optimization.
Part 2 of our blog, soon to be published, will look at how Google messaging (aka callouts) have evolved pre and post pandemic.
Want to learn more about how you can make the most of your metasearch marketing campaigns in 2023? We can help! With more than 10 years of experience managing metasearch, including brands, independent hotels, tech vendors & suppliers, we can develop a program that’s right for you.
