Competitive Pricing for Metasearch

The importance of competitive pricing for metasearch.

Having the cheapest rate advertised on metasearch channels will lead to increased conversions at lower CPC.

Although the statement above is true for many, we understand achieving competitive rates is not an easy accomplishment. We explore what happens when our clients focus their efforts on achieving competitive rates and how this impacts their metasearch performance.

What is competitive pricing in the context of metasearch?

Consumers are most concerned about finding the best price for a hotel. With so many options available to book, consumers want to feel confident they purchased the best rate available. One thing you can do to reduce uncertainty (and improve your performance) is to display the best rate on all metasearch channels.

A competitively priced rate plays a big part in determining where you rank on a site. It also influences the value your CPC bid must be to gain visibility. All the main channels consider room rate as an important element of its auction calculation.

Competitive pricing influences ranking

As an example, Google determines the most competitive bids for an auction by combining your CPC bid along with your price competitiveness and quality score. This is what Google Hotel Ads call Ad Rank.

By placing different room rates into different buckets will determine what you pay for a click. The more competitive your rate is against others Google has received (from OTAs), the lower your CPC must be to achieve a higher position.

Simply put, if you have the cheapest rate, you pay less for the best position.

Auction metrics that directly influence Rank

It affects where your ad is placed

How the best rate is displayed varies among the channels, for Google, you can achieve a deal badge, further aiding click-throughs.

For other channels such as Tripadvisor and Trivago, the best rate is given more real estate on the site encouraging further clicks.

Example of Champion Position
Champion position on Trivago generates 90% of clicks from the rate card.

Work to maintain consistent pricing

It is one thing displaying a competitive price on metasearch channels. It is also important to make sure that same price is reflected on your landing page. By achieving this you can improve your conversion rates as it increases confidence in the user to go on and make a booking.

How does rate parity affect performance?

When working with our clients to improve their rate competitiveness we have seen click-through improve by 36%. More importantly, we have seen improved efficiency on CPC values with bids decreasing by 16%.

Conclusion

The importance of having competitive rates on metasearch channels cannot be understated. With benefits including lower cost per clicks and increased click-through rates, it is important to stay on top of the rates you advertise.

Many channels provide reports to help you monitor your competitiveness. These reports bring to light where issues of parity and price accuracy occur. Providing you with the actions required to rectify noncompetitive rates.

We strongly recommend hotel digital marketers share the common goal of achieving competitive rates with your revenue management teams. It can be a big challenge to achieve but once accomplished the rewards follow.

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