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October 25, 2016

Metasearch Cross-Channel Optimisation

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Remember the good old days of hotel metasearch? It seems like just yesterday when all you had to do was get connected to start enjoying the traffic. OTA sites would scarcely take notice because they had bigger fish to fry, and the mere presence of your direct website as a booking option would have no impact on cost per click.

Boy, has that changed! Plus, now that everyone wants to be a meta channel, what’s a hotelier to do?

The ever-changing world of metasearch

In the early days, we only had to think about one or two major metasearch channels. However, they quickly expanded (and continue to!), and now we find ourselves rushing to get connected to the “next big thing.”

Fast forward just a few months, and suddenly we realise that metasearch is about more than just generating click traffic. One million clicks a month doesn’t mean that much if no one books a reservation.

Enter the era of campaign optimisation, with bidding algorithms and strategies to help define and accomplish your goals.

The birth of channel managers

Does this sound familiar to anyone? Didn’t we do exactly this same thing when OTA merchant model rates became all the rage, and hoteliers had to log into a different extranet system for each one to manage these? Fortunately, software programs appeared to help alleviate this strain, and extranet management portals were born. These evolved into what we now call Channel Managers.

It didn’t take long for the metasearch channels to realise such management programs were affecting their traffic volumes and take action. Calls between hoteliers and channels, such as Google and TripAdvisor, usually focused on all the clicks the hotel was leaving on the table—and all the missed opportunities! As a result, they began developing bid management programs of their own and encouraged their clients to use these platforms via various extranet modules.

A call for cross-channel optimisation

We’re at a crossroads where we see the same dilemma forming within the hospitality metasearch market. Hoteliers can directly manage their campaigns through Google, Kayak, TripAdvisor, Trivago, Wego and many other channels. The only problem is this means logging into multiple systems, each with their own unique approaches, and having no means by which to compare them side-by-side.

Hoteliers need to apply proper cross-channel optimisation. The principles behind this are very similar to revenue management. However, they require a holistic view and management of your entire campaign from a single source.

Let’s take the following example for a hotel using channels A, B and C.

Channel Clicks Cost CPC Revenue ROI
Channel A $ 1,000 $ 1,000.00 $ 1.00 $ 13,000.00 13.00
Channel B 1,500 $ 1,875.00 $ 1.25 $ 16,000.00 8.53
Channel C 2,000 $ 3,400.00 $ 1.70 $ 18,000.00 5.29
Total 4,500 $ 6,275.00 $ 1.39 $ 47,000.00 7.49

By applying cross-channel optimisation, we can shift budgets and strategies to achieve higher revenues with less cost, thus increasing the overall ROI:

Channel Clicks Cost CPC Revenue ROI
Channel A 2,000 $ 2,400.00 $ 1.20 $ 21,600.00 9.00
Channel B 1,500 $ 1,875.00 $ 1.25 $ 16,000.00 8.53
Channel C 1,000 $ 1,200.00 $ 1.20 $ 11,400.00 9.50
Total 4,500 $ 5,475.00 $ 1.22 $ 49,000.00 8.95

In the above example, we decreased our CPC threshold on Channel C. This resulted in fewer clicks, but it also generated a higher ROI because of the lower cost involved. Likewise, we increased our CPC threshold on Channel A, which actually reduced their ROI but significantly increased volume.

The need for a proper solution

We see cross-channel management and optimisation becoming even more complex with the next evolutionary stages of metasearch revolving around retargeting and programmatic advertising. This will make it even more important to seek out companies who have the ability to manage all of these programs within a single application. Doing so will enable hoteliers to quickly adapt their budgets and marketing strategies for better results. Find out more about metasearch management with Click.

About the Author

dean-schmitDean Schmit works with DerbySoft Click as a Sales Operation Manager. Dean lives in Nebraska with his wife and 7-year-old son and hopes to one day star in a remake of Gilligan’s Island—we’ll let you decide for yourself which character!

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