There’s a lot of information and resources out there on how to optimize marketing campaigns on Google, Facebook, Instagram or LinkedIn. But for travel brands there’s a world of ads you can buy on other travel sites like metasearches or even some competitors that is widely used but little data is used into the decision making process of how to bid in order to achieve a positive return on investment.
Ad Placements
First let’s cover the main types of ad placements and analyze the different strategies that should be used for each of them.
In-line
This is placed between the organic results of a search, typically with a fixed frequency of one ad every five results or something in that range. Since the design tends to be very similar to the actual results, traffic is usually high quality and you should expect to pay more for it. The question is not only how much to bid, but more importantly when.
Competition analysis is key on this one, because you should have a strategy based on how competitive you actually are on that route in the organic results. On metasearches if you already are in the top positions in terms of pricing, you should not bid at all because you might be paying twice for that user. And even if you bid, the amount must be minimum.
A whole different scenario is when you know you are expensive. This is the ideal play to steal that user using the ad placement in a search where you’d never get the organic click. Here you should bid higher but it’s paramount that you showcase your price on the ad. It should also say why even being more expensive you are the best option, like flexible dates or more luggage. But without the price shown it will just be an expensive click with a terrible conversion rate, because the user will easily realize that other competitors are cheaper and exit your site.
Sidebar
Another relevant ad type is the sidebar comparison box, where it shows a simple list of brands and when clicked redirects the user to your site and runs the same search parameters as the current results. Main issue with this one is that you can’t display your price or any other information, meaning it just serves a purpose for brand awareness. As most branding campaigns, you shouldn’t expect a positive return short term so you’d better focus on bidding low and trying to break even at best. It’s also a good idea to play with different bids on each market and each route since there’s no really a reason you should have 100% coverage on every search.
Compare to
On the homepage or search page of the site you might have a checkbox below the search form where users can run the same search on multiple sites. Options are generally clicked by default and the user should unclick them in case they don’t want it. In my opinion this is the worst experience for the customer and I’d stay away from them. Even at the minimum bid of one cent it tends to be expensive and ends up losing money, besides the association of your brand with a bad spammy experience.
Exit unit
A few sites have enabled this placement called exit unit, which is a pop up on a different window showing after the user exits the site. Since it shows without any click, this is usually charged by impressions. Same as the compare to, the experience is terrible and I wouldn’t bet on it either.
Bidding
After covering the basic types of ad placements the main question is now how much to actually bid on the campaigns.
First thing you need to know is whether you can bid separately for each route or even search dates. The deeper you go into the segmentation, the better results you can expect.
The idea behind the bidding strategy is to create one campaign for each search segment, let’s say one for each market and route. Once you set them up, start with a minimum bid, usually one cent in your currency. Then monitor each campaign daily and measure the actual revenue generated. Calculate also the daily cost for that campaign and compare both numbers. Also set an investment return expected ratio which we will call R%. This variable depends on your business goals. If you want to grow faster, aim for a small return and focus on revenue. If you are in a tough financial situation focus on profit and set a higher R, but expect to get a lot less traffic.
If number of clicks are less than 20, increase CPC by one cent
If number of clicks are more than 20 then:
- If revenue is greater than cost by X%, increase bid by (X-R)%
- If revenue is smaller than cost then decrease CPC by one cent (zero means off)
In order to implement this process you have two options. You either automate it and run it for every route and market or you do it manually selecting only your top routes where you expect to be competitive and have high traffic levels.
Final Thoughts
Competition analysis combined with automated bidding is the key to being successful on travel native ads. If you are just starting off I suggest to begin with the manual approach until you are comfortable with the process and variables setup. Once you see results, it means it’s time to automate everything and scale up.
