Good news for property owners? We think so!

Just over a week ago Google made a big announcement about free advertising. It’s fair to say it shook up the meta search hotel booking space like a gorilla with a rattle. We all like to have something for free and from an advertising giant like Google, we would surely love it.

But let’s pause for a minute, what is this? We know that the OTAs typically spend in excess of $6 Billion a year with Google on advertising. Are they giving all of this away? No, I’m sure they are not doing that.

So, if it’s not a total giveaway then what is it? What is the free advertising Google are offering and how good is it for accommodation owners? More to the point, WHY have Google done it?

As a Google Hotel Ads feed provider and Ads manager for nearly two years, here at freetobook we have seen the progress and have a few insights into the strengths and weaknesses of the Google Hotel Ads as it stands, and, as it might develop alongside its competitors – chiefly TripAdvisor – in this meta search space.

What is the free bit that Google offer? The new free listing of the rates and availability feed is a section at the foot of the advertising block. It fits in below the paid or sponsored listings and looks a bit like this …

For those of you familiar with search engine terms this new “free” block is analogous to “natural” listings. Natural listings are the opposite of paid listings, they are free and they are ordered based primarily on customer preference. If many customers pick a certain supplier for that property it is likely that supplier will float to the top.

Anyone providing a feed to Google can be listed in the free or natural section and the order they are presented will be a secret algorithm known only to Google which is 100% independent of any payment to Google. No advertising payment can ever influence a natural listing, that is certain.

How good is this free “natural” advertising? This is the tricky bit to answer but I think I can. In short, the reality is that it’s as good as Google wish to make it. They are the universal masters of natural listings vs. sponsored or paid listings. Their whole business model has, at its core, the advertising auction to get to the top of the page (where the clicks are) vs. the natural listings that give more authentic content and customer satisfaction.

The answer is probably about 10%. Google is giving away about 10% of the traffic to natural listing. We know this roughly from volumes of bookings and it kind of makes sense as a natural vs. paid split.

It sounds small but to accommodation owners this is a fantastic opportunity. If you are not currently paying Google to advertise in their feed (and the majority are not) then this 10% is actually 100% of something you didn’t have before and for free. If you remember the $6 Billion dollars, they are giving away a chunk of that to massively improve their customer offering and bring in new potential advertisers. Not a bad price for them and remember Google controls the prominence of natural listings (as they always have), so that 10% might not always be 10%, the structure/visibility of that display will continue to change.

What’s in it for accommodation owners? Our feed to Google is direct so it shows to the consumer as “Official site”, this puts properties at an advantage against the OTAs in the natural listings (free section). This is because consumers are drawn to the direct channel when everything else is equal. Every property’s direct feed should by “rights” be at the top of the natural listings and so you could get the 10% of clicks for free. But beware! The OTAs are all also in the free feed and if any OTAs were to have a better rate than yours they would almost certainly come above you in the natural listing. If you are not at the top, it is likely you have given a special offer to an OTA and your direct rates are higher than the OTA rate.

Now this is the bit worth paying attention to … here are our tips to being top of the natural listing:

a) Have the best rate direct
b) Keep the best availability for your direct bookings
c) Do not accept OTA virtual cards or they will undercut your direct rate
d) Make sure your Google My Business listing is as unique and rich as it can be with reviews, photos, amenities etc. In other words if your direct feed is not at the top it is your fault and you need to fix it – which is as easy as a,b,c,d.

So yes, this is a massive opportunity for the direct booking feed, if you are managing your rates properly you will benefit. For the small number of properties that do not list with the OTAs this is even better news because they will have no competition for their direct bookings, a “no-brainer” as they say.

Why are Google doing this?

Lots of good reasons. Google really cares about the user experience. You use Google search because they are the best search engine. They want you to say you also book via Google meta because it is the best place to find the best rates and availability.

1) Google can only show the best rates and availability if they have all of the properties in the world on board and feeding them with the best on offer. So, on one level, this is a ‘land grab’ to get the whole world’s accommodation listed and bookable.
2) As a customer on Google you want to find the best rate. In the sponsored listing the best rate is not at the top, the top spot is for the highest bidder. This is sub-optimal as a user, why is the best rate hidden down the list of OTAs? Not a good user experience. The natural listings solve this issue because the most popular link comes to the top (most likely the best rate).
3) New advertisers become possible. As google advertising is an auction, these always work better with more bidders. Google would like you to play in the 90% of traffic that isn’t free so they will get you on board with the 10% free and take it from there.
4) Great authentic natural listings are what customer’s ultimately desire. They want to see what the best link is and the only way to do that is to remove the paid side of it.
5) Google probably know that by having all the small independent properties (the “longtail”) on board they will increase their overall bookings including those with the larger chain hotels. Guests want choice and that’s why the OTAs want to have all properties listed.
6) Reviews and content are becoming a bigger part of what Google offers. Having availability next to their accommodation reviews is a very smart move. We have seen the growing importance Google and Facebook place on collecting reviews… another blog in itself.

Google knows how to juggle the supplier’s desire for customers “traffic” with the customer’s desires. They know that if their meta is to work it must work for customers and the most authentic way for it to work is with natural listings providing by definition; what the customer wants at the top of the list.

We know Google has the best tech, they can do the math on advertising bidding better than any other company. They soon will have most of the rates and availability, a very good set of customer reviews and other content, making them the “go-to” place to book a hotel and other travel-related services. If I was a review website or an OTA I would be looking hard to see how I could keep my revenue. If I was an accommodation provider I’d take advantage of the free offer and see what plays out – Google vs. OTA vs. Big review site.

PS: Where Google goes and makes a success, Facebook and Amazon watch to see how its done!

Craig Stewart, Director freetobook