TripAdvisor Advertising – CPC Case Study and ROI
A great guest post by Piotr Majdan from Mirai Espana, that takes a deeper look at the performance of TripAdvisor PPC (not to be confused with Business LIstings) activity. Piotr had also published a case study on the ROI of TripAdvisor Business Listings as while back. These conclusions were derived by Mirai after investing €27,000 with 58 hotels:
Your direct rates, your hotel’s website rates, can now appear on Tripadvisor dealing face to face with intermediaries such as booking.com and expedia.com. Should you join this program? What can you expect regarding the required investments and the return you will obtain? Does this return affect your hotel’s position within your city’s ranking? After a comprehensive three-month study, we have got answers.
Tripadvisor’s CPC (Cost per Click) program will generate new bookings in most of the hotels’ websites, mainly for the best rated hotels, but it is not predictable when it comes to cost and can generally be expensive “commission wise”.
In any case, “high” commission is a relative concept and should always be compared with the margin you get through intermediary sites (IDS) or classical tour operators . It still might be worth it for many hotels. Here is how we got to this conclusion.
In May 2010, Mirai pioneered the testing of the Tripadvisor Business Listing. Once again, we are the first ones to explore the new opportunity given by Tripadvisor – their CPC program. The difference between them is that the former is based on a fixed fee and the cost of the latter is variable depending on the traffic.
Other companies on the market offer this service (sometimes with a set-up fee or monthly fixed payment) directly to their clients promising new bookings. Before doing so, we at Mirai, have conducted a test to check the return you can expect by participating in this program. We invested €27,000 in 58 of our clients and analysed the results.
So what is the CPC program and how does it differ from Business Listing?
Business Listing allows you to add a link to your website, as well as the contact information (Blue).
Case Studies and ROI – TripAdvisor Business Listings
A recent blog post and case study shared by Mirai, on TripAdvisor’s Business Listings option introduced earlier this year. Many hotels have jumped onboard and many others have held off till better information is available about the Return on Investment on these (often pricey) listings.
TripAdvisor Business Listing – not for everyone
On May 6th 2010 in its press release Tripadvisor announced that over 12 000 hotels around the world had subscribed to its Business Listings service and added their urls, emails and telephone numbers. Five months after the launch Paris has taken the leader position wih 13% slice of the total listings with urls, followed by Rome, Florence and Venice.
It looks like a great business for Tripadvisor! According to cautious estimates, the above numbers can mean at least 5 million euros in revenue generated by the new feature. But is it really worth for a hotelier to pay from 400 up to 10 000 Euros per year? Since TripAdvisor launched the service we have received many enquiries from numerous hoteliers, keen to boost their direct sales by placing a link, asking whether it pays off. We decided to check it.
Will Artificial Intelligence spell the end of the TripAdvisor Model?
Travel and Hotel Reviews…love ‘em or hate ‘em, they’re here to stay. The question just begs to be asked though…just how long will the user-generated model of referrals really last?
TripAdvisoris used as an example in this article because its simply too big and too well established to ignore. However this piece is not aimed at the company (to be perfectly fair, I love TripAdvisor and have used it on many occasions to find and book accommodations in strange and foreign lands). There are various other travel and hotel booking websites, guides and online travel agencies that also incorporate user reviews to add an element of trust and ‘referral credibility’ to their products.
Image Source: Compete Inc. “Consumer Generated Content in Travel” 2007. Not surprisingly, 82% consumers in the survey indicated they trust other consumer opinions over what a hotel had to say about itself. But interestingly enough, even now, less than 70% really trust the information and barely 51% feel that TripAdvisor content is unbiased.
