Trivago adds CPA model as a bidding method
Good things come to those who wait!
2019 was undoubtedly the year of Google Hotel Ads, which has already been going strong since 2017.
The growth of Google Hotel Ads, both in amount invested and revenue, has increased year after year. See graph 1 showing Roiback hotel revenues from the top 3 Metasearch engines:
In 2020, Google Hotel Ads has shown more moderate growth, stabilizing at 67% of the total share. As travel continues to recover, we predict that the share of Google Hotel Ads will continue to increase.
To adapt to this trend among chains and hotels, trivago has sought to reinvent itself. Through its CEO, Axel Hefer, trivago has announced that it will start offering CPA (Cost per Acquisition) as a bidding model.
For those of us who have been working with this platform for more than a decade, we know that linking the word CPA to trivago was utopia up to now. Now it seems that they are finally adapting to the demand of hoteliers.
To their well-known CPC model, trivago now offers the CPA model and the Hybrid model.
What is the new trivago CPA model?
Expected to launch soon, the CPA model allows hoteliers to bid on commission or CPA rather than on cost per click. Commissions will be payed on reservations made, and not on stays.
The trivago CPA model will be similar to Google's CPA model, in which hotels pay commissions on all reservations, whether they are cancelled or not. At this moment trivago are not offering the GHACP (Google Hotel Ads Commission Program) model - now called Pay per Stay - in which a commission is paid only if the guest has actually stayed at the hotel.
Trivago has yet to provide information on CPA percentages, although everything indicates that the commission level could be defined on a case-by-case basis, depending on a number of hotel variables.
To work with this new model, trivago will require a connection and integration to its conversion API. Hotels will not be able to bid for two different models, if it is part of the same POS (Point of Sale).
In addition to the CPA model, there is a Hybrid model, which is a combination of CPC and CPA. This combination can be done at the campaign level and not at the hotel level. That is, within your account you can have hotels at CPC and hotels at CPA.
What other news has trivago announced?
In addition to the changes to the bidding model, trivago has also opened up to other traffic and revenue generation models:
● Sponsored Listings: As Tripadvisor has already done, trivago is looking to monetize the most sought-after spaces in its search results. You can bid - on a CPC model - for the first positions, where the hotel can show its price exclusively with its logo.
● Display ads: trivago wants to take advantage of its huge traffic and therefore it is preparing to monetize its page views with Display advertising, as other Metasearch engines already do.
Display ads will help you increase brand awareness, reconnect with post-Covid19 travelers and reach segmented audiences. The model will be mainly CPM (Cost per thousand impressions.
● Taglines: These are a kind of “sitelinks” or text ads like Google Ads, where hotels can communicate additional information that they want to highlight.
Their main advantage is to improve the CTR (click thru rate). It is not yet clear what the bidding model will look like but we understand it will be based on a CPC.
The system will allow you to create text ads, trivago that will translate them into all languages, coordinated by an Account Manager.
The taglines are still in the testing period and there is no set date for their release.
Finally, trivago has added 3 more functionalities that hotels can use to optimize their strategies:
● Mobile Exclusive Rates: Special rates for mobile devices.
● Rewards Rates or Member Rates: Special rates for trivago “logged in” users.
- Flash Rates: Special rates for specific dates.
In a nutshell:
Trivago has lost a lot of market share in the last 3 years and has seriously jeopardized its business model. Still, it still has financial muscle, brand recognition, and robust, reliable technology. They have decided to move forward to recover their lost space.
It is good news that other Metasearch engines adapt to the real needs of hoteliers.
Hopefully, this is not the last of new and interesting developments that will allow hoteliers to generate more sales and increase the cost-effectiveness of their campaigns.