Two of the most common questions we get asked when running Pay Per Click (PPC) have to be:
"Do we really need to run branded PPC Campaigns?" and "Does branded PPC cannibalise the organic traffic?"
Excellent questions that really need a lot of investigation....so we did just that!
Do you really need to run branded PPC campaigns?
The most common thought process is that the organic listing would attract the clicks anyway and I have to say that this was a fair argument a few years ago. However, Google (and let's not forget Bing) search results pages have changed a lot in the past few years and these are now designed to send a higher number of visitors via PPC.
A few of the major changes are listed below:
Prominence of PPC
Above the fold, PPC adverts now occupy more real estate than before as the addition of advert extensions push organic listings down the page. The latest addition of image extensions is a great example of this.
Aggressive tactics from OTAs
OTAs represent a large percentage of Google's revenue and have been big players for several years. The difference now is that they have become more intelligent in the way they bid against your brand, they target the times of the day and markets that convert best and look for opportunities where they can exploit your brand coverage. This is where rate parity and a detailed PPC strategy become essential.
Increase in internet-savvy users
Internet users have become savvier and are aware that there is a possibility they will find a cheaper price on another website. With OTAs advertising huge savings on most hotels, it's only natural that the visitor will have a look around their website for a closer look. This could lead to a potential loss of direct bookings, customer loyalty and an increase on commission fees.
Multiple devices being used
The increase in tablet and mobile usage has changed the way information is displayed on the search results page. For example, when searching on a mobile device on Google, 66% of the listings are PPC.
Having a branded advert showcasing the latest offers and best rates help
push the competition down the page and increase the chances of a direct visitor. Not running brand protection could see half of your traffic go to other websites on mobile devices. The downside to this, as the percentage grows so does the commission and wrestling this back can be an expensive exercise.
All of these recent changes help you understand that the landscape has changed and will continue to do so in the future. One thing we can be sure of is that PPC will continue to play a key role in the search results pages, as this drives the majority of revenue for the main search engines.
This takes us nicely to the second question and most debated one of all...
Does branded PPC cannibalise my organic traffic?
A great question and one that has no doubt been debated in many a meeting room over the past few years. Occupancy Marketing has conducted a study into this that involved looking at the Google Adwords paid and organic reports for a number of luxury hotels over a period of three months.
What we found was that PPC does cannibalise organic by between 7% & 20%:
But wait, it adds on an additional 30% to 50%!
Example market share without PPC
Example market share with PPC
So yes you do pay for a little traffic that you would have had anyway but you grow your market share by such a large amount that it makes it worth it to run branded PPC. This ensures that you have the potential to drive more direct bookings, up sell additional products and build customer loyalty, instead of letting competitors and OTA do it in your place.
What would I recommend...
I would always recommend covering your brand terms in all important search engines. Let me put this a simpler way, if there was an advertising board at the top of your hotel, would you let a competitor advertise there?? That's what I thought.
About the author
Craig Burns is the Internet Marketing Manager for Occupancy Marketing, an internet marketing agency for the travel and tourism sector. The company's focus is on increasing all types of conversions from phone calls and wedding brochure requests, to all-important online hotel bookings.