Google is shaking up its bid strategies for hotel ads, as it plans to discontinue commissions (per stay) and commissions (per conversion) in October. Instead, the platform will introduce target Return on Ads Spend (tROAS) for hotel campaigns and expand Performance Max for travel goals as alternative bid strategies.
The move comes as Google aims to provide advertisers with more efficient and effective ways to optimize their campaigns. With tROAS, advertisers can set a target return on their ad spend, allowing Google’s AI to adjust bids accordingly. This strategy gives advertisers more control and helps them achieve their desired results.
Meanwhile, Performance Max offers a comprehensive solution for travel advertisers, combining various bidding strategies and ad formats across Google’s properties. This allows advertisers to reach customers at different stages of the travel journey, from inspiration to booking.
Advertisers will need to shift their bid strategies before the October deadline to avoid disruptions. Google recommends exploring the alternative bid strategies, tROAS and Performance Max, to ensure campaigns continue to serve as usual.
Commissions (per stay) and commissions (per conversion) have been popular bid strategies for hotel campaigns. Commissions (per stay) allows partners to be billed only when a guest’s stay is completed, reducing the risk of cancellations. Commissions (per conversion) charges advertisers only when a traveler successfully books a hotel, optimizing for increased conversions. These strategies have provided flexibility and performance-based approaches to advertising costs.
However, Google’s decision to phase out these bid strategies signals a shift towards AI-driven bidding strategies that can adapt to the speed of consumers. It also aligns with the ever-evolving privacy environment and aims to meet people’s expectations while delivering better results for advertisers.
The transition away from commission bid strategies will happen gradually. From February, new allowlist requests for commissions (per stay) will no longer be accepted. From April 30, both commissions (per stay) and commissions (per conversion) will no longer be available bid strategies within Google Ads. Campaigns with active commission-based bid strategies will continue to serve until the sunset date in October.
Google is committed to providing guidance and support to advertisers throughout this transition. Michael Trauttmansdorff, Director of Product Management for Travel Ads, emphasized the benefits of AI-driven bidding strategies, stating that they will make it easier for advertisers to keep up with consumer demands and deliver better results.
As the October deadline approaches, advertisers are encouraged to read Google’s full announcement for more information and to explore the alternative bid strategies offered by the platform. Google’s aim is to help advertisers succeed in the ever-changing landscape of digital advertising while maximizing their return on investment.
