Allocating Hotel PPC campaign budgets in 2018

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PPC budget allocation for hotels

This article is about managing pay per click campaign budgets for hotels and resorts efficiently. In the age digital everything, it is important to know how to make the biggest impact. 

As we learned in our 2017 research, most hotels fall into 3 categories based on their available PPC advertising budget. In this article, we will see optimal budget allocations and best practices that can be implemented today.

Please feel free to copy paste, forward, share or use this for your own hotel marketing.

 

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Hotels with small budgets (below $1,000 / month)

This budget is typically available in small 3-star hotels, boutique hotels and guest houses. 

With such small budgets, PPC campaigns will be bare basic but good enough to return acceptable ROAS or ROI (return on ad spend / investment) and some minimal brand growth can be achieved with efficient setups.

 

Google Search: $300 / month

  • Brand keywords: $150
  • Competitor keywords $100
  • Location specific keywords $50

Display network: $100 / month

  • Banner remarketing (ads following past website visitors)

Video ads: $100 / month

  • Youtube remarketing (in-stream ads or bumper ads before video plays)

 

On YouTube, there are currently two ad formats: bumper ads (below 6 sec, non-skippable) and in-stream ads which can be longer but can be skipped. Bumper ads prove to be more efficient to get a message across, and typically generates higher positive interactions and actions taken than longer in-stream ads.

 

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Hotels with average budgets (between $1,000 and $5,000 / month)

Most independent 5-star hotels and resorts spend between around $3,000 monthly on paid online advertising. This means significant advantage compared to hotels that spend below $1,000. Such budget is sufficient to reach over 500% more potential guests, structure better campaigns, attract significantly more traffic and ultimately generate much higher ROI.

 

Google Search: 40% of budget / month

  • Brand keywords: 20%
  • Competitor keywords: 10%
  • Location specific keywords: 10%

Display network: 30% of budget / month

  • Banner remarketing (ads following past website visitors)
  • Targeted display campaigns

Video ads: 10% of budget / month

  • Youtube remarketing (in-stream ads or bumper ads before video plays)

Social Media remarketing: 20% of budget / month

  • Facebook & Instagram remarketing campaigns

 

As video content is by far more engaging than images, it is recommended to use video shorts (10-30 second edits of hero videos) instead of static images. Using fresh video content for both YouTube and Social Media remarketing is highly recommended - this will not only engage the audience more but will also offer the opportunity to communicate more aspects of the stay experience the hotel is offering.

 

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Hotels with larger budgets (above $5,000 / month)

Hotel management teams that can afford to spend over $5,000 on digital advertising campaigns are in the position to dominate the market and outperform most of their competitors by overbidding them on Google Search, pay higher CPM on banner and video networks, making it close to impossible for others to get any considerable impression share.

Such budgets allow more funds to be allocated on strategic brand building, as well as on competitive bidding - tapping into audiences of competing properties.

 

Google Search: 40% of budget / month

  • Brand keywords: 20%
  • Competitor keywords: 10%
  • Location specific keywords: 10%

Display network: 20% of budget / month

  • Banner remarketing (ads following past website visitors): 10%
  • Targeted display campaigns: 10%

Video ads: 20% of budget / month

  • Youtube remarketing (in-stream ads or bumper ads before video plays)

Social Media remarketing: 10% of budget / month

  • Facebook & Instagram remarketing campaigns

 

Summary

These numbers are our recommendations based on overseeing over 50 successful hotel PPC campaigns. An optimal budget allocation in your hotel might be different, but as a general rule, always try to cover the basics first (brand keywords & location specific keywords) then diversify the remaining budget by allocating to remarketing then brand building campaigns. 

Unfortunately, even in 2018, some hotel management teams consider PPC campaign budgets and online ad spend as a cost instead of seeing it as a great investment that actually generates additional revenue.

Please feel free to use these suggestions or get in touch in case you need advice on your PPC budget allocation.