I have helped dozens of businesses use PPC for the past 7 years, am a Google-certified specialist, and personally manage over $1,000,000 in annual ad spend. From this experience, I’ve observed a few common misconceptions.

Myth: High natural search positions make PPC ads redundant

Reality: Paying for clicks when it’s likely a person would click your natural search listing may not seem logical. However, it’s important to do it for branding reasons. Ever wonder why huge corporations advertise for their own names?

They have a ‘lock’ on the top spot in organic rankings, but often purchase ads to increase the certainty that a person ends up on their site…not a competitor’s. Redundancy is good in this situation. It also gives them the ability to quickly distribute new special offers.

Myth: Set it and forget it – You’ll see the best results immediately

Reality: The best results come through continual optimization. There needs to be ongoing split-testing to determine the most effective ad copy, keywords, and bidding strategies. I have seen results improve each week for 6+ months in many cases: you don’t want to settle for sub-par performance.

Myth: Every search engine’s PPC program is the same

Reality: There are obvious similarities between the search platforms offered by Google, Yahoo, MSN, and others – but each has unique nuances. It’s important to learn even the subtle differences to get the best results.

Myth: Only Google matters

Reality: Google currently dominates between 75-80% of the entire paid search market. However, it’s often very competitive. You may get even more visitors by running a campaign on Yahoo or a less popular search engine.

Myth: Click bids are the only factor in ad rankings

Reality: There are many factors involved. Google uses quality score – a mix of ad relevance and clickthrough rates – to determine where to position ads. Bidding more may increase your ranking to a certain extent, but cash-rich companies cannot just buy their way in with a weak campaign.

Myth: The content network should always be avoided

Reality: The content network is where search engines allow other websites to display PPC ads for additional revenue. Sometimes, the click quality is slightly lower than search – but not always. Clicks are often cheaper to obtain here, and the overall cost per conversion (sale) may be lower. You need to test to find what is true in your market.

Myth: Position #1 is the most effective

Reality: It may feel good to win the auction and be on top, but that doesn’t always mean you’ll get best ROI. Research shows that positions 2-5 often have much better conversion rates. My experience confirms this.

Myth: Click fraud is too large a risk

Reality: The risk does exist, but its presence should not stop you from starting a campaign. Since their revenue is dependent on getting advertisers to use their networks, search engines have gotten smarter about detecting and preventing fraud. More importantly, there are several steps you can take to minimize your exposure to risk. Geo-targeting, analytics checking, and testing all help to prevent fraud.

Myth: A good PPC campaign will always give good ROI

Reality: Even a brilliant ad campaign will fail if your website isn’t properly optimized. A good ad campaign will only bring more people to your website – it cannot guarantee sales. I suggest you take a few lessons from ecommerce websites, and give your web booking system a makeover to turn more clicks into reservations.

What happened

Microsoft and Yahoo created a partnership where:

• Microsoft’s technology and Bing! algorithm will power Yahoo search
• Yahoo will become the exclusive sales force for both companies’ premium (large) advertisers
• Self-serve (smaller) advertisers will use Microsoft AdCenter for both platforms
• Each company will maintain their separate display advertising businesses

The agreement will last for 10 years. However, the deal must pass regulatory approval in 6 months, and will take at least 2 years after that to complete.

Why it’s important

Basically, this alliance was formed to make a stronger competitive alternative to Google. Since Google currently has around a 78% paid search market share, it was often not worthwhile to develop separate ad campaigns for the Yahoo and Microsoft platforms (especially for smaller properties).

Hotel advertising implications

Nothing will change immediately: this is a long-term deal. It will take many months (if not years) to fully realize. But it’s encouraging to see a serious competitor to Google in the search marketing space. The combined R&D capabilities of these two companies could drive innovation…which is always a good thing.

What’s your opinion on this development?

2. Success is instantly measurable
Within 48 hours of campaign launch, you should be able to determine if the campaign is a success. Either it works or it doesn’t. Conversion tracking is easy, so you can see how much you pay for each new booking. This rapid feedback is not possible for many other types of media.

3. Ad delivery is very targeted
Search engines provide a wide variety of distribution options for your ads, so you can appear to your target markets. Depending on the tactics you use, you can show ads for relevant keywords, on selected websites, or to a group with similar demographics.

4. You reach people actively searching for your product
By showing your ads to people as they search the web, you reach them at the decision making stage of the buying cycle and dramatically improve the quality of the impressions.

5. Message testing is easy
Using split testing, you can perform accurate market tests to see which headlines and ad copy pulls the best. After just a few days, you can take this knowledge, and apply it to other promotional material.

6. Instant changes are possible
Is something not working? Want to change the direction of your ad copy? This can be done with a couple clicks, and your campaign is instantly updated. There is not need to wait until the next issue or ad cycle.

7. International advertising is simplified
With a globalized world, your potential guests could be coming from 10,000 miles away. PPC makes it easier to reach people searching for hotels in your area.

8. Branding exposure is free
Even when people aren’t clicking on your ads, you still get brand exposure. And unlike traditional ad campaigns, these impressions don’t cost you a thing.

9. You only pay for results
By definition, you’re only paying for actual website visitors – but when you begin using conversion tracking, you can make sure your ad spend is actually tied to new guest reservations. This eliminates all the risk you face when considering other types of media.

10. High ROI is typical
The combination of all the reasons above usually results in highly profitable pay per click campaigns for hoteliers.

If you’re still wondering whether to try PPC marketing, I encourage you to give it a try. There’s not much you can lose.

Feel free to download this chart to help you with your hotel PPC campaign.

Image via Wikipedia

50 years ago, it would have been impossible to launch a nation-wide advertising campaign with just $50. Now, you can not only do that, but also rigorously test your message for effectiveness – and only show ads to people actively looking for a hotel like yours.

The technology making this possible is pay-per-click (PPC) marketing.  The concept was pioneered by Jeffrey Brewer and Bill Gross of Goto.com in 1998, but only started gaining popularity in 2002, allowing advertisers to show ads inside search engine results pages.  The premise is powerful: people that view your ad are already searching for what you offer.

Because of this, pay-for-performance advertising brings several very strong advantages to your promotional toolkit:

1) You only pay for results. Your investment is directly tied to the number of visitors to your website. This greatly reduces the risk of running an expensive campaign and getting no results.

2) Your campaign goes live quickly (often with 15 minutes). You can open an AdWords account to quickly test an idea or concept in the market. By bypassing the traditional ad campaign development cycle, you can enjoy first-mover advantage.

3) It’s easy to test for results. Pay-per-click marketing is very analytical.  You can track and test a number of important benchmarks and see which message performs best.

4) You can start on a small scale. With $50 (or less), you can launch a pilot campaign to determine if the format works for you.

5) You can target specific demographics or regions.  AdWords and other PPC platforms make it easy to only show ads to a highly targeted group of people or places. This accuracy helps you deliver your message to the right people.

Pay-per-click marketing should be part of a two-part search marketing strategy that includes organic optimization.  For more information, take a moment to read the differences between the two tactics.

If you’ve been marketing for a while, you undoubtedly know some metrics that work for traditional marketing and advertising campaigns.  However, the rules of the game change once you begin marketing online and encounter a wide variety of new media options.

What metrics should you use to measure the effectiveness of your digital hotel marketing campaign?  Let’s start off by putting aside a couple web marketing metrics that have been used in the past, but aren’t really that helpful anymore.

• Number of ad views – in the early days of the web, it was common to purchase advertising based on the number of ad impressions or views.  Now, there are other more effective ways (such as pay-per-click).
• Website visitors – the number of people that visit your website might have little correlation to the effectiveness of your marketing campaign.

Should you track these?  Absolutely.  They just don’t provide enough insight.  So let’s move on to some more helpful metrics.

1. Conversion rate – what percentage of website visitors are booking a room?
2. Cost per booking – actually, you should be tracking a wide variety of “cost-per” actions for any advertising campaign. How much does each click, visitor, and lead cost? Spending must be tied to revenue gains.
3. Referral source type – knowing the type of websites that provide the most visitors can help you decide the direction of your marketing campaign
4. Search engine rank – How high do you rank in search results for each important keyword phrases?  Search is still the #1 way people find websites, so you need to list high for key phrases.
5. Social media mentions – How many bloggers and social travel networking websites are talking about your hotel?

Those are the core metrics that are important for anyone doing hospitality marketing.  Other metrics that could be useful in your situation include:

• Percentage of positive mentions in social media – this statistic is a little harder to generate, but the results are more insightful.  What is the overall consensus on your facility?
• Average time on site – how long do people stay on your site?
• Bounce rate – how many people leave your website without visiting any other pages (the lower this number, the better)
• Reservation abandonment rates – you need to know when and where potential guests are giving up in your booking system
• Top referral keywords – which phrases do people use to find your website?
• Number of inbound links – your goal should be to increase the quantity and quality of inbound links each month
• Google Pagerank – Google’s measure of website authority

Whatever combination of indicators you plan to use, the important thing is that you track and save this information.  You can only make efficient marketing decisions by looking at historical data, and then focusing your marketing resources on what works.

Let me ask you this: What metrics do you use for digital marketing?

With this in mind, how can you position your hotel to capture a larger share of search engine traffic?  There are two broad approaches to search engine marketing (SEM), which I’ll explain in this post.

1. Natural (Organic) Optimization

All search engines will include your hotel website somewhere in their results pages – it’s just a question of how far from the top.  The natural approach to ranking high involves optimizing your website, and getting other popular sites to link to you.

The advantages of organic optimization:

• Getting visitors from natural searches is totally free for you
• The people coming from search engines will be actively looking for you
• A higher placement conveys authority for the term searched for

The disadvantages of organic optimization:

• It can take a while to reach the top for your core keywords
• In some markets, the competition can be very intense (lengthening this time even more)

2. Paid Placement

It is possible to pay to appear in search engine result pages.  Usually, this is accomplished by using pay-per-click services such as Google AdWords.

The advantages of paid placement:

• It’s possible to instantly appear at the top of search results
• It can potentially be a very cost-effective way to attract guests (usually under $1 for each visitor)
• The ability to measure campaign success (more than any other advertising medium)

The disadvantages of paid placement:

• Your campaign can cost a relatively large amount (depending on the strategy you use)
• Ongoing management of your campaign is needed

In future posts, I’ll discuss in greater detail how to design and launch a campaign using both of these types of search engine marketing.  Stay tuned!

Let me ask you this: Which search marketing strategy does your hotel focus on?