Trivago adds the CPA model as a bidding method
July 7, 2023
2019 has undoubtedly been the year of Google Hotel Ads, which had already been going strong since 2017.
Google Hotel Ads growth, both in amount invested and revenue, has increased year over year. See chart 1 showing Roiback's hotel revenues from the top 3 metasearch engines:
In 2020, Google Hotel Ads has shown more moderate growth, stabilizing at 67% of total share. As travel continues to recover, we expect Google Hotel Ads share to continue to increase.
To adapt to this trend among chains and hotels, trivago has tried 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 with this platform for more than a decade, we know that linking the word CPA to trivago was until now a utopia. Now it seems that they are finally adapting to the demand of hoteliers.
In addition to its well-known CPC model, trivago now offers the CPA model and the Hybrid model.
What is trivago's new CPA model?
The CPA model, which is expected to be launched soon, allows hoteliers to bid on a commission or CPA basis rather than on a cost-per-click basis. Commissions will be paid on bookings made, not on stays.
The trivago CPA model will be similar to Google's CPA model, where hotels pay commissions on all bookings, whether they are cancelled or not. At the moment, trivago does not offer the GHACP (Google Hotel Ads Commission Program) model - now called Pay per Stay - where a commission is only paid if the guest has actually stayed at the hotel.
Trivago has not yet provided information on CPA percentages, although all indications are that the level of commission 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 on 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 in CPC and hotels in CPA.
What other news has trivago announced?
In addition to changes in the bidding model, trivago has also opened up to other traffic and revenue generation models:
● Sponsored listings: As Tripadvisor has already done, trivago seeks to monetize the most searched spaces in its search results. It is possible to bid - on a CPC model - for the top positions, where the hotel can display its price exclusively with its logo.
● Display Ads: trivago wants to take advantage of its huge traffic and is therefore preparing to monetize its page views with Display advertising, as other Meta Search Engines already do.
Display ads will help you increase brand awareness, reconnect with post-Covid19 travelers and reach segmented audiences. The model will be primarily CPM (Cost Per Thousand Impressions).
● Taglines: These are a kind of "sitelinks" or Google Ads type text ads, where hotels can communicate additional information they want to highlight.
Its main advantage is to improve the CTR (click thru rate). It is not yet clear how the bidding model will be, but we understand that it will be based on a CPC.
The system will allow the creation of text ads, which will be translated by Trivago into all languages, coordinated by an account manager.
The slogans are still in the testing period and there is no date set for their launch.
Finally, trivago has added 3 more functionalities that hotels can use to optimize their strategies:
● Exclusive mobile rates: Special rates for mobile devices.
● Rewards Rates or Member Rates: Special rates for users "logged in" to trivago.
● Flash Rates: Special rates for specific dates.
Trivago has lost a lot of market share in the last 3 years and has seriously jeopardized its business model. Even so, it still has financial muscle, brand recognition and a robust and reliable technology. They have decided to move forward to regain lost space.
It is good news that other metasearch engines are adapting to the real needs of hoteliers.
Let's hope this is not the last of the exciting new developments that will enable hoteliers to generate more sales and increase the profitability of their campaigns.