Trivago reinvents itself and adds the CPA model as a bidding method

2019 was undoubtedly the year of Google Hotel Ads, which had already been going strong since 2017.

The growth of Google Hotel Ads, both in investment and in weight in revenue, has increased year on year considerably as we can see in the following graph*.

*Roiback hotel revenue from the 3 main metasearch engines (excluding Kayak and Skyscanner due to low weight):

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In 2020, Google Hotel Ads has moderated its growth, stabilizing at 67% of the total weight, although we estimate that as the post Covid-19 recovery progresses, the weight of Google Hotel Ads will continue to increase.

The big losers have been trivago and Tripadvisor. Probably trivago more than any other since, unlike Tripadvisor, which has been combining different bidding models for some time, trivago has its core in the price comparator itself at CPC (cost per click), a model that many hoteliers are wary of.

To adapt to the demand and trend among many chains and hotels, trivago has sought to reinvent itself technologically.

Through its CEO, Axel Hefer, trivago has announced important innovations within its Marketplace, among which is a change in the bidding model that could revolutionize the way hotels approach their marketing plans.

Trivago goes CPA – the good stuff is long overdue!

Of all the new features announced by Axel Hefer, the most important is that they are adding the CPA (Cost Per Acquisition) model to their bidding system.

For those of us who have been working with this platform for more than a decade, we know that linking the word CPA to trivago is utopia. Now it seems that they are finally adapting to the demand of hoteliers.

To the already known CPC model par excellence of trivago, now 2 other models have been added: the CPA model and the Hybrid model.

What is the new trivago CPA model?

Scheduled for launch soon, the CPA model consists of bidding on a commission or CPA basis rather than on a per-click basis. The payment of the commissions will be made on the revenue of the bookings generated during the closed month and therefore not on the bookings consumed.

Trivago’s CPA model will be similar to Google’s CPA model, in which hotels do pay for cancelled bookings within the commission at the close of the month, unlike the GHACP (Google Hotel Ads Commission Program) model – now called Pay per Stay – in which a commission is paid after the booking is consumed.

Trivago has not yet offered 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 an excellent connection and integration to its conversion API. There will be no “overlap” between models for the same hotel. This means that the same hotel 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, it will be possible to work on what is called “Hybrid” model, which is nothing more than a mix of CPC and CPA. This combination can be done at the campaign level and not at the hotel level. That is to say, within your account you will be able to have CPC hotels and CPA hotels.

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What other new features has trivago announced?

In addition to the changes in the bidding model, trivago has opened up to other traffic and revenue generation models:

Sponsored Listings; Just like Tripadvisor already did, trivago is launching into monetizing the most highly rated spaces in its search results. It will be possible to bid on a CPC model for the top positions, where the hotel will be able to show its price exclusively with its logo.

trivago

The operation is practically the same as Tripadvisor’s Sponsored Placement Direct. It is expected to be launched soon.

Display ads; trivago wants to take advantage of its huge traffic and is therefore preparing to monetize its page views with Display advertising, just like other metasearch engines already do.

trivago

Its main advantage is to increase brand awareness to reconnect with post-Covid19 travelers and reach segmented audiences. Its model will be mainly by CPM (Cost per Thousand impressions).

Taglines: This is a kind of “sitelinks” or Google Ads type text ads, where hotels can communicate additional information they want to highlight.

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Its main advantage is to improve the CTR (click-through rate). It is not yet clear what their bidding model will be like but we understand it will be based on a CPC.

Another advantage is that the system will allow you to create the text ads you want to add and trivago will translate them into all languages, coordinated by an Account Manager.

The taglines are still in a testing period and there is no definite date for their launch.

Finally, trivago has added 3 more functionalities with which hotels will be able to optimize their strategies. These are 3 new rates available:

Mobile Exclusive Rates: Special rates for mobile devices.

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●     Rewards Rates or Member Rates: Special rates for trivago “logged in” users.

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●      Flash Rates: Special rates for specific dates.

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In conclusion:

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 set out to move forward to regain their lost space.

It is good news that other metasearch engines are adapting to the real needs of hoteliers.

Let’s hope that it is not the first and that the rest of Metas take steps in this direction to provide more options, in addition to Google Hotel Ads, to generate low-risk bookings.

Laura Oliver BeltránJuly 10, 2020