Knowledge#3: Performance analysis of your metasearch campaigns – get to know the most important KPIs
When trying to determine the success or effectiveness of a metasearch campaign, there are a number of KPIs or Key Performance Indicators that we need to take into consideration. These will tell us whether our campaign is successful or not and whether we might rethink our advertising strategy.
Those key performance indicators can be found on any metasearch, such as Google, Trivago, Tripadvisor & Co. They will help you to monitor your success. In this blog post, we will present you the most important KPIs and show what significance they have for your online campaigns.
In the context of digital advertising, traffic represents all visits that internet users make to a website. So in the context of metasearch, traffic is all visits that internet users make directly to a hotel’s website or booking engine via a metasearch link.
When we are talking about the hospitality industry, the most common way to drive traffic to a hotel website and it’s booking engine is through ads placed on various metasearch platforms such as Google Hotel Ads, Trivago, Tripadvisor, Kayak etc., which help in directing internet users looking for accommodation options to the websites of hotels.
Regardless of whether we are talking about traffic to a hotel website or traffic to a website of any other company advertising their products and services online, traffic is important because the number of visitors coming to a certain page represents the equal number of opportunities a business has to potentially turn a visitor into a buying customer.
Quantity or quality?
When we talk about website traffic, traffic quantity is just as important as traffic quality. While high traffic might mean that we are getting many visitors to our website, it might not necessarily mean that these visitors are good quality leads that are actually ready to purchase what we are selling.
From the standpoint of a hotelier, this means that not all users coming to his hotel’s website will also complete a booking.
High quality traffic represents the volume of website visitors which fit the profile of your target audience that the content of your website resonates with and are thus more likely to convert on your website.
Note: Click here for our tips on how to boost visits to your website and convert it into actual reservations.
This KPI shows how often your metasearch link was shown to a user. In contrast to other metrics such as conversions, this is a non-action-based metric. It only gives an overview of how often users could potentially have seen the ad, but not whether and what actions the users took after seeing the ad.
Impression share plays a more central role in this context. It represents the percentage of impressions the ad received compared to the total number of impressions the ad could potentially receive (opportunities). The latter is based on the ad's targeting settings, approval levels, bids, and quality scores.
Our goal is to achieve the right impression share to meet the expectations and revenue targets set for the campaign. A low impression share consequently means wasted potential and is an indication to improve the ad (if necessary with a higher click price).
Clicks are relatively easy to define as they are exactly that – clicks: The number of times users actually clicked on our ad. Clicks are an action-based metric, since the searcher has already interacted with our ad.
The number of clicks itself is rather irrelevant for success monitoring, much more decisive is the number of clicks in relation to the amount of impressions.
#4: Click-through Rate
This is a percentage of people who clicked on our ad after seeing it. From a marketer’s perspective this can be understood as a really important metric, because it impacts the quality score of metasearch ads and thus the ranking of the ad itself.
It also helps us understand user behaviour further down the customer journey and the sales funnel. A high number of impressions but a low amount of clicks results in a lower click-through rate and implies that there is something wrong with your ad. Something in the ad is not convincing enough for the user to click on it. A possible reason could be the fact that other advertisers are offering more attractive room rates (rate disparity) which demotivates the user to click on our ad.
#5: Cost-per-click (CPC)
The click price is the amount of money an advertiser pays for each click on their ad on platforms operating on a PPC (Pay Per Click) model. It determines the costs that an advertiser has when users are interacting with the ad.
The CPC is one of many factors that determine how your metasearch ad will rank, i.e. what position your ad will get in the price comparison. Metasearches are dynamic marketplaces, so it is essential to regularly check and adjust the click price in order to maintain or increase visibility.
The optimal CPC varies depending on the platform, the location, the number of competitors and the desired visibility level. A distinctive expertise and experience in bid management is crucial.
Talking about turning visitors from mere window-shoppers to actual paying customers, we come to another important KPI: conversions.
In the world of digital marketing a conversion occurs every time a website visitor completes a certain action on that website, whether it is filling out a form, subscribing to a newsletter, buying a product or, in the world of hotels, booking a room.
Although more traffic to a website also means more opportunities to convert users into paying customers, that doesn’t necessarily mean a higher conversion rate. This is the percentage of people who visited a website and actually completed a conversion out of the total number of visitors.
e.g.: If you have 200 website views and 5 bookings in one day. This results in a conversion rate of 2,5%. ( 5 / 200 * 100 = 2,5%.)
But how to define a "good" conversion rate (CVR)?
The average conversion rate is not an absolute KPI and should therefore be viewed in relative terms, as it depends heavily on various factors, such as the metasearch channel. Furthermore also the traffic has a significant impact. The higher the volume of visits on the link, the more likely it is that the conversion will be lower.
Nevertheless, a low conversion rate despite high traffic often indicates that there is a need for action on the website, booking engine or price optimization. Reasons for this could be, for example, unattractive content or a booking process that is too complicated and time-consuming.
Note: Click here for our tips on how to make your website more bookable and perfect your online presence.
#7: Return on Ad Spend (ROAS)
Another important factor that should be considered is ROAS. This key figure is an indicator for the profitability of the advertising spend and shows the achieved return per marketing spend. Calculating the ROAS tells us whether our campaign budget generates sufficient revenue.
We calculate the ROAS by dividing the revenue generated by a campaign with the cost for that campaign: Revenue / Cost = ROAS. As a rule of thumb a good ROAS is the ratio of 4:1.
This KPI is especially relevant when it comes to evaluating the efficiency of a campaign, comparing different campaigns with each other, or making decisions about optimizing or shutting down ads.
#8: Cost-per-Revenue (CPR)
At the end, we would like to explain the CPR to you. This metric defines the ratio of cost to revenue. It measures the cost you pay for the revenue generated when you run metasearch ads. This KPI is similar to ROAS, but is calculated in reverse.
It can be calculated like this: CPR = Costs / Revenue * 100
Basically, the lower the CPR, the more successful your campaign. Nevertheless, a very low cost ratio also shows that revenue may have been given away. After all, higher investment in an efficient metasearch campaign means higher profits, which flow directly into your company.
There are a number of different metrics that can be used to measure the success of your metasearch campaigns. However, it is important not only to look at the numbers in an isolated way, but rather in correlation with one another and to interpret them correctly. This requires time, resources and know-how.
That's why, as part of our campaign management and full management, a personal expert is available to take on this task for you and carry out regular checks and analyses, as well as implementing appropriate optimization measures: this is how your metasearch campaigns become a success.
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