Google Shopping Ads are certainly nothing new, in fact they have been around since 2012. You’ve certainly encountered them at some point, whether it be doing grocery shopping or, looking for a specific pair of shoes, these ads generate a large percentage of Google’s revenue in 2021.
The rise of experiences
In 2019 however, a peculiar thing happened. More and more, big gifting companies like Red Letter Days & Virgin Experience days began selling vouchers through the medium of Google Shopping, meaning results that would have once shown nothing more than text are now showing up with text and a collection of shopping ads, diverting more and more of the demand through shopping ads.
For companies like RLD’s & Virgin, this means they may pay Google £5 for a £100 voucher sale, then give your hotel £55, netting a cool £40 profit. What’s more, this method of selling experiences is only going to become more lucrative for these companies throughout the 2020’s thanks to a combination of Google integrating shopping content ever more so into the SERP and thanks to general trends data suggesting the gifting industry is continuing to grow year on year.
How can we compete?
I know what you’re thinking – that all sounds great Jack but there is no way my hotel can get into Google Shopping and compete with the big boys. Well, I’m here to tell you that you can compete with them and it doesn’t cost as much as you think.
Whilst it is true you will have to get an ecommerce back-end set up, become integrated with Google shopping and put aside a budget, these are all things that can be done through a trusted advertising partner (such as ourselves…shameless plug!). All of this is an upfront risk, hence why so few take this approach. However, I’m confident this upfront risk will have residual future benefits.
Think of it this way – if you are selling 2000 vouchers a year at an average of £50 each, that’s £100k per year. If your distribution partner takes 15%, that’s £15k p/y. 10 years later, that’s £150k out of the business. On the other hand, if you invested £1k upfront and hen for every month you get these vouchers sold through your own site at 5%, after 10 years, that has cost you £51k, a saving of £99k. In this case, I’d say that initial effort is well worth the residual rewards.
Closing thoughts
Hotels that win in the 2020s will be the brave few that don’t rely on OTAs or any sort of distribution partner for business. Instead, they will build a community and make their websites a handy tool for past, future and present guests. Selling vouchers via Google Shopping Ads are just one of the many ways hotels can become truly independent, making more money in the process.
What do you think of Google Shopping Ads? Have you tried them? How did it go? Have I missed something? Whatever your thoughts, please fire them my way here, good, bad and ugly!
Lots of love – Jack