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Google Performance Max for Hotels: Understanding the KPIs

Google Performance Max for Hotels: Understanding the KPIs

Lucas Firmino
Lucas Firmino August 12, 2024
Google Performance Max for Hotels: Understanding the KPIs

TLDR: Google Performance Max, is the advertising giant’s ad platform that makes a lot of automated decisions, buying ads across many channels — think YouTube or display ads. Its automation makes it a black box in terms of identifying ROI for individual channels, Plus, as reported recently in Search Engine Land, Google thinks that too much knowledge leads to too much intervention in the business of AI bidding. Does it work? Yes. Is it worth using? Absolutely — if you understand what you’re getting into.

How Google Performance Max Buys Ads for Hotels

Running Performance Max to boost bookings at a hotel means using the Performance Max for Travel Goals platform. Marketers provide a range of inputs, including integrations with a hotel booking engine, budgets, ad copy, images, videos, and information about ideal customers, including common search terms, demographics, and interests. Then, as we recently outlined in a post about how Performance Max works, its automated processes take over. 

Performance Max will remix images and copy into ads in the margins of websites, or items in a Gmail inbox. It’ll run ads on YouTube, and help hotels appear in Google search results. Wherever it thinks it’s found a potential hotel booking, it spends your budget. And because it’s integrated with bookings, it gets smarter as it goes, finding more and more people that match the profiles of the folks who ultimately book. 

So what’s the catch?

Which Performance Max Ads Have the Highest ROI for My Hotel?

We frequently advise our clients to introduce Performance Max for their hotel advertising campaigns. It generates high returns and offers steady presence. But we do so with a caveat: Unlike manually managed campaigns, Google will not report results at the ad-level or platform-level.  Are more people converting on YouTube or do email inbox placements drive more room bookings? How are we ranking in search? Google won’t say. All of the sophisticated automations outlined above mean that hotels — and their agencies — have very limited visibility into what Performance Max does with all of the assets we feed it. For performance-obsessed marketers like us, it’s a hard pill to swallow. For hotel operators, it can be frustrating, when all they want to know is how their customers found them!

Marketers instead are forced to divy up campaign budgets by platform, comparing, for example, Performance Max, Instagram, and Expedia costs against hotel revenue. Want to get more granular? We would need to shut off Performance Max and run channels like Display and YouTube separately. This leaves some AI bidding functionality, but not the advanced level available in Performance Max.

Our adaptation: variety. The more angles we have to advertise a hotel or hospitality offering, the more Performance Max has at its disposal to optimize the ads for a given customer. This means mixing up the copy, image selection, videos, etc. It’s not going to give us the insights we wish we had, but it will maximize the platform’s ability to score a conversion. 

Why Won’t Google Let Hotel Marketers See Full Performance Data?

The Search Engine Land article finds several possibilities that can be boiled down to these main reasons:

Performance Max Adapts to Hotel Marketing Demand Very Quickly

Google fears that a granular focus on channel-by-channel performance will restrict its ability to adapt and find hotel customers wherever they go online. They claim that their automations, left wide open, may continue to find new opportunities over time.

Performance Max Fills their Ad Inventory

Google buys ads in every corner of the internet. This channel gives them the ability to place them far and wide, and far from scrutiny. While the platform yields high ROI overall, it also guarantees that Google ad auctions have the greatest possible flexibility to spend advertisers’ money

Reviewing Hotel Marketing Channel Performance Neglects the Full Picture

When marketers focus intensely on the top-converting channels — the ones that landed the booking or generated the inquiry, the impulse is to cut out the ones that did not. Google urges caution. Most customer decisions come over time during a process of research and consideration. With Performance Max, Google has the opportunity to reach customers with evolving messages across so many channels that they may attribute the credit for the conversion in unconventional ways. 

Performance Max is a Black Box, Intersecting with User Data

As the biggest search engine out there, with integrated browsers and so much more, Google’s data is hard to comprehend. How it sources, categorizes, and measures different user data attributes is a vastly complex enterprise. Privacy is an issue. Security is critical. Their tech is proprietary.  And when they layer AI and machine learning over it all in order to make sense of behavior, the complexity grows even more. It’s no wonder the talk track for advertisers is, in short, “Trust the algorithm.”

Our (Mostly Clear-Eyed) Perspective on Using Performance Max for Hotel Marketing

We advise clients to introduce Performance Max into their media mix all the time. For all of the drawbacks of channel-level measurability and visibility into exactly what it’s doing, it remains a platform with a very high return on investment that can scale. We always recommend diversifying ad spend to reach more likely customers. Performance Max gives hotels a powerfully diverse mix of channels right out of the box. It’s just that this box is closed to our prying eyes. 

The experienced marketers at O’Rourke are comfortable setting up and managing these campaigns to generate efficient revenue for hotels, and we understand which levers remain at our disposal. If you’re interested in how we can use this and other cutting-edge ad technologies to drive more bookings and revenue for your hotel, reach out to us today. We’d love to have a conversation and answer your questions.

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