Using Remarketing Lists for Search Ads (RLSAs) to drive higher ROAS on your hotel’s paid search campaigns

May 4, 2017

Of all the various tools that Google AdWords provides for digital marketers, one of most useful (and perhaps underused) ones for the hotel industry is its Remarketing Lists for Search Ads, also known as RLSAs.

What are RLSAs?

RLSAs allow hotel advertisers to tailor search campaigns based on whether a user has previously visited the hotel website, and the pages that the user has visited on the site. Users are tracked via cookies placed on the website.

For example, say a user visits the hotel website www.hotelxyz.com. Later, when that same user searches again for the hotel name, or for any other specific search terms targeted by the advertiser, Google AdWords can serve up an ad with language targeting that particular user.

Note: this is different than typical display remarketing ads, in which users who have visited a hotel website will see banner ads for that same hotel as they browse around the web. The primary difference here is that in display remarketing, the banner ads are served up indiscriminately. For RLSAs, the user will have to demonstrate a specific search intent before Google serves up the tailored remarketed ad.

How to use RLSAs for smarter hotel marketing

At Travel Tripper, we’ve been using RLSAs to successfully target users that have visited a particular hotel’s website, but that have not yet converted (made a booking).

As those same users continue their travel search, we then target and bid on specific search terms that fall into one of three categories:

1. The hotel’s brand name
2. The hotel’s competitor names
3. Top-of-funnel terms

When the users search for anything that falls into that category, we then serve them an ad that may look something like this:

Notice the language on the ad. It specifically references the user’s past behavior on the hotel website (that they visited, but didn’t convert), and it attempts to entice the user back into the booking funnel with a special offer of 25% off. Again, only users who looked but didn’t book are targeted with this type of ad.

How did we select the search terms?

One of the great thing about RLSAs is that you can be strategic about the search terms you use to bid for ad placements. At Travel Tripper, we use our understanding of traveler consumer behavior to make sure we get a better Return on Ad Spend (ROAS) for our RLSA campaigns. Here is how we break down our three categories of search:

1. The hotel’s brand name

If a user is searching again for the brand name of a hotel website they have already visited but not booked from, there is a reasonable assumption that they are an interested user. This makes the user more likely to convert than one who is visiting the website for the first time.

Building out a separate campaign that targets specifically these users allows you to bid more than you might usually do, as the conversion rate is likely higher. We even recommend allocating a separate budget to this campaign, so that you’re less likely to miss out on these extra valuable search queries.

2. The hotel’s competitor names

Why target people searching for your competitors? Well, if someone has visited your website but hasn’t converted, and is now looking at your competitors’ websites, it’s likely that they still need a property to stay in. At this point, we will present those users with an ad with language that might convince them to change their mind—usually in the form of a special offer.

3. Top-of-funnel terms

Top-of-funnel terms include general searches with location, such as “hotels in nyc” or “boutique hotels new york.” So why target these users who are jumping back to the top of the funnel? Because it’s likely that they still need a place, but simply haven’t found the right one yet. By serving up an ad with a unique offer, at the exact moment when consumers have abandoned their search for competitors, we’re able to create an almost unbeatable competitive advantage.

How well does this RLSA strategy work?

We worked with a five-star luxury property in New York City to run a RLSA campaign using the hotel’s brand name as the key search term (targeting users who have been on the hotel website already). We tested this against a normal brand search campaign (targeting any users searching for the hotel name).

For users who had never visited the hotel website before, we converted approximately 12.5% of click-throughs on the ad. But for our RLSA campaign (remember, these users have been on the hotel site but didn’t book) we converted 32% of click-throughs—that’s a 156% increase! The ROAS on this campaign across a 30-day period was 57:1.

When it comes to top-of-funnel terms, we saw an ever more incredible uplift using RLSAs. Most hotel marketers know that bidding on broad terms like “hotels in nyc” is the equivalent of throwing money down the drain. Not only are those terms expensive and highly competitive, but they don’t match user intent; most travelers doing those searches are not ready to book.

In fact, most hotels see negative returns here—they essentially lose money on these ads.

But we tested out a few RLSA campaigns bidding on top-of-funnel terms for users who have visited the hotel website before. One client experienced a 13:1 ROAS on this campaign across an eight-week period—an enormous uplift, considering that the hotel would have otherwise lost money on these type of bids.

Incredibly, one broad match keyword—“hotels nyc cheap”—achieved a return of 266:1, bringing in $4,534 in revenue from a spend of only $17. And this is even with an average ad position of 2.9, the no-man’s land of paid search results (more than 55% of clicks go to the first ad position).

Across all campaigns that we ran, using RLSAs showed significant increases in conversion rates and ROAS from regular keyword campaigns. Using such tactics should clearly be a part of any hotel’s paid search strategy.

…but how does cost per acquisition factor in?

One of the key tenets of this RLSA strategy is the ability to give a special offer to entice the potential customer and “seal the deal.” To that effect, we recommend that hotels be willing to discount rooms to a certain level—the hotels that we worked with were able to offer between 20-30% off their rates.

The benefit of the discount is especially important when targeting users who were either looking at the competition or searching again for top-of-funnel keywords. Seeing personalized messaging such as “How about 25% off your stay?” provides that extra push that can get those users to click and ultimately book.

Given the relatively deep discount to the room, revenue managers might start to wonder if the cost of acquisition would be the same as selling the room on an OTA, minus the hassle of paid search marketing.

We see several benefits to an aggressive direct selling strategy:

Offering the extra discount upfront to get the customer to book direct can increase the overall lifetime value of the customer. If they book direct once, they’ll likely book direct again.

When planned properly, RLSAs can be employed only during certain times (low season or low occupancy periods, for example) to manage extra inventory. Instead of dumping last-minute inventory to OTAs and having to compete on those sites with other hotels for bookings, this RLSA strategy allows hotels to fill out occupancy more efficiently while maintaining tighter control over their revenue management.

If the choice is between a user booking your hotel, or losing that booking to a competitor, we always say that earning a portion of something is better than earning 100% of nothing.

Planning for an RLSA strategy

Ultimately, hotels will need to work with their paid search vendors to develop an RLSA strategy that fits with the property’s revenue management targets. Some considerations:

• Type of hotel and typical ADR
• Starting price and discount to offer, as well as available inventory
• Available budget for specific to RLSA campaign

With these goals in mind, experienced search marketers will be able to determine the right bidding strategy and spend, and will also be able to set up the campaign so that it targets exactly the right users.

It’s not a simple setup, but the benefits are well worth the effort in terms of increased conversion rates and ROI. If RLSAs aren’t a part of your hotel’s basic search marketing strategy already, you’re missing out on a huge opportunity.

Interested in learning more about maximizing your hotel’s Google AdWords spend? Sign up for a free digital marketing consultation today.