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Do You Need an Agency to Manage PCC Ads for Your Hotel?
Ads are everywhere online: at the top of every Google search, plastered along the borders of websites and peppered across your Facebook and Instagram feeds. Typically referred to as pay-per-click or “PPC” ads (referencing their cost, in which advertisers pay the platform for every user that ‘clicks’ on the ad), these ads may appear simple, but there is a vastly complicated set of algorithms that determine when and where the ads are shown and to whom.
The question that we are addressing here is not whether it is worthwhile to run ads or not—we assume you’ve already recognized the money that you can make with a savvy online ad campaign. We’re here to answer the next question: should you run the ads yourself or hire a company to run them for you?
Admittedly, we are a little biased in this area since we are, in fact, a company that helps hotels run ads. But the fact remains that it is possible for you to run Google and Facebook ad campaigns yourself. The question is: which option is right for you? Here are some points to consider.
What’s Your Budget?
If you’re a small hotel with only a few hundred dollars to budget towards marketing and advertising every month, the answer is simple: you would be better off running ads yourself. Most agencies either require a minimum advertising budget or a base fee that simply would not make sense with very small budgets. In these cases, you would be better off attempting to run ads yourself—especially if you have some time to educate yourself on the basics.
That said, if you’re working with a modest budget (say $1000/mo or more), it’s worth considering outside assistance. Yes, you’ll have to pay the agency to run the ads for you, but if they have a proven track record and a solid foundation of data to build your campaigns from, the potential for ROI is much higher than the additional investment to pay the agency fees.
It’s Not Just About Clicks
Running ads is not just about getting clicks on your website. Clicks are easy. People click on ads and that’s how the platform gets paid. If you run ads yourself or have an agency do it, you’re going to get clicks either way.
The secret is getting clicks from the right type of user with the right type of intent at the right moment in their path to purchase at the right price per click. To have the right secret sauce in your campaign design to achieve and sustain this takes a significant amount of technical know-how and ongoing optimization work.
The risk of simply running ads yourself is not that you won’t get users to your website. It’s that these users won’t end up making a purchase, meaning you’ve spent a whole lot of money getting the wrong type of person to your website.
What you want are ‘qualified’ leads—i.e. people who are likely to make a purchase, thereby converting the cost that you paid to get them to your website into measurable bookings revenue.
Crunch the Numbers
When it comes to digital advertising for hotels, almost everything is measurable because of eCommerce tracking technology on most booking engines. That means whatever amount you’re paying an ad platform (along with the agency you’ve hired to manage the ads) can be measured against the total bookings revenue from purchases made by people who clicked on the ads.
The important number is not what an agency is going to charge you to design an ad campaign, but what your ultimate return on investment is. You could be spending $500/mo. running ads yourself, but if you’re only making $1000/mo. in booking revenue that is a very poor ROI and an unwise investment. You need to consider the combined dollar amount of ad spend and agency fees and measure that against your actual (or projected) bookings revenue from the ads to judge whether it’s a profitable investment.
Reduce Risk
If you decide to hire an agency to run ads for you, consider an agency that offers a flexible approach. Having the freedom to pause or cancel your campaign if the results are not there (or if other unexpected challenges emerge) can mitigate potential losses and provide a good incentive to try an ads program with limited financial risk.
To learn more about different options for running digital ads for your hotel or resort, contact us at Digital Hospitality today. We’re always happy to chat.
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