About Commissions (pay-per-conversion) for Hotel ads

Note: This article applies only to Hotel campaigns in Google Ads. If you haven’t yet migrated  your campaigns to Google Ads, read about bidding in the Hotel Center.

Commissions pay-per-conversion is a way to pay only when a traveler books your hotel. Commissions is a Smart Bidding strategy that automatically adjusts your bid to help you maximize conversions. You pay a percent of booking value that you set.

Overview of Commissions

Commissions pay-per-conversion helps you achieve a predictable cost per conversion. This cost is a percentage of booking value that you set in Google Ads. The commission should represent how much revenue you're willing to spend on Hotel ads for each dollar that you earn from bookings from your Hotel ads.

Benefits

  • Maximize your conversion value with minimum effort
  • Define a consistent cost relative to revenue you earn from Hotel ads
  • Adaptive learning predicts performance at different bid levels to maximize conversions
  • Auction-time bidding for every auction, not just a few times per day

Before you begin

Before you can use Commissions pay-per-conversion, you need the following from the Global Site Tag (gtag.js):

Conversion tracking with the following required parameters:

  • 'value'
  • 'currency'

While optional, these parameters also help Google optimize your performance:

  • 'start_date'
  • 'end_date'
  • 'id'

Notes:

The value of 'value' is used to compute your Commissions pay-per-conversion cost for a particular conversion. If the value is not provided, Google will interpret that conversion as having zero value.

There is no minimum number of conversions required to enable a campaign using Commissions.

How Commissions works

The Commissions pay-per-conversion bidding strategy predicts future conversions and associated values by using your reported conversion values, which you assign through conversion tracking. Then Commissions sets an optimal cost-per-click (CPC) bid while trying to maximize total conversions at the cost-per-conversion equal to your target.

To help improve your performance, the pay-per-conversion strategy adjusts bids using auction-time details such as the traveler's device type and location, the Google site where the Hotel ad appears, geographic location, itinerary, and hotel price.

The average cost-per-click will vary, but regardless of the number of ad clicks, you only pay if a conversion happens.

Example:

Users who didn't convert Users who do convert
  1. Your Commissions pay-per-conversion bid is 12%
  2. User clicks on your ad
  3. User doesn't convert on your site
  4. You pay $0
  1. Your Commissions pay-per-conversion bid is 12%
  2. User clicks on your ad
  3. User converts on your site. Booking value is $450
  4. You pay $450 * 12% = $54

For general information on conversion tracking and how Google uses conversion tracking data, see track sales and other conversions.

Note: Commissions pay-per-conversion is meant to help maximize your ads' reach, and because you only pay when users convert, costs from this bid strategy will not count towards your account's daily budget.

Choose the right Commissions bid

To find the right Commissions pay-per-conversion bid, determine what distribution margin you want to spend for your bookings.

For example, if your goal is to spend an average of 12% of booking value and maximize your booking revenue, and you have a cancellation rate of 10%, then your Commission bid should be 10.8%.

If you decrease the Commission, your bid in the auction will decrease and can result in less bookings. Similarly, if you increase the Commission bid, your bid in the auction will increase and can result in more bookings. Keep in mind this depends on the auction, and booking volume changes aren't guaranteed with Commission changes.

Conversion metrics

Conversion metrics such as "Conversions" and "Average Booking Value" can be updated one or more days after a click occurs depending on when an individual user converts and your account's attribution window (the number of days after the customer clicked that we'll attribute a conversion to a click). This means that the cost for a campaign using a Commission bid strategy can also change one or more days after a click.

Set up Commissions

You set your bid strategy at the campaign level. If you'd like to change the strategy, change how you bid

Evaluate performance

You can view the current conversions and cost-per-conversion for a campaign in the campaign summary table. Understand your conversion data

Best practices

This section lists some best practices when setting up and using the Commissions pay-per-conversion bidding strategy.

  • To get the best performance with Commissions (pay-per-conversion), your campaign should have at least 20 conversions per day. If your campaigns don't have this many conversions per day, consider merging some campaigns together when using Commissions.
  • Organize hotels into different campaigns depending on distribution margin or conversion rate. Commissions may perform better when partners group hotels with similar ROI goals and performance. Learn more about hotel groups.
  • Allow the campaign to accumulate traffic for at least 7 days before evaluating performance and making changes.
  • Don't change your Commissions pay-per-conversion bid more than once every few weeks. This gives you time to account for any conversion delays and give the Commissions autobidder strategy time to adjust.
  • Ensure conversion tracking is well implemented on all points of sale and all devices. Outages in conversion tracking (complete or partial) can significantly impact your performance and volume.

Tune and evaluate

  • The more data Google Ads has, the more it can optimize pay-per-conversion bids.
  • Keep in mind that changes in ad performance are natural, and you may need to use the Commissions bid strategy for some time to understand how it affects your campaign's performance.
  • Don't make large changes to a campaign while using Commissions pay-per-conversion. (For example, don't pause all active hotel IDs and replace them with new ones.)
  • Don't remove your conversion tracking code from your website or move it to a different location while running the Commissions pay-per-conversion bid strategy. These kinds of changes can result in significant changes in which clicks lead to reported conversions. If you do change your conversion tracking code, the pay-per-conversion bid strategy might need several weeks to adjust to these changes.
  • Compare your clicks and conversion rate before and after using the Commissions pay-per-conversion bid strategy to gauge its impact on your campaign.

Frequently asked questions

On what levels can partners apply and set Commissions pay-per-conversion bids?

Partners can use the pay-per-conversion bidding strategy at the campaign level only. It's not possible to set Commissions bid overrides for ad groups or hotels.

How does the Commissions pay-per-conversion bid strategy interact with the CPC auction?

When using the Commissions pay-per-conversion bidding strategy, Google Ads sets optimal cost-per-click (CPC) bids for partners' hotels to help maximize booking value at the specified cost-per-conversion, which is a percent of booking value you set.

Are Commissions pay-per-conversion costs billed as of the query date, click date, or conversion date?

Commissions pay-per-conversion costs are billed as of the date of the query. Google won't bill for conversions outside of the partner-configured attribution window.  

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