About Commission (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 Hotel Centre.

Commission (pay-per-conversion) is a way to pay only when a traveller books your hotel. Commission is a Smart Bidding strategy that automatically adjusts your bid to help you maximise conversions. You pay a percentage of booking value that you set.

Overview of Commission

Commission (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 your Hotel ads bookings.

Benefits

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

Before you begin

Before you can use Commission (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 optimise your performance:

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

Notes:

The value of 'value' is used to compute your Commission (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 Commission.

How Commission works

The Commission (pay-per-conversion) bidding strategy predicts future conversions and associated values by using your reported conversion values, which you assign through conversion tracking. Then Commission sets an optimal cost-per-click (CPC) bid while trying to maximise 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 traveller'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 Commission (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 Commission (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: Commission (pay-per-conversion) is meant to help maximise your ads' reach. Because you only pay when users convert, costs from this bid strategy will not count towards your account's daily budget.

Choose the right Commission bid

To find the right Commission (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 maximise 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. Bear in mind that this depends on the auction and that 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 on 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 Commission

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 Commission (pay-per-conversion) bidding strategy.
  • To get the best performance with Commission (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 Commission.
  • Organise hotels into different campaigns depending on distribution margin or conversion rate. Commission 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 Commission (pay-per-conversion) bid more than once every few weeks. This gives you time to account for any conversion delays and gives the Commission 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 optimise pay-per-conversion bids.
  • Bear in mind that changes in ad performance are natural and you may need to use the Commission bid strategy for some time to understand how it affects your campaign's performance.
  • Don't make large changes to a campaign while using Commission (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 Commission (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 Commission (pay-per-conversion) bid strategy to gauge its impact on your campaign.

Frequently asked questions

On what levels can partners apply and set Commission (pay-per-conversion) bids?

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

How does the Commission (pay-per-conversion) bid strategy interact with the CPC auction?

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

Are Commission (pay-per-conversion) costs billed as of the click date, or as of the conversion date?

Conversion metrics (counts, values and cost) listed in the performance dashboard, and in performance reports, are always associated with the date of the click that led to the conversion, because of delayed conversions.

Commission (pay-per-conversion) costs are billed as of the date of the conversion. This means that you may see a slightly different total cost for your Commission campaigns in the Hotel Ads Centre and your monthly invoice. For example, if a click happens on the last day of this month and the user converts on the first day of the next month, you would only be charged for that click on the invoice at the end of the next month. However, your performance metrics for the last day of this month (the day of the click) would be updated to reflect that conversion and Commission cost.

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