Google plans to abandon its strategy of setting commission rates for hotel ads

Marketers should transition to a new bidding strategy before commissions (for stays) and commissions (for conversions) are phased out.

In October of this year, Google Ads will gradually stop using commission-based bidding strategies for stays and conversions for hotel advertising.

Instead, the platform offers alternative bidding strategies such as target return on ad spend (tROAS) for hotel campaigns, as well as enhanced maximum efficiency for travel-related objectives.

Why is this important?

Marketers need to switch to new bidding strategies before the deadline to avoid disruptions and ensure the continuous operation of campaigns in normal mode.

• What are commissions (for stays)? “Commissions (for stays)” is a bidding strategy specifically designed for hotel campaigns. Under this approach, partners are billed only after the guest has stayed. This strategy allows partners to leverage Google’s AI efficiency in booking guest stays while simultaneously reducing concerns about potential risks associated with booking cancellations.
• What is a commission (for conversion)? Commission (for conversion) is a payment model developed for hotel bookings, where you are charged only when a traveler successfully books your hotel. It functions as an intelligent bidding strategy, automatically adjusting your bid to increase conversions. The fee is a predetermined percentage of the booking value you set, providing a flexible approach to advertising expenses based on performance.

What to do next?

You can continue using commission-based bidding strategies until the end date. However, Google recommends familiarizing yourself with alternative bidding strategies, such as target return on ad spend for hotel campaigns or maximum efficiency for travel-related objectives, during the preparation stage. After the end date, there will be a gradual transition away from commission-based bidding strategies, as described below.

• From February: Commissions (for stays) will no longer accept new requests to be whitelisted.
• From April 30: “Commissions (for stays)” and “Commissions (for conversion)” will no longer be available for bidding strategies in Google Ads. Campaigns with active commission-based bidding strategies will continue to work until the end date.
• From October 31: Campaigns with commission (for stays) and commission (for conversion) will no longer be available. You will still have access to historical reporting data for the respective campaigns.

What does Google say?

Michael Trauttmansdorff, Director of Travel Ads Product Management, stated in his statement:

• “The AI-based bidding strategy will help you bring your offerings to market at the speed of consumers. And in an environment of constantly changing privacy, this will bring you closer to meeting people’s expectations and multiplying results.”
• “To prepare you for success, we will continue to provide you with guidance along this path.”

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