Michael Cooperberg 01/19/2021

When it comes to the vacation rental industry, paid search (PPC), and Google Ads in particular, has proven to be a very effective marketing tool. It’s tough to imagine a better way to spend your marketing dollars than directing it squarely at potential guests while they are in the midst of searching Google for their next vacation. This rings especially true when you have your ads dialed in; adjusting your ad spend for each individual searcher, based on important factors such as their location, the time of day & year, the device they’re searching from, the specific phrase they searched for, and so much more.

If you’ve run PPC marketing ads in the past, you know that the value that they generate doesn’t end with the increase in leads and bookings that you see. The real value lies in the massive amount of data that each click to your site brings. Without this data, you’re simply putting ads out there, hoping to strike gold. Sure, you’ll get lucky and find a booking or two, but ultimately you’ll be wasting tons of money that could be better spent elsewhere. When you’re able to make sense of the data you’re generating, however, the story changes, and you can begin to focus your ads, limit your wasted spend, and start seeing some real ROI improvements.

Basic Metrics

To begin understanding PPC data, you first need to understand your basic account metrics. These are the numbers you should be reviewing on a daily to weekly basis, to ensure that a) your account is running smoothly, and b) that you’re staying on budget. Impressions, clicks and spend are the key things to look at here. How many times have your ads shown? How many clicks did they generate? What was the total cost of those clicks? If anything looks out of the ordinary here, it’s important to troubleshoot right away.

Digging a little deeper, you begin to look at things like click-through-rate (CTR) and cost-per-click (CPC). CTR tells you the percentage of people that click your ad after seeing it. A low CTR lets you know that you have room to increase and generate more clicks, and it may also mean it’s time to update your ad copy. A high CTR tells you that your ads are communicating well with your searchers and they are interested in what you have to offer. It also means you have competitive bids and are showing high in the search results.

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CPC is the average cost for each ad click to your site. And while it may seem like a basic metric, it’s all important when it comes to optimizing your account. You want CPC to be as low as possible, while also driving as much quality traffic to your site as you can. You don’t want it to be so low that you miss out on quality traffic that may now book with a competitor instead, but you also don’t want it so high that you are exhausting your budget before the end of the day. The main factor in determining your average CPC is your Max. CPC bid, which you set for each individual keyword in your account. You are essentially setting the maximum you are willing to pay for each ad click, depending on the keyword. As you’ll learn later, however, there are many other factors that come in to play when determining your actual CPC.


Now that you understand your basic metrics, it’s time to figure out what you’re getting in return. Beyond clicks to your website, you need to know how these users are interacting with your site, and whether or not they are converting. You can generate a ton of clicks to your site, with a very low CPC, but if none of these users are converting into leads and bookings, it’s all wasted spend.

Setting up conversion tracking is one of the first steps you should take when launching a new PPC marketing account. You should make sure that you are tracking all lead points on site, as well as booking and revenue data, making sure that there is no double counting. In addition, call tracking is highly recommended, both for call leads and bookings made over the phone. The key with PPC data is consistency first, accuracy second. If you’ve been tracking data consistently for years, it has meaning. If your tracking methods are constantly changing, things start to lose their value, and year over year comparisons become skewed. Accuracy is also hugely important, but the truth is that numbers will never tell 100% of the story, no matter how accurate you are. Because of this, consistency holds the most importance, followed closely by accuracy.

Another important thing to consider when setting up conversion tracking is that conversions aren’t a standardized metric. CPL (cost per lead) and ROI (return on investment) metrics are not only unique to the industry, but also unique to each individual company. Each company should be tracking things their own way, with many factors differentiating their data from the next closest competitor. This means it’s always important to take cross company comparisons with a grain of salt. If one company is spending heavily on their own branded terms, which drives up ROI, and another doesn’t even bid on their own branded terms, there won’t be too much to learn when comparing the two until you can isolate NonBranded traffic for both.

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Now that that’s out of the way, it’s time to understand your booking data. Ultimately, no other metric is a better benchmark for success than ROI. ROI simply takes your booking revenue generated from your ads and divides it by your total ad spend to determine how much revenue you are generating per $1 of ad spend. To be as accurate as possible, you should take your total revenue generated and multiply it by your management fee percentage (20% is a good industry average). So, if you see $100,000 in booking revenue, of which your company receives 20% (the rest goes to owners, taxes, fees, etc.), you are looking at $20,000 in actual revenue. And if it cost $5,000 of ad spend to generate that revenue, ROI becomes $20,000 / $5,000 = $4.00, or $4 in return for every $1 of ad spend.

Other important booking metrics include transactions (you want to make sure your booking volume is where it should be), booking % (the percent of clicks that turn into bookings), CPB (cost per booking), and average order value. Booking % is a metric you always want to increase, meaning your ads are targeting increasingly more relevant users, who have a higher likelihood of completing a booking. In the same respect, you always want to decrease your CPB, and it’s always nice from an ROI perspective to increase your average order value as well. If you know that a user who searches for a “luxury vacation rental” typically produces a higher average order value (despite a lower booking % and higher CPB), you’ll still want to bid higher on that keyword assuming it leads to a higher ROI.

Beyond bookings, it’s also important to track leads. Property inquiries, contact form submissions, phone calls, property management leads, etc. Tracking these provides valuable additional data, allowing you to better optimize at the keyword level. CPL is the main metric to look at here, and you always want to drive CPL lower. If a specific keyword only has a couple of bookings, and thus not enough data to make actionable optimizations, lead data and CPL can provide enough additional information to determine if you need to increase or decrease bids.

One last thing of note: It is important to keep your account organized and efficient to make it easier to filter your data and implement optimizations. Things like Property Management campaigns should be kept separate, as they are not ROI focused but instead CPL focused. Likewise, Branded and NonBranded campaigns need to be kept separate to easily determine the ROI for each. When grouped together, ROI will be inflated as Branded campaigns tend to drive very high ROI’s, as the user is searching for your specific brand. There is a high likelihood that this user would’ve booked with or without the PPC ad. By being able to separate out your NonBranded campaigns and determine your NonBranded ROI, you are increasing the accuracy of your ROI metric allowing for better optimizations.

Stay tuned for our next update as we take a deeper dive into some more nuanced PPC metrics, and more importantly learn how to digest everything, visualize it, and turn your data into actionable improvements!