[MUSIC] An alternative, but as we will see, linked approach, is to pay for position. Practically all search engine have some form of paid placement that allows you to promote certain pages when users type in specific terms. For every keyword, you bid a certain amount per click. And your position in the listing shown to the user, by the search engine, is basically determined by the amount of your bid, relative to that of the other bidders, although the relevance of the page contents to the search phrase also generally has an effect. Thus, it's easy, if expensive, to jump to the number one position, simply by bidding more per click than anybody else. Using this strategy is attractive, as it is performance-related. If no one enters the keywords in question, or if no one clicks on your listing and the search results screen, then you pay absolutely nothing. But if you are both successful at picking the right keywords and encouraging people to click through to your website, the economics of the technique depend greatly of the conversion rate of your landing page, or more properly your landing pages, in other words, your success at converting lookers, visitors, into bookers, purchasers. It's this conversion rate that helps determine how you should pay for each and every keyword. Conversion rate is a key metric, and refers to the percentage of your website visitors who actually buy. For example, imagine that out of every 100 visitors that come to your website, 3 buy. This would mean that your conversion rate is 3 divided by 100, or 3%. Now imagine that you pay 50 cents for each click. That means you have paid 50 cents x 100, or 50 euros to attract those visitors. If your conversion rate is 3%, then you can calculate your customer acquisition cost, which is 50 divided by 3, which is about 16.67. Now, imagine on average each customer spends about 200 euros. Then your return on advertising would be 16.67 divided by 200, which is 8.3%. As we will discuss in Module 4, this is effectively your transactional distribution cost, which compares very favorably with the typical 15 to 20% commissions paid to the OTAs. It's worth also pointing out that it should be easier to convert visitors who arrive at your website through paid search, assuming, of course, that you're picking the correct keywords, than through other electronic marketing techniques, as the latter are already actively searching for the product that you are selling, and thus may be more predisposed towards purchasing in comparison to your average website visitor. The big challenge for hotels is that in contrast to the OTAs, most websites are not optimized for conversion. As was discussed in the section on content earlier, each individual webpage needs to be highly focused, with a single objective. This is particularly true on the landing pages onto which the searcher gets taken if they click on a paid search ad, which need to be 100% dedicated to completing the sale. Unfortunately, right now, few hotels are at the level of sophistication where they make use of customized landing page, reducing conversion rates and changing around the economics of paid search engine marketing.