The Digital Marketer

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HOTELS January/February 2015 www.hotelsmag.com
ER
SPECIAL REPORT: DIGITAL MARKETING
AS BUDGETS SHIFT DRAMATICALLY TOWARD DIGITAL
PLATFORMS, hotel marketers are working to unlock the
big opportunities, all the while addressing new challenges
and surprises.
contributed by JERI CLAUSING
From banner ads,
websites and
social media
to slicing big data and metasearch, hotel digital marketing budgets are, not surprisingly,
on the rise, with some companies now turning
almost exclusively to the online world. But
while the wealth of new technology and data
collection tools have made it easier to target
and track customers, it hasn’t necessarily made
it cheaper.
At the same time, the digital world presents
a host of new challenges for marketing, advertising and public relations executives as they
increasingly shift their budgets to keep up with
and work across the seemingly endless influx of
new channels, data points and mobile devices.
“It’s a lot of trial and error,” says Stas
Pietrucha, vice president of online marketing
and global ecommerce for Wyndham Hotel
Group, Parsippany, New Jersey, which like
most companies is shifting more and more of
its marketing budget away from traditional
print and broadcast channels to the digital
marketplace.
Pietrucha says since 2010, Wyndham has
doubled its online spend, which now represents
about half of its marketing budget. And that’s
well below what Chris Jackson, president of
the hospitality industry-focused GCommerce
Solutions, Park City, Utah, estimates is the
average for independent hotels.
“It really varies,” Jackson says. “But we
have seen it increase pretty dramatically in the
last two years. I would say on average digital
marketing is in the 70% to 75% range. We have
some hotels that are spending 90% to 95% of
their entire marketing budget on digital.”
The social equation
One big variance is whether social media is
included in digital marketing numbers. At
global companies, social media is generally
handled separately by each of its brands. Like
Wyndham, Accor says about half its marketing
budget is digital. Dubai-based Jumeirah Hotels
& Resorts says its digital marketing budget is
over 50% of its total marketing spend at the
brand level, while Miami-based boutique hotel
management firm Trust Hospitality says digital marketing for its independent hotels ranges
from 15% to 50%. Social media is also being
used less for promotions and increasingly more
for interacting with customers.
At Omni Hotels & Resorts, Chief Marketing
Officer and Senior Vice President of Sales Tom
Santora says the company recently merged
its ecommerce and marketing departments
into one. Since then, Omni has quadrupled
its spend from print to digital in the last few
years. “Digital sort of leads that strategy,” he
says. “From a digital standpoint, you can track
everything. … You can quickly determine if
this booking is costing me 6% or 20%, and how
do we adjust that pricing.”
Pointing to the old adage “that 50% of
advertising is a waste of money, you just don’t
know what 50%,” Santora says. “Now we can
monitor, adjust, literally by the hour, by the
www.hotelsmag.com January/February 2015 HOTELS
25
SPECIAL REPORT: DIGITAL MARKETING
“We have some hotels that are spending
90 95
%
%
to
of their entire marketing budget on digital.”
– CHRIS JACKSON, GCOMMERCE SOLUTIONS
day. It’s really a chance to be more fluid
and develop a presence, real time.”
Santora adds that Omni still spends
on print by targeting “the right publications… where people are that in that
dream stage of travel.” Omni also still
uses some newspaper advertising to keep
the company “top of mind” for things
like annual Top 10 rankings.
In the digital world, hotel companies
say they are focused on updating and
creating new websites, using banner ads,
search engine optimization, email marketing and other tools to keep their listings relevant.
Omni recently launched a new website
that resembles a news site with constant
updates about the brand. It is also creating new websites focused on the destinations where Omni has properties, not
the hotels themselves. The first site was
recently launched for Austin, Texas.
Similarly, Accor’s new website has a
comprehensive destinations guide, and
it is launching a new digital platform
focused on mobile. Romain Roulleau,
director of ecommerce for Accor, says the
company is also unique in that it has videos of each and every one of its properties
on the Internet.
Jumeirah’s digital and loyalty Vice
President Ross McCauley says the
company allocates a larger share of its
marketing budget to video because of
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HOTELS January/February 2015 www.hotelsmag.com
the popularity of YouTube in its regions.
In fact, Jumeirah’s YouTube channel has
surpassed 5 million hits.
All that data
Some of the biggest digital challenges,
however, come as hotel companies
venture into metasearch and big data.
Global chains are leading the way, helped
by the wealth of data from their millions
of rewards members.
Starwood has a team
of about
30
people
from its call centers monitoring
mentions of its brand on Twitter and
Facebook in
11
24/7.
languages,
Jackson of GCommerce Solutions says
he helps his clients with big data solutions
by outsourcing to companies to help target consumers who have indicated intent
to travel.
“BlueKai is one of the largest aggregators of consumer data in the world,” he
says, noting it has data from all the major
Fortune 500 companies to all the travel
companies – from Expedia to airlines.
“What we do is integrate this third-party
data to create segmented audiences. So if
we have a hotel in Los Angeles, we identify consumers who have shown intent to
travel to Los Angeles. … We want to find
people who have either looked for tickets
from New York to Los Angeles, or have
recently bought in the last day or two, or
who have purchased a rental car.”
Jackson adds that hotels can also pull
consumers’ past hotel purchase activity and household income to create a
segmented audience that can be targeted
with the best rates for their dates of
travel, as well as spa specials, if the data
shows they are spa enthusiasts.
“It’s expensive, but not really as expensive as you might think,” Jackson says.
Such ads represent about a 20% to 30%
increase in cost per impressions. “But the
campaigns are so much more targeted that
the increase is totally offset by the returns.”
Wyndham’s Pietrucha calls metasearch the “new battleground.” Wyndham
has data from 38 million rewards members that it can leverage on channels like
Google to adjust its bids and messaging
when their members start searching.
The biggest problem? “It’s a very open
market and we are competing against
our OTA partners and they have very
large budgets that we really can’t match,”
Pietrucha says.
SPECIAL REPORT: DIGITAL MARKETING
THE DIGITAL
MARKETER: SOCIAL
On Black Friday last November, The
Langham Chicago launched its first exclusively social media-driven sale. The
response to the 30% savings offer was
tremendous, says Social Media Manager
Eric Ziegenhagen. Nonetheless, the social sale likely isn’t something he will
make a habit of repeating.
Instead, Zeigenhagen and most social
media and marketing executives agree
that Twitter, Facebook and Instagram
have become places where brands interact rather than try to sell rooms. They
agree that the medium is more for connecting and staying front of mind.
For instance, Four Seasons Hotels &
Resorts recently launched a new wellness program called Energy by Four
Seasons. On social media, they introduced it with a 30-day wellness challenge for their followers to try. Four
Seasons followers were encouraged
to try a different energizing tip or technique and invited to share their experiences via Instagram, Facebook,
Twitter and Google+ using the hashtag
#30DaysofEnergy. Participant posts
were then shared on Four Seasons social
media channels.
Social media channels have also become key extensions of much more than
just a hotel’s marketing department.
“I think one of the challenges and opportunities now is even figuring out
where to put social media on a property’s organizational chart,” says The
Langham’s Ziegenhagen. “It used to be
marketing, now it’s more operations. It’s
becoming an extension of the call center,
front desk and concierge.”
Indeed, whether it’s getting a quick response to a complaint or getting saved
from a lockout, examples of Twitter being
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HOTELS January/February 2015 www.hotelsmag.com
“I think one of the
challenges and
opportunities now
is even figuring
out where to
put social media
on a property’s
organizational
chart.”
– LANGHAM CHICAGO SOCIAL
MEDIA MANAGER
ERIC ZIEGENHAGEN
used for unique guest outreach abound.
Starwood Hotels & Resorts, for example,
which has a team of about 30 people from
its call centers monitoring mentions of its
brand on Twitter and Facebook in 11 languages, 24/7, was able to rescue a guest
who tweeted he had been locked out on
his hotel room’s balcony.
At Omni Hotels & Resorts, Santora
points to an instance in which a customer in Fort Worth, Texas, was tweeting
that the Wi-Fi was poor. “They went and
found the guy in the lobby and bought him
a glass of wine while they reconfigured
something,” he says.
Omni also says it has also had good
luck with Pinterest, where it started
a campaign that before the holidays
focused on “The Art of Pie,” offering
recipes from its different properties
and calling for others to share recipes.
“It’s more about interaction, awareness,” says Santora, who notes that the
project also helps build out the brand
from a search engine optimization perspective. “If there are people out there
searching for something pie-related,
they are going to bump into Omni.”
In the United States, many hotel companies say Instagram has become a
fast favorite. “I think people’s attention
spans are getting shorter and shorter
as the amount of content grows and
grows,” says Patrick Goddard, president
and COO of Trust Hospitality. “Now you
have to figure out a way in 15 seconds or
less to engage with somebody. So really,
Facebook is becoming a bit obsolete as
people are turning toward Instagram as
a communication tool. It’s very challenging to engage on any other channel. You
have to be very targeted.”
With the growing emphasis on visuals,
Ziegenhagen says hotels can easily use
a good picture without having to worry
about coming up with any fancy text that
over-describes it. He says people often
follow hotels on social media after they
had a good time “and just want a continuation of the experience they had while
staying there.” Ziegenhagen also likens
social media posts to an amenity card
rather than a sales pitch. “Advertising
says ‘buy now,’ whereas on the property
itself you would never tell people what to
do – unless there was a fire,” he says.
Other good practices, Goddard says,
include ensuring posts are unique, interesting and “speak to the brand.”
But there are also a lot of don’ts.
“Don’t forget to be relevant,” Goddard
says. “Don’t forget to communicate often. Don’t be dull. Don’t be redundant. You
don’t want to clog up people’s feeds. You
don’t want to post for the sake of posting.”
SPECIAL REPORT: DIGITAL MARKETING
THE DIGITAL
MARKETER: BIG DATA
Big data may be one of the most exciting
ideas in marketing, but many hotel
companies are still grappling with how
best to get, crunch and match all the
information in a relevant, useable and
affordable way.
“I am not sure everyone in the industry really understands what big data is,”
says GCommerce’s Jackson, “and it’s really worthless unless you know how to
act upon it, monetize it.”
Most big hotel chains are in the big
data game, drawing on information on
their millions of rewards members that
allows them to fine tune and target ads
when those members start searching.
“But individual hotels don’t have the
resources to build out big data that meaningfully,” says Bob Gilbert, president and
CEO of HSMAI (the Hospitality Sales &
Marketing Association International).
Companies like Jackson’s GCommerce
are working to help even that playing
field. But the problem, he says, is that the
cost of acquisition is rising faster than
demand, “and we have to address this as
an industry or it is going to be in big trouble when the next downturn comes.”
“It is unsustainable,” Jackson adds,
“because there have been so many intermediaries that are out there.”
Jackson points to consumer tools that
monitor prices and automatically cancel
and rebook if the price drops.
With so many new channels, hotel companies around the world report their cost
of advertising is rising. “All of these things
are starting to eat into the value chain,”
Jackson says. “So a lot of hotels think that
a direct reservation is the cheapest form of
booking they could ever achieve.”
But Jackson pointed to a recent study of
200 New York properties that showed the
cost of acquisition for direct bookings was
between 15% and 25% for independent
“Digital cost of management is not going up. The
cost for advertising is going up. There’s more
competition, more advertisers.”
– PATRICK GODDARD
THE DIGITAL
MARKETER: MOBILE
Accor recently unveiled its Digital 360
plan. Digital 360 is largely focused on
building out an app that gives travelers
access to everything they need for their
trip, such as restaurant reservations,
airfares and car rentals. The app will
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HOTELS January/February 2015 www.hotelsmag.com
also store all of a user’s loyalty program
and travel bookings, regardless of whom
they are traveling or staying with.
With the new program, the company
will be driving the vast majority of its
technology to mobile – an area many hotel executives say still represents the
biggest challenge, particularly in the
United States.
While consumers in some markets like
Brazil and Asia make the majority of their
properties and 25% to 30% for branded
properties. That compares with the 20% to
25% normally paid to OTAS. “The advice is,
you can’t control cost per acquisition until
you can effectively measure it,” he says. “I
would say most hotels, particularly independents, cannot, or are not, measuring it
right now.”
Jackson says his company can tag every form of media out there, from email
to paid search and social media, and pull
it all into a model that shows the cost for
acquisition across all the different channels. “Then we can dive into the individual bookings and look at what are the
most affordable channels, and control or
lower your cost per acquisition.”
At the boutique hotel management
firm Trust Hospitality, President and
COO Patrick Goddard says he uses technology from Tambourine to measure ROI.
“We have a dashboard that measures,
on a daily basis, all our key performance
indicators,” Goddard says. “Digital cost
of management is not going up. The cost
for advertising is going up. There’s more
competition, more advertisers.”
Jackson says ROI can range from 30to-1 to 50-to-1, depending on where the
customers are in the booking funnel.
“We are shooting for a minimum of
about a 7-to-1 return,” he says. “We’re a
lot more happy when it’s in the 10- to 12to-1 range.”
purchases on mobile devices, people
in the U.S. tend to use multiple devices,
with many beginning their search on
their phones but completing their bookings on computers.
“When someone switches between
devices, I don’t really know who they
are,” Jackson says. “How do we get
over that? We are reliant on technology.
Google is trying to help us with that, but
nobody has figured that out yet.”