NEW YORK—As hotels and hotel brands each year amass large marketing budgets and battle online travel agencies for their share of bookings, the return on those marketing dollars spent online remains difficult to measure.
Panelists at an Association of Travel Marketing Executives’ think tank on the 2013 media outlook and travel marketing forecast said online attribution models, technology and marketing spend measurement continue to lag.
Jessica Brown, associate media director for Mindshare, a marketing, media planning and media buying organization, said online consumption has finally reached a crescendo—whether it be through digital advertisements, social media, mobile or a combination of the three—but measuring the return on marketing investments in those channels is “not there yet.”
“Someone can ask me my return for ad spend on digital, and I can’t tell them,” she said. “Whenever we get there, it’s going to be awesome.”
Most panelists agreed—at least in the sense that attribution models provide general figures but don’t provide accurate data to justify the spend. However, most were quick to point out that just because returns can’t be proven doesn’t mean they don’t exist.
In fact, Rob Torres, managing director of Google’s travel vertical, said companies that aren’t participating in digital marketing efforts today are going to get left in the dust.
“I agree that attribution isn’t perfect, but what do you lose by waiting?” he said. “Yahoo, years ago, if they didn’t know it was going to evolve they wouldn’t have invested in it.”
Brown said poor attribution is simply the reason more companies aren’t spending as much as they should on digital advertising and marketing. “That’s the reason the dollars aren’t flowing in,” she said.
Digital marketers don’t speak the same language as traditional advertising channels, such as print and TV, she said. All platforms need to be speaking the same language so marketers can better understand their measurements.
“We’d like to have one measurement tool that says the same thing TV measurement does,” Brown said, adding Mindshare treats TV and YouTube marketing as a single video channel.
Rosanne Zusman, senior VP of brand marketing at Wyndham Hotel Group, said Wyndham uses media mix modeling—historic information, such as sales data, used to quantify the sales impact of various marketing activities—to better understand how each channel drives business. While the measurement can’t attribute a number of bookings generated, it can show trends on how offline spend drives online traffic, and vice versa.
“When we run media mix modeling, we see improvements across all the channels,” she said.
Zusman said there hasn’t been a significant shift in Wyndham’s marketing mix from offline to online. About 60% of the company’s marketing spend is directed toward digital, she said, although that differs between Wyndham’s 12 brands.
“In online, the majority is spent on paid search,” she said. “Online marketing is incredibly effective, but it’s just this insatiable beast. It can always eat more of your money.”
Zusman cautioned that ROI, particularly surrounding paid-search spend, can be misleading. For example, a hotel brand buying its own name as a term would produce the best ROI, however that wouldn’t provide the most bang for the buck because travelers searching for the brand would most likely already be a loyal customer.
“You can’t get too focused on just the ROI,” she said. “For us, it’s about finding ways to generate more marketing revenue so we can throw more money at (it) but also find new ways to make the most of the dollars we are spending.”
Digital trends
With the ever-increasing consumption of digital content on various devices, hotel marketers need to blend their spend online and offline more seamlessly, panelists said.
Google’s Torres said offline and online worlds have blurred, leading to what he termed a “non-line world.”
“You can’t look at online and offline separately,” he said. “Every stage of travel now has a digital component. Obviously, people are booking online but now they’re doing the dreaming stage online and also sharing pictures and video.
“It’s just exacerbated as we move onto this 24/7, four-screen world,” he continued. “People don’t look at TV, tablet and mobile differently. If you’re going to distinguish yourself as a brand, you need to cross-platform on all devices.”
Max Starkov, president and CEO at Hospitality eBusiness Strategies, said travel marketers should embrace three device categories—desktop, mobile and tablet.
“Treat those channels separately,” he said.
Search and social also are two critically important digital marketing channels that cannot be ignored, Mindshare’s Brown said. Melding the two will lead to the future of hotel marketing, and mobile platforms might pave that path.
After all, he said, 30% of travel searches are coming from outside the desktop.
“You can’t control where the consumer is going to take in these messages,” Torres said. “You need to continue pushing into social and mobile.
“Search is still core to travel researching,” he continued, “but how travelers conduct their searches is differing. Desktop is going down, mobile is going up. It probably happened quicker than we even expected.”