What Hotel Brands Need to Know to Boost Advertising ROI Across Various Digital Marketing Tactics
As an agency, we are often asked what the ROI (Return on Investment) or the ROAS (Return On Ad Spend) is for our digital marketing various services. As we focus on hospitality and e-commerce brands, the customer experiences are very similar in strategy but the technical approach and execution of some of these tactics can vary. The efficiency of these marketing tactics depends drastically on which strategy we use as much as the ROI fluctuates depending on the value and price points of the brands’ products or services sold. In order to bring some transparency and clarity to the equation, we have put together an outline of various strategies and approaches for business owners to have a better understanding and comprehension of how to meet their audience where they’re at and how to most effectively use their marketing dollars, time and energy. Understanding the marketing tools available and their respective ROIs will better enable business owners to get a sense of where in the business lifecycle is best for implementing and using each of these various marketing tools.
In general, the idea of marketing is to meet the customers where they’re at, to speak a language that resonates with them, adds value, differentiates the brand, and to ultimately build trust, loyalty, and advocacy through the customer journey. This customer journey may be a culmination of dozens of micro-moments where a customer first hears about the company, then visits the social media, and then leaves and gets retargeted before ever hitting the website. Each one of these micro-moments is an opportunity to build upon the experience and value the brand has in the eyes of the consumers. Just like how in sales it can take up to eight times for information to be retained by customers, in the buying process we will ultimately use that same process of garnering and building trust with a brand before buying from them. This can be built through things like reviews and testimonials, but ultimately through using multiple touchpoints to be able to reach them. This outline of tactics is segmented into active and passive marketing strategies. These two strategies are going to initiate and perpetuate the brand experience with customers.
ACTIVE MARKETING STRATEGIES – A “Pull Strategy”
In terms of active marketing strategies, we’re talking about a customer-initiated experience, meaning that they actively sought the brand or product out. These are customers that want a product, service, or solution, and are currently in demand and eager for information. In the buying cycle, they’re currently looking for a need to be fulfilled and are seeking solutions they’ll happily pay for to solve their problem. There are short, mid and long-term approaches to this buying journey and the marketing tactics to reach them. Various ways that these customers are going to search and seek brands out are through Google, by asking Alexa or Siri about services, using the new trend of voice to text, or through online distributor outlets like Amazon, Best Buy or Walmart.
Pay Per Click (PPC) & Ad Buys – If we look at the time it takes to build these strategies, stand them up and start seeing results, Pay Per Click is the most time-efficient and is the easiest means to be able to get the business in front of customers. We use the analogy of a helicopter and the preparation of checking all of the control panels and flight paths because it can be a little risky. Even Google professed that a lot of ads that are placed with them are inefficient because they aren’t targeted well enough, resulting in a ton of ad waste. More often than not businesses trying to build this themselves waste ad dollars by not narrowing down the target audience enough because of fear that it limits who they’re in front of. This process is much like throwing darts – we need enough ad impressions, we need enough data to be able to understand the time of day, the user’s location, and the programmatic AI artificial intelligence to know who the right target audience is based on click-throughs and conversions. Look at the best means for optimizing the campaign to get as much return on investment as possible. The ROI is quicker on this strategy because ad spend is turned on and will immediately see impressions and click-throughs. Typically, in our hospitality marketing strategies, paid ads that are branded and tied to a brand or hotel name should see an ROI in the realm of 20x to 40x more, meanwhile general regional searches for hotels like “beachfront hotel in City” don’t yield as high of an ROI, closer to 8x to 16x ROI.
Search Engine Optimization (SEO) – Google’s becoming more complex with thousands of considerations and elements in their algorithm and other search engines are getting more sophisticated too. The fundamentals of SEO and the relevance of a term that someone is searching for a brand or product mirrors being that person in real life. How is the brand the thought leader and expert that it says it is? How much do others see that the brand is the thought leader and expert that it says it is? What’s its track record? How in compliance is the company with playing Google’s game? They want to ensure that the brand is providing the best user experience possible which means components like website design and the user experience, layout, page optimization, speed, mobile, friendly, and being responsive. The big component here is ensuring that the search engines are actually seeing and tracking the evolution of the brand’s website. One of the pitfalls that we see around SEO is that brands will do a lot of creation, social media, email campaigns, PR, marketing tactics that are intended on driving traffic and backlinks that will grow that external validation, however, the search engines never are properly seeing and indexing the brand and its evolution. And thus, these companies aren’t getting the true SEO benefits that they want. This is undoubtedly a longer-term ROI, but when done properly, the long-term ROI can be really effective because of the sustainability. With SEO, there is around-the-clock longevity and visibility to drive people to the brand’s total online presence.
When people ask what the ROI of SEO is, one of the things we invite them to consider is the cost of their product and its relation to ROI so have them look at how this is evaluated in real estate. Not all real estate is the same footprint, value or cost. If we drive leads organically to a site that sells a million-dollar home versus a half-million-dollar home, the ROI on that is twice as large. It’s really hard to be able to understand unless there’s only one product. However, over time that builds and get leads, and depending on the scale of that, there’s less to pay for that cost per acquisition and the ROI incrementally goes up over time.
Website Performance & Optimization – For any brand online experience, we’re looking at a practice called Conversion Rate Optimization (CRO) which is how to take the user experience someone has on a website and optimize it to reduce clicks to purchase the product, or to do whatever the desired outcome is. We want to guide people intuitively through that process and limit the resistance for them to achieve that. We have to look at the brand’s website’s experience as part of this larger customer experience and marketing strategy and see where it can be enhanced. Once people actually visit the website and have the best experience possible, Google is going to reward it because it will see more people clicking through pages engaging and it will result in a lower bounce rate. It is part of our job as a Fractional Chief Marketing Officer and extension of our client’s brands to refine the customer experience across each of these marketing tools and tactics so the ROI is as optimized as possible to get them to the website. The guest experience doesn’t stop there though. In exploring the guest experience on the website we need to encourage people and guide them through the process to engage with the brand and ultimately buy. Reviewing where guests have bottlenecks in the online experience a brand presents is where we can influence the process and create less resistance through adding Call to Actions, having images or other elements click-through, and refine their experience to drive bookings and sales.
Amazon Optimization – Amazon is another outlet where customers are going to actively come looking for a brand, product or service that they want. Amazon is a wonderful online outlet and distributor for brands to get additional exposure, convert sales, and to start building some brand awareness. However, it’s not effective at building brand advocacy and loyalty because the customer experience stops at Amazon and doesn’t extend to a brand’s website, social media or newsletters. While it is very convenient and can be a great place to push the brand, we believe it’s just one additional strategy to increase brand/product awareness but it shouldn’t be the only outlet nor the first outlet used. This is because Amazon parallels hotel experiences with Online Travel Agencies (OTAs) in that they “double-dip”. Not only can brands advertise within the category to get more exposure and visibility to people, but then there’s also a commission when they buy which eats into the profit margin more substantially than paying for Pay Per Click. Depending on the product and scale, the margin that Amazon is going to take out of both ads and commissions can be much more significant than other outlets. So, while a great initial place to get visibility and some sales and close, it shouldn’t stand alone. Simply, the ROI with Amazon is going to be less than other marketing tactics.
PASSIVE MARKETING STRATEGIES – A “Push Strategy”
As it relates to passive marketing strategies, the key component to understand is that these tactics are for more broad brand awareness and this is a “push strategy” to get a company in front of those that otherwise wouldn’t see it. These passive marketing strategies involve tactics like social media, email blasts, referral and loyalty mechanisms, traditional marketing, and public relations. The ROI of these efforts is, in general, way harder to derive because they’re a lot more ambiguous and historically harder to track eyeballs and impressions value. Luckily, with some of the innovation and technology today, there are some really unique tools that we’ll be able to help track more effectively. It’s not nearly as black and white as the active marketing strategies and looking more globally at the marketing will strengthen the ROI and isolate certain strategies.
Social Media Marketing – Social media is a critical component because companies aren’t just presenting their brand online to the globe but also are interacting with their customers, prospects, and communities in general on their behalf or through influencers. Thus, depending on who is representing the brand we have categorized these into the Brand, Customers, and Influencers efforts to help clarify and delineate the respective ROIs.
Brand: As a brand, there’s a need to push out a social media content strategy and look at ways to make social media more engaging and valuable to the customer experience. Social media helps to really show more of the brand personality, a day-to-day update of what is happening, and engagement with its community of users. Social also enables the ability to have pixels on the website to see where customers came from and track the various type of conversions they can make in the customer journey. While brands are able to track click-throughs and purchases, the ROI of these efforts are still very ambiguous because it depends on how much time or money brands spent and if they hired a marketing agency or a social media director internally and actually attributing social media as the sole cause of conversion and not the whole brand experience they had online. Knowing the customer’s interactions lets us know that they’re part of a larger customer experience.
Influencers: For brands influencers, are much easier to be able to track because of the ability to have unique affiliate or referral links. These allow us to track how effective the influencer promotion was, how many people clicked on the links, how often a code was used, and if those people converted. There are many really influential, impactful people with very small followings because they have a really high engagement and a lot of social capital with their following. Don’t discredit someone that has only 30,000 Followers because they could have a really great rapport with their audience that will engage and click through, especially for niche topics or activities.
Customers: Lastly, the brand needs to take into consideration that customers also are posting and tagging products and experiences with geolocations or hashtags, which needs to be accounted for in evaluating social media ROI. Companies may not have been the one who created the content but are benefiting from client acquisition from former patrons. This is part of the overall brand experience and online presence that needs to be considered as to how it boosts the ROI. Generally, social media over time, as a brand grows, as its adoption grows, and community and loyalty grows, the ROI will become increasingly higher. So, understand that the ROI of social in the beginning is going to be a lot different for the brand than after a couple of years. What’s being put forth towards it will grow respectively and proportionally.
Email Marketing – Email has evolved a lot as well. Because of businesses sending emails rather than traditional mail, Outlook, Google, and other service providers have created a lot of spam filters. Despite this, email can still be very effective from a hotel or eCommerce perspective if there’s have a really great strategy that keeps customers opening them for daily products, new offers or sales, and to just keep a pulse of what’s going on. Being able to have an effective email strategy means looking at it in this larger stack of the customer. Look at what ways to disrupt and add value to the customer experience through emails, rather than just saturating them with stuff they don’t care about. When looking at it from an engagement perspective with the customer base, it’s going to get a better ROI, more clicks, and Google will reward it for the experience the company created.
Referral & Loyalty Marketing – Referral and loyalty marketing is similar to Word of Mouth and leverages brand advocates that promote the brand or product because of the experience that it created for them. While word of mouth marketing is one of the best ways to build rapport for the brand, it’s also one of the hardest to track until it start digitizing it. It’s important to look at ways to empower customers with text messages, images, promotional offers and other ways that customers can share the brand experience with friends. We can also start to look at means and mechanisms to incentivize and take care of the customers as a value exchange and without necessarily putting more money in their pocket. By adding more value to them, it’s going to expand the opportunity for them to share the company with others that might be in need of it when the time is right. Because this is a push approach it’s imperative to look at all of these holistically rather than operating in silos. Customers are going to have multiple of these customer experiences and it’s important to ensure that each minor moment is positive in order to garner that referral when the time is right. For ROI, the costs of this are minimal and might just include a design for a flyer or a text message to share, but it’s important to recognize that it is going to be more difficult to track. Although not possible to track 100%, a few modern technologies exist to help.
Traditional – In traditional marketing for things like magazine ads, newspapers, TV commercials, billboards, and bus stop ads, we are tracking impressions. This means tracking how many people drove down the road and saw the billboard, how many people watched the commercial on TV, how many magazines are left at the end of the month out of the total distribution, etc. This gives advertisers an understanding of how many eyeballs they’re getting in front of. This doesn’t necessarily convey a translation to sales but it’s critical for building brand recognition, awareness, and associating the brand with certain publications that can leverage social capital. However with QR codes, now we are able to have unique codes per outlet so we can have the same ad placed in different media and can see how many people are clicking through a certain landing page or product offer. This gives the ability to compare outlets and find the highest optimal ROI.
Public Relations – Public relations is important for associating the brand to a predominant, primary influential media outlet and getting the distribution in front of a tailored audience. This could be a regional newspaper or niche magazines. The idea is to be able to get the product in front of an audience that already has a curated interest in it. These media outlets innately have a large audience of people that are already subscribing or purchasing because of the topic of content or industry. Through online distribution, these outlets have the capability to push a lot more material than before and at a much faster frequency than print. Online distributi
on also makes it easier to track impressions, click-throughs, and how people are finding the site. Public relations within media outlets enable targeting to niche groups and earns brands clout because of the connection to an outlet that has high authority and an established reputation within a certain industry. Naturally, people are going to see the business as a thought leader because of the brand alignment with this trade outlet and the association will result in more positive impressions amongst these viewers. The more niche and granular the distribution and association is, typically the better the ROI is going to get because it’s being seen by like-minded individuals that actually care.
While historically a lot of these strategies operated in silos, the customer experience today transcends many to build the brand to scale and to gain the reputation desired. In order to get that trust, loyalty, and advocacy, there needs to be a comprehensive understanding of each of these. The ROI of each of these strategies will vary and will increase throughout the evolution of the campaign. As all of these components build concurrently, it will be building brand equity and association which is invaluable. Ultimately it can be measured at the next business exit, looking at the EBITA multiplier, to whoever the next highest bidder is who is going to buy the business. As clarity and a strategy is found for this, the ROI is going to go up because the return on ad spend and the cost per acquisition will go down. By driving that gap of profitability, it’s going to be able to position the brand upon sale at a higher multiplier. These strategies may also be used as stepping stones as there is a right time and place to use each. These principles are important to understand so business owners can decide what tactics to explore and what conversations you should be having with your agency on how to develop a growth strategy that reflects this for the brand.