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 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 30- to-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 12- to-1 range .”
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 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 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 .”
30 HOTELS January / February 2015 www . hotelsmag . com