These are the presentation notes that Tom West and Jonathan Cross presented at the recent Bali Hotels Association marketing workshop about Increasing Hotel Revenue with Digital Marketing.
If you would like more information you are welcome to contact us.
Increasing Hotel Revenue with Digital Marketing
by Island Media Management
How many of you here are a good manager?
Who would like to be a better manager?
Ok, good, so we are all in the right place as we are going to show you how you can all be better managers. To begin with we would like to ask you to think about how much money your hotel puts aside for it’s marketing budget. You don’t need to tell anyone else but what we would like you to do is think about how the money is split up, where do you designate that money?
Perhaps is it:
- Magazine advertising
- Billboard advertising
- Promotions at the airport
For each item that you spend your marketing budget how many of you know how much revenue is generated from each item? There is no one in the room that knows that information!
What we want to discuss today is how you can divert some of that marketing budget into a campaign that allows you to track what you generate from every single dollar that you spend.
How many of you would like that?
We are not asking you to spend more money, just move things around so you can track the expense and revenue clearly.
Why do We Use Digital Marketing
In the 1920’s radio advertising was the latest way to get customers, everyone was doing it. Fast forward thirty years and it you were not advertising on TV then you were already behind the times. Radio advertising was still around but the big players were diverting their money into TV advertising.
In 1995 paper advertising was all the rage, online marketing did not exist. Many of you would have been spending large amounts of money to get your promotional material into a host of high quality magazines.
It’s 2015 and a lot has changed over the last decade.
You can make your own mind up if you think that focusing on old forms of advertising are working for you. If you want to be on top of the pile then you need to be focusing on the latest trends.
Let’s have a look at how the world is changing when it comes to expenditure on digital marketing.
If we take a look at the chart below we can see that the average spend on internet marketing has increased dramatically over the last decade with most of that spend coming out from the paper advertising segment.
Companies are now spending much more money to advertise online!
The chart below shows you what hotels in USA are spending on advertising.
For the first time ever, in 2015 hotels will be spending over 50% of their marketing budget for online marketing.
Ten years ago we had this:
And now, ten years later it is more like this:
These visuals send you a strong message. If everyone else is spending so much of their budget on digital marketing then why are you not?
Advantages of Digital Marketing
There are a number of reasons why digital marketing is seeing so much growth. For one, the money you spend on digital marketing can be so easily targeted.
If you think about how paper advertising works, you would get information about the reader demographics, circulation, location and other information yet you would never truly know what revenue you generated from that advertising.
With Digital Marketing you can!
Digital marketing is also very easy to turn on and off. Getting setup takes a short period of time and receiving data from your campaigns is almost instant, there are no long waits for months on end which is what you can experience when you use magazines.
It is also very cost effective to get involved with digital marketing and probably the most important item for those spending the money – digital marketing is transparent.
You can see what you spent, and what you got back in return, every time.
Channels in Digital Marketing
So let’s now take a look at how it all fits together. Digital marketing consists of many areas but it is always good to first determine your goals.
What could they be?
Well, for many of you your goals could be:
- Company branding
- Community development – building goodwill with your clients
- Providing information to the outside world
- For many of you in this room it will be driving SALES – online bookings and reservations.
Where does all the traffic come from?
The website is the central component for 99% of businesses!
You can see we have various sources of traffic coming into the website:
- Organic traffic – the holy grail of web marketing
- Social traffic – also a long term goal for many
- Referral traffic – we expect this to build over time
- Direct traffic – usually brand related
- Return traffic – generated by re-marketing, email & newsletters
- Paid advertising – here and now
SEO (Search Engine Optimization) is key to successful organic traffic coming to the website, as well as social traffic. If we take a look briefly at the traffic that comes from Google we can highlight a number of facts.
For organic search traffic:
- If you are top spot you can get around 37% of the traffic
- Second spot will claim you around 18% of traffic
- Over 90% of all Google search traffic comes from page 1 of Google search results
When you do a search on Google you will see they have both paid ads and organic listings (non paid). One report suggests that up to 65% of traffic coming to a SERP will funnel to organic traffic.
The competition for organic traffic is very high so as a business you should prepare your team and business to follow the best SEO practices set out by Google.
Keep in mind that organic SEO is a long game!
A great way to get results quickly is to look at Google paid advertising. Google Ads allows you to effectively track your expenditure and see actual results. Unlike other forms of non digital marketing, Google adwords allows you to track every dollar you spend and every dollar of reveneu that you generate.
Tracking Google Ads
Why is using Google Ads great for hotels?
If we search in Google for “Hotels in Bali” how many of you think you will be on the first page? (So many hands)
In actual fact there are no hotels listed on this particular day. (7th May 2015)
Why, competition for organic search results are very strong in this industry. especially from the OTA’s (Online Travel Agents) which this first page of results is full with.
You can also see from the SERP (Search Engine Results Page) that there are a lot of paid advertising. With Google Ads it is really quick to get started and allows you to track data effectively.
How do you get the most out of Google Ads?
How may of you know how much revenue or profit you generate from every click to your website? How about for every email that a client sends you?
These are two typical conversion goals with Adwords. If you know how much money you generate from a click on your website, you can know how much money you are willing to spend in order to get that click.
Without that information it is impossible to know if a Google Ads campaign is working for you or not.
NOTE: Some Google Ads campaigns are focused on impressions, rather than clicks, as companies are looking to get brand awareness rather than on site conversions. In this case these comments do not really apply.
Setting up Google Ads
As General Managers and DOSM’s you are unlikely to do this yourself but there are some basics that you need to know so that yo can help direct your IT team in the right direction.
Make sure you link your Google Analytics and Google Ads accounts.
Critical as these two programs work so well together and will help you gather more meaningful data for you to review.
You can see from the image below that we divide our data up in to groups to help us manage the campaigns more effectively. For example, you can see that we have groups for Sanur Villa, Seminyak Villa, Ubud Villa and so on.
We then look to create adverts for each adgroup. These adverts are displayed in the search engine results page (SERP) and can be customized to fit the message you are trying to send out. As an Adwords management specialist we would look to make numerous adverts that we then assess for effectiveness, edit and adjust as necessary in order to achieve the best results.
We then have a range of keywords for each adgroup. Each keyword will cost a different amount so we need to look at these carefully. More competitive keywords will cost more than those with low competition.
There is a lot more to the setup than what we have mentioned here but these are the basics.
Tracking with Analytics
So let us have a look at how you can track your data using Google Analytics.
As you look from left top right on the image above you should note the following items.
For each campaign on the left we have numerous data.
- Clicks – how many people clicked on your advert
- Cost – what it cost to get those clicks
- CPC – the Cost per Click
- Sessions – A session is the period time a user is actively engaged with your website
- Bounce rate – Bounce Rate is the percentage of single-page visits (i.e. visits in which the person left your site from the entrance page without interacting with the page).
- Pages / Session – Pages/Session is the average number of pages viewed during a session.
- Conversions – if you set up goals correctly you can see, in this instance, how many emails were sent for that campaign.
If we know how much money we get from the conversion, we can know if the money we are spending is worthwhile.
For example, if you know that for every email submitted to your website you are making $10 in profit, you can then look to see what you are spending to get one email conversion.
If you are spending less that $10 you are making money, if you are spending more then the Adwords campaign is not effective for you.
Daily Checks for General Managers and Director of Sales & Marketing
How do you check what is going on with your website?
Who here can spend 5 minutes of time once a day to discover how your website and Adwords campaigns are performing? With Google Analytics it is really easy to set it up so that you get automated alerts and reports straight to your inbox, saving you time and energy and putting information right at your fingertips.
Custom alerts are easy to setup and allow you to receive alerts for numerous things. For example:
- Get an alert when you web traffic is down 50% from last week
- Get an Alert when your web traffic is up
- Get an alert when any of your goals are met – if you get a set number of emails from a new campaign
Custom alerts is a very useful tool to track when something different happens.
Automated Google Analytic Reports
Let me show you four simple reports that can be delivered right to your inbox that will help you track what is going on with your website and digital marketing efforts.
You can compare all of these reports with previous periods, for example:
- Compare July 2015 with July 2015.
- Compare the last 30 days with the 30 days before that.
- Compare the last week with the same week last year.
Easily take a look at how many sessions, users, duration on the site, bounce rate and more.
Acquisition – channels
Have a look at where your traffic is coming from – direct, organic, social, referral, paid advertising, etc.
Acquisition – goals
See how well you are converting – make sure your goals are setup correctly.
We have seen this report already but you can check how much you are spending on Adwords and how much are your converting.
How do you deliver
It is great that you now have these reports coming into your inbox each day but how do you ensure that your team is able to deliver the results you are looking for?
Having an in house team that can deliver results is the best way to go. When you look to hire employees make sure they are qualified for the position. Google Ads and Google Analytic professionals should be certified in that field.
Advantages: You have a long term team that can deliver success.
Disadvantages: You may have to change current members of your team who are not qualified.
In House Training
We all want to develop our in house team so if you have members who are not qualified with Google Analytics of Google Ads then you can get a company in to do in house training, this bridges the knowledge gap.
Advantages: You develop your long term in house team.
Disadvantages: It can be time consuming and costly.
By far the quickest way to get things done right is to outsource a company that specializes in Google Ads and Analytics. This also ensure you are up to date with the latest techniques and trends from Google.
Advantages: Quick and easy to get started and you have excellent technical knowledge and experience at hand.
Disadvantages: They are not on hand all the time like your normal staff.
We have looked to inform and empower you with information about digital marketing. Hopefully you have more insight in how to look at data with Google Ads and Analytics that will allow you to be better managers in your day to day work.
Data shows us that the global marketing community has shifted their marketing expenditure towards digital marketing, the question is then, why have you not?
We are happy to answer any questions you may have about any of the content in this presentation, or any other questions you may have about your digital marketing. All you need to to is get in touch.