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Hoteliers rake in returns through retargeting
March 9 2012

Sources say retargeting campaigns—serving customers specific ads based on sites they visited—are more effective than traditional push advertising. However, privacy laws are calling the practice into question.

Highlights
  • Through retargeting, hoteliers with a relatively small budget can give the impression they’re advertising across the Internet.
  • For hoteliers, retargeting is best used to creatively target consumers who searched on the hotel website but didn’t book.
  • “From my standpoint, if you’re looking at how you spend your dollar, it’s an incredibly efficient way to spend your money,” Marriott International’s Andy Kauffman said.
By Jason Q. Freed
Contributing Editor, Tech Impact Report

 

GLOBAL REPORT—While there have been a number of recent big-splash hotel marketing and distribution advancements—and companies such as Google and Facebook have added new layers to the space—it is a behind-the-scenes advertising practice that sources say is making the largest impact.

Hotel brands and individual properties are successfully embracing “retargeting” campaigns, and one brand said the returns on investment are regularly between 5-1 and 10-1.

“Google’s retargeting program creates far more revenues for the hotel industry than Google Hotel Finder,” said Max Starkov, president and CEO at Hospitality eBusiness Strategies.

Retargeting is serving specific advertisements to travelers after they leave an advertiser's website. It helps companies advertise to visitors who leave a website without a conversion and is done by displaying ads to the user as they browse the Internet and visit other sites. For example, if a traveler visits Marriott.com and searches for a hotel but does not book, Marriott International could subsequently serve ads to that person as they visit other sites across the Web.

Through those retargeted ads, Marriott could offer discounted rates or other promotions to entice the traveler to go back and book direct.

 

John Hach

 

 

Retargeting "is more effective than traditional push advertising,” said John Hach, VP of emarketing solutions for TravelClick. “Not one major hotel chain advertised during the Super Bowl because the cost is extremely expensive. So hotels are looking to get the most efficient advertising out for quality returns. When you know specifically that the person is interested in your product, that’s a big help.”

“The huge opportunity is that with really specific information and a relatively small budget, you can give the impression that you’re advertising across the whole Internet,” added Josiah MacKenzie, director of business development with ReviewPro, web-based tool that allows hotels to manage their online reputation and presence. “When travelers are surfing YouTube or reading the New York Times, they’re seeing your banners everywhere. It looks like your company has massively large ad buy.”

How it works
There are media companies that offer retargeting as part of their advertising packages or pay-per-click options, but sources interviewed for this story said Google is the most dominant player. As part of Google AdWords, a hotel advertiser can build a code into a page on their website and when visitors check out the page, the code installs a cookie showing they’ve visited. From there, the hotelier can create a campaign through Google where the visitor is served advertisements that are part of Google Display Network.

Google Display Network can serve up text, image, rich media, and video advertisements across all of Google’s affiliated sites as well as on more than 1 million partner websites, which includes some of the largest media companies in the world.

On the flipside, Hach—who helps TravelClick purchase advertising programs for its client hotels—said retargeting can be most beneficial for the hotel at the local level.

“Where hoteliers will actually spend more will be on a period where transient business is slow, such as a shoulder month,” he said. “They’ll increase ad spend that is showing local interest and use it as filler to increase direct bookings. It’s a direct-response medium that hotels can use to supplement their other ways of putting heads in beds.”

 

 

Josiah MacKenzie

 

 

ReviewPro’s MacKenzie said for hoteliers retargeting is best used to creatively target consumers who searched on the hotel website but didn’t book. The code should be placed on a page that is deep in the booking process so the hotelier knows the consumer is already engaged. From there, hoteliers can be creative with researching what led the consumer to leave and target them with relevant display ads on other sites.

Expedia Media Solutions offers retargeting campaigns for its hotel advertiser clients, and VP Noah Tratt said the company is able to work with advertisers to identify segments of consumers and target them offsite to bring them back to the clients’ websites.

“People who go to brand sites are brand loyal,” Tratt said. “Marketers have been successful in targeting those people who are already coming, now they’re trying to target those who aren’t coming.”

Case studies
Andy Kauffman, VP of global ecommerce marketing at Marriott, sees retargeting as a “very effective marketing vehicle.”

“Retargeting is a bit of a different advertising approach,” Kauffman said. “Promotions and other acquisition vehicles are much further upstream and you’re going in and acquiring a new customer. Retargeting is more about closing the same customer and asking them, in our case, to book a hotel with you.”

“From my standpoint, if you’re looking at how you spend your dollar, it’s an incredibly efficient way to spend your money.”

Kauffman said online advertising shifted during the past few years and, with tools such as retargeting, has moved from advertisers buying websites to advertisers buying audiences.

“Audiences move all around the Internet,” he said. “It isn’t as much about the placement of the ad as it is about the person you’re targeting. We’re not saying placement isn’t important, but the audience is more important.

Kauffman said retargeting is about being at the right place at the right time.

“We’re looking at the behaviors: what sites they’ve visited, what signals they’ve given off, and we marry that with who provides the contextual shelf space. When you buy through ad networks, you’re buying the audience across many sites.”

Palace Resorts recently ran a 30-day retargeting campaign through Expedia and Meliah Cranmer, media planner for MMGY Global, assisted. Cranmer said the Mexico-based all-inclusive brand used the campaign to target “low funnel” travelers, or those who already decided on their destination and were in market to actually book a stay within a few weeks.

“We were able to target those consumers who had done their research on our targeted destination and were in market to purchase. Not only were we able to retarget them, we were able to retarget them outside of Expedia and at a much lower (cost per impression), which in turn gave us a higher overall return on ad spend,” Cranmer said.

 

 

 

Privacy concerns
However, all the sources for this story were quick to point out the dangers of studying consumer behavior too closely. There are guidelines and self-regulations surrounding what information you can and cannot extract from a consumer, and regulations might get more stringent soon.

The Wall Street Journal reported late last month a coalition of Internet giants, including Google, agreed to support a do-not-track button to be embedded in most Web browsers. It is one step toward the White House's call for Congress to pass a "privacy bill of rights" that will give people greater control over the personal data collected about them, the newspaper reported.

Kauffman with Marriott, Tratt with Expedia and Hach with TravelClick were adamant in saying their companies do not collect personally identifiable information, or what is commonly referred to as PII. As long as companies remain transparent and don’t cross that line, retargeting will remain an effective way to reach consumers in a relevant and highly targeted way. And the consumers will benefit as well because they will be served information, such as hotel deals, they are truly interested in.

Hach said the solution lies in educating the consumer so, when they see the advertisement about a topic they recently searched, they understand why and that no personal information was breached.

 

Noah Tratt

“The confusion that exists is whether or not someone or something is spying,” he said. “When you can spare it and say, ‘This is helping me get a better deal,’ then it’s valuable content.”

He said upcoming legislation will help consumers identify with more effective types of advertising and will help clarify what is PII and what isn’t.

“Do a search on Expedia and then go to another site where you’ll see some of our offsite advertising,” Tratt suggested. “The ads have an icon that says ‘Ad choice’ where the consumer sees what we’re tracking and can immediately get into an opt-out user interface. Obviously, this is dynamic because this is an evolving field, but let’s just keep doing the right thing by our advertisers, and we’ll be in good shape.”

 

COMMENTS   Show All
Caroline Watts
3/9/2012 8:05:00 PM
“The huge opportunity is that with really specific information and a relatively small budget, you can give the impression that you’re advertising across the whole Internet." This is one of the most valuable benefits of retargeting. I would say the other is the extremely high return on spend. You can get much more out of your marketing budget by serving ads only to people you know are interested no more wasting money on irrelevant impressions. I just want to point out that Google is not the only company who offers retargeting. I work for a company that actually specializes in retargeting, ReTargeter.com, and we offer a variety of retargeting solutions. We can serve ads in Google's display inventory as well as Yahoo's and many, many more.
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