Strategies to stay ahead in online travel marketing

December 01, 2011 | Hotel Marketing

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Even though digital marketing has increased tremendously this year - with some hotels having increased their digital media budgets by more than 500% - it’s time to go harder. Digital marketing in travel holds the key to gaining market share, increasing customer value and increasing incremental revenue.

By Layton Han, CEO Adara Media

In the travel business they used to call them “recession chops.” It’s a slang term for the skill set that comes with decreased consumer spending, increased costs and a need to maintain if not increase market share. As this economy looks to be headed for a tough couple of years, “recession chops” won’t be enough. Even though digital marketing has increased tremendously this year, and in any year-to-year comparison, it’s time to go harder. Digital marketing holds the key to gaining market share, increasing customer value and increasing incremental revenue. Digital marketing is the 2012 version of “recession chops.”

Let’s first salute the travel category for grasping the initial opportunity. Kantar Media research released in October shows that shows total ad spend is up by 10% from last year in the travel category. A media breakdown reveals that paid search and display advertisements dominate the category as advertisers direct ad budgets away from traditional media and into the Internet.

And that’s not even the really good news. An analysis of the top ten digital advertisers in the travel category during the first two quarters of 2011 shows a total investment level of $275.5 million and an increase by almost one-third compared to a year ago. And it’s not just online booking sites that lead the rise. Some travel companies (airlines and hotels) have increased their digital media budgets by more than 500% this year.

It would be a good time to rest on these laurels. But that would be missing a huge opportunity. The travel category must continue to spend and innovate its way to the right consumers. Smart travel companies will be among those that are taking their digital budgets up to triple digit increases. But like most things digital when something works today, it's gone tomorrow. Travel companies need to stay a step ahead. The following five strategies will help spur innovation rather than complacency:

1. Testing: A comScore executive estimated earlier this year that 75 percent of its clients are testing their digital creative in parts of their campaigns. That’s a good number. Testing must be done for creative but it must also be done for audience relevance, segmentation and timing. Testing is relatively inexpensive, effective and essential.

2. Find growth areas: Once a travel company integrates a testing mentality they can be more aggressive and innovative about finding growth areas. Is it a destination? A new target audience? An underestimated holiday? Find something that can produce incremental growth.

3. Customize messaging: Even with the uptick in travel ads online, too many companies still rely on a few executions. If you want to be innovative, create a dozen of them based on microsegments. Take it to the next level and partner with cutting edge ad platforms that offer dynamic creative executions. Dynamic creative capability essentially creates custom ads for individual customers in real-time. For the travel category it can take a generic message such as “low fares” into specific fares for specific destinations based on individual customer preferences and behaviors.

4. Audit customers: Are the affluent customers still affluent? Have the older customers in the database travelled recently? Are business travelers using their loyalty program points? A rigorous customer audit will answer these questions and enable travel companies to execute against them.

5. Identify more customer segments: If you have five, lean on your digital marketing partner to ID five more. Digital marketing generates enough data to create more customer segments and execute customized campaign to keep and grow them.

It’s simply time to put the throttle down on digital marketing. To cut back at this point risks precious market share points and potential profits.

Adara Media offers a loyalty audience platform that enables top brands to monetize and nurture their loyalty program customers online. Please visit www.adaramedia.com