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Press Releases
SEARCH ENGINE MARKETING (SEM) COST MANAGEMENT
LODGING INTERACTIVE WHITE PAPER SERIES: 4 OF 7
PARSIPPANY, NJ, November 14, 2005 - "Internet use as a means to research and to book travel will continue to trend-up as technology and users become more sophisticated. Competition will increase and companies that are able to invest in travel research and booking feature improvements, targeted promotions and robust CRM programs will reap the greatest benefits." This statement is an extract from a report provided by the company; Research and Markets. This same report projects that 30% of all travel bookings originate on the Internet.
As the marketing value of the Internet continues to grow, the recent statement by Bill Gates "advertising is rapidly migrating to the Internet" could not be truer. The downside of this shift in sales channels is that the rising costs for Internet advertising and marketing will place more pressure on travel companies and hotels to manage their marketing costs more efficiently. There are three basic steps to follow in managing your Internet marketing costs successfully, these steps are:
- Set realistic expectations based on your new overall site traffic, traffic to specific pages that will produce sales and availability requests as well as actual bookings that are traceable as a direct result of your Internet program.
- Know what proven applications are available to achieve each of your expectations.
- Know how to measure your results and how to place a dollar value on your returns.
A major error that we often see when talking to hotels about their Internet programs is their ability to overlook their direct time and labor expenses incurred when they take on Internet marketing in-house. It is critical to measure time and labor for website development & changes, SEO & pay per click management and a number of other Internet related activities that are so important to a successful program. These tasks require experience, skill and a core competency not readily available. Often, it does require a full time person to manage these tasks effectively. A poorly managed Internet program can escalate into thousands of dollars lost very quickly.
On the other hand, when you outsource these critical elements of your marketing strategy you have to be sure you know your supplier and their experience and resources specific to Internet marketing. Website developers or advertising agencies are not always skilled in the art of Search Engine Marketing. Although, they will tell you they are. Plus, there are Internet marketing companies who will claim they can get your website listed on page one of Yahoo and Google in just a few days. Of course they can with your property name and other nefarious methods. When you encounter a claim like this be sure to get details of how they will achieve it and ask for a guarantee. And last, contrary to what anyone tells you marketing hotels on the Internet are quit unique and it requires a working knowledge of the hospitality industry.
There is also the underlying fact that you must have a good website. A good site consists of precise information, easy navigation and visual gratification for the visitor. Your site should also be SEM compatible. The elements that drive SEM are optimized content, reciprocal links, page count and keyword page density. A website is not an electronic brochure! How you deliver your message and direct the site visitor to a sale is an interactive process, not just a printed message. Just having a website doesn't necessarily mean you will attract visitors. Your investment in brochures and printed collateral should highlight and promote your website in every way possible. Online it is all about the search engines!
Let's just assume you have a great website. To manage your SEM costs, let's look at your expectations, available applications and measurement factors.
- Your expectations should be based on the fundamental benefit of SEM and that is to attract more visitors to your website. You also have to take into consideration your hotel's basic business factors such as seasonality. An often overlooked tool in setting your expectation is your ability to check and compare what your competitor is doing online (take a look at our previous white paper on this subject). The reality is that SEM does not guarantee a sale, but it will certainly put your hotel's name and assets in front of more interested prospective guests than any alternative marketing technique.
- Once you know your expectations, which SEM applications will produce the best results within your budget? These applications include (a) search engine optimization (SEO) (b) pay per click (PPC) (c) email broadcasts linked to your website (d) online advertising (e) reciprocal links. Each of these options has its unique benefits. SEM is referred to as "organic". The reason for this description is because the value of your SEM grows over an extended period of time. PPC, on the other hand, will produce a quicker return with the right set of keywords. The challenge here is taking control of your cost per click (CPC). Managing your "bid gap" can be time consuming, but it is worth every dollar. And last is email marketing, a successful email campaign is dependent on your email list and how you target your message. Keep your email simple and short and deliver it in both text and html. Online advertising success is of course price driven, so know where you are in comparison to your top three competitors.
- Now that you have set your expectations and you have selected your SEM application(s). How do you measure your ROI? If you are managing your SEM in house you need to consider real direct time and labor costs. Your time includes not only writing optimized content, monitoring multiple search engines but frequently analyzing data and keeping up with search engine changes to make the changes that will keep your positioning on your keyword search pages. Not to mention, adding website pages, negotiating reciprocal links and be sure to schedule changes. Your search engine ranking is dependent on all of these factors and more depending on which search engine.
When you outsource, you will need to determine your ROI based on some basic measurements because the data may come from multiple sources such as your PMS, your webmaster and your SEM provider. The core data you need to determine your ROI includes; traffic from the top search engines, traffic by keyword on each search engine, total w ebsite hits and page views per unique visitor and finally your conversion rate. The conversion rate is the percentage of site visitors who booked your rooms. When measuring your sales conversion you should also consider peripheral sales that are a direct result of your SEM, a peripheral sale can be a sale from a direct phone call, fax or email inquiry that develops into a sale. Market statistics show that there is an average of two phone sales to every online sale.
Your ROI will, of course, fluctuate based on seasonality, availability and other factors specific to your market, but at the end of the year it should show a consistent growth rate over a pre-determined period of time. If your hotel or bed and breakfast has a very low off season, don't forget that people shop and book all year round so you can't shut off your website or not offer information in the slow season. If you set a benchmark at the start of your program your ROI analysis will be much more valuable to you when making future Internet marketing decisions.
About Lodging Interactive
Lodging Interactive is a leading provider of Internet Marketing Services to the travel and lodging industries. The company provides a portfolio of effective Internet Marketing Services to hundreds of hotels, resorts, timeshares and bed and breakfasts worldwide. We also offer hotelBLAST.com, a self-service email marketing system and MyWebsitePromotions.com, a self-service online promotions marketing system.
Lodging Interactive clients include branded properties such as Marriott, Sheraton, Hilton, Radisson, Crowne Plaza Hotels, Doubletree Hotels, Candlewood Suites, Best Western, Wyndham Hotels plus numerous independent properties. The company is headquartered in Parsippany, NJ and can be reached at 973-402-4970 or by visiting its website at www.LodgingInteractive.com or www.MyWebsitePromotions.com
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