Bowen Payson, Online Marketing Manager at Virgin America

I run the online marketing team, responsible for all digital communications from Virgin America
There’s four of us working on social media: 2 from marketing, 2 from corporate communications
My workday is 50% managing content development, 50% on promotional activities generating direct revenue
We’re focused on fare promotions, and also on telling people about our unique amenities
People may say something online, but do something else. On our recent Facebook promotions, for every person that complains, 5 are buying a ticket
We have a matrix approach to promotions: if we only did one type (discount, giveaway, etc) it would burn out the audience. It’s all about creating a mix.
Twitter a year ago was totally different than Twitter today. Facebook is the same way.
Early adopters used be the only ones on some social media; now it’s more mainstream
For me, Twitter is a newsfeed; for others it may be something else
We plan some social media promotions months ahead of time
Our editorial calendar is pretty lose and open, so we can change and update as needed
Our most successful channel in terms of views, clicks, and sales is Twitter
Facebook is growing, but user behavior is different. Facebook can bring a very engaged audience.
Nick Schwartz is our voice on Twitter
If there’s a basic question, Nick takes care of it. If it’s bigger, we work closely with our guest services team to resolve issues.
A big project for us right now is finding the right buzz channels. Last week we launched a promotion around “awkward family photos,” where people send in photos for a chance to win prizes.
It’s great because the photos are viral and funny, but it’s also a good offer for our customers.
Our website is intended to be fun and user-friendly. It’s meant to be relevant and intuitive. We’re using big photos and less text to quickly get the message across.
If I could start over, I would have focused more on search optimization. I’d work on deeper integration of the social media into the website.
One of the best things we ever did was in emails to our Elevate members: including a “tweet this” button in our emails. Different people at different times need different things from email. Sometimes people aren’t buying, but want to share an offer with their friends.
Social media takes a lot of work. What you invest, you get out. You need to invest in people, thought, time and strategy. It’s not like buying traditional media.

See Bowen next week at EyeforTravel’s Travel Distribution Summit North America 2010.

Charles Deyo of Cendyn joins us today to explain how hotels and guests can benefit from targeted behavioral advertising. Listen to the full program here, or read the summary below:

[Download the mp3 file here]

Josiah: Can you explain to us what behavioral advertising is and why it’s so important for hotels?

Charles: Basically, behavioral advertising looks at web users and determines their behavior relative to where they’re going on the internet, and sends them relevant communication to make their web experience better.

In the case of hotels, we might look at somebody who’s going to airline sites as an example, and put them in a bucket with someone that’s potentially looking for travel options. With the new technology that we have today, with some of the ad serving platforms, we can put that individual into a bucket and start doing things like advertising to that person through messaging, or we can actually change the messaging to make that more relevant to the user.

Josiah: From the perspective of the hotels — the people doing the advertising — this gives us a much higher level of targeting. Are you seeing conversion rates go up as a result of this?

Charles: Yes, absolutely. One of the metrics that we use in the industry is “return on ad-spend”, and we’ve seen it go up significantly. Not just on display, but across all integrated campaigns. For example, someone’s doing a display campaign and a paid search campaign on Google; the combination of those are greater than the sum of the parts. We see a lift on both the paid search and on the return on ad-spend on the display campaign.

It’s a great win/win for the hotel and to the web user who gets more relevant content and a better web experience.

Josiah: Can you give us some of the top things that hotel operators need to know about behavioral retargeting? For someone brand new to this, what do they need to know?

Charles: What you need to know is how the process works, so that you can make the messaging very relevant to the end user. Then, you need to have what’s being advertised correlate to the targets that you’re going after.

For example, if I’m looking at potentially geotargeting and time-based targeting — the location of the individual and time that they’re looking at information — that would dictate the type of offer or messaging that I want to put on the display ads. You need to understand not only how the process works but also the different attributes that would make sure that the messaging is very relevant to that particular campaign.

Josiah: Are big brands interested in this or is this something you can only do on a small scale?

Charles: No, big brands are investing a lot of money into this technology now. They’re doing it more at the brand level. In many cases, when you look at some of the big chains, you’re not seeing a lot of retail-oriented ads, you’re seeing a lot more brand-oriented ads where, “Come stay at any one of our hotels; click here to learn more about our special offers”, and that’ll bring them to a webpage with multiple properties listed as an example.

With individual properties, we’ve seen great success with targeted retail ads, so what you see is a combination of both. You see the big chains investing in brand oriented campaigns, and we’re seeing a lot of investment from retail properties. For example, with big casinos or big resort destinations, they’ll do very retail specific advertising.

Josiah: Is Google Advertising where most of the behavioral targeting is used or are there other options?

Charles: There are a lot of different networks out there. A lot of them can access the same websites, and a lot of the ad serving platforms all have retargeting capabilities built into them. What’s happening in the online advertising space is that we’re seeing less focus around the networks and more emphasis, now, on the data.

When we talk about data in the online advertising space, we’re talking about the anonymous cookies that are used to really track those behaviors that people move around the internet. We’re seeing opportunities where you can build a proprietary cookie pool.

For example, we’ve built a proprietary cookie pool of people that we know are frequent travelers. We have the ability to track those anonymous cookies across the internet so we can send them very relevant advertising that should make their web experience better.

Josiah: You had an article published in Hotel Online in June 2010 where you said you had 200 million of these frequent traveler profiles. How detailed is the information you have on these people?

Charles: These are anonymous cookie profiles –we don’t have any information about who they are, but we do know in most cases the sites that they’ve visited. And then in other cases we’ll have other attributes that are more useful for more complex targeting.

For example, if there’s registration data associated with those cookie profiles, we might know gender, we might know income levels, different things that the user has filled out as part of a registration process on a website that is then linked on a cookie profile. But, anytime that occurs, we take it as a prompt to send out an email, where somebody understands that the information is used to provide them more relevant product information that would be useful to them.

Josiah: Is this something you’re building proprietary to Cendyn?

Charles: It is proprietary to Cendyn, relative to what we’re doing with the cookie pool, but it’s not to say that other companies aren’t doing something similar. What’s proprietary around Cendyn, is we’ve got a 360 degree marketing platform, and I think the big difference with us — aside from the cookie pool — is that we look at how we don’t only send the right message to the right user at the right time, but also through the right channel.

I think the most important thing is not only having the right data and using it for the purpose of targeting, but also understanding that an integrated campaign always works better.

Josiah: What’s the best way to targeting groups or audiences together? What are some of the different attributes that you try for effectiveness?

Charles: What we do, is we have a first ring — this large pool of people that we know — for the purpose of discussion, very travel oriented, and based on the campaign, we look at the behavior of how those cookies interact with our ads so that we can take them out of the big pool and put them “in market”, so they’re “in market” for that campaign. That’s how we create those subsets.

Josiah: From that article, you also mentioned a “game over” mechanism and making sure that if people want to stop the ads from following them around there needs to be a place to stop. How does that look practically?

Charles: The way that it works is, of course, someone can turn off their cookies, and the process doesn’t work. A lot of the networks now are also building in capabilities for people to opt out of some of the retargeting and behavioral advertising process.

For example, Google just announced recently that they’re doing behavioral advertising and are making available a preference page that somebody can go in and adjust the settings relative to their web experience.

Josiah: Can you tell me a little bit of what you’re working on to take advantage of this platform?

Charles: One of the things we’re doing is continuing to make our 360 degree platform more robust and creating the ability to provide this behavioral targeting across any channel – whether that’s social media, mobile advertising or display advertising, it doesn’t matter. We should have the ability to send the right message via the right channel.

The other thing that we run is a product called Insight which is like a customer analytics and campaign management tool that we market to hotels. We have all the guest history data out of our property management system, and then we’ve got a lot of information about somebody, and we’re actually interfacing that as part of our 360 degree marketing platform so we can plan a sort of “best customer” profile and use that to go out and find additional customers that fit the “best customer” profile for a particular property.

Josiah: Is there any push-back from guests or people seeing the ads?

Charles: My personal opinion — but of course, I am a marketer — is that it makes the web experience better. People want relevant information. We learned this many years ago through the email campaign process. All of us in the email marketing world strived very diligently to make sure that we’re sending the most relevant content we can to a recipient, and the same philosophy applies to the advertising space. If we’re doing our job of sending relevant content, we will make the web user’s experience better.

Josiah: Can you give me a specific example of a hotel that’s taking advantage of this technology in a good way?

Charles: We did a case study not too long ago, because we really wanted to get some firm metrics on what the overall value of this type of technology would be. To make sure that our case study was very empirical, we not only tracked online revenue, but we put the voice tracking in place so that we could record the phone calls associated with the campaign, and had somebody listen to the calls and key in the revenue values associated with that.

We also tracked, not only hotel online bookings, but also RFPs — requests for proposals — for meetings, that type of thing. What we found was that we had a significant return on ad spend - 17 to 1, where every dollar spent on an ad was returned 17 times. It’s very significant, and I think that’s representative of what you can expect when you’re running these types of campaigns on an integrated basis.

Josiah: Thank you very much, Charles, for explaining this for us.

Charles: It was a pleasure, and I look forward to talking to you in the future!

One of the biggest misconceptions about social media is that it’s free.

I think in the push for business adoption, it was presented as a free or low-cost promotional option.

Not true.

Social media will cost you. Time and money.

Oh, and just because social media will cost you something doesn’t mean it’s not worth taking part.

Even if it were the most costly communications channel we had, it would still be worth using.

Let’s just set expectations right from the start.

A reader recently wrote me with this common dilemma:

We are a 15-room boutique hotel, that is a bit off of the main travel area – especially during the winter months. A 103-room resort recently opened close by, which has been extremely hard on us, not to say the least about the economy problems.  Now, we are on a no-budget marketing expense lockdown, heading into the off season, and trying to attract business. Any advice?

How can you run a marketing campaign with no budget?

I covered a little bit of this in my free hotel marketing article, and you need to be very creative and resourceful.

Zero Budget Marketing Strategy

* If you’re going to promote successfully with no budget, you’re going to need to use word of mouth: people talking about you.

* Get a strategy together for guest review sites like TripAdvisor. Reviews by your past guests gives you extra online exposure, and can encourage people to stay at your hotel. Read the marketing guidelines from TripAdvisor (and Qype) before getting started.

* Build a referral system that lets your guests spread the word for you

* Partner with other businesses to refer guests. Look for ‘piggyback’ marketing opportunities.

* Get involved with your community through volunteering. (Here’s how David McConnell does it)

* Avoid mass promotion. Instead, focus on a very small market and practice mass personalization. “The smaller the target, the bigger the bulls eye.”

Zero Budget Marketing Tactics

* Start blogging (Seriously, this works) Have your own employees write the blog – readers find that much more credible.

* Repurpose your existing content in ways that help you attract new guests

* Social media may be the answer. (And it may not be.) Understand that it often takes a lot of time to promote effectively on these ‘free’ websites. Track results and see if it’s worth your while.

* Plan an email marketing system for travel agents and corporate travel planners – people who could send you lots of business

* Look into pay-for-performance tools such as MeetingsBooker

I’ll bet you have more ideas – how do you create something with nothing?

Many hotels are working on their marketing budgets right now. I have received multiple requests for advice on budgeting this week, and wanted to put together this practical, straightforward guide. We will examine the biggest factors to consider when planning your Internet marketing budget, 11 major categories hotels should budget for, and finally 3 basic hotel budgeting approaches.

This advice comes from my own real-world experience as the marketing manager or consultant for dozens of leading organizations around the world — and also as the owner of three companies. When your own company’s money is on the line, you tend to take a very pragmatic approach to marketing, and that’s what I intend to do in this article.

Factors to consider while planning your hotel marketing budget

Many industry professionals recommend you start with the industry average marketing budget. I disagree. Every business success I’ve been involved with has been contrarian. If you spend your resources like everyone else, you’ll get average results. Breakthrough campaigns often require unusual approaches. You decide what works for you.

Be aware of industry standards, but don’t feel bound by them. It can be helpful to know the average prices hotels are paying for individual marketing tactics — if only for a point of reference.

Start with an internet marketing plan for the year. Sounds simple, but true. If you don’t know how you want to spend your money, calculating the amount will be extremely difficult! Some tactics to include are explained below.

A good budget will take into mind past results your company experienced — but will also realize that things change. What worked five years ago may not work over the next five years.

Remember your primary business objective. Do you want more overall sales, to build your brand, or consolidate your profits? Each requires a different approach, which we’ll cover later.

Know your marketing priorities. Separate the “musts” from the “wants.” So many things can happen along the way that cause you to deviate from a plan made months ago. Having priorities ensures the essential gets done.

Identify which marketing strategies you don’t need to implement. There are a seemingly unlimited number of marketing tactics you could try, so identifying the non-essential helps you focus and cut costs. Every hotel doesn’t need to do every tactic out there.

Be aware of trends, and budget appropriately. Some organizations on annual budget cycles approve money for trends way too late — and missed the boat. Make sure the resources that you’re dedicating to a tactic or strategy will be valid 1, 2, 5 years from now. You don’t want to outdate yourself.

I personally recommend most hotels abandon all traditional marketing and advertising in favor of any Internet focused strategy: 75% of budget for web-based communications, 25% for PR. You can discount this advice as someone who has worked in web marketing his entire career, but the numbers don’t lie. In the campaigns that I’ve been involved in, we have achieved phenomenal return on investment… and received media coverage an organization our size shouldn’t normally be entitled to.

Separate your marketing costs into two categories. Initial development costs include research and strategy development, website design, content creation, marketing systems set up. Ongoing expenses and maintenance include e-mail marketing, pay per click advertising, search visibility improvement, website maintenance and development, consulting fees, and analytics and tracking analysis.

Ensure that you are sufficiently capitalized. Many marketing tactics will take several months to show results, and often the best results are obtained by sticking with your marketing plan month after month — for the next 12 months. You may have to adjust your marketing plan to enable this, but make sure your budget is sufficient to accommodate consistent execution.

Be aware that your most important marketing investments may not even be under the traditional ‘marketing’ budget category. For example, introducing a fabulous collection of guest amenities can cause your guests to promote your hotel for you. At the end of the day, your guest experience is the marketing. Money you spend to create an amazing guest experience at your hotel has some of best ROI.

Finally, think of your marketing program as an investment. If you are promoting properly, every dollar that you spend on marketing will come back to you many times over. Good hotel marketing budgets are never an expense, and it’s important we remember this.

11 most important hotel marketing budget categories

Read more…

Occasionally a business outside the hospitality industry contacts me to optimize their pay per click campaign. A few weeks ago West Chester Vacation Rentals – an Anchorage, Alaska-based firm that rents furnished apartments on a short-term basis hired me to fix up their campaign.

Following the optimization, we were able to reduce their average cost per click from $4.47 to $1.55. My fee quickly paid for itself, and now the company has a much more efficient advertising system for bringing in new business.

I’d like to share the steps I used to accomplish this, so you can avoid paying more than you have to for pay-per-click visitors:

I performed extensive keyword research to find hundreds of 3-5 word “long tail” phrases that cost less than generic terms.

I added very specific keywords to only display ads to people likely to reserve an apartment.

I targeted ad positions 2-4 instead of trying to always be at the top of results. Research shows ads in the top position give less ROI.

I split the campaign into separate ad groups for more control and flexibility.

I achieved strong clickthrough rates (CTR) – by writing benefits-oriented ad copy and using dynamic keyword insertion (DKI). With some ads earning over 7% CTR (up from 0.09%), this improved our quality score and dropped the cost per click.

If you decide to use PPC as part of your marketing strategy, it’s important to optimize your campaign for best results. A few basic changes like the ones above can save you thousands each month.

For more information on pay per click marketing for hotels, see:

• Top 10 Reasons Hotels Should Invest in PPC Advertising
• How to setup your hotel AdWords account
• Geo-targeting for precision and profits
• Advanced Metrics for Hotel PPC Campaigns
• 23 Questions You Must Ask PPC Management Companies

To hire us for Adwords PPC campaign management, call 1 (800) 737-5817 ext. 2 or email josiah[at]gradigio.com.

A few of you left great comments on my recent post, creating a social media management routine. For many hotel marketers, the biggest issue may not be which activities to perform, but how much time should be spent on each one.

How do you allocate your limited time among a myriad of social media options?

I think this is a good time to take a careful look at your metrics. What’s working? What’s not?

Follow the data!

This may require you to develop a new set of metrics, but numbers don’t lie. If a trendy new site isn’t producing results you’re looking for, then stop spending so much time on it. Of course, most new initiatives will require some time to build your profile in the community, but after a few months you should have sufficient data to guide your management schedule.

Some networks naturally consume more time than others. Writing a blog post takes longer than posting a tweet. Producing a new YouTube video will take longer than moderating a Flickr group. But if the additional time investment gives you higher overall ROI, then it’s worth it.

It comes back to Pareto’s 80/20 rule – find the select few social media activities that produce tangible results, and focus your time there.

Since this is highly variable on your property and hotel concept, follow these steps to create a unique plan for you:

1. Develop new metrics for measuring social media activity that are relevant to your hotel.
2. Compare your past statistics with your new metrics. (If you have not been gathering sufficient data, then take a week or two to do that)
3. Use insights from your comparison to develop a list of social media top performers – for you.
4. Create a personalized social media management routine based on this data.  (Feel free to adapt my chart for your own use)

My post last week about Facebook for hotel marketing attracted a lot of interest. There was some helpful discussion by hotel marketers with real-world examples, and I’d like to share some of the comments with you…

Nuno Valinhas of Tiara Hotels:

Our strategy of promotion in the social media environment is no more than “to get outside”, “to be visible” and to try to reach more and more potential clients. Beside our offline Marketing campaigns and actions, the social media networks able us with a cost of ZERO to somehow influence and engage more people to get to know our brand/name as well as our hotel, and their locations. We’ve a facebook fan page that is still starting. Personally I share the same opinion than you, Facebook isn’t the best tool to generate more reservations. But in the same way that you become a fan of anything, you also can be a fan of Tiara Hotels & Resorts, and with that, your friends and connections will get to know us.

My reply: I’m not yet convinced that this type of awareness will increase reservations. I have hundreds of Facebook ‘friends’ and most of them are fans of several organizations. Am I aware when they become a fan of a new business? Usually not. Does it influence my travel plans? Never.

John Beckley of SortedSites:

I think facebook business pages should be on the portfolio of Social Media sites that Hotels use. I disagree that this is for a younger crowd, one of our Resort clients facebook page has 60% over 35years old. Interestingly enough 70% are women.

Too many times I see Facebook pages being too dormant. Hotel staff should be involved, upload photos, videos, create events and make sure that this is another place for your guests to leave a review or offer feedback.

My reply: Yes, business pages should be in the toolkit of any social media marketer…just maybe lower on the priority list. I also agree that if Facebook is going to be used, it needs interaction. Thanks for sharing your resort client example. There are older people using Facebook, and if your target demographic uses it – then by all means you need to be there.

Michael Hraba of Hraba Consulting:

I ran some low level ad experiments with some fairly reputable boutique hotels I work with, and the results of FB “highly targeted” marketing with their ad model was… laughable. People just don’t click on internet ads anymore. There is actually something called “banner blindness” to the ad guys.

Only when I stopped trying to promote it and let them sit, organically get discovered, and now have 100’s of fans. But still…. they don’t actually *DO* anything. They don’t interact in meaningful ways. They certainly don’t book rooms off the FB page. They might book elsewhere, then chat about their next stay on FB…. but there isn’t any meaningful traffic through to the booking engine, to say the least. I wouldn’t spend a dime, but I think you need to at least have a page there. Just let it reinforce the brand, be another place with your link, and another point of accessibility for guests.

My reply: Interesting campaign result with Facebook PPC ads. I’ve had the same results, and I think hoteliers should avoid running paid campaigns there.

In summary, I know Facebook can be used to communicate with guests and build your web presence, I just think it’s not most efficient way of doing that. If you have the time, by all means put up a page: it can’t hurt. Just be realistic on the benefits you will receive, and don’t rely on it for increasing your bookings.

I love Facebook…for personal use. It’s a great way for me to stay in touch with friends and family around the world. Its media sharing tools have greatly improved over the last few years, and it has taken the place of the majority of my personal email.

So why don’t I like Facebook for hotel marketing? Because I look at the numbers, and it’s not effective in generating new bookings. Most hotels we’ve worked with at Gradigio achieve much higher ROI from other social media networks.

With that in mind, there are a couple cases when Facebook may be a viable marketing option for your organization.

1) If you’re a hostel or targeting the under-30 crowd. In social media marketing, it’s all about demographics. You need to know who your target audience is, and then build a presence on those networks. Facebook has grown from the days when you needed an academic email address to join, but it remains a younger network. Quantcast shows 78% of the sites’ users are under 34 years old. If you are a luxury leisure property, this probably isn’t the place to be.

Chart courtesy of Quantcast.com

2) If you’re a larger hotel chain looking to build an application. Several travel companies have built very successful apps for the Facebook platform that spread quickly virally. But due to development cost and market size, this would only work well if you have a number of properties over a large geographic area. Users won’t install an app from one hotel unless it helped them elsewhere.

Recent updates in the Facebook interface have made the platform more conducive to the real-time sharing of information and media. This is a positive development for hotel marketers, but the platform still remains not the best time investment for most properties.

Hotels can achieve higher ROI by focusing on social media networks that reach potential guests in the decision making stage of the buying cycle. Not many travel planners use Facebook in their research process. They do check guest-written hotel reviews and user-produced media. Efforts to cultivate those are much more effective.

The short answer: you can’t. At least not in the traditional sense.

Sorry to disappoint.

Here’s what you can do:

• Build visibility
• Improve your online reputation
• Build search ranking
• Generate buzz

All of these are critically important objectives for anyone trying to promote a hotel. It emphasizes the importance of participating in online conversations with guests and potential guests.

Some say that social media is more like PR than advertising. That doesn’t mean it’s less effective at generating revenue. It’s just harder to measure and track.

So just because you can’t create a neat little spreadsheet with familiar figures, don’t abandon the whole concept. Understand the role of social media outreach, and develop new measures of success.