Augmenting Traditional Advertising Channels with a Targeted And Measurable Media-Rich Approach

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October 01, 2001
Marketing
Mike Dubsky - mdubsky@hotelview.com


© 2001 Hospitality Upgrade. No reproduction or transmission without written permission.

Online hotel video presented as a two to four-minute vignette, presents a compelling, sensory-rich advertising message, and has been proven effective as an online reservation catalyst.


The power of the Internet as a significant information portal and reservation engine for the travel industry is now substantiated by quantifiable results, as reported by the major hotel chains and independents. With the simultaneous emergence of broadband, and the media-rich content that it can deliver to an Internet user, a compelling new medium is available to facilitate the on-demand delivery of informational video. Online hotel video presented as a two- to four-minute vignette, presents a compelling, sensory-rich advertising message, and has been proven effective as an online reservation catalyst. According to the Seybold Report (Apr ‘01), “with streaming media, hotels are able to transcend a flat brochure and tell their story to vacationers with the richness of full-motion video. A hotel’s amenities can come alive with sound and motion, providing a more compelling reason for businesses and vacationers to plan their stay.”1 By using the Internet platform to support rich-media advertising initiatives, hoteliers gain the ability to, within their core business, efficiently reach targeted segments within the global market and evaluate the success of online campaigns, ultimately increasing overall business levels.

Introduction

By its very nature, the Internet’s tremendous potential as a global information portal and conduit for electronic commerce creates unique marketing opportunities for both products and services. However, the Internet’s magnitude also creates a formidable dilemma for every online marketer, “How can I harness the power of the Internet to reach my target market(s) in a managed, cost-effective manner?”

Lodging professionals agree that successful marketing campaigns focus on specific segments and include the right mix of television, radio, press and, now, Internet advertising. Of these promotional channels, the Internet has the greatest potential to reach a global audience in the most efficient and cost-effective way.

The benefits of Internet promotion cannot be ignored. The Internet boasts several, key strategic advantages:

  • The Internet is continuously available (24/7).
  • Specific information is accessible on-demand (pull) or delivered (push).


1. Pull Advertising – Specifically required media
-Sensory-rich streaming audio and video (“Rich Media”)
-Searchable information–Web sites, white papers, reviews

2. Push advertising – Indirectly requested media
-Banners
-Interstitials (pop-up–inter-stream ads)
-E-mail
-Information can be updated in real time
-The Internet has global reach
-Targeted reach can be achieved through managed online partnerships
-Online marketing efforts are quantifiable


The Relevance of Rich Media

Several definitions of rich media exist. The common characteristics among these definitions identify rich media as an interactive, sensory-rich online experience. Specifically, rich media utilizes sight and sound to satisfy a user’s immediate need.

Given the informative nature of the Internet, rich media has grown in scope to include informative and educational experiences. These enriching experiences often combine with rich media’s entertainment value to form unique, promotional “e-advertising” opportunities, essentially creating a compelling facility for on-demand advertising.
 
Over the last few years, rich-media advertising has grown in popularity among advertisers. Industry metrics consistently indicate that the average click-through conversion rate on traditional banner ads is less than 1 percent. For rich media available metrics indicate that the average book-it conversion rate ranges from 8 percent to 12 percent.

Consumers appreciate the opt-in and informative nature of rich-media advertising. At the same time, Internet marketers acknowledge rich media’s global accessibility, 24/7 availability and the higher conversion rates that Internet-based rich media provides, among other benefits.

Overall, online hotel vignettes provide a direct and compelling sales-oriented medium for interested viewers to preview a property’s external features and internal amenities; thus, through an informative and entertaining experience they will both facilitate and augment property interest and reservations traffic.

The Proliferation of Broadband Internet Access

Presently, there are two primary categories of Internet connectivity: dial-up and broadband. Dial-up utilizes a standard phone line to transmit data at speeds up to 56 kbps. In contrast, broadband utilizes several distinct channels within a single connection, facilitating the transmission of larger amounts of data with greater speed. Broadband connectivity mediums include:

Integrated Services Digital Network (ISDN): supports downstream (toward the subscriber) data transmission at approx. 100 kbps.

Digital Subscriber Line (DSL): supports downstream data transmission at approximately 500 kbps.

Cable, T1 and above: supports downstream data transmission at approximately 2 megabytes per second (mbps).

Note: Actual data transmission rates can vary by locale and service provider.

Because streaming video (with audio) requires the transmission of large amounts of data, relative to other online media, it is best experienced via broadband connectivity. Fortunately, for dial-up users, a scaled-down streaming slideshow encoding technique can be implemented to create a positive use experience.

Over the last few years, broadband connectivity has experienced significant growth. This trend is expected to continue. For 2001, eMarketer predicts that the number of U.S. residential broadband subscribers will total 9.85 million, a growth rate of 100 percent from 2000. By 2004, eMarketer estimates that there will be 30.98 million broadband subscribers nationwide. As broadband continues to grow, the potential and effectiveness of online rich-media advertising campaigns will improve.

Measurable Results

One of the Internet’s key characteristics is its ability to provide specific measures of activity. Commonly tracked and analyzed metrics include: site usage data and site user data, which can include log-in accesses, unique users, impressions (page views), repeat visitors and user sessions. However, within a supported environment where the appropriate software is in place, the Internet can provide additional metrics and identify, monitor and update user preferences.

Through the analysis of these critical online metrics, online marketers can quantify the impact of their online initiatives – targeted channel metrics with greater accuracy, greater relevance and with a faster response. These improved reports, in turn, facilitate optimal strategic decision making.

The Program: Online Video Distribution

The online potential for hotel vignettes cannot be ignored. Specifically, the outward distribution of each hotelier’s vignette to their Web site and throughout a network of partners increases and improves the hotel’s online exposure. Partners, typically, represent some of the Internet’s top portal, destination, hotel reservation, meeting planner, travel information, travel agent and multimedia sites.

Justifying the Program

The proposed program’s sole objective is to generate incremental online revenue for hotels. This objective is reached by:

1. Producing a professional property vignette
2. Promoting the property through meaningful online distribution
3. Enhancing consumers’ search for acceptable accommodations, and
4. Facilitating lodging reservations


The core streaming video component allows consumers to interactively evaluate a property for their individual preference(s). The established distribution component adds value to hoteliers by enhancing each hotel’s existing online features with Internet video, building valuable viewer awareness for the member among those consumers visiting the hotel’s feature on existing online affiliates. In many cases, online hotel video programs facilitate an increase in online affiliates for member properties.

One of the most compelling aspects of online hotel advertising lies in its ability to track and report vignette activity. In doing so, hoteliers can evaluate the program as a marketing investment.

Statistics

By continuously tracking each vignette’s activity, hoteliers obtain real-time metrics. Typical hotel metrics include video views and book-its. These valuable metrics are combined to formulate the hotelier’s return on investment (ROI).

A video-view is registered every time a user requests to view an underlying property vignette. A member property’s video-views may be segmented by partner and by specific format/speed combination.

A booking conversion is registered every time a consumer utilizes a property’s book-it link throughout HotelView’s partner network. These conversions can be segmented by partner.

Return on Investment

Figure 1 uses sample metrics to effectively calculate a property’s ROI. This case study represents sample data for the first quarter 2001 ROI for a Caribbean resort. This model assumes only a 10 percent actualized reservation rate from all book-it conversions. By multiplying the property’s average daily rate (ADR) with the property’s average nights per stay, along with the property’s actualized reservation rate, the hotelier can reasonably quantify the program’s revenue contribution against the program’s cost.
 
In conclusion, by participating in a comprehensive online distribution program, hoteliers can increase their online presence, enhance all existing feature areas with sensory-rich media and evaluate their online campaign(s) by monitoring the metrics of these media experiences. These attributes, together, greatly improve the hotelier’s ability to recognize increases in online revenue.

Mike Dubsky is business development manager of Visual Data Corporation. He can be reached at (954) 917-6655 ext. 1077 or mdubsky@hotelview.com.



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