Online Marketing Strategy and Consumer Behavior - IHG Owners ...

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This brings us back to the question of attribution models. Since we do not know what the traveler was doing on the OTA sites, and given the widespread visitation of many travel sites by the IHG bookers, we are back to wondering which site(s), or other communication vehicles such as banner ads, email, or PPC ads, or off-line advertising (TV, radio, print ads), along with some combination of the seven to eight (or ten) websites that were visited, actually triggered the booking. This is a highly pertinent question that requires further study as the data from the CHR Billboard Effect study do not provide an answer. IHG Business Patterns Upon examination of the full set of IHG brand. com bookings, during the same timeframe as the study (IHG indicated there were 10 million), there is no change in the pattern of business, when compared by brand or when compared to its entire competitive set—all of which were contracted with Expedia during the time when IHG was not. In fact, ironically, but likely due to IHG Direct Web Revenue IHG Stopped Working with Expedia 134 An Ah&lA And stR sPeciAl RePoRt IHG Started Working with Expedia business cycles at the time of the start and end of the Expedia relationship, brand.com actually increased upon cancellation of the deal with Expedia and declined when the agreement resumed as illustrated in the chart. It appears there is little to no change in the business levels due to the presence or absence of a relationship with the OTA. If there were three to nine brand.com reservations for each booking on Expedia caused by a presence on the OTA (as claimed by the April 2011 CHR study), or if there is a 7.5 to 26% lift in reservations due to a presence on Expedia (as claimed by the October 2009 CHR study), there might be some notable drop in bookings when the hotels were removed from Expedia and the data do not show this pattern. (Refer to IHG Direct Web Revenue chart). In fact, examination of IHG brands’ revpar performance (revenue per available room), using Smith Travel Research data for the full timeframe involved versus its comp set yields no change during the timeframe when its comp set was listed on Expedia, and they were not. Direct Web Revenue 12 Month Moving Average Jan Apr Jul Oct Jan Apr Jul Oct Jan Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 03 03 03 03 04 04 04 04 05 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11
Online Marketing Strategy and Consumer Behavior Summary—Billboard Effect Studies The findings from the CHR billboard effect studies indicating that a hotel’s presence on Expedia cause three to nine bookings or result in a lift in reservations of 7.5% to 26% on brand.com may be a depiction of the results for an academic study, but a hotel marketer could not expect this outcome with all the variables that come into play in the crowded digital marketplace. Further study to evaluate all reasonable variables that affect brand.com bookings would be helpful for the hotel industry to better understand this complex consumer behavior. In summary, the comScore data from the April 2011 CHR study support a dynamic that could be described as follows: some combination of the seven to ten travel websites visited, along with emails, ads or other digital or off-line media, seems to influence or trigger a hotel booking, because a booking was consummated on an IHG website 1,720 times and IHG did not discontinue all other promotional activity during the time frame of the study. We might assume that some of the hotel bookers were going to make their hotel reservation whether or not they visited Expedia, since we know all of them ultimately became hotel buyers, and the data shows they were very active travel website visitors during this study period — no lack of hotel options in terms of the sites they visited. We don’t know whether they would buy an IHG hotel or some other brand, but given the high number of visits to IHG websites and other competitive hotel websites, it appears there was hotel research being conducted. We do not know if they looked at IHG hotels on Expedia, or other hotels or any hotels at all. Some hotel shopping may have happened on an OTA site, but the study data do not contain the detail of the specific OTA pages visited, and the high number of visits to car and airline sites after an OTA visit imply that some of those visits may well have focused on car and air research. The data do not tell us at what point they decided to choose the IHG brand. There are many “billboards” along a shopper’s path. But like John Wanamaker might say if he were here today, “which half of our marketing budget should we credit with our success?” These are precisely the types of attribution issues that should be addressed to assist a hotel or brand in its marketing resource deployment. However, due to the limited nature of the variables considered in this study, it does not provide an answer to the attribution question. This topic can be pursued further through testing with various combinations of media that are utilized in the sales path and would be more accurately done for each hotel or group of hotels to determine the appropriate effect for each company’s customer segments under examination. thErE arE many “bIllboards” along a shoppEr’s path. but lIkE john wanamakEr mIght say If hE wErE hErE today, “whIch half of our markEtIng budgEt should wE crEdIt wIth our succEss?” travEl mEdIa The dominant media impressions in the U.S. consumer market come from the OTAs and the major hotel brands. In order to analyze them in a systematic way, a comparison is helpful to look at spending patterns by type of medium and to examine creative themes that are frequently conveyed to the traveling public. These themes resonate with consumers and serve to drive their attitude and behavior toward travel. Media Expenditure Based on public records of spending from the Security and Exchange Commission (SEC) filings, Expedia and Orbitz spend approximately one-third of their revenue on marketing and selling, with operations being closer to 20% of revenue. This is in contrast to the amount a hotel spends, which is approximately 10% to 12% of its revenue on marketing and 35% to 40% on opera- 4 Published by the hsMAi FoundAtion 135
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