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

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-
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