Hotel Advertising:

             Augmenting Traditional
     Advertising Channels with a Targeted, and
     Measurable, Me...
Lodging professionals agree that successful marketing campaigns focus on specific
segments and include the right mix of te...
Consumers appreciate the opt-in and informative nature of rich media advertising. At the
same time, Internet marketers ack...
where the appropriate software is in-place, the Internet can provide additional metrics and
identify, monitor and update u...
Additionally, each HotelView member is provided with VHS copies (in either NTSC or
PAL) of their professionally produced p...
HotelView’s core streaming video component allows consumers to interactively evaluate
a property for their individual pref...
This case study represents the actual first quarter 2001 ROI for a member resort, located
on a popular island in the Carib...
Business Goals:

The HotelView program’s rapid growth and success is attributed to its members and
content partners. Our m...
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Hotel Advertising: Augmenting Traditional

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Hotel Advertising: Augmenting Traditional

  1. 1. Hotel Advertising: Augmenting Traditional Advertising Channels with a Targeted, and Measurable, Media-Rich Internet Approach Summary: Visual Data Corporation’s HotelView program combines the proven results of video advertising with Internet distribution to formulate a new, innovative way for hoteliers to manage their marketing efforts and expand their advertising reach. 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. A HotelView video presented as a 2-4 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.” * 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 on-line campaigns, ultimately increasing overall business levels. Introduction Problem Statement: 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?”
  2. 2. 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: o The Internet is continuously available [24-Hours / 7-Days]. o Specific information is accessible on-demand (pull) or delivered (push) 1. Pull Advertising – Specifically Requested Media  Sensory-Rich Streaming Audio and Video ("Rich Media")  Searchable Information – Websites, White Papers, Reviews 2. Push Advertising – Indirectly Requested Media  Banners  Interstitials (Pop-Up - Inter-Stream Ads)  E-Mail o Information can be updated in real-time. o The Internet has global reach. o Targeted reach can be achieved through managed online partnerships. o 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/or sound to satisfy a user's immediate need (often to be entertained). However, thanks to 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 “eAdvertising” 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%. For rich media, available metrics indicate that the average “Book-It” conversion rate ranges from 8% to 12%.
  3. 3. 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. 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 kilobits per second (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 (towards the subscriber) data transmission at approximately 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% 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 strategic characteristics lies in 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
  4. 4. 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 relevancy and with a faster response. These improved reports, in turn, facilitate optimal strategic decision-making. The HotelView Program Visual Data Corporation has positioned the HotelView program to accommodate the differing video production needs of individual hotels, hotel management groups and global hotel chains, while maintaining a uniform program consisting of on-line hosting and distribution, with quantifiable results. Video Production: HotelView’s core component consists of a two to four minute video vignette, showcasing a featured motel, hotel or resort (“property”). In simple terms, HotelView vignettes allow viewers to preview a property’s external features and internal amenities; thus, its slogan “Go There, Before You Get There!”. Specifically, HotelView vignettes are produced with the viewer in mind. Every vignette is professionally filmed on location, and produced in-house, complete with a written script, musical background, voice narration and digital encoding for the Internet. HotelView is committed to providing viewers with an informative and entertaining experience. Once production is completed, each member’s vignette is tested and copied to our global server network for Internet distribution, as the HotelView program includes the online hosting and serving of member vignettes. Online, HotelView’s vignettes are readily available in two formats and several underlying speeds: Microsoft’s Windows Media Player – bundled with MS Internet Explorer 1) 56k Dial-Up: Slideshow 2) 100k ISDN: Full-Motion Video 3) 300k+ Cable: Full-Motion Video RealNetwork’s RealPlayer - available online from RealNetworks 1) 56k Dial-Up: Slideshow 2) 100k+ ISDN & Cable: Full-Motion Video
  5. 5. Additionally, each HotelView member is provided with VHS copies (in either NTSC or PAL) of their professionally produced property vignette. Other ancillary production services include: in-room loop tapes, CD-ROMs, CD business cards, DVDs and foreign language narrations. Online Video Distribution: Simply put, HotelView provides members with a complete Internet solution, leaving no aspect of online vignette support and distribution to the hotelier. One of the program's most valuable benefits is its growing network of content partners ("partners"). Each member's vignette is linked to corresponding attractions, destination and golf course video on HotelView's online directory, located at: http://www.hotelview.com . In addition, HotelView also manages the outward distribution of each member's vignette through to their Internet site and throughout HotelView's rapidly expanding network of preferred content partners. HotelView's partners represent some of the Internet’s top portal, destination, hotel reservation, meeting planner, travel information, travel agent, and multimedia sites. Depending on the specific partner, HotelView vignettes are accessible via co-brand or custom-player pages (“interface”). HotelView works with each member and partner in developing a customized interface solution. To permit instant, real-time updating, each interface page is hosted and served by HotelView. Each partner needs only to integrate and reference the provided links, to access each property's interface page. Justifying The HotelView Program Utilizing its online network, the HotelView program’s sole objective is to generate incremental online revenue for its member properties. 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 But, HotelView is not a reservation company. Instead, HotelView is a complete online media solution.
  6. 6. HotelView’s core streaming video component allows consumers to interactively evaluate a property for their individual preference(s). HotelView’s equally important distribution component adds value to members by managing the integration of each member's existing online features with Internet video, building valuable viewer awareness for the member, among consumers visiting the member property's existing online affiliates. In many cases, HotelView facilitates an increase in online affiliates for member properties. HotelView directly facilitates reservations through the placement of a conversion component on its interface pages. These “Book-It” links facilitate a buy transaction by linking consumers to a real-time booking engine or reservation form. Specific “Book-It” links vary by each individual interface (content partner). However, the most compelling aspect of the HotelView program lies in its ability to track and report vignette activity. In doing so, HotelView literally allows hoteliers to evaluate the program as a marketing investment. Statistics: Through the continuous tracking of a property’s vignette activity, HotelView provides members with real-time metrics. Specific property metrics include “Video-Views” and “Book-Its”. These valuable metrics combine to formulate a 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: The following ROI model uses HotelView’s metrics to effectively calculate a member property’s ROI, based upon a model specifically created for HotelView by PricewaterhouseCoopers.
  7. 7. This case study represents the actual first quarter 2001 ROI for a member resort, located on a popular island in the Caribbean. HotelView Quarterly ROI Worksheet Property: A HotelView Caribbean Beach Resort “Book It” Month Video Views Conversions Month 1 January-01 2236 393 Month 2 February-01 1640 314 Month 3 March-01 2069 423 Totals 5945 1130 # of Reservations Based on % 10.0% 113 ADR $175.00 Avg. Nights/Stay 3 Quarterly Revenue $ 59,325.00 Quarterly Investment $ 1,350.00 Quarterly Income $ 57, 975.00 Notes: Algorithm=( nn% of Reservations*=Number Who Arrive That Month x $nnn ADR x Average Night Stay = Quarterly Revenue) (Quarterly Revenue – Quarterly Investment) = Quarterly Income or Return on Investment (ROI) *reservations = actual book and arrive through any channel, i.e., on-line, telephone, email, travel agent, direct book. This model assumes only a 10% 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 HotelView program's revenue contribution, against the program's cost.
  8. 8. Business Goals: The HotelView program’s rapid growth and success is attributed to its members and content partners. Our members have overwhelmingly reinforced the value of “Video on the Web” and HotelView’s continued contribution to the success of their online initiative(s). Our partners have expressed similar enthusiasm about “Video on the Web” and its value in increasing their site traffic and look-to-book ratios. HotelView’s ongoing commitment to its members includes the continuous expansion of the program to include: o adding additional Internet content partners, including: portals, CVBs, affinity sites and online travel sites o adding compatible distribution across new platforms, including wireless and kiosks o balancing its global property portfolio o balancing its portfolio of moderate to high-end properties o maintaining its lead position among online video producers o creating greater brand awareness among lodging consumers Being a core component of the program, HotelView is equally committed to its growing network of content partners. Current areas of cooperation include: o integrating properties o integrating additional property feature areas o exploring new revenue alternatives o exploring new business synergies In summary, HotelView is committed to providing hoteliers with new and innovative media solutions that combine the proven results of video advertising with Internet distribution, allowing hoteliers to efficiently manage their online marketing efforts and expand their advertising reach. The HotelView program empowers today's proactive hoteliers with the ability to efficiently reach targeted segments within the global market, evaluate the success of their on-line campaigns and improve their property's business performance. End of Report -written by M.Dubsky, Business Development; August 2001 ----------------------------------------------------------------------------------------------------------- * - Used with the permission from Seybold Reports: http://www.seyboldreports.com

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