Becoming Obsolete in the Web 2.0 Frenzy?
|by Max Starkov and Jason Price, September 2007
Web 2.0 continues to generate much attention in the online travel industry.
Inquiring hoteliers want to understand the status and future of search
engine marketing and other Internet marketing formats in this new Web 2.0
environment. Are search engines becoming obsolete? Are Web 2.0 sites going
to replace the search engines as an advertising media? Will online travel
consumers abandon Google as a travel planning and research tool and shift
their attention to Web 2.0 sites such as TripAdvisor.com and social networks
like YouTube.com? Must a hotel engage in such strategies?
This new dynamic has caused a degree of confusion and many hoteliers are unsure about the implications of Web 2.0 on more "traditional" Internet marketing formats such as search marketing, email marketing, and display advertising. This article details the roles of Web 2.0 and search engines and their significance, as well as supporting data and case studies on how search engines remain of strategic importance long-term in online marketing and distribution.
Examining the Roles of Web 2.0 and Search Engines
Web 2.0 and CGM represent a new dynamic in communication by allowing consumers to drive the content. No one can question the important role, relevancy, and impact of such social network sites as YouTube, MySpace, and in the travel space sites like TripAdvisor, Yahoo Travel Planner, Igoyougo, HotelChatter, and many more.
So what about Web 2.0 and the search engines? Are these new and old Internet media formats in synergy, or are they at war with each other? A recent article raised a very important question, asking if search engines are slowly becoming obsolete, especially as consumer-generated media appears to increasingly dominate online behavior.
Here is how hoteliers replied to our question regarding search engines and Web 2.0:
HeBS Poll Results:The majority of hoteliers are correct. Web 2.0 is not a threat to established search engines like Google, Yahoo, and MSN. Consider the following:
The online travel consumer research and purchasing habits clearly show the need for both media:
Search engines are an essential component of the hotel direct online distribution strategy:
Shopping for personal travel, the following services were used in deciding what to purchase:
(The PhoCusWright Consumer Travel Trends Survey, Ninth Edition, 2007)
According to a recent HeBS analysis, revenues directly attributable to search-generated leads (natural and paid search) were the highest source of website traffic and revenues for the hotel – more than email, strategic linking, online banner ads, third party intermediaries, and Web 2.0 sites and other forms of advertising combined.
HeBS researchers tested whether search engines still have relevancy going into 2008 amidst increased dominance of the direct online channel and the rise of Web 2.0 applications. While our researchers anticipated that search engines would still have relevancy, it was never anticipated that it would be on such a grand level.
To measure website conversions, including those generated through search, HeBS employed state-of-the-art website analytics and campaign tracking technology.
Here are some of the findings:
Search engine contribution to hotel website traffic and revenues
What Do Hoteliers Think About Search Engines?
What are the Internet marketing formats hoteliers believe generate the highest ROIs? The 2007 Benchmark Survey on Hotel Internet Marketing Budget Planning and Best Practices in Hospitality, conducted by HeBS in conjunction with NYU’s Tisch Center for Hospitality, Tourism, and Sports Management, clearly shows that hoteliers understand that long-term, strategic objectives and Internet marketing formats such as website re-designs and organic search optimizations, search marketing, email marketing and strategic linking produce higher ROIs than new media formats such as CGM, blogs, etc.
The following chart shows hoteliers believe that long-term solutions such as search and website optimization produce higher ROIs vs. CGM, blogs, etc:
Web 2.0 and Search Marketing Strategies Are All Part of a Bigger Picture
In 2007, one-third of all reservations in hospitality in North America will be generated from the Internet (30% in 2006). Over 65% of these Internet reservations will be via hotel-branded websites, though some major hotel brands already enjoy a very healthy 85:15 direct vs. indirect online distribution ratio. By 2010 over 45% of all travel reservations in the U.S. will be done via the Internet (Merrill Lynch, HeBS). As discussed above, a significant percentage of these reservations will be directly influenced by search marketing, as well as other direct Internet marketing formats.
In our view hoteliers should consider Web 2.0 and CGM initiatives only as part of a comprehensive Direct Internet Marketing Strategy, together with other fundamental Internet marketing formats such as search marketing, website re-design and optimization, email marketing, strategic linking and link popularity, online sponsorships and display ads. CGM initiatives like blogs should become a line item in the overall hotel marketing budget.
There are three approaches to building the hotel Web 2.0 / CGM strategy. Which approach to use depends on your situation and needs. If the goal is to protect and monitor the ‘chatter’ on the web about your hotel for whatever reason, then a Brand Defensive Strategy should be entertained first. If the goal is to leverage the expert knowledge that currently exists at your property out there on the web, then consider a corporate sponsored CGM initiative, like a hotel blog. Lastly, if the goal is to simply communicate to readers on high traffic Web 2.0/CGM sites, then you can advertise on them (run of site banner on MySpace.com goes for as little as $2-$3 CPM).
As discussed above, there is no doubt that search influences the hotel’s bottom line. As research shows, search engines influence travel planning and purchasing on a grand scale.
Search engine marketing is a comprehensive undertaking that includes both organic and paid search, and has four unique formats:
Web 2.0 and Search Engine Guidance on 2008 Internet Marketing Budget Planning
In 2008, as much as 37%-38% of all hotel bookings will be transacted over the web, which represents 15%-16% growth over 2007. Use this as a benchmark to increase your overall Internet marketing budget. Now more than ever, billboards along the highway, hotel print brochures, and other traditional means of advertising should be shifted towards the web.
The top areas to devote your 2008 marketing budget include:
Search marketing continues to play a major role in driving revenues and success, and should be a chief component of any comprehensive Internet marketing strategy. Despite all the interesting and novel Web 2.0 and CGM approaches to information sharing and communicating over the web (and more are sure to come in the future), it all starts with the fundamentals that generate the bulk of the hotel website revenues–search marketing, website re-design and optimization, email marketing, strategic linking and link popularity, online sponsorships and display ads.
Hoteliers should keep a close look at Web 2.0 and develop a strategy as discussed above. In addition, Web 2.0 and CGM initiatives like customer reviews and experience sharing should become a line item in the overall hotel marketing budget albeit a small percentage.
Consider seeking advice from an experienced Internet marketing hospitality consultancy to evaluate your current website assets and Internet marketing presence, and to help you build a robust Internet marketing strategy as per best industry practices, including the most appropriate and effective Web 2.0 / CGM strategy.
Note: Mariana Mechoso, Manager eMarketing Services at HeBS, also contributed to this article
About the Authors:
|Also See:||Top 10 Challenging Questions to Ask Your Internet Marketing Vendor; Important considerations before hiring an Internet marketing company in hospitality / Jason Price and Max Starkov / July 2007|
|Hotelier’s 2007 Top Ten Internet Marketing Resolutions / Max Starkov and Jason Price / January 2007|
|Search Engine Marketing in Hospitality / Max Starkov and Jason Price / September 2005|
|Strategic Linking in Hospitality: Build a Robust Link Popularity / Max Starkov & Jason Price / September 2006|