The most frequent criticism of social media as a marketing tool is that the return on investment (ROI) is so challenging to measure. For the hospitality industry, this complaint is amplified by the fact that hard-pressed hotel operators can no longer afford “experimentation” in their marketing and sales efforts. This report deals with social media from the perspective of lagging adaptation, its ancillary value for businesses and the importance of branding, and offers concrete facts for finding real ROI.
“The definition of digital transformation is the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees and more effectively compete in an ever-changing digital economy.” – Brian Solis
Hotels: A Special Case
In the hotel realm, convincing owners and directors of the efficacy of brand awareness, typical public relations functions like media outreach, and the value of social media marketing is, for all intents and purposes, a huge waste of time. Most hotel decision makers are too busy dealing with “real world” problems, and they leave bookings to the big OTAs and travel agencies, for the most part. This is true for several reasons, not the least of which is the fact that most hotel owners did not have my friend, Altimeter visionary Brian Solis, to show them the ropes.
Bad or no advice is one thing, but the fact hotel industry decision makers are forced into traditional marketing and operational postures more than almost any segment does not help either. Furthermore, their “reluctance” to change is a function of a brick and mortar industry that has been slow to innovate, a lack of data backed education, and the credibility gap marketing is creating. Put bluntly; hoteliers are tired of buying snake oil. I would not be honest if I failed to point out the negative effects unreliable PR hacks and unscrupulous marketers have on this industry and others. It is this “trust” challenge that makes our work many times harder. This makes using the proper measurement tools all the more critical.
In order that the reader sees the situation with hotel marketing, it’s important to understand an industry still in flux. This comment by my friend and colleague, Minas Liapakis, who’s co-founder of one of Europe’s top hotel marketing firms, EyeWide Digital Marketing Agency serves to portray the past and current situation:
“When the hotel industry was initially confronted with the necessity of digital transformation, even marketing was behind the leading edge. many mistakes were made, hoteliers have left adrift in a sea of digital marketing trial and error. this caused a huge “trust” rift we are only now overcoming.”
Liapakis went on to suggest the importance for hoteliers to turn to agencies specialized for serving the hotel & travel industry, and that they invest in digital marketing strategies instead of more traditional approaches. The good news is that there are many positive cases studies and research for quantifying social media marketing efforts for hospitality. For instance, a good point of measurement for showing clients value is being able to show a hotel’s share of voice across their social media channels versus local competitors. While it is difficult to measure in dollars and cents conversions, it is possible to measure and show a brand’s social media activity and performance versus the competition.
We can also show that hotel guests ARE using social media to figure out where they will travel, where they will stay, and what they will do once they visit a destination. A scholarly report entitled “The Marketing Effectiveness of Social Media in the Hotel Industry: A Comparison of Facebook and Twitter,” reveals several pertinent general facts related to conversions. Researchers Xi Leung from the University of Texas and Billy Bai from UNLV utilized something known as the attitude-toward-the-ad (Aad) model and applied it as an attitude-toward-social-media-page for making an assessment tool. They first conducted surveys to determine the efficacy of using Aad for measuring hotel marketing effectiveness across social media. Then they applied the strategy to discover some groundbreaking logic. I quote here from the abstract of their study:
“The results revealed that hotel customers’ social media experiences influence their attitudes-toward-social-media-site, which in turn influences their attitudes-toward-hotel-brand, and that hotel customers’ attitudes-toward-hotel-brand affects their hotel booking intentions and, in turn, intentions to spread the electronic word of mouth.”
On Ancillary Social Media Value
Another aspect of social media that can help hoteliers (or any segment) glean its real value is the capability to augment a business’ customer care efforts. Social media channels are a two-way communicative matrix that is not only a promotional tool but also as a space to provide fast, excellent customer care. Also, using social media as an experience broadcast network lets marketing departments highlight positive guest experiences and stories online, which will ultimately drive revenue. However, the most important feature in any digital marketing toolbox is data collection, evaluation, and reporting. It does not matter if your engagement and reach in social media are through the roof if a hotel or other business cannot see how your effort affected their bottom line.
A report from PricewaterhouseCoopers (PwC) reveals why ROI from social media is difficult to assess, and how social commerce can impact measurement. At the top of the marketing funnel, social media’s impact measurement is still a nebulous mess. However, at the lower end of the funnel things like brand consideration, conversion, and loyalty and service related activities can be accurately measured.
Hotel marketers are now able to measure and report on conversion rates, incremental revenue, and repeat business — and thus more accurately measure ROI. The key is knowing how to use social media in each of these stages. Accurate measurement can increase lead generation and influence the purchasing decisions. Finally, it’s at the end of this funnel where loyalty becomes advocacy when a deeper connection is established with the guest/customer, and where the real community is forged. The question remains, “How do we glean the data we need?”
More On Branding
The PwC paper mentioned above discusses “imperatives” any business needs for developing an effective social media contingent and deals with strategies for getting the right data. The report is a bit long-winded, but the key to success is to have an easy-to-use, flexible platform for collecting and using data. PwC goes on to discuss integrated approaches to social commerce and how social media fits into an overall multi-channel marketing strategy.
However, we still don’t have a tangible model for actionable social media data – and this is what most corporate or marketing genius reports show us. To frame how vital (and nebulous) branding is to your social effort we need to understand the importance of an established name. This report from Deloitte entitled “Global Powers of Luxury Goods 2018 Shaping the future of the luxury industry,” clues us. As it turns out, a familiar company named Burberry offers us one of two keys to understandingsocial media’s conversion value – the value of being recognized.
I know the reader will be surprised to discover that Burberry dedicates over 60% of its marketing budget toward engaging customers on Facebook, Twitter, Tumblr, Pinterest, Instagram, and YouTube. The luxury brand’s seemingly magical ascendence to be one of the three most famous names in social media is not “magical.” Their rise to prominence was as much luck as anything. I’d love to be able to tell you Burberry’s marketing gurus are wizards, but the brand knew all along how to influence people to buy their famous trenchcoats. The only excellence in Burberry’s social media approach is congruent cross-platform campaigning.
Moreover, that’s standard practice, and by now you are wondering if there is any definitive way to measure and prove social media ROI. Well, you’ll be grateful when I offer the simplest solution for ROI you ever heard. Are you ready?
Surprise: Proving the ROI Is Simple
To glean the data you need in order to convert, begin by putting tracking parameters on all social media links. I know, I know, this requires yet another onerous step by your social media team. However, without these tracking parameters there can be no accountability. Using tracking tools, hoteliers/marketers can measure and apply metrics like website traffic variables, email metrics, sales by source and associated click attribution. As for “vanity” metrics, measuring likes and shares is meaningless if we look at the larger picture. By leveraging native social media analytical tools, as well as those from the likes of Hootsuite, Social Bakers, Sprout Social, Google Analytics others, you can prove ROI. There is a caution, however. As I pointed out earlier, the powerful branding effects that only become apparent watching the long tail effects of media and ads should not take a back seat just because they are harder to measure. On this aspect, I contacted my colleague Martin Soler, who’s a partner at Soler & Associates, and one of the industry’s most trusted experts. Here is what Martin said about relying too much on the short-term ROI quest:
“There are two indicators to measure in order to accurately determine your social media ROI. There is, of course, direct ROI from clicks and so forth. But this is only a small part of the total ROI. The bigger picture only comes into view when we begin measuring the relationship between social media traffic and organic search traffic. The latter will give us yet another set of relationships and value, though this aspect is much harder to glean.”
As a former public relations executive, I must advise you to consider the intangible benefits of social media. I’ve touched on branding, but we must remember marketing is not PR. Owning and earning media are functions of media relations, while bought press is more closely aligned with advertising and marketing. Also, the potential SEO benefits that come from social and other media campaigning cannot be overlooked. While aspects are not yet certain constituents of ROI, anyone who’s evangelized a brand in the simplest way knows there’s tremendous value there. Being able to show direct ROI (SMT Infographic), in combination with these intangible facets, will convince even the most stoic hotelier to make the needed effort via social media.