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Budget season tips: Mapping your hotel’s 2018 digital marketing budget

It’s budgeting season, which means your hotel is probably ready to start planning how, when and where you’ll be investing during 2018. In the following two-part series, we’ll be offering expert tips to help you budget for two areas that could define how successful you are next year—your digital marketing strategy and your hotel website.

When it comes to allocating your digital marketing budget for 2018, our top tip is simple: allow for flexibility in your monthly spend.

For example, say your hotel has $24,000 per year to spend on digital advertising. The tendency in making budgets is to allocate $2,000 per month across the 12 months. The digital marketing agency is often told to “use it or lose it.”

But when monthly budgets remain rigid, this could result in lost opportunity in the few months of the year where the marketing team suddenly needs extra money in a period that’s busier than predicted.

Instead, build in leeway each month to go over or under depending on demand. Ideally you’ll want to be able to save money on months where overall bookings are typically lower than usual, and use that saved money on months where there’s increased demand. An experienced digital marketing agency can help to advise you how to best balance this out throughout the year.

Why flexibility is important

Two major factors that come into play when considering how to spread the digital marketing budget across months, especially when it comes to search marketing: seasonality and unplanned events.

Hotels that have a strongly defined high and low season will want to make sure there is extra marketing budget for the months leading into high season—right when travelers are making their initial searches for their upcoming trip. Because search patterns vary between countries and lead times, it’s important to have a bit of flexibility to bring that marketing budget up if you see a sudden bump in searches for your brand name or for hotels in your local area.

Hotels should also be able to pull back on budgets in case of unplanned events. Just after the 2016 election, for example, there was an unexpected surge in Google searches for the “New Yorker Hotel”—largely due to Hillary Clinton’s concession speech being held there. As most of these searches were likely by people not interested in staying at the hotel, the New Yorker (at the advice of Travel Tripper’s digital marketing team) decided to pause the campaign to save money, which could better be used at a later date when search behaviors returned to normal.

A similar situation recently came up for hotels in Florida and the Caribbean that were affected by Hurricane Irma. With catastrophic weather disrupting travel plans (and subsequently search behaviors), digital marketing campaigns have been put on pause to resume when the situation begins to return to normal.

Money saved during such periods can then be put towards periods of high demand, or when the hotel has a sudden need to fill rooms. It also allows room for experimentation, trying out new marketing channels that you may not have originally budgeted for earlier.

Splitting your digital marketing budget between channels

Another major consideration is looking at how you split your budget between different advertising channels. The three major channels that most hotels allocate to include 1) search marketing, 2) display advertising, and 3) metasearch advertising, usually prioritized in that order. Some hotels may also decide to allocate budget for social media advertising, such as Facebook and Instagram ads, or review/listings site advertising, such as Yelp ads.

The truth is there’s not one standard way to divide the budget up—it really varies from property to property. Larger properties might have more room to experiment with all different channels, using search and metasearch marketing primarily for end-of-funnel searches (i.e. brand name searches) while using display, meta, and social ads for awareness building. Smaller properties with lower budgets may decide to focus on search marketing alone.

By clearly communicating your goals and ROI expectations, a skilled digital marketing agency can help you to figure out the best allocation for your budget.

Just remember that when calculating your budget, be sure to factor in the management or commission fees from the agency, as well as any additional creative or productions costs such as display banner creation, copywriting, etc.

In 2018, it’s also likely that we’ll see the continuation of a shift towards video and virtual reality-based marketing. As travelers frequently look to find trip inspiration from immersive online content, hotels should be prepared to invest in these two expanding areas.

You’ll want to prioritize your various marketing channels and be prepared to make cuts if necessary. Marketing is often the first budget that is cut when things go wrong, so make sure to plan wisely.

Does your website convert?

You can spend all you want on digital marketing and get travelers to come to your website, but if your site isn’t optimized to convert lookers into bookers, you’re likely throwing money down the drain. So while setting next year’s digital marketing budget, don’t forget to also take your website’s performance into consideration. In our other article, we detail the questions you should be asking when it comes to deciding whether your hotel needs to budget for a new website.

Nancy Huang

Nancy Huang

Nancy is the Senior Marketing Director at Pegasus and expert in strategic communication, brand development, and content marketing. She is an admitted travel junkie and loves finding amazing hotel deals when booking direct. Contact her at nancy.huang@pegs.com.

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