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2020 Budget season tips: Mapping your hotel’s 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 2020. As part of the “20/20 Strategy” series, we’ll offer expert tips to help you map your digital marketing budget, which could define how successful you are next year. This is part 1 of the series. 

Part 2: Why digital marketing metrics can lie – and how you can better evaluate campaign performance

Let’s start with multi-channel marketing, which is a hot topic nowadays. Clients often ask me: should we invest in search marketing, display advertising, and/or metasearch advertising? Or are we best allocating more budget for social media advertising?

In truth, there isn’t one standard way to divide your marketing budget up—it really varies from property to property. However, adopting a multi-channel approach is best to expand your reach and target different customers throughout their travel journey.

A skilled digital marketing agency can help you figure out the best way to allocate your budget, taking into account your goals and ROI expectations.

Remember to factor in additional costs when you calculate your budget. This includes management or commission fees from your agency, and additional creative or productions costs, such as display banner creation or copywriting.

Not all ROAS is equal

Your ROAS (return on ad spend) can vary from channel to channel, not just month to month. So, you might want to consider setting multiple ROAS targets that collectively let you hit your end-of-year goal. Remember, applying the same static target to different channels with different attribution models may not give you a true picture of how your direct channels perform.

Plan to be flexible

Piggy bank tied up by measuring tape

In a fast-moving industry, you could be left for dust if your marketing budget isn’t flexible. Your competitors might launch an aggressive promotion. Or there could be a sudden increase in searches for your brand name or hotels in your area. If you’re fixed to a budget with no wiggle room, you might miss a golden opportunity to drive bookings.

Instead of evenly distributing your budget across every month, plan ahead. Look at your historical data and aim to spend more of your annual budget during peak periods. Equally, don’t rigidly stick to your allocated monthly budget if market forces take an expected turn for the worse (e.g. an extreme weather event).

If you need help creating a more dynamic budgeting plan, consult with your digital marketing agency or expert.

Invest in metasearch

If you haven’t already done so, we recommend putting aside budget for metasearch in 2020. Metasearch is one of the fastest-growing digital marketing channels. Not only is it valuable for top-of-funnel marketing (which involves reaching customers early in their travel research), it’s an effective campaign tool for generating bookings.

As we’ve discussed in the past, metasearch can deliver impressive results on a limited budget. Need more advice on this topic? To take things to the next level, find out how to integrate metasearch within your digital marketing mix.

Don’t shoot the messenger

Often, poor campaign performance is not the result of the actual platform or channel being used. More commonly, it’s down to mismanagement of the campaign or internal issues at the property. In many cases, adding more budget to an underperforming channel will not fix the underlying problem — unless the problem is not enough budget!

If your campaign isn’t delivering results, don’t instantly disregard the value of the channel. To begin with, objectively evaluate what the internal cause might be and try to find a solution.

Evaluate the true value of direct versus OTA

In most cases, a good direct campaign will be far more cost-effective than any OTA channel — when it’s executed correctly! However, a lot of hotels underinvest and undervalue their direct channel, partly because they’re not aware of the true cost of distribution.

If that’s the case with your property, we highly recommend adding more budget to direct in 2020. Investing in a new website can make a huge difference to your direct bookings and profit margins, helping you to shift away from high-commission third-party bookings.

Maximize defensive strategies over offensive

If you’re managing a limited marketing budget, take care of the basics first. Put aside an adequate budget to protect the essentials. For example, bidding on your own brand name in AdWords campaigns is extremely important to help you maintain visibility in SERPS and prevent the OTAs from bidding on your brand terms instead.

Take time to evaluate vendors and channels

Every agency operates differently and often can’t be compared to each other. For instance, a lot of agencies use overly generous attribution models that inflate their results, but do very little to help your hotel’s bottom line. Our post on common vanity metrics highlights the attribution models to be wary of and what to measure instead.

With that in mind, budget time is a great opportunity to ask what attribution models your hotel is using. If you’re relying on vanity metrics, it’s time to look at actionable alternatives that will help you measure your results and drive progress in 2020. The team at Travel Tripper and Pegasus can help you understand your reports and consolidate the results into a digestible format.

Setting your hotel marketing budget for 2020

Stacked coins with 2020 budget blocks

As you plan your budget for 2020, check with your marketing agency for any new channels or technology on the horizon. The industry is changing at lightning-fast speed, and knowing about new marketing options (and how you might specifically take advantage of them) can help you stay ahead of your competition in the year ahead.

In our upcoming webinar, experts from Travel Tripper & Pegasus will share the key steps to creating a cross-channel, data-driven strategy for 2020. Sign up now to reserve your spot!



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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