Most travel brands have a scattershot approach to online marketing based on a guess and a prayer rather than on solid data.
Consumers visit as many as 26 different sites for information before completing a travel booking with a provider, and most of those providers have little or no idea how much influence each site visited had on the booking decision, says travel industry marketing and research expert Mark Lommano. Travel companies, he said, need to develop “attribution models” to accurately identify how much influence each site has on the decision to make the booking.
Without that information, he told Travel Weekly PLUS, travel brands are just throwing money at whomever claims to have the most influence. They’re also putting themselves at risk of losing the brand loyalty of their customers to Google, Facebook or Apple when those sites launch their own travel apps — a development Lommano describes as “inevitable.”
Known for his work with Smith Travel Research over more than two decades, Lommano is currently executive board member of newBrandAnalytics, a consultancy that provides social market intelligence solutions for the restaurant, hospitality, government and retail industries. This is the second excerpt from a discussion between Lommano and Travel Weekly PLUS Editor in Chief Diane Merlino.
Merlino: You’ve described how consumers are shaping brands and changing the way travel is distributed. What does that mean for travel businesses?
Lommano: One of the things the travel industry needs to do is create attribution models that identify the influence various sites have on a consumer’s decision.
Depending on who you talk to, before a consumer books an airline flight or a hotel stay, or decides what destination they’re going to go to, they visit anywhere from eight to 25 different sites before they make their purchase decision. Travel companies don’t know how to assign value to each of those sites. There’s no model that tells them what influenced the consumer’s decision and how to attribute value to each site the consumer visits.
I’ve been in marketing for about 50 years. These kinds of attribution models were very common in the 1950s and 1960s when these same hotel companies and destinations and airlines knew where to place their advertising: how much on TV, how much in print media, how much in direct mail. They had created attribution models to know what worked for them.
No such thing exists in the Internet space right now. People have begun working on them but they’re not close to completion, so there’s no way to assign value. And because there’s no way to assign value, every site says they’re the primary driver for the consumer’s decision. That creates a very complex environment where people have a scattershot approach to trying to get to the consumer and influence the consumer without really understanding what’s helping the consumer formulate their decisions.
Merlino: Is there a solution to that situation?
Lommano: There absolutely is, but it’s one of those things that will take a fair amount of work. Fortunately, the data’s available because there are companies that track consumer movements. I know there are people who are talking about working on it, but I have not seen any completed studies yet.
But it’s going to be absolutely imperative that this is done. Otherwise you’ll scatter your marketing dollars and your advertising dollars and your distribution dollars all over the place not knowing what actually has value for you, only what your gut tells you.
Merlino: Is this sort of scattershot approach to online marketing and distribution characteristic of most travel companies?
Lommano: This is where we’re at right now. Just to give you an example, one hotel company told us that before their customers book with them online, they visit 24 to 26 different online sites.
Merlino: What’s the source of that information?
Lommano: Their own internal bookings. They can track where the consumer is going. It’s crazy. Even though there’s so much more information out there, in so many ways airlines, hotels, destinations, whatever, are as much in the dark as they’ve ever been about how consumers make a decision.
Merlino: Is that at least partly due to the very rapid introduction of a lot of new and transformative technologies in the travel space?
Lommano: I think it’s a combination of that and what we discussed earlier — that most travel companies are not leaders. The orientation of the leaders isn’t on saying, “Okay, we need to figure this out. We need to create attribution models.” It’s not their orientation. Somebody needs to tell them to do it.
Merlino: Is it possible to change that orientation? Or is it too entrenched historically?
Lommano: That’s a wonderful question. It’s entrenched historically, but they’re going to have to change, because if you don’t understand what drives the consumer to your site, you’re going to be paying a lot of money to people who say that they are the primary driver. That’s going to erode your profitability, and ultimately the owners and the stockholders — the people who own the bottom line — are going to demand that there be some cost controls. And the only way to control the cost is to understand how the bookings are made, through what mechanism. It’ll be slow though.
Merlino: That brings us back to Google, Apple and Facebook being poised to refer millions of consumers to travel sites where they can then make the reservation and complete the booking.
Lommano: Right. When the day comes when the 20-something generation can book a hotel room or an airline or a cruise through a Facebook app or a Google app, even though they know what airline they’re going on and what hotel they’re staying at and what their destination is, who is their brand? Where’s their loyalty? Is it to where they’re going, how they’re getting there, and where they’re staying? Or is their loyalty to Facebook, Google, or Apple? Would they rather have loyalty points and extras through those sites rather than through some of the traditional travel brand sites?
Merlino: If brand loyalty shifts to Google, Facebook or Apple, there are some far-reaching implications for travel companies, including some that would be hard to predict.
Lommano: Yeah, it’s a brand new dynamic. I was guest lecturing at a university yesterday, and I asked that question to a bunch of students, and they almost unanimously said, “If such a thing existed we would rather have Apple points instead of any hotel or airline points.”
Merlino: What other potential game changers would you advise travel executives to keep up with?
Lommano: You have to create a great user experience. People have always talked about that, but they talked about it more than they actually did much about it. You really have to do it; you have to know your customers.
You have to have an online strategy that works, that you’ve thought through. You have to get social; you have to understand where customers are talking about you and what they’re saying about you and what that means for you.
And you have to seek sustainable profit. What I mean is that a lot of travel businesses have been very top-line focused. For example, in the hotel industry they have something called revenue managers. What they need are profit managers who understand what it means if a guest books through one site versus another site. How much does that cost me? How much money am I going to make from it? The industry has to evolve from a top-line look to a bottom-line look.
Merlino: That would involve a different orientation in the leadership.
Lommano: Some of these big companies have been around for a long time, and they’re very successful. And sometimes there’s a critical mass in those organizations that makes it very difficult to change and modify. I think those companies have to take a look and ask, “Does our corporate infrastructure work in a social environment? Can we react fast enough? Can we do the things we need to do?”
Look at somebody like Google. It’s a big company but the whole culture is about change, evolution, modification. To some degree Apple is the same way. Travel companies are going to have to figure out how to emulate that model. It would be different, but it would embrace those same values, so if a travel company saw a new consumer trend, they would say, “We can’t take five years to figure out what this means for us. We’ve got to figure it out in three months.”
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