Traditional Revenue Metrics – Yay or Nay in 2020?
- Posted by Gabe Hoffman
- On January 15, 2020
In previous blog posts, we’ve talked about the importance of display advertising and unbranded paid search campaigns and how to measure those campaigns’ performance without using traditional revenue metrics.
Today – we’re here to reiterate that point.
We’ll be showcasing the performance of a hotel group that has increased its prospecting budget by 155% YoY.
Google and Facebook’s ability to track bookings across devices has greatly improved over the past years, but it still isn’t able to completely give credit to your prospecting campaigns for a couple of reasons.
Google and Facebook can only track across devices if you’re logged into the same account.
Let’s say you interact with an advertisement at work while logged into one account – and then go home and book your trip from your phone that is logged into a different account. The interaction at work won’t get any credit for the conversion.
It also wouldn’t be tracked/attributed to you if you do all of the research – but then your significant other or friend books the hotel on their own device.
The industry default in tracking conversions has only a 30-day conversion window. This means that if you interact with an advertisement on December 1 but book your hotel at the beginning of January (after that holiday bonus hits), we can’t attribute the revenue to your first interaction.
We need to look at other metrics when tracking unbranded and prospecting campaign success.
This can mean clicks, click-through-rates, CPCs and website usage metrics.
Another way we can track success is by tracking the number of brand impressions. If we’re spending more budget on prospecting new audiences, theoretically more people should then know who we are and seek us out by brand name.
Think back to either of the attribution examples earlier. All of the research started with someone seeing a prospecting ad (unbranded search, social advertising, and/or display advertising) but it most likely ended with someone typing in a branded search when they were ready to book.
The group of hotels mentioned in the first paragraph increased their prospecting spend by 155% YoY – and saw a 14% increase in branded impressions.
A 14% increase in branded impressions for a 155% increase in spending may not seem like it’s worth the investment, but let’s break those numbers down a little further:
- CTR and CPC stayed consistent YoY for branded terms, which means it also drove a 14% increase in branded clicks to the website
- ROAS for branded terms also stayed consistent YoY (year one having a 17:1 ROAS for branded terms, year 2 increased to 18:1)
This resulted in an increase of 12% in branded revenue in year 2 and the 12% increase in revenue was equivalent to four times the investment the hotel group put into prospecting campaigns.
This increase also doesn’t include any bookings made via phone call, through OTAs, or booked directly on those prospecting ads with no need to go back and search for the branded terms later.
This is just another example of why hotel and resort marketing teams should focus on the big picture and not rely solely on ROAS as the only metric for success.
As we all know, successful marketing efforts take time and build across months of consistently focusing on the channels that are bringing in the right kind of new customers and guests.
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