On budgets and budgeting

Oh boy

For many, it's budget and planning season, and nothing ruins a perfectly good Fall like having to plan next year's budget. Especially these days. 

But there’s pretty much no way around the fact that you’re going to do better with some sort of advertising and marketing. Which means you’re going to have to invest in it, and make no mistake, advertising and marketing are an investment. Business isn’t going to get better all by itself. 

We have a few thoughts that can help. 

Don’t start with a list of tactics. That's backwards. You'll almost always come up with more tactics than you can afford. In a way, you’re an architect, and an architect doesn’t start with the building materials. He or she starts with a vision. So start with what you want to accomplish. What are your goals for 2022? 

But at this point, think in terms of how you can differentiate yourself from the competition in order to achieve your goals. How can you create desire for your product or service that isn’t based on price? You may need some professional help with this. 

How much should you spend to get it done? Usually, advertising and marketing budgets are defined as a percentage of revenue, and that percentage can vary depending on who’s doing the defining and the circumstances of any particular business. Startups, for example, need to invest more now than they will as they get established.

The Small Business Administration recommends spending 7 to 8 percent of gross revenue for marketing and advertising for businesses doing less than $5 million a year in sales. We’ve seen recommendations as high as 20 to 25 percent for start-ups. The consensus seems to be around 7-10 percent. Of course the greater your revenue, the smaller the percentage to apply to marketing and advertising. In any case, we wouldn’t suggest going much below 5 percent.

This begs the question, should you base your budget on your current revenue or on your revenue goals? There are definitely cash-in-hand considerations, but we'd go with goals. You don't want to budget just to jog in place. 

One last thing. When it comes to actually delivering your message, stick to the media channels that will have the biggest impact. This, of course, requires a good understanding of your target audience, but don't try to do everything or be everywhere. The ROI isn't there. It's a lot better to do a few things well than to do a bunch of things halfway.

That kind of supports that don't-start-with-tactics thing, too.

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Eggs, baskets and digital avertising

Thoughts on digital advertising

Digital advertising is here to stay. It’s an important part of any company’s marketing communications mix and will be until the next marketing technology tool comes along. 

But before you dump all of your ad dollars into some form of digital media, it might be worthwhile reviewing a few facts and thoughts that come to us via Bob Hoffman’s new book, “Advertising For Skeptics.” (Available on Amazon.) 

One study showed that the eight kinds of advertising most disliked by consumers were all some form of digital advertising. Which could explain why between one and two billion computers, tablets and phones have ad blockers on them. 

In order to get five clicks, you have to run 10,000 ads – and 60 percent of those clicks are reported to be mistakes Only nine percent of digital ads are even noticed. 

This is a direct quote: “The idea that the same consumer who was gleefully clicking her remote to escape from TV ads is going to joyfully click her mouse to interact with online ads is going to go down as one of the great marketing fantasies of all time.” Think about it. 

With AdTech – as opposed to buying an online ad directly – you often don’t know where your ad may appear, except that the goal of AdTech is the most eyeballs on the cheapest websites possible. That could easily be on one of those “The Worst Plastic Surgery Mistakes Ever” sites. 

And this comes from the Wall Street Journal: In 2017, Proctor & Gamble cut more than $100 million from its digital marketing spend in the second quarter with little impact on its business.

Of course, new privacy requirements from Apple are going to hamper re-targeting strategies. A lot.

Drive business is the thing for hotels and resort right now. So outdoor, local and cable television, radio, local media outlets and direct digital buys on local or regional websites make a lot of sense. 

Digital advertising isn’t going anywhere and any hotel or resort that doesn’t employ it is making a mistake. But in light of these limitations, perhaps it makes sense to not put all of our budget eggs in that digital basket. 

Just some food for thought.

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At the taffy stand

On the boardwalk.

It's like walking down a boardwalk and finding your way to the salt-water taffy stand.  

What was it that got you there? Or what combination of things? The signage? The aroma as you went past? Someone you saw with a box? Maybe an ad or poster you saw?

Now you understand the concept of a journey map and full-path attribution.The journey map is that walk down the boardwalk. Full-path attribution is the combination of signage, scents and ads that created your desire for some taffy. Which is to say, it wasn't necessarily just the last thing you saw. 

This is how that your hotel or resort is like salt-water taffy: If you identify your targets' journey map and understand the different things that influence them along the way, you can make better use of your marketing dollars. Because it's not just the last thing a prospective guest saw that created their desire for your property. 

Which is to say, it wasn't necessarily just that last click. Even though digital channels will usually claim credit for the booking. 

In fact, a branded search - search for your property, not just properties in your neighborhood - has a far, far higher conversion rate then non-branded searches. And the parts of the journey map that can incite a branded search are what did the trick. 

In fact, it's never that simple.

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You can't out-Mick Mick

You can't out-Mick Mick Jagger.

The smart wannabe rocker won’t even try.

This applies, believe it or not, to the hospitality business as much as it does to rock and roll. That is to say, as the market starts to come back, an independent hotel would not do well trying to beat the chains on battlefields where they have an advantage. They will always have a bigger mailing list, a better rewards club, more name recognition and a bigger ad budget.

So beat them at something you can do that they can’t. Or can’t do very easily.

It’s probably not as hard – or expensive – as you think. Remember, the local arm of a big chain usually needs some approval from the mother ship for anything dramatic. You probably enjoy a bit more freedom. The average GM or DOM at an independent is much more empowered than their counterparts flying a national flag.

As an independent, you can re-jigger your brand to adapt to changing circumstances. And you can do it quickly. A chain isn’t going to adjust its brand without taking months to do it and spending more money than your entire marketing budget along the way. And an individual property won’t get away with going off-menu on their own.

Want to have a flash sale? You can have one tomorrow. Want to turn one of your suites into an Elvis Suite? Do it. Reposition mid-week downtime to something special and create demand. Show movies in the pool and give everybody an inner tube to float around in. Go for it.

Distinguish yourself.

And there's this: As an independent, you are almost certainly more a part of the local fabric than the local outpost of an out-of-town corporation. Work it. Build your local business for your F&B outlets while you wait for distance travel to loosen up. Develop partnerships with local businesses.

The point is, for all the advantages they have, there are limitations that go along with being part of a chain. You’re more likely to hear “Oh, we could never do that” in the executive offices of a local flag property than in the GM’s office of an independent. You probably can "do that."

It would probably be a good idea to get some help with this, too. From people who do this sort of thinking for a living. People who think and see things differently than you do. People who tend to ask “why not?” a lot. Fresh eyes and ideas and all that. No disrespect intended here, but this is not really the sort of thing your web firm or whomever handles your AdWords placements is built to do. This is a whole other thing.

This is about strategic creativity. And in the months and years ahead, creativity and innovation are going to win the day. This is where, as an independent, you've got a competitive edge.

Because there is only one Mick Jagger.

And if you want to be a bit more upscale about it, there's always Oscar Wilde: "Be yourself. Everyone else is taken." 

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Teaching guests to buy on price

 Are you teaching guests to buy on price?

Hotel guests are good students, and for years, the hotel business has been teaching them to buy on price.

Specials and promotions are a critical part of any hotel's marketing mix. So are OTAs. And PPC.

We just don’t think an overreliance on them is the best thing for long-term rate growth. We think Brand loyalty is better than having potential guests window-shop for price. Certainly price is what OTA listings lead with. And price is the most effective use of that limited PPC ad space.

Of course, branded searches have higher conversion rates. And branded searches are driven by desire, not price.

You want people to come to your property because they want to stay at your property, not because it's cheaper than one down the street. It's better if they are drawn to what you have to offer, not just how cheaply you sell it. We're always excited when we drive clients' website traffic for reasons other than price.

So maybe it makes sense to plan for some benefits-oriented marketing. Maybe take a look at your Brand and ask yourself if it creates desire for your hotel or resort.

If you’re selling a benefit (and creating desire), price becomes less of an issue, but if you’re selling on price, then price becomes more of an issue. Actually, the only issue.One of these two scenarios is, of course, better than the other.

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Why create desire?

  Why "creating desire?"

It's our brand.  

It’s what we do. And, after all, it’s the point of the whole exercise, isn’t it?  

One of us is a regular judge for the HSMAI advertising awards competition. I's was disappointing how many entrants defined their success in terms of how many people saw the ad or post or how many likes they got. Few of them related those results to actual increased conversions or revenue.  

For many, the means alone were the end.  

It just seems to us that defining success on how many people saw your Facebook post or Google ad or Instagram post is kind of like defining success by how many people subscribe to the magazine where your ad runs. It’s important, but it’s not the point, is it?  

Again, the point of the exercise – we think – is to create desire – and desire is measured in things like reservations, and room nights. Conversions rather than just website visits. Desire is what will drive a consumer to one brand over another. Desire is what engenders loyalty. And desire is what will move a consumer to pay a premium rate – or at least not shop strictly on price. 

Rather than just wait to see what's going to happen in the next few months, this is probably a good time to be proactive and to take a look at how you present yourself – in your advertising, on your website, through your social media posts. Do you have a strategy for creating desire? 

We’d be happy to take a look at what you're doing and give you a complimentary, no-obligation, evaluation and recommendation. 

So yeah, creating desire is how we define our company. Because we think that’s the most important thing marketing and advertising can do for a hotel or resort. 

Because, as we sometimes say, lust is a lot more profitable than likes.

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 You don't need a tattoo to be creative.

We've written about how creativity can be of great value to hotels and resorts. But perhaps some of you might be thinking that we only mean “creative” in an "ad-agency-black-t-shirts-and-website-design” sense.

Not so. One of our favorite quotes (over there, to your right) is by George Lois, a legendary art director: "Creativity can solve almost any problem. The creative act - the defeat of habit by originality - overcomes everything."

Note he said "any problem," not just advertising problems.

So we thought we’d share a few books on creativity and creative thinking that might kick-start or re-start your creative juices. Or show you another way to look at things. There’s also the video below. It’s well worth the time it will take to watch it. Then check out some of these gems:

“Creativity: A Short And Cheerful Guide.” – John Cleese

“The Creative Habit: Learn It And Use It For Life.” – Twyla Tharp

“The Do-It-Yourself Lobotomy” – Tom Monahan

“Predatory Thinking” – Dave Trott

“Hare Brain, Tortoise Mind” – Guy Claxton

“The Trickster's Hat. A Mischievous Apprenticeship in Creativity" – Nick Bantock

“Trust Your Crazy Ideas” – Kobi Yamada

“Leap. A Revolution in Creative Business Strategy” – Bob Schmetterer

Nobody expects you to turn into an ad guy or web designer, but, as George Lois said, creativity can solve any problem. So the more you embrace it, the better off you'll be. Dave Trott calls creativity a "legal unfair advantage." And, of the bazillion books out there on creativity, these are some we think are particularly inspiring and useful. Enjoy.

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Dealing with social media limitations

You don't get a thousand words on social media.

A dilemma.

It’s a fact that any business that can manage to continue to do some marketing and advertising at the depth of a recession (which, in many ways, is what this is) will come out of it faster and better than those who don’t. 

But the hard truth is that it’s tough to come up with money for advertising and marketing when your occupancy is down. Especially if you’re an independent hotel or resort without a brand Mother Ship somewhere. 

As a result, many of you are defaulting to social media. Free and sponsored posts, mostly. 

No mistake about it, social media can be a useful tool. And an affordable one. But everything has a price. And the price of social media is to cede a lot of creative control to the media channel. And, with all due respect, those folks are usually skilled tech people, but not creative people. And creativity is what will distinguish your message from others. Frankly, creativity is never going to be their main concern and it’s not their problem. It’s yours. 

Unfortunately, social media tells you how big your ad can be, how big your photo can be, whether or not you can run type across it, how long your headline is, how long your copy is and it ensures that you’re working with a template just like everybody else’s. Again, their focus is not on making your ad or post stand out so much as making sure it fits in. 

Having spent quite a bit of time in recent weeks reviewing social media campaigns in the hospitality arena, we’re here to tell you, the boxes set up by social media companies beget a lot of lookalike stuff. And lookalike stuff won’t get the job done as far as making you stand out from your competitors. Which is what you need in times like these. 

But there’s a workaround. Three of them, actually. Your photography, your headlines and your idea. 

Let’s start with photography. Your photo is going to be the same size as everybody else running on Facebook or Instagram (and, with only three or so options, any sort of digital display ad, actually). So invest a bit in NON-lookalike photography. You don’t have to spend more – or, these days, even a lot – to get better photography. You just have to hire a photographer who sees things differently and turn ‘em loose. Your creative firm is just dying to get someone like that for you. Or they should be. And any photographer worth his or her salt will relish the opportunity to do something different. 

A client once challenged us to define what we mean by “different, better” photography. Easy. Look at what everybody does and don’t do that. What you want is photography that simply will . . . not . . . blend . . . in. 

Your headline. Sure, there’s a character count limit, but a copywriter can make it fit. A good copywriter can come up with something far better than most of what’s out there. And actually ensure that your words and pictures work together. 

And your idea? Well, let’s just say “buy two nights and get a third free” isn’t an idea. Booking long-term at a resort so working from home isn’t anything like working from home is. Don’t just think out of the box. You need to go way past that. Your goal is to do what the Other Guys didn’t think of. 

A few years ago, a guy named Ernie Schenck wrote a great book called ”The Houdini Solution.” The premise is that the tighter your limitations, the more creative you can be. He wrote it before digital and social media took over so much of the ad world, but he must have seen the future coming. 

Photography. Headlines. Ideas. Those are the keys to making low-cost social media work harder for you.

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