{468x60.media}
Mr. Navach

Technology

Leveraging Vertical Search to Go Direct

By Jeff Navach, Vice President of Marketing, MediaAlpha

Hotels find themselves in an uphill battle as they seek to increase loyalty to their own brands and recapture market share from OTAs. Many hotels are increasingly embracing digital advertising, recognizing it as a critical channel to acquire consumers directly and compete more effectively with OTAs. But as hotels expand their digital marketing presence and ramp up advertising budgets, they would do well to consider some creative approaches that can help level the playing field and turn the tide in their favor.

One emerging approach is targeting high-intent, bottom of the funnel consumers through vertical search media. Many OTAs have utilized vertical search media themselves as an important customer acquisition channel, acquiring many of the same consumers they send to the brands this way. Which basically means hotels already see vertical search consumers. They just happen to arrive through intermediaries with higher acquisition costs and lower profit margins.

Today's creative hotel marketers have begun turning to vertical search media themselves to more effectively target direct consumers and increase the efficiency of their marketing spending.

What is Vertical Search?

Broadly defined, a vertical search is any online search focused on a specific topic, industry or product. Vertical search examples include product searches on Amazon (nearly 50% of all online product searches now originate on amazon.com), a search for auto insurance quotes, or shopping for hotels on metasearch or niche travel websites. You can think of a vertical search as a more granular and targeted search than a typical keyword search conducted on a search engine.

There are hundreds of travel sites, ranging from large travel destinations to niche destination travel sites that exist to help consumers evaluate travel choices and make purchase decisions. When consumers visit these sites, they're sending a strong message that they know what they want and have an above average likelihood of making a purchase soon.
Search marketing helped revolutionize advertising by flipping the model on its head and enabling consumers inform brands on their intent and interests. In essence, Google and others figured out how to connect brands with customers while they were looking for what the brand was selling. But looking for something doesn't necessarily mean being willing to buy it. Search advertising is very effective in engaging customers in the middle of the sales funnel who are typically researching or engaged in longer cycle buying decisions.

Vertical search takes this notion of consumer intent one step further, engaging customers further down the purchase funnel when they are closer to making a purchase decision. In practical terms, it's similar to the difference between a travel consumer searching for "Top hotels France" or "Best rates on Paris hotels next week." The distinction and intent in the latter example is clear, and thus, the potential value to advertisers of identifying consumers with this level of intent is quite high.

How is it Unique?

There are three key criteria of vertical search media that distinguish it from other digital advertising formats and provide travel advertisers with an attractive acquisition channel that aligns with their strategic objectives:

  • High-Intent - The ability to identify high-intent customers is the most valuable characteristic of Vertical Search. Vertical search media targets consumers as they conduct deep travel searches for hotels and other travel needs. This enables hotels to directly target in market consumers who have a high likelihood to purchase. This level of purchase intent makes vertical search a very attractive and high performing media channel.

  • Data Driven - A fundamental benefit of digital advertising is the ability to utilize data to more effectively target consumers with the right ads at the right time. This is also a critical differentiator of vertical search, which possess an inherently rich data set that does not come with other media. When consumers conduct a vertical search, they provide valuable information about their intent and needs (origin/destination, travel dates, property class, amenities, etc.). The inclusion of this data enables advertisers to execute highly targeted campaigns to find the exact consumers they are seeking.

  • Relevance - Unlike top of the funnel advertising that seeks to grab a consumer's attention away from another activity, vertical search is delivered to the consumer within the context of their search and their focus. Digital marketers can think of vertical search as a highly relevant form of native advertising in which the content and message both align with the digital experience and the objectives of the consumer.

Why Now?

Hotel advertisers have not always capitalized on vertical search media because it was a secondary advertising channel that was often difficult to access relative to other online advertising channels. Online advertising is still an emerging customer acquisition channel for many hotels, and so it stands to reason there is less familiarity with secondary advertising channels despite the existence of significant value and opportunity. Further, vertical search has been the domain of the OTAs, who have built their business models around effective online customer acquisition and have made significant investment to develop better online advertising capabilities.

For the major hotel brands, any advertising channel must deliver sufficient consumer reach and scale to make a noticeable impact. And since vertical search can be more fragmented than some other forms of media, some of the major brands have felt constrained because they lack the same technology tools and online advertising expertise to effectively compete with the OTAs for this media.

Likewise, for boutiques, niche brands and single location hotels, smaller budgets typically necessitate more efficient media spending. The ability to execute highly targeted vertical search campaigns actually lends itself quite well to smaller brands that align with specific destinations and niche travel sites. But smaller advertising budgets and teams also dictate a level of selectivity in spending and placement that can be challenging to execute efficiently without the proper tools.

Fortunately, vertical search media has now emerged as an attractive and effective customer acquisition channel for hotels. In particular, the emergence of technology solutions in the marketplace is helping to democratize vertical search in a way that allows brands of all sizes to compete effectively and realize significant value and customer growth in the channel. Most notably demand side technology platforms now connect to a vast marketplace of travel-related vertical search sites, making valuable travel inventory accessible at the click of a button. Technology is also providing advertisers with unprecedented levels of control to enable highly targeted and efficient buying. Advertisers now have the ability to choose exactly where and when they run vertical search media, unlocking a new competitive advantage in the race go direct.

What Are the Benefits to Advertisers?

OTAs have already found value in vertical search, capitalizing on this segment to acquire high-intent consumers. To catch up, hotels should begin capitalizing on vertical search as a high value acquisition channel that can deliver strong benefits today:

  • Direct Access to Consumers - Vertical search media provides a direct path for hotels to directly acquire travel consumers. Hotels can tap into the same customer acquisition channels that most OTAs are already utilizing.

  • Cost Efficiency - Direct access to travel consumers offers hotels a valuable second benefit, the elimination of intermediary commission fees. By targeting and acquiring consumers directly at the moment of purchase, hotels can significantly reduce acquisition costs. These savings can improve profitability or be reinvested to acquire more consumers and increase bookings.

  • Better Marketing Efficiency - As hotels continue to increase digital marketing spend with an emphasis on capturing market share from the OTAs, savvy and creative marketers will be sure to focus a significant portion of spending on in-market consumers at the bottom of the funnel. There are not many digital marketing channels that offer advertisers such a direct path to consumers who are ready to buy their product.

Vertical search is a valuable and largely untapped customer acquisition segment for most hotel advertisers. For hotel brands seeking to engage more consumers directly to increase market share and optimize the efficiency of their marketing spend, vertical search media should be an essential component of their marketing mix.

Jeff Navach is the Vice President of Marketing for MediaAlpha where he is responsible for leading all marketing activities, including brand development, demand generation and customer insights. MediaAlpha innovates at the intersection of programmatic technology and vertical search, bringing transparency and efficiency to both buyers and sellers. Its platform empowers advertisers to more effectively engage high-intent consumers through a variety of touchpoints to increase campaign ROI. Publishers gain granular control over their inventory to optimize yield and maximize revenue. Mr. Navach can be contacted at 773-988-8754 or jeff@mediaalpha.com Please visit http://www.mediaalpha.com. for more information. Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
RESOURCE CENTER - SEARCH ARCHIVES
General Search:

NOVEMBER: Architecture & Design: Authentic, Interactive and Immersive

Eric Rahe

The advent of social media brought with it an important shift in the hospitality industry. Any guestís experience might be amplified to thousands of potential customers, and you want to be sure that your hotel stands out for the right reasons. Furthermore, technology has increased competition. According to Euromonitor International, the travel industry will have the highest online payment percentage of any industry by 2020, often occurring through third-party sites that display your competitors alongside you. As a result, many hoteliers are looking to stand out by engaging customers and the experience has become more interactive than ever. READ MORE

Pat Miller

Even the most luxurious hotel has a finite budget when it comes to the design or re-design of hotel spaces. The best designers prioritize expenses that have the biggest impact on guest perceptions, while minimizing or eliminating those that donít. This story will focus on three blockbuster areas Ė the entry experience, the guest room, and the public spaces. This article will focus on these three key areas and shed light on how the decision making process and design choices made with care and attention can create memorable, luxe experiences without breaking the bank. READ MORE

Patrick Burke

For over 35 years, American architect Patrick Burke, AIA has led Michael Graves Architecture & Design to create unique hospitality experiences for hotel operators and travelers around the globe, in Asia, Europe, the U.S. and the Middle East. As the hospitality industry has shifted from making travelers feel at home while away to providing more dynamic experiences, boutique hotels have evolved to create hyper local, immersive environments. Having witnessed and contributed to the movement, Burke discusses the value of authentic character that draws on physical and social context to create experiences that cannot be had anywhere else in the world. READ MORE

Alan Roberts

More than ever before, guests want and expect the design of a hotel to accurately reflect its location, regardless of whether they visit a property in an urban center, a historic neighborhood or a resort destination. They also seek this sense of place without wanting to sacrifice the level and consistency of service theyíve come to expect from a beloved hotel brand. A unique guest experience is now something expected not just desirable from any hotel wishing to compete in the world today. A hotelís distinctive design and execution goes a long way to attracting todays discerning customer. READ MORE

Coming Up In The December Online Hotel Business Review




{300x250.media}
Feature Focus
Hotel Law: Issues & Events
There is not a single area of a hotelís operation that isnít touched by some aspect of the law. Hotels and management companies employ an army of lawyers to advise and, if necessary, litigate issues which arise in the course of conducting their business. These lawyers typically specialize in specific areas of the law Ė real estate, construction, development, leasing, liability, franchising, food & beverage, human resources, environmental, insurance, taxes and more. In addition, issues and events can occur within the industry that have a major impact on the whole, and can spur further legal activity. One event which is certain to cause repercussions is Marriott Internationalís acquisition of Starwood Hotels and Resorts Worldwide. This newly combined company is now the largest hotel company in the world, encompassing 30 hotel brands, 5,500 hotels under management, and 1.1 million hotel rooms worldwide. In the hospitality industry, scale is particularly important Ė the most profitable companies are those with the most rooms in the most locations. As a result, this mega- transaction is likely to provoke an increase in Mergers & Acquisitions industry-wide. Many experts believe other larger hotel companies will now join forces with smaller operators to avoid being outpaced in the market. Companies that had not previously considered consolidation are now more likely to do so. Another legal issue facing the industry is the regulation of alternative lodging companies such as Airbnb and other firms that offer private, short-term rentals. Cities like San Francisco, Los Angeles and Santa Monica are at the forefront of efforts to legalize and control short-term rentals. However, those cities are finding itís much easier to adopt regulations on short-term rentals than it is to actually enforce them. The December issue of Hotel Business Review will examine these and other critical issues pertaining to hotel law and how some companies are adapting to them.