October 2018, Las Vegas
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Is Facebook still the way to become king of conversions?
The recent privacy scandal which has put the social giant at the centre of a federal investigation, seems to have done ‘virtually nothing’ to sway travel marketers
Facebook has become integral to the marketing strategies of travel businesses, and plays a crucial role in converting the customer, according to a recent white paper from EyeforTravel.
However, since the Facebook-Cambridge Analytica scandal made global headlines in March this year, the social media giant has been somewhat under the cosh. After sharing data of 87 million Facebook users with the now defunct British political consultancy, it the social network has become the subject of a federal investigation being led by the Department of Justice, the Federal Bureau of Investigation, and the Securities and Exchange Commission. Meanwhile, on this side of the pond, in the UK, The British Information Commissioner’s Office, the UK’s data protection agency, is also threatening a £500,000 fine.
Amid the furore, Facebook reported second quarter earnings, which indicate that its popularity could be waning. In North America daily active users (DAUs) remained flat at 185 million, while European DAUs decreased by three million users to 279 million, arguably a consequence of the recent General Data Protection Regulation (GDPR).
So, what does this mean for travel brands, and especially those heavily dependent of Facebook?
You might expect David Armstrong, CEO of online travel deals platform Holiday Pirates, to be worried. This is a company that has taken social to another level by building its brand almost entirely through the medium, and since launching in 2011 has accumulated over 10 million Facebook fans.
But Armstrong, who will be speaking in Las Vegas, isn’t worried. “The Cambridge Analytica issue didn’t have an impact on our Facebook business whatsoever. Personally, I also feel that the public has also put this aside quite quickly due to the way Facebook dealt with it. I don’t imagine that it’s an issue anymore.”
Jason Lee, a senior director of product and technology at Orlando-based Travel Media Group, agrees. The impact, he says, is “virtually nothing”.
Creating Facebook clickbait is a fool’s errand in the world of hospitality
While Lee acknowledges that there may now be a stigma regarding user privacy issues, he doesn’t believe the situation affects Facebook travel advertisers.
“For the travel and hospitality industry, it’s very straightforward marketing with a very straightforward purpose,” he says. “Creating Facebook clickbait is a fool’s errand in the world of hospitality because the objective is to encourage qualified consumers to purchase. In this, Facebook is still a valid source of potential customers.”
Taking on Google
There is, of course, competition, not least from Google, which inJuly, officially rebranded Google AdWords to Google Ads. At the same time, it launched four new campaign types including Hotel Campaigns, its newest Hotel Ads’ product. Managed from within Google Ads’ main interface, the new tool is said to offer enhanced control such as managing campaigns as a function of its return on investment (ROI) objectives.
Having said that, Lee argues that when considering cost-per-click rates, Facebook is still more cost effective, especially for independent hotels.
“I would challenge that Google is a crowded space when you consider that Priceline and Expedia are pushing a few billion marketing dollars into it,” he says.
When considering cost-per-click rates, Facebook is still more cost effective, especially for independent hotels
In addition, major hotel brands have more clout with Google, and brand restrictions, which makes it more difficult for independents to compete.
In fact, all individual hotels, whether they are part of a brand or wholly independent, are at the greatest disadvantage. This is particularly true in major markets, says Lee, as cost-per-click rates of the most popular generic search terms can be as much as $15 to $18 per click. “That’s money that a single property couldn’t afford in a 12 to 15% conversion scenario,” he says.
Though not everybody will agree, Lee argues that Google is not a particularly cost-effective marketing partner for hotels with average daily rates (ADR) of less than $100. There are, however, exceptions; regional hotel groups with at least three or four hotels in a secondary or tertiary market where Google’s CPC rates are lower, have a better shot at competing. Indeed, any hotel in any market with a significant enough budget and a Google strategy that targets a specific segment can also succeed with the search engine’s platform.
Content is king
When it comes to Facebook, Lee advocates content driven rather than basic ad campaigns because it exposes users to the underlying culture of a hotel, while the traveller is in the inspirational phase. It also serves as a billboard for activities and community involvement that is distinguishable from a competitive set.
Building Facebook content also creates a forum where potential, current and future guests can interact with the property, and view other interactions with the hotel. Says Lee: “Facebook content has more to do with communicating the hotel’s vibe, which travellers can’t otherwise see in the pre-booking phase. And, almost none of that story telling has to do with discount promotions.”
Use your budget wisely and build a strategy around the reasons that people travel
That’s not to say that Facebook promotions can’t drive bookings. However, Lee stresses that in almost every case, these succeed because there is a reason, for a traveller to book, such as a sports event in the area. Promotions like this shouldn’t just be about a good deal. Rather, Lee recommends showcasing the hotel’s proximity to a popular local venue, or its shuttle service to ease the journey. “Use your budget wisely and build a strategy around the reasons that people travel,” he stresses.
The use of independent, editorially led curated content is something that works well for Holiday Pirates, which only pays for 7% of its traffic! Earlier in the year, Armstrong explained that the firm doesn’t automatically push things through technology or an algorithm. It always has a step through an editor - a human! - who approves or declines a deal that the technology has recommended.
- Skip Facebook promotional opportunities that include gimmicky surveys and quizzes
- Mine Facebook as a content marketing vehicle where they can create and convey a narrative about their business
- Use posts and photos of the property and its location as well as the staff and service offered, in conjunction with Facebook ads that similarly reflect those descriptive elements
- Be prescriptive and careful about the business that you’re going after. In other words, don’t think of Facebook as a general arena to find guests simply because you have a good deal
David Armstrong, CEO, Travel Pirates will be speaking at the upcoming Las Vegas Summit, which Travel Media Group is sponsoring.
Kerry Medina interviewed Jason Lee as part of an upcoming EyeforTravel whitepaper on direct bookings that is sponsored by Fornova. Additional reporting from EyeforTravel