Google Adwords - a Primer for Hoteliers

When your company's name becomes a verb and gets added to the Merriam Webster Collegiate Dictionary you know you have become a household name. Given the ubiquity of the Google brand one would have thought that everyone would understand at a basic level how they generate revenue of almost $30 billion, profits of $8.5 billion and why they possess a staggering $106 billion stock market valuation!

Yet it still amazes me how little the average person knows about how Google makes money. But maybe it shouldn't as until about 3 years ago, I admittedly understood very little about Google's business model beyond the fact that they generate revenue from some form of online advertising. 

I suspect that many hoteliers in the Caribbean are in the same position that I was a few short years ago and understand very little about Google's advertising platform, Google Adwords, and how to use it to their optimal benefit. To better understand Google Adwords' potential benefit to a hotel or any business for that matter one has to put the following in perspective:

1. The internet has a major impact on travel research and traveler buying decisions. According to a recent survey conducted by WIHP Hotel, a hotel internet marketing company, more than 60% of customers first find out about a hotel through online sources, particularly Online Travel Agents and Tripadvisor. The remaining 40% of the time, travelers usually first discover a hotel through referrals by friends and family. This was based on a survey of actual travelers that was conducted recently. You can read the entire article here http://www.wihphotel.com/mag/2011/stimulus-moment-of-truth-hotel-marketing-part-1-of-4/. 
2. Once a potential customer has become aware of your hotel, they will then use the internet for research and according to a the above mentioned survey they will use an internet Search Engine such as Google, Bing or Yahoo more than 72% of the time. http://www.wihphotel.com/mag/2011/zero-moment-of-truth-in-hotel-marketing-part-2-of-4/
3. As a result of its dominance of the search engine market, Google is the world's largest website (albeit with Facebook closing in on them) with about 1 billion monthly visitors. 

Given the above facts and given that using a search engine is such an important part of travel research, clearly a hotel's presence and ranking on Google is critical.

When someone searches for "St. Lucia Beach Resorts" for example you get two kinds of results: "organic" or "natural" search results and "Sponsored" or paid search results. See the screen shot below:

As you can see, the Sponsored Search Results are the most prominently displayed search results. They are displayed to the top against a coloured background as well as on the right hand and a clearly labelled as "Ads". Just under the sponsored search results are the organic search results which are not paid for.

There are thus two ways to improve your presence on Google. The first way is to aim for a higher position in the organic search rankings by investing in Search Engine Optimization (SEO) services. Long term this probably provides the best return on investment and is the best way to improve your Google ranking. But this can take quite a bit of time and don't look for instant results if you go this route. SEO basically uses several techniques including making your content more search engine friendly and getting links to your website from relevant, "authoritative" websites to improve your organic ranking on search terms that you consider important: "St. Lucia hotels", "St. Lucia Weddings", "St. Lucia Diving" etc.

The other option is to invest in Search Engine Marketing (SEM) via Google's Adwords platform. Google Adwords basically allows you to take a "short cut" of sorts and just pay for premium position by bidding on those same key search terms ("keywords" to use the jargon). Google Adwords uses a "Pay Per Click" or "Pay Per Impression" billing model so that you only pay whenever someone clicks on your ad and thus visits your website or when your ad is displayed (in this case you would pay a rate per thousand impressions). Some of the advantages of Google Adwords advertising over traditional print, television or radio advertising or even some other forms of online advertising include:

1. It is highly targeted - you choose the keywords that matter to you and your ad will only be shown if someone searches for one of those keywords. This way you know that the person who sees or clicks on your ad is more than likely to be interested in your product or service. This is unlike advertising in a mass market travel publication for example where you might find that several of the readers may not even be interested in travel to your destination, let alone your hotel. 
2. Ability to geo-target and target by demographics - With Google Adwords you can have your ad target persons from a particular country, state, city or zip code as well as target by gender, age groups, specific interests and even bid more for targeting these persons at certain times of the day! This is a feature of Google Adwords that is virtually impossible to replicate via any other offline medium and very few online advertisers (perhaps Facebook and Bing/Yahoo are the only ones who come close) are able to achieve this with the same level of detail. 
3. You are in control of your advertising budget - you determine how much you want to bid on each keyword as well as your daily and monthly budget. 
4. Reporting and Analytics - whoever designed the Google Adwords platform is speaking my language! What's the point of paying for an ad if you can't find out how it is performing. This is a clear limitation of traditional advertising but it really surprises me how many online advertising platforms provide very little information beyond impressions and clicks. Not so with Google Adwords. You get real time reporting on impressions, click throughs to your website, which keywords are performing best, which countries and demographic groups are responding best to your ads and even conversions (see below). A treasure trove of information of you love to delve into the detail or high level "dashboard" style reports for busy executives. If you link Google Adwords to your Google Analytics account you can get even more detailed information user behaviour on your website. For example did persons spend more time browsing your website when they came via the keyword "St. Lucia hotels" or "Soufriere hotels". This information can further help you to fine tune your advertising campaign. 
5. Ability to measure your ROI - this is one of the more advanced features of Google Adwords but one that I would advise even beginners to use. How often do we wonder whether our ads are really helping us to generate revenue? Well Google Adwords' Conversion Tracking feature allows you to determine whether persons who clicked on your ad are signing up for your newsletters, completing wedding or conference inquiry forms or making a booking on your website (and even determine the value of that booking with a little basic programming from a reasonably skilled webmaster). This information has been invaluable to us at Bay Gardens Resorts. With this information I was able to determine that one of our ads was generating a 1000% ROI ($10 in revenue for every $1 of ad dollars spent) and thus allocate more advertising funds to this ad away from ads that were not converting as well. 

With so many advantages, high potential ROIs and given the instant gratification that one can get from seeing their ads in the top spot for certain search terms would I advise hoteliers to dump more traditional offline and online advertising and put everything into the world's largest online advertising medium? Not exactly. Offline (magazine, newspaper, television, public relations) advertising still has its place in the marketing mix and for some niche markets it is absolutely critical. Moreover, it is possible to end up wasting a lot of money on Google Adwords without generating any results by among other things:

1. Bidding on keywords that are too broad or too competitive and hence too expensive to be worth bidding on. For example, I used "St. Lucia hotels" as an example of a keyword but the fact is you are competing against the major tour operators and OTAs who are bidding $2 per click and more to get premium placement. Better to bid on keywords that are less competitive but more relevant to your hotel's niche e.g. "Boutique Saint Lucia Hotels" or "St. Lucia All Inclusive Hotels"
2. Using poorly designed landing pages that do not provide relevant information. When someone clicks on an ad that advertises your wedding packages for example they don't want to end up on your home page that has information on all your service offerings. Better to send them to the "Weddings" section of your website where they can get the information they were searching for in fewer clicks. The easier it is for potential customers to find relevant information the more likely you are to get them to convert.
3. Poorly constructed ads - Google Adwords has a strict word limitation so you would think there would not be much room for error but it amazes me how many ads are constructed without the relevant keywords and key selling points in the ads. This in turn leads to low click through rates (the percentage of ad impressions that lead to a click) which in turn leads to you paying more per click that you should.

Google Adwords tend to "punish" poorly constructed ads that bid on inappropriate keywords and send persons to websites (landing pages) with irrelevant content. This is to protect the integrity of the Adwords platform and to discourage advertisers from trying to steal traffic by bidding on popular but irrelevant keywords (a online shoe retailer bidding on the keyword "Barack Obama" for example would be one extreme example). They assign such ads and the keywords they are bidding on lower "Quality Scores" which in turn leads to them having to bid more per click for the top position. So it is entirely possible that competitors who are better versed in Google Adwords are going to end up paying less than you for a better position as they are able to achieve better Quality Scores. 

Therefore, before shifting a large portion of your marketing budget to Google Adwords I would advise any hotelier to first do the following:

1. Determine what your goals are - Are you trying to generate traffic to your website? Fill rooms during a soft period? Generate leads? This is important as there may well be more efficient ways to achieve your goals (SEO for example). 
2. Invest some time in educating yourself and your staff - if you are reading this article this is a start but I am by no means the authority on this! There are lots of articles out there as well as the Google Adwords Learning Centre. I actually decided to go as far as getting the Google Adwords Certification but this is by no means a necessity for anyone!
3. Experiment - Try different ad formats and different keywords.Target different demographics, countries etc to determine which respond best. There is even an "Experiment" option in Google Adwords that allows you to determine which combinations work without spending your valuable ad dollars!
4. Measure your results - use Conversion tracking and Google Analytics to determine how the ads are performing. There is no point spending on online marketing if you cannot determine if it is generating returns!
5. Consider getting outside help - it may make sense to outsource but make sure you are clear on what you want your marketing consultant to achieve and avoid compensation structures that are based on a % of ad spend. My preference is to pay based on results and there are some who are willing to have a portion of their compensation tied to results. 

This article is really just an introduction into Google Adwords and how it can be a valuable part of your online marketing mix. I will be writing a series of articles that delve into more advanced topics and share some the lessons we have learned the hard way at times. Many businesses have used Google Adwords to generate fantastic returns but I have also seen some hotels in the Caribbean use it incorrectly and end up wasting thousands of dollars. 

At Bay Gardens Resorts, Google Adwords makes up between 4-8% of our advertising budget on a monthly basis so it is by no means our largest advertising expenditure. It is a part of our marketing toolkit that we use for particular niche markets and I would encourage hoteliers to look at it in the same light. 

Using Google Analytics to Make Better Marketing and Business Decisions

Let's be honest. A lot of hoteliers and marketing managers are just not comfortable with number crunching or data analysis at all. Who has time for spreadsheets and interpreting stats? Don't we have accountants and analysts in place for that kind of work?

But even arithmophobiacs (a real word, I looked it up) have to admit that you can't run a business entirely based on gut instinct and intuition (important as these skills are!). You need reliable information and you need to know how to interpret that information at some basic level to be able to make informed and profitable business decisions.

So on top of the daily management reports, occupancy forecasts revenue & expense budgets, income statements, guest satisfaction scores etc that hoteliers have to pour over, here's another often overlooked source of mission critical data to add to your toolkit: Google Analytics.

In a previous post I highlighted some of the benefits of using Google Analytics and how to set it up. Just to recap quickly Google Analytics is a free tool offered by Google that provides detailed information on traffic to your website. Some persons are happy just having an idea of how many "hits" they get to their website on a monthly basis and whether it is growing or not. But why would you not want a little more detail on how persons interact with your website or how they get there in the first place?

There are hundreds of articles out there describing Google Analytics and how it can be used. But what I am going to do here is highlight three ways in which paying attention to trends noted on Google Analytics has allowed us to make better marketing and business decisions and to improve our profitability:

1. Demographic information:


What the report shows - where does your traffic come from? Which countries, regions, cities? What languages do they speak? You might be very surprised at the results gleaned from the Demographics section under the "Audience" tab in Google Analytics (see screen shot below).

What we noticed - We were not surprised that the US made up our largest source of visitors, but Canada and Trinidad and Tobago being ahead of the UK? Given that traditionally the UK has been our largest source of business, this was a surprise to us. What was also surprising was that upon drilling down into the US data we found out that one of our largest sources of web traffic from the US came from California. Again surprising given the distance and the length of the flight to St. Lucia.

How we used this data to increase profits - focus additional marketing efforts (both on and offline) on locations that show significant interest in our properties and find ways to convert "looks" to "books" for these locations. We have continued to see our business from Trinidad grow and we have also been able to determine (using Google Analytics) that a lot of our online bookings from Trinidad are being influenced by our marketing efforts on Facebook and Google Adwords.

2. Sources of Traffic:


What the report shows - there are 3 basic ways that persons get to your website. Direct (someone typed in your url directly into the browser or got there via a bookmark), Referral Traffic (via a link from a listing on another website such as Tripadvisor), Search (from a search engine such as Google or Bing, both paid and organic). This report breaks it down for you (see screenshot).

What we noticed - we noticed very quickly that some sites who claimed to be sending us significant "hits" to our website were not sending us enough traffic to justify the cost. We continue to be amazed at the amount of high quality referral traffic that is generated by Facebook and we even know which key search terms are generating hits to our website (what are persons searching for when they find our site on Google or Bing).

How we used this data to increase profits - we immediately cancelled marketing campaigns that were not working for us and no longer need to guess if a listing on a website will generate profits. We can simply ask for a 1 or 2 month free trial listing and then see how it performs via Google Analytics to determine whether to continue. This has helped us to increase our ROI from our online marketing activities tremendously and we have seen bookings from our website double over last year (it is now our largest source of business) and this had a lot to do with tweaking that took place after reviewing these reports. We also noticed that most persons who were getting to our website via Google (organic) searches were getting there by searching for Bay Gardens Resorts, Bay Gardens Hotel or other Bay Gardens specific search terms. Not bad in and of itself but it did mean that we were dependent on the person knowing about our properties in the first place. Ideally you want persons to find your website after searching for "St. Lucia hotels" or "Saint Lucia resorts" or other similar search terms. We have therefore invested more in search engine optimization (SEO) through both in-house and external efforts which is producing better results for us. There are so many other ways that you can use traffic sources reports. It almost deserves an article to itself!

3. Conversions

What the report shows - what's the point of a website if it does not generate revenue? Google Analytics Conversion reporting helps you to determine if your site is achieving its true potential. There are two basic types of conversions from Google's standpoint. Actual bookings from your website (if you have a booking engine hosted on your website) also known as "e-commerce" conversions can be tracked via Google Analytics. This requires a bit of assistance from your website administrator as some tracking code needs to be installed on the booking engine's pages. If you use a booking engine hosted on another site (Sabre, Globekey, Siteminder etc) you can still do this but you would have to ask the booking engine that you work with to set up a Google Analytics account for your hotel's booking engine website which would be seperate from the GA account for your hotel's website. A little more complicated but still worth looking into. If you don't have a booking engine on your site, you can still track other "conversions" that you consider important such signing up for a newsletter, completing a wedding or conference inquiry form or watching a promotional video.

What we noticed - we took a listing with a well known destination wedding portal and were a little dissappointed at first when we noticed that we were getting very few inquiries from our profile listing on this site. We would have probably pulled this listing after the year's contract was up if we had not set up conversion tracking on our wedding inquiries on our own site. We soon noticed that quite a few persons who were referred to our website from this site were inquiring with us directly rather than with the destination wedding portal. We also know exactly how much online revenue is generated via our website by property, by room category, by country, by state and by city. Great information to have at your finger tips.

How we used this data to increase profits - it has helped us to better determine our ROI from our marketing activities. As mentioned above we were able to determine that a destination wedding listing was in fact driving valuable traffic that was converting into leads and sales. Same for our Tripadvisor Business Listing (although it worked better for some of our properties than for others). We were able use a combination of Demographic and Traffic Sources reports to determine that 80% of our Trinidadian web traffic was coming from our Facebook ads and this was behind the dramatic increase we had seen in revenue from this market. We also cancelled a lot of online marketing contracts that were costing us thousands but not producing enough traffic to be justified by the cost. Finally, by linking our Google Analytics account to our Google Adwords campaigns we were able to determine which ads were working and which keywords were converting and which were not. I was very disappointed for example that a Google Adwords campaign targetting the conference and events market was not working out and paused it to refocus our efforts on a Weddings campaign that was producing fantastic results in terms of the quality of the traffic and conversions. Google Analytics helped us to determine what worked and what didn't.

There are many other uses of Google Analytics and at it will require another posting for sure. But just to highlight a few:

1. Quality of traffic - sure a particular ad campaign sent a lot of traffic but was it high quality? By that I mean,  how much time did they spend on the website on average, how many pages did they visit on average? Did they get to critical pages ("Book Now" or "Sign up for our Newsletter") and how often?
2. Effectiveness of your web design team or SEO consultant - so you paid a web designer thousands to redesign your website. Did it work? Are visitors more engaged than they were before? Are they getting to the critical conversion pages more often. Same for your SEO consultants. If you don't see an increase in organic search traffic (it may take a few months so be patient) then you need to question how effective their efforts were. 
3. Effectiveness of your selling cycle - at what point in the booking process are persons "abandoning" the shopping cart? Are there too many steps in the booking process? Are persons stopping right at the point that they have to put in their credit card (in which case some sort of online security seal such as Verisign should be considered to increase customers comfort levels)? Google Analytics' "Funnel Visualization" helps you to determine this. 
4. Technology - what devices are being used to get to your website? We have noticed a significant increase in the use of iPads and iPhones by visitors to our site but alas quite a few of the features on our site are Flash dependent. So we may long term have to change some of these Flash rotating banners to Javascript or something that can be viewed on an iPad. 
5. Exit pages - at what point are persons leaving your website? If a page has a high exit rate, then perhaps it is a page that needs to be tweaked or "optimized" as the online marketing experts call it. It may be as simple as changing a few photos!

There are so many other uses of this valuable tool. The key with any analytic tool is to understand what it represents and what it doesn't. It is important that you focus on long term trends. Don't get overly excited by one-off events. 

I don't expect every hotel GM or owner to start using this tool every day. But certainly invest some time in understanding it and ensure that someone in-house is looking at it daily and providing weekly reports to the management team. Google's "Conversion University" provides a full online training portal (there's even an exam and Google Analytics Qualification!). 

These insights into your web traffic will help you make better decisions with how you allocate your limited online marketing resources and will help you generate higher profits. Even if you aren't a fan of numbers and analysis that has to be music to your ears!

About Me – Not your typical internet marketer

Hi there!

Thanks for visiting my blog. I certainly don't consider myself to be a traditional online marketer. I am an accounting and finance person by profession who after 4 years of working on Bay Street (Toronto’s version of Wall Street) decided that it was time to come back home to my lovely island of St. Lucia and help take my family business Bay Gardens Resorts to the next level.

Bay Gardens Resorts is a highly successful, locally owned hotel chain consisting of 3 hotels totalling 195 rooms in Rodney Bay Village, St. Lucia’s entertainment capital. But maintaining such high year round occupancy and profitability in the face of the Great Recession is not easy and we have been just as affected by the tough economic times as anyone else. 

With my background as a Chartered Accountant (CA) and Chartered Financial Analyst (CFA) everyone on the Board and in management assumed that I would focus on internal controls, accounting, banking, balance sheet reconciliations etc (you know the stimulating stuff that I got my formal training in). And I have done a lot of that, but what nobody bargained on was the amount of my own time that would be spent on internet and social media marketing and business development.

It might seem strange that an accountant would develop such expertise but it actually makes perfect sense. I’m a business person first and foremost and my accounting and finance background means that I understand return on investment. No matter how you look at it all marketing dollars spent are meant to generate additional profit (not just revenue but incremental profit margins over and above the cost of the marketing itself). Yes, sometimes it is difficult to measure the ROI from certain types of marketing (PR, TV ads etc) but no hotelier would spend good money on any of this if they did not think it would benefit their bottom line in some way.

Internet Marketing – Great ROI for Small Hotels

That’s what I love about internet marketing. It is so much easier to measure your ROI. When you place an ad in a magazine or in a tour operator’s brochure don’t you wonder how many persons actually read and respond to these advertisements and actually make a booking? It is not impossible to measure the response to these types of ads but it is really tough. With internet marketing it is much easier to measure your return on investment. I know how many persons visit my website from a Facebook or Google Adwords campaign and furthermore I know how much revenue is generated from it. I can even tell you which city generates the most revenue from my online marketing activities and what room category persons from a particular zip code booked most often.

I think that the internet provides an excellent medium for small, independent hotels in smaller markets (such as the Caribbean) to gain amazing exposure to a variety of markets that are prohibitively expensive to break into via traditional marketing methods (TV, print, radio). Best of all I have seen it first hand from the perspective of an owner/manager who is not an internet marketing guru. And because of my financial background I can speak first hand of the financial impact that our increased focus on online marketing has had on our bottom line at Bay Gardens Resorts in terms of increased occupancy and ADR and better ROI on marketing spend.

Internet Marketing – Not just for “techies” and “gurus”!

There are a lot of so-called internet marketing experts out there and they charge anything from $100 – $200 US per hour and up to do things that you can honestly do on your own. Some of the things that I manage in house (with the assistance of my talented marketing department) include:

1. Set up and management of various social media accounts (Facebook, Twitter, Linkedin Youtube) and advertising through these media. We have perhaps the most active hotel Facebook page on island (www.facebook.com/baygardensresorts) with 4000+ fans and counting.

2. Set up and management of various pay per click campaigns including Google Adwords, Yahoo/Bing, Bookingbuddy, Travelzoo, Kayak, Expedia among others. 

3. Limited search engine optimization (SEO) – we did outsource some of the more complicated functions but the basics were done (and is still being done) in house

4. Email marketing using Constant Contact - great tool that is really easy to use and affordable.

And much, much more on top of my other functions in accounting, finance and general operational management.

My goal with this blog is to empower independent-minded owners, general managers and marketing managers with information that I have gathered through experience with a variety of internet marketing methods. I am also hoping to get ideas from you about some of your own experiences with internet marketing as well as hospitality management overall.

Happy reading!

Sanovnik Destang, CA, CFA, Google Adwords Qualified Individual

Assistant Managing Director, Bay Gardens Resorts
Board Member, St. Lucia Hotel and Tourism Association (SLHTA)