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From the course by ESSEC Business School

The fundamentals of hotel distribution

511 ratings

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ESSEC Business School

The fundamentals of hotel distribution

511 ratings

Course 1 of 4 in the Specialization Hotel Management: Distribution, Revenue and Demand Management

In today’s hotel sector an increasingly complex network of traditional and web based channels have to be managed to insure hotel success. Key questions include: how should you distribute over the web? What should you include on your brand.com website so people book through it? How can you maximise the potential of online travel agents (OTAs)? With the distribution environment both highly complex and constantly evolving, this course will give you comprehensive foundation of current industry practices to help jump start your career in this fascinating domain. Acknowledgements: Claire Bertrand, Vincent Chatain, Jessica Moses, Benjamin Six (ESSEC Business School), Emilie Dupré (Image-In), Gregory Halidy (Triplay)

From the lesson

Direct distribution: the key to hotel success

Distributing directly, thus building an effective and efficient website, is an essential success factor. Through this module, you will have a deep understanding of the web development process but also understand the cost of driving traffic, and the importance of using indirect distribution and online marketing techniques.

Introduction to online marketing2:12

Organic search engine marketing4:48

Paid search engine marketing3:34

Email Marketing4:18

Display Advertising4:27

Affiliate marketing2:10

Social Media Marketing1:15

Meet the Instructors

Peter O'Connor
Professor of information systems, Director of the MBA in Hospitality Management
Information systems
Nicolas Graf
Professeur
Management

[MUSIC]

A third method of driving business to your website is using display advertising.

Almost since the beginnings of the World Wide Web, eye-catching banner adverts have

adorned webpages, exulting us to click on them to take advantage of their offers.

Currently, banner adverts are getting more and

more intrusive, taking up more space on webpages, incorporating animation and

video, or even taking over browser windows completely.

Since the beginning, debate has surrounded their effectiveness.

Detractors claim that few people even notice banner ads anymore, and

even fewer click on them.

While this is true to a certain extent, new techniques, in particular,

retargeting, have greatly increased the effectiveness of display advertising and

make it worth considering.

To place a display ad on a particular website,

you can either approach the owner of the site directly, or

make use of a network such as Double Click, part of Google.

The latter approach means that instead of having to identify sites for

your banners yourself, you give the agency guidelines and the type of

audience that you would like your adverts to reach, and leave the rest to them.

In either case, display adverts are generally monetized using

a pay per display, or rather a pay per 1000 displays model,

known as CPM, with M being the Roman numeral for 1,000.

Another acronym related to CPM is CTR, which stands for

click through rate, meaning the percentage of people who view a particular page

containing an advert that click on the ad.

As was mentioned above, click through rates have fallen drastically over

the past few years as people becomes more used to using the web and

more resistant to the charms of banner ads.

Click through rates at this stage are below 0.01%, meaning that

many thousands of adverts have to be served up to generate even a single sale.

This is obviously expensive.

How can you decrease this cost?

Obviously, you need to focus on the three elements discussed earlier,

increasing click through rate, increasing the conversion of visitors

once buyers come to your website, or by decreasing the CPM.

The latter simply may not be possible, as really the only way to do it

is place your banner ads on less popular sites, which although they charge less,

would obviously result in lower volumes and probably less qualified traffic.

Both of the other strategies, however, increasing click through rate and

increasing click conversion, depend largely on making either the advert or

the offer more attractive to the web surfer.

Filters can be used to specify criteria that limit the occasionss on which your

advert will be displayed, ensuring that only the surfers that you think will be

interested in your product get included in your cost per thousand impressions, and

thus increasing your click through rate.

So, for example, when placing a banner advert on a particular site,

you might specify that you only want the advert displayed to surfers

who look at pages related to travel to Paris, or

surfers who have already booked a flight to your city on that site.

Using relevant filters brings two benefits.

They reduce the overall cost of banner advertising campaigns,

since when used properly, it should reduce the number of times

that an advert is displayed, as well as increasing its effectiveness

as they increase relevance by only showing the ad to qualified surfers.

Retargeting goes even further by serving adverts on a third-party site

to someone who has previously visited your site featuring a product that the person

in question has already expressed interest in by looking at a particular page.

This means that they have at least some interest in the product in question, and

thus, using retargeting can greatly increase your click through rate,

hence its popularity today as an electronic marketing technique.

However, as discussed earlier, the biggest problem with the pay per display approach

is that you have no guarantee as to its effectiveness.

It can be displayed many thousands of times, thus generating a hefty bill for

you, but might not generate any sales on your site.

From the perspective of the advertiser,

something more performance-related would obviously be much more attractive.

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