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Copperhead

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Ran across this article today from a marketing company. The article explains how TA calculates the value of your business listing and how YOU should calculate the value.

For all you guys in the know, can't wait to hear you all chime in!
 
Interesting.
However that calculation assumes that the rooms would otherwise be sitting empty and you're waiting for TA to fill them. As I've said before, I did the calculations to compare TA against adw ords and goo gle came out much cheaper per click. As awd ords is always telling me I can increase my click thru rate by increasing my daily budget it makes more sense to spend the money with goog le than with ta.
You might think maybe the ta clicks are better quality, but even when I took the bounce rate out of the calculations goog le still came out cheaper.
 
A fundamental problem with these analyses is the underlying question of what is an acceptable "ROI" on your advertising/marketing spend. The article says "We believe 200 – 300% ROI is very reasonable to expect. This is doubling or tripling the money you invested with bookings." But their figure is ridiculous! Most guidance I've seen for small businesses (in general, not necessarily hospitality specific) suggests that businesses (that are going concerns, not start-ups) should budget between 5 to 10% of expected revenue towards marketing -- this implies you should be looking for an "ROI" of 10X to 20X on your ad spend, not 3X!
Another way to think about this is to figure out what the "effective commission" rate is that you would be paying. If your ROI is only 2X to 3X on your TA business listing, then you are paying TA an "effective commission" rate of 33% to 50%! In those terms, B.C at 15% commission is a much better deal! (That's a 6.7X ROI).
Remember that you have a lot of other costs beyond just your advertising -- you need to make sure that the business you are bringing in is helping to pay all of those costs, not just covering your ad spend...
The other problem with these analyses is one that HJ has pointed out -- the assumption that the rooms would remain vacant if it weren't for TA (or whatever other ad medium you are considering). So when considering investing in a "new" ad spend in addition to your existing marketing, one has to look at how will the new ad fill in your existing vacancies (slow periods, shoulder seasons, etc...) -- getting bookings from the new ad for the times that you would already be full don't count! If it is a renewal, you have to give consideration to how your other marketing would fill in any gaps left by dropping TA (or any of your other advertisments).
In case you can't tell, I am generally pretty skeptical of the claims about ROI that I can expect made by places that are vying for a piece of my limited marketing dollars...
 
We don't do online reservations so I can't tell how many sales our TA listing earns for us, I can only look at referrals from their website to ours. In terms of the cost per referral it is not the best or the worse of the money we spend in that manner. I like having the listing for the convenience of our guests as long as their rate is affordable, but I really believe guests book because we try hard to please and get good reviews from guests on TA.
 
Harborfields said:
A fundamental problem with these analyses is the underlying question of what is an acceptable "ROI" on your advertising/marketing spend. The article says "We believe 200 – 300% ROI is very reasonable to expect. This is doubling or tripling the money you invested with bookings." But their figure is ridiculous! Most guidance I've seen for small businesses (in general, not necessarily hospitality specific) suggests that businesses (that are going concerns, not start-ups) should budget between 5 to 10% of expected revenue towards marketing -- this implies you should be looking for an "ROI" of 10X to 20X on your ad spend, not 3X!
Another way to think about this is to figure out what the "effective commission" rate is that you would be paying. If your ROI is only 2X to 3X on your TA business listing, then you are paying TA an "effective commission" rate of 33% to 50%! In those terms, B.C at 15% commission is a much better deal! (That's a 6.7X ROI).
Remember that you have a lot of other costs beyond just your advertising -- you need to make sure that the business you are bringing in is helping to pay all of those costs, not just covering your ad spend...
The other problem with these analyses is one that HJ has pointed out -- the assumption that the rooms would remain vacant if it weren't for TA (or whatever other ad medium you are considering). So when considering investing in a "new" ad spend in addition to your existing marketing, one has to look at how will the new ad fill in your existing vacancies (slow periods, shoulder seasons, etc...) -- getting bookings from the new ad for the times that you would already be full don't count! If it is a renewal, you have to give consideration to how your other marketing would fill in any gaps left by dropping TA (or any of your other advertisments).
In case you can't tell, I am generally pretty skeptical of the claims about ROI that I can expect made by places that are vying for a piece of my limited marketing dollars....
Click to expand...
We get a 10x on bb.com. My local CVB? I'm not sure we make the money back at all. It used to work very well, but it's rare to have someone say that's where they found us these days.
 
Being new owners of this B&B, we went ahead and renewed all of our advertising subscriptions. Three days after a guest checks out they receive a thank you email with a link to a survey. We also ask them to complete it as they are leaving. One of the big questions is "How did you hear about us?" We are keeping up with these to see how we are going to spend our marketing budget money next year.
I can see now that we will be cutting many things. The TA business listing will most likely be one of them. I'm going to use the Special Deal thing with them to see if we get business over the slow season, but as of right now, it is not worth it. So far, only 6.45% of respondents used TripAdvisor.
Almost 20% were Google Searches and nearly 50% were return guests. Unless something changes in the next few months, these are where we will focus our marketing on next year.
 
Harborfields said:
A fundamental problem with these analyses is the underlying question of what is an acceptable "ROI" on your advertising/marketing spend. The article says "We believe 200 – 300% ROI is very reasonable to expect. This is doubling or tripling the money you invested with bookings." But their figure is ridiculous! Most guidance I've seen for small businesses (in general, not necessarily hospitality specific) suggests that businesses (that are going concerns, not start-ups) should budget between 5 to 10% of expected revenue towards marketing -- this implies you should be looking for an "ROI" of 10X to 20X on your ad spend, not 3X!
Another way to think about this is to figure out what the "effective commission" rate is that you would be paying. If your ROI is only 2X to 3X on your TA business listing, then you are paying TA an "effective commission" rate of 33% to 50%! In those terms, B.C at 15% commission is a much better deal! (That's a 6.7X ROI).
Remember that you have a lot of other costs beyond just your advertising -- you need to make sure that the business you are bringing in is helping to pay all of those costs, not just covering your ad spend...
The other problem with these analyses is one that HJ has pointed out -- the assumption that the rooms would remain vacant if it weren't for TA (or whatever other ad medium you are considering). So when considering investing in a "new" ad spend in addition to your existing marketing, one has to look at how will the new ad fill in your existing vacancies (slow periods, shoulder seasons, etc...) -- getting bookings from the new ad for the times that you would already be full don't count! If it is a renewal, you have to give consideration to how your other marketing would fill in any gaps left by dropping TA (or any of your other advertisments).
In case you can't tell, I am generally pretty skeptical of the claims about ROI that I can expect made by places that are vying for a piece of my limited marketing dollars....
Click to expand...
Just back from a trip during which we have allowed our business listing to expire. It was really helpful and appreciated seeing some numbers that help me talk with TA with more education. When they call I have been unable to express myself effectively. This should help. Thanks
 
ChrisandShelley said:
Being new owners of this B&B, we went ahead and renewed all of our advertising subscriptions. Three days after a guest checks out they receive a thank you email with a link to a survey. We also ask them to complete it as they are leaving. One of the big questions is "How did you hear about us?" We are keeping up with these to see how we are going to spend our marketing budget money next year.
I can see now that we will be cutting many things. The TA business listing will most likely be one of them. I'm going to use the Special Deal thing with them to see if we get business over the slow season, but as of right now, it is not worth it. So far, only 6.45% of respondents used TripAdvisor.
Almost 20% were Google Searches and nearly 50% were return guests. Unless something changes in the next few months, these are where we will focus our marketing on next year..
Click to expand...
I have went as far as offering 40% off on my TA promotion just to see if ANYONE would bite... Crickets. As a matter of fact, I just looked at my analytics...The last 12 months they sent 141 new users to my website!!! I'm cancelling today. My traffic from BNB is more than 3x that.
 

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