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At the HSMAI Hotel Commercial Strategy Conference, a panel discussion titled “Revolutionizing Profitability, Rethinking the ROAS Mindset” brought together industry experts to discuss the evolving metrics and strategies for digital marketing in hospitality. Moderated by Nancy Johns, SVP of Integrated Marketing and Digital Solutions, the panel featured insights from Dan Fernandez, VP of Digital Marketing & Strategy at Concord Hospitality; Noreen Henry, Chief Revenue Officer at Sojern; Rory Peska, VP of Ecommerce at Aimbridge Hospitality; and Joe Spirito, VP of Demand Generation Advisors at Amadeus.

Moving Beyond ROAS: A New Perspective

Dan Fernandez kicked off the discussion by addressing the limitations of Return on Ad Spend (ROAS) as a primary KPI in digital marketing. He highlighted that unlike other top-line disciplines, digital marketing is overly reliant on ROAS, which can lead to a disconnect with other departments. Fernandez pointed out that the KPIs used in digital marketing often don’t translate well across different disciplines, causing communication barriers and hindering collaborative efforts. He argued that it’s crucial for digital marketers to understand and leverage a broader set of KPIs that resonate with the entire organization, promoting a more unified approach to performance measurement.

Fernandez emphasized the philosophical nature of many digital marketing KPIs, such as awareness and inspiration, which can be challenging to quantify in concrete terms. This often leads to less collaborative discussions in meetings where other departments focus on more tangible metrics. By expanding the scope of KPIs beyond ROAS, digital marketers can better align their strategies with overall business goals and foster more effective interdepartmental collaboration.

The Power of the Loyalty Loop

Noreen Henry from Sojern urged attendees to look beyond ROAS and consider the broader impact of their marketing efforts. She introduced the concept of the “loyalty loop,” which focuses on engaging customers throughout their journey, not just at the point of conversion. Henry explained that effective marketing should extend beyond driving initial bookings to enhancing the guest experience, encouraging repeat business, and turning customers into brand advocates.

Henry stressed the importance of metrics that capture the full customer journey, such as customer engagement, share of wallet, and brand advocacy. By focusing on these broader metrics, marketers can unlock the true potential of their efforts and drive long-term profitability. She encouraged a shift in mindset from short-term conversion goals to long-term customer value, highlighting the importance of nurturing relationships and creating memorable experiences.

Addressing Attribution Challenges

Rory Peska from Aimbridge Hospitality discussed the challenges of attribution in digital marketing, particularly as the industry moves towards a cookie-less world. He pointed out that ROAS often fails to capture the full impact of marketing activities due to its narrow focus. For instance, ads may contribute to bookings made through other channels or influence group bookings and ancillary revenue, but these contributions are not reflected in ROAS.

Peska emphasized the need for more holistic measurement approaches that account for the complexities of the customer journey. He highlighted the limitations of current tracking technologies and the importance of developing new methods to better understand and attribute the impact of marketing efforts. Peska advocated for looking at overall occupancy and revenue performance, rather than relying solely on ROAS, to get a more accurate picture of marketing effectiveness.

Holistic Metrics for True Impact

Joe Spirito from Amadeus underscored the importance of profitability as the ultimate measure of marketing success. He recommended focusing on metrics that directly impact the bottom line, such as customer acquisition cost (CAC), revenue per occupied room (RevPOR), and customer lifetime value (CLV). Spirito argued that these financial metrics provide a clearer understanding of the true impact of marketing efforts on profitability.

Spirito explained that while traditional metrics like ROAS can provide valuable insights, they often fail to capture the broader contributions of marketing activities. By incorporating financial metrics into performance evaluations, marketers can better demonstrate the value of their efforts and secure greater support from stakeholders. Spirito’s approach aligns marketing goals with overall business objectives, fostering a more integrated and strategic approach to profitability.

The Importance of Goal Alignment

The panelists collectively emphasized the need for goal alignment across all departments to achieve a cohesive commercial strategy. Fernandez highlighted the importance of understanding and aligning with the goals of other top-line disciplines and ownership groups. By speaking a common language and focusing on shared objectives, marketers can ensure that their strategies support the broader business goals.

Henry added that achieving goal alignment requires clear communication and collaboration among all team members. She stressed the importance of setting unified KPIs that reflect the overall success of the organization, rather than individual departmental achievements. This approach fosters a culture of mutual support and shared responsibility, enhancing overall performance.

Fostering a Collaborative Culture

Peska discussed the role of collaboration in optimizing digital marketing strategies. He emphasized the importance of having open conversations about marketing activities and their impact on overall performance. By ensuring that all team members understand the rationale behind marketing decisions, organizations can create a more cohesive and effective strategy.

Spirito highlighted the value of continuous learning and adaptation in response to changing market conditions. He advocated for a culture of experimentation and innovation, where teams are encouraged to test new ideas and approaches. This agile mindset enables organizations to stay ahead of industry trends and drive sustained profitability.

Lightning Round: Key Reports and Metrics

In a lightning round, the panelists shared their most important reports and metrics for assessing overall profitability. Fernandez emphasized the value of the P&L statement and Demand 360 channel data for understanding performance against competitors. Henry suggested looking at internal financial reports, customer acquisition costs, and lifetime value metrics to gain deeper insights into profitability.

Peska and Spirito echoed these sentiments, highlighting the importance of comprehensive reporting that includes both financial metrics and customer engagement data. They stressed the need for a balanced approach that incorporates multiple perspectives to get a holistic view of marketing effectiveness.

Evolving the ROAS Conversation

The panelists reiterated the need to move beyond the narrow focus on ROAS and adopt a more comprehensive approach to measuring marketing success. They emphasized the importance of aligning marketing strategies with overall business goals and fostering a culture of collaboration and continuous improvement. By focusing on profitability and long-term customer value, marketers can drive sustained success and demonstrate the true impact of their efforts.

This insightful panel discussion provided valuable perspectives on the future of digital marketing in hospitality, encouraging attendees to rethink traditional metrics and embrace more holistic and strategic approaches to profitability. As the industry continues to evolve, these insights will be crucial for navigating the complexities of digital marketing and achieving long-term success.

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