Hilton Advance: Marketing Strategy and Fee Changes
Hilton launched a new digital marketing program, called Advance, on July 1st, 2019. This fast-moving initiative changed the current structure between Edge, Top-Up and Destination Marketing.
NB: This is an article from Cogwheel Marketing
It focuses on incremental revenue and share shift from OTAs. Also, decision making is shifting to focusing on the Life Time Value of customers.
Previous Hilton eCommerce Program
Previously, Hilton’s eCommerce division was segmented and invoiced via different strategies:
- Edge: This program combines online paid advertising and dedicated eCommerce expertise to effectively manage all aspects of the user’s online experience. This covers search engine optimization, local listings management and various paid campaigns run at the enterprise level. Examples are TripAdvisor Business Listings, Google Ads PPC and retargeting. Originally, you had a dedicated eCommerce manager to have calls with hotels and discuss strategy, but now it has more recently turned into a self help model. They introduced Content Gateway to allow hotels to be more self-sufficient in updating their website content. But, you have to know what you need and what to ask.
- Top-Up: This has been around a while is Hilton’s metasearch program. It allows hotels to layer and add their funds to Hilton funds to combat OTAs and drive more direct revenue to brand.com via metasearch. The layering of funds provided opportunities that could not be reached as a single hotel. Originally an opt-in program, it turned into an opt-out program. Under Advance, you are 100% in, no matter what.
- Destination Marketing: This was an opt-in co-op program for select destination markets. This leverages the bargaining power from participating hotels in the market to deliver larger campaigns. An example would be partnering with the local baseball or football teams, that a hotel would not be able to fund on its own. Currently, they are in 31 cities. Under Advance, you are 100% in, no matter what.
The new Advance program combines all 3 initiatives into 1 REQUIRED program.
Previously, the 3 programs were managed independently:
- Edge: 4.25% commission on consumed stay revenue from Demand Gen bookings. This means you only pay for associated campaigns, invoiced monthly.
- Top-Up: This fluctuated and was market specific, billed monthly.
- Destination: Per room fee model ranging from $24 to $120 per room per year, billed twice per year.
Hotels can expect a $2000 increase in fees each year
The new Advance program combines fees for all 3 initiatives plus other additions. The Advance program fee will be 1.35% of all digital direct bookings, not to exceed $30 per booking.Most hotels can expect an average of $2000 increase in fees per year. For a breakdown for your hotel or portfolio, email email@example.com and ask them for a breakdown.
There are contribution exclusions, like POG bookings and HHonors Redemptions. But, if your client prefers to enter the corporate ID into hilton.com instead of the POG, it is not excluded.
100% of Hotel Contributions will be invested in generating more direct bookings. Also, the brand will continue to provide significant funding to invest in Hilton Advance.
What do I get for the higher fees?
- Enterprise Advertising: Again, it is important to note these initiatives are enterprise level and will likely impact the hotel, but indirectly. Think about the new Anna Kendrick campaigns. Huge marketing push with great results, but didn’t help the individual Hampton Inn in the suburbs of Alabama. (Think it had something to do with pushing Hilton past Marriott as most valuable brand?) Expect this program to fund more consideration and intent campaigns via billboard, radio and TV like this.
- Paid Search: The current Hilton Paid Search Strategy focuses on 100% impression share for Branded terms and 60% impression share for Branded + GEO (example: “Hilton Hotels in Atlanta”). The new strategy will have a goal to increase Branded + GEO terms coverage to 90-95%.
- Reporting: Currently, the Lobby Reporting provides a few eCommerce reports: GOS Property Reports, Pulse Report (with Channel Mix) and MetaSearch Campaign Results. Hopefully, the new reports will provide more transparency for this addition of funds. Word on the street is Koddi is helping with this expansion, as they already do this for Marriott and IHG.
- Website: Hilton expects to improve the digital experience via Hilton.com and the Hilton app, which they are calling One Hero Web. For a sneak preview of the new designs, check out this hotel that has both websites live:
More on the new Hilton Website
The new one-page website for some brands is a completely new layout with content and SEO concerns, but that is a post for another day. It is expected that each hotel will have less and less control over the content and on-site search engine optimization.
Strategies will be tested, learned from then rolled out on a large scale or peeled back if unsuccessful. They have a goal of March 2020 to implement company-wide.
They are also rolling out dream category pages. Currently, when you go to hilton.com, you are first forced to put in a destination to start your journey. But, what if you don’t know where you want to go? This new experience will likely help the resorts and city center destinations, but not the outlying hotels.
Advance will still focus on these key digital channels:
- Paid and Natural Search
- Web and Mobile Banners
- Social Media Content
- Affiliate Sites
- Search Consolidators
- Hilton’s digital fees are increasing, and you have little control over participation. This new Advance program gives Hilton the opportunity to invest in new channels by removing constraints so they can move money as they see fit.
- Hotels will continue to pay for SEO (search engine optimization) and content services, but have little control or input as objectives move to enterprise level, not hotel level.
- ECG (ecommerce Consulting Group) will be available for additional revenue opportunities, reporting and questions.
- Hilton feels this will eliminate the need to do additional marketing at hotel level, but working on incremental campaign opportunity with Koddi. Also working on non-room revenue advertising opportunities.
- Moving away from hotel or management company level decision making on a regular basis.