Brand building: Digital vs Direct

The digital versus traditional marketing debate is not new but it is likely to be settled before long if trends in a number of industries are any indication. A recurring (and inspiring) theme at the recently concluded World Retail Congress in Berlin was the revival in traditional marketing. Advertising giant WPP's boss Martin Sorrell took to the floor noting that "that companies are now looking at investing in growth strategies again and at building their brands through marketing" and then went to definitively proclaim that the "increase in investment in traditional marketing rather than digital is (seen as)  better for building brands. There's a view that online is more about price promotion, traditional more about brand-building. It may be one of the reasons why traditional has come back a bit."

WPP's Sir Martin could have a point based on a Harris interactive poll of nearly a year ago which found that only one percent of American consumers reported paying attention to internet banner ads while television ads (considered traditional) led the responses with 37 percent. Newspaper ads came in second, with 17 percent of consumers saying they are helpful. Internet search engine ads placed third with 14 percent.

While a revival in traditional ad spending is welcome, it need not and cannot be at the expense of digital. At first glance digital media's impact on brands appears to still be on the margins per a couple of surveys. One was from a year ago by WorkPlace Media  which found social media to have limited to no effect on branding. A more recent report  from the Internet Advertising Bureau seemed to underscore that irrelevance by noting that  7.7 per cent of people in its survey had complained about a company on a social network or forum but fewer than 40 per cent had received a prompt response. Nevertheless, there are several major brands that have put in place a mechanism to respond quickly to potentially brand damaging customer complaints that could spread virally via social media. That was the case with Delta airlines as this report in the Wall Street Journal points out. In a similar vein hotel giant Hyatt guarantees answers within 24 hours to questions that are posted on its Gold Passport Loyalty program's Facebook page.

The foregoing would suggest that digital not print or traditional is indicative of trends and, therefore, the focus of ad dollars. Hotels have been among the first movers to establish brand identity on the internet with most majors having identical ad messages in all media otherwise known as channel convergence. And digital is where hotel dollars are being spent. In fact, a 2007 survey by Hospitality eBusiness revealed a remarkable 68% of hoteliers expected to shift their budgets from offline to online marketing activities, With nearly 50% of all hotel bookings expected to flow from the internet that impetus is all but de-rigueur.  Based on anecdotal accounts that predicted move to digital is now reality for most if not all major hotel chains.

A particularly appealing aspect of the future (and indeed the present) of digtial branding is the opportunity to spread a positive image virally and much of it for nearly nothing. An instance of the latter can be found in the growth of auction pricing sites such as Off and Away whereby a "lucky" winner gets to stay in some iconic hotels like the Taj Pierre in New York. 

While the winner of the auction gets to pay a fraction of the actual cost (a $40,000.00 suite at the Pierre recently went for under $1000.00) numerous other unsuccessful bidders had "credits" from their failed attempt to bid on the suite which they then have no choice but to use on one of several hotels in cities offered by the site. The "featured" hotel company's brand meanwhile gets plenty of online exposure and potentially even some business from those seeking to use their credits. Naybe there is such a thing as a free lunch after all; something brands are unlikely to find in the so-called traditional platforms.

 

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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