Media Bytes
June 4, 2009
Big Time For Smaller Advertisers
By David Sklaver
Appeared in Hotels Magazine on June 4, 2009
Few commodities are more perishable than a hotel room: It's gone forever in a day. So hotel companies routinely scour their bookings for looming vacancy periods and then create promotional deals for those times to try to fill the gaps.
For years, mid-sized hotels and resorts-the majority of advertisers, with budgets under $20 million-have had to tout those deals in whatever media was available, not what would be most effective. The reason: They were priced out of big media.
Today, the media environment dovetails neatly with the natural "deal" orientation of mid-sized hotels and resorts. Now, that campaign featuring a special rate aimed at filling up empty weeks in July can be run in places and at times that were once prohibitive.
The fact is, prices are falling faster, and lower, than at any time in media history. Some areas of TV are putting wee-hours advertisers on primetime because they're the only cash at hand. Some areas of magazines are doing deals at well under 50% of rate card. And even local search-the bid-driven sanctuary of Internet advertising-is experiencing a slide.
What's more, cutbacks at the biggest advertisers have led to mass pullouts in TV, especially. Because of the nature of TV contracts-big advertisers make upfront commitments each spring for the coming season, which are cancelable only with penalty-pullouts mean less money in pocket. So there's less competitive clutter across media, because the biggest brands have to cut print, online and outdoor budgets to meet their TV obligations.
That's an unprecedented opportunity for the majority of advertisers which have not been able to get priority treatment in major media-particularly TV, which is only getting more important in the hard-sell recessionary environment as a way to fill up rooms fast. Typically, mid-sized chains have had to scrap for the spoils in the so-called scatter marketplace for local TV spots and national openings that weren't committed to Fortune 500 companies like Hilton and Marriott in the upfront.
To seize the opportunity, smaller advertisers have to turn the rules around; the classic rules of marketing and media were written by, and for, the largest brands.
o Zero in on your best customers. Mid-sized hotels and resorts can't afford to settle for demographic targeting, which is, at best, an approximation of their customer base. Merging customer and media databases let you find your best customers in the media they connect with on a daily basis, dramatically increasing your chances of driving bookings and eliminating waste. Mandalay Bay did this in a promotion that also factored in airline capacity and ticket prices from feeder markets -- so, not only who would respond, but could they get there? They hit 96% capacity before the midpoint of the campaign.
o Choose flexibility over the illusion of "clout." It's not how much aggregate money you bring to the marketplace that will determine your treatment, it's how you wield cash in hand when opportunities open up and bigger hotel companies don't have the money to block you out. Nimble beats fixed in this economy, for many reasons-not the least of which is maintaining adequate presence in the growing arena of new media options.
o Add a direct response mechanism to TV advertising. You'll provide the push that activates selling, and you'll get better rates; direct response time is generally sold for a significantly lower price than "brand" time because it is "pre-emptible." Therefore, a hybrid buying strategy of direct response and fixed position media can provide impact, purchase incentive and significant cost savings.
o Create roadblocks the competition needs to maneuver around. For example, you might be in a position to co-create a show with a cable network. Or, you could create an annual promotion, or an interstitial corresponding with your hotel. The point is that middle-market advertisers of all kinds need to do something special to create media showcases they can "own." Media outlets are more open to these types of offerings now.
Independent, mid-sized marketers are inherently in a better position to do these things because they won't comprise a large percentage of any medium's revenues. A network, station, magazine, or website can't afford to risk being pressured into replicating a special deal across other holdings of a big retail conglomerate.
Bottom-line: This economy creates an unprecedented opportunity in size. Mid-sized, that is. With the right approach, mid-sized marketers can gain significant ground.
David Sklaver (dsklaver@kslmedia.com) is president of KSL Media, one of the largest independent media agencies in the U.S., with clients including Curacao, Guitar Center, and Grey Goose Vodka.