Hostelworld aims for ‘Holy Grail’ marketing strategy after return on investment doubts

Hostelworld aims for ‘Holy Grail’ marketing strategy after return on investment doubts

Specialist OTA Hostelworld is taking a new approach to marketing to focus on customer life time value and to dial down reliance on third party cookie-based advertising and celebrity endorsement.

Speak at last week’s Travel Weekly Future of Travel Spring Forum, Gary Morrison, chief executive of the Dublin-based firm, said the COVID-19 downturn was a chance to focus on return on investment.

He said the challenge the brand had faced was to ascertain incrementality from marketing based on third-party cookies or from YouTube celebrity endorsement videos.

This was partly because Hostelworld was using multiple systems which made it more challenging to analyse data.

One of the main projects Hostelworld has undertaken during lockdown when bookings were supressed was to consolidate its website tracking, measurement attribution under the Google suite.

Morrison said in normal times migrating such systems would be highly risky but COVID presented it with an opportunity to bring tech updates slated for 2021 into 2020.

He said with the old metrics of app downloads, celebrity endorsement and on-page advertising there were doubts about their true value.

“When we looked at celebrity endorsement and when those things were on air we did not create any incrementality at all.

“There were tens if millions of views on YouTube, people love celebrities, but was not doing anything for us at all.

“By looking at the existing customer we have…it become apparent that if we can target customers based on lifetime value versus customer acquisition that would be a differentiated strategy.

“That takes you to what kind of data do you need to do that. Well, you need your own data, you need to be able to analyse your own data like booking patterns and source destination pairs.

“There are probably about 30 different variables, all of our own data, to evaluate that lifetime value.”

Morrison said due to the current depressed level of demand and the fact that any demand is domestic focussed, the data is not representative of Hostelworld pre-pandemic.

“I need demand to come back to train up the models on something that’s representative of the future rather than what we are seeing right now,” he said.

Morrison said for all travel firms the ‘holy grail’ of marketing is to be able to measure whether it is good value, something he said it tough to  achieve at scale.

“The Holy Grail is being able to look at a particular part of your portfolio…and to ascertain what the lifetime value is of the customers you recruit from that particular big unit.

“Then you can contrast that with your customer acquisition costs and say does that represent good return on investment for me?

“That sounds very simply to say, but actually to execute it at scale is tough. If you can make those prediction models work at a particularly granular level then you can operationalise that.

“You need to have data models, measurement, and tracking all set up in once place so that means you can build your machine learning on the side to do the heavy lifting for you.”

The other area Hostelworld opted to focus on was replacement of its 20-year-old payments systems to integrate with fellow Dublin firm stripe.

This website uses cookies to ensure you get the best experience. Learn more