Every year we see more tourism, destination and hospitality clients shifting budget dollars toward their interactive programs. We have some clients that spend as little as 5 percent of their total marketing budgets for online initiatives -- and others spend as much as 40 percent.

But in all cases, when clients see results and realize they can measure ROI, they always allocate more to their interactive budgets the next year. The significant shift I see from traditional to online marketing comes when a travel organization really tracks and measures results and compares the two mediums.

For some actual figures on these shifting budgets, travel marketing professionals should check out a recent joint study by NYU and PhoCusWright, "Online Marketing Strategies in the Travel Industry: A Survey of Travel Marketers."¹ The survey respondents were made up of destinations, hotels, tour operators and other travel industry organizations. Hospitality made up 45 percent of the respondents, while destinations accounted for 20 percent.

The report underscores what we have known at USDM.net for years -- a strong Internet marketing strategy delivers results every time. One of the strongly recommended tactics we use, permission-based marketing, has helped USDM.net build a double opt-in traveler database of 120 million Internet users. This is just one of our primary assets in marketing for our clients; we use a total of about 65 different best practices programs wrapped around strategy.

Some key points from the report:

1. The number of marketers who plan on spending 20 percent or more of their marketing budget online this year has doubled.

2. In comparison to 2004, 74 percent of respondents are spending more on Web site design and functionality; 73 percent are increasing spending on e-mail marketing; and 64 percent are spending more on search engine optimization (SEO).

3. Over two-thirds indicated that SEO and e-mail marketing are the most effective online marketing media, and one out of two marketers specified Web site design and functionality as the most successful initiative.

4. When asked to choose the top three trends that will have the most significant impact on future online marketing strategies, respondents overwhelmingly chose the same three: Permission-based e-mail marketing, metasearch, and viral marketing. Powerful Internet marketing strategy when used correctly was chosen as the number one trend.
   

Travel consumers are bombarded with Internet marketing, usually following their first click of the day. Travel suppliers have become savvy as to what online marketing initiatives actually lead to a purchase. The results from PhoCusWright and NYU show there is a significant shift in marketing expenditures under way -- from traditional marketing channels to online strategies and tactics.

The study also confirms that online marketing trends are moving away from banner ads and pop-ups and toward more sophisticated, effective, and measurable methods -- such as Web site design, functionality, search engine optimization and e-mail marketing. The results indicate that the challenge for travel suppliers' online marketing programs is to get in front of the right customer, at the right time, to acquire new customers -- even more than retaining existing ones.

I'm convinced that permission-based e-mail marketing remains the method that will have the most significant impact on future online marketing strategies. And search engines, e-mail marketing, and effective affiliate programs will remain key methods for gaining new customers and extending the reach of any brand online.

I would like to hear your comments on the shift of budget from traditional to online.

Leah

¹ Online Marketing Strategies in the Travel Industry: A Survey of Travel Marketers by New York University And PhoCusWright Inc. Joint Research - 2005

Posted at 11:31 AM