Evolving Past ROAS as the Primary Marketing KPI

Stephanie Smith, CEO and Digital Matriarch, Cogwheel Marketing & Analytics, HSMAI Marketing Advisory Board Member

Traditionally, Return On Ad Spend (ROAS) has dominated as the primary metric for evaluating the success of marketing initiatives. As we evolve past ROAS, I wanted to get the take from my fellow experts on the HSMAI Marketing Advisory Board. We had an engaging discussion around other KPI’s that our organizations lean into to show value in our digital marketing initiatives. Read on for some key takeaways and ideas to get started.

Beyond ROAS: Index Based KPIs

There is a growing recognition of the limitations of ROAS as a solitary measure of success. This metric, while valuable, often falls short of capturing the full impact of marketing initiatives on a property’s revenue and customer engagement.

The conversation highlights a shift towards index-based KPIs, such as Brand.com Occupancy Index in regards to Channel Mix which offers a broader view of a hotel’s performance relative to its competitors and the market at large. One of my fellow members shared, “It’s incredibly complicated now with all these touch points…educating on the various customer journeys and putting the customer at the center of it.”

Ideas for Measurements:               

1. Media mix modeling – a statistical technique used to analyze historical data and quantify the effectiveness of various marketing channels on sales or desired outcomes, enabling optimized advertising spend for maximum investments.
2. Frequency – Related to social media; also the other metric for social is saves.
3. Adding RPI impact on paid media reporting – offers a big picture perspective next to room nights, revenue production, and conversion.
4. Lifetime Value – total revenue a hotel can reasonably expect from a single guest throughout their relationship with the brand.

Revenue Marketing vs. Marketing Verbiage

One insight that was clear is the necessity for marketing and revenue management to speak a similar language. This alignment ensures that marketing efforts are not only measured accurately but also resonate with the broader strategic objectives of the property. One AB member noted, “Marketers talk about channel mix and revenue manager talks about segmentation mix. The other verbiage to be clarified is booking window and planning window. Each discipline needs to educate the other regarding the perspective and the impact.

Questions for Your Team

1. What metrics, other than ROAS, do you talk about with your owners?
2. How do you educate on the entire customer journey?
3. How do you get buy-in for top of funnel/low ROAS channels?
4. What KPIs do you focus on for social media?

Originally published by HSMAI On April 11, 2024