150 - The brand that spend $5B to stay #1

The real cost of being a big brand. Precision marketing the holy grail. Making blue collar work great again. More ads on streams. Focusing your hotels campaigns.

Hello,

Spring was here this week. I had forgotten what it meant to be outside in a t-shirt and still feel warm. I guess that’s the great thing with winter, we enjoy spring and summer more. Now to the newsletter.

Best, Martin

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Is precision marketing the goal?

AI is making it possible to apparently show the right hotel to the right person, a lot of marketers and revenue managers seem to see this as the holy grail. I’m not sure it is. I think there’s a mix-up between sales and marketing. Marketing shouldn’t loose sight of making good, relevant and repetitive messaging that drives home a position and a clear interest in a brand of product. I’m not sure hyper personalization will improve revenue.

PRECISION MARKETING

About me: I'm a fractional CMO for large travel technology companies helping turn them into industry leaders. I'm also the co-founder of 10minutes.news a hotel news media that is unsensational, factual and keeps hoteliers updated on the industry.  

Boring AI is good

A push into AI-driven asset setup tackles one of the least glamorous but most painful parts of hotel operations: manual data entry. This is a good reminder that AI’s biggest wins may not be guest-facing hyper personalization, but unglamorous back of house data entry.

AI WORKFLOWS + AGENTIC CHECKINS⁺ + PMS AUTOMATIONS⁺

The Talent Gap in Aviation

Operational roles are becoming harder to fill across industries. McKinsey’s angle suggests strategy and innovation can close the gap. Hospitality is facing similar pressures, just less visibly. I think we need to celebrate people who can do things more. Those roles are going to be needed for a while still. And people who are willing and able to do physical work should be looked up to. If you have any doubts, try asking your teenage kid to take out the trash.

AVIATION TALENT

P&G brings media in-house

P&G’s move to internalize media planning seems to be a trend. I think this will be assisted or managed by AI for all the regular stuff. Then acute needs can be managed by hand - such as a Nutella pot flying through a space capsule. However this is a big shift for the big ad agencies. But as there is a constant need (see column below) an internal team seems to make sense.

MEDIA STRATEGY

Brands are built holistically

Orlando Wood’s argument that brands must be understood as coherent wholes makes sense. It isn’t consistency for the sake of consistency. He states Red Bull as a classic example. But this is super complex problem in hospitality. Buildings are inconsistent. Time wears them down. Maybe that’s why hotel brands are turning to their rewards programs as the main brand.

BRAND BUILDING

Streamers Push for more Ads

Netflix’s pricing strategy signals a clear direction: ad-supported models are becoming central, not secondary. Amazon has shown how much money can be made from ads (they make most of their profit from ads now, even more than AWS). But wasn’t this the very thing that Netflix tried to fix? Travel industry has it’s share of this. And when hotels will be selling ads on your in-room TV, let’s hope they don’t wake you up at night to show you an ad.

STREAMING ADS

Focus beats broad

Trying to attract everyone often results in attracting no one. Independent hotels that define a clear audience can sharpen their positioning and messaging significantly. Clarity creates stronger demand than compromise. It’s simple, but in the hotel industry we still love to make “everyone hotels”. Outside of the ultra-luxury brands there are a few like Zoku, citizenM, who built hotels around clear audiences. I remember teaching a class on hotel marketing and telling hoteliers to figure out how they will be the best hotel in ______ and sticking to that.

TARGET AUDIENCE + HOW TO FIND HOTEL USP

The Rise of trust over price

Apparently, 83% of travelers prioritize trust over price, that’s a major shift in value perception. I don’t have the data how this was calculated. If you ask people “do your prefer trust over price” I think they’ll answer trust 8 times out of 10. Also what is trust when you’re booking a hotel? The reviews? ratings? Photos? - interesting still.

TRUST ECONOMY

Still asking who owns the Guest?

The obsession with ownership of the guest is funny in the hotel industry. In the end the guest comes to your building, stays in a physical room you provided, in a bed you prepared. Of course the hotel owns the relationship. The others are merely routing. But do try to make sure you can reach out to them again later.

GUEST RELATIONSHIP

AI Is Driving OTA Growth

Algorithms increasingly direct users toward OTA platforms. This was predictable. They have standardized inventory. Anyone building a global system wants a single pipe for all the data. I just can’t imagine a scenario where having hundreds of different data feeds will be a better option for AI platforms. Hotels should focus on the long-tail searches. “Hotel within 20 minute walk from Microsoft offices in London”, there’s a lot more to be done here.

OTA AI IMPACT

Opinion

There is no such thing as “Done” in Branding

Let’s talk about a company that has been around for over a century. They are, by almost every metric, the most recognizable brand on the planet. Every country knows them. Every demographic uses them. They are the undisputed leader of their industry.

Last year, they spent $5 billion on advertising and brand building. More than almost any other company in the world.

If you’re already Number One. If the entire world already knows your name. Why on earth are you still one of the top three spenders in global advertising?

The answer is uncomfortable for most founders and startup CEOs. Building a brand isn’t a project you finish, it is something you do to stay relevant - all the time.

Here’s the typical Founder scenario. A company builds a fantastic piece of software or a revolutionary physical product, and they funnel every single cent into R&D. They believe that if the product is good enough, the world will beat a path to their door.

They’re wrong.

The company I mentioned above is Coca-Cola. And here is the “brutal” reality: for decades, in blind taste tests, customers ranked their product second best. Yet, they remained the global leader. Why? Because while a good product gets you in the door, the brand wins the championship.

Coca-Cola doesn’t sell brown carbonated water; they sell “happiness,” “refreshment,” and “legacy.” That costs $5 billion a year to maintain.

But, investing in a brand is painful. It’s brutal on the balance sheet because, unlike a direct performance campaign, you don’t see that money come back next month. You see it 10 years from now when a customer chooses you instinctively over a cheaper, “better” competitor.

The truth is if you aren’t comfortable with the relentless, expensive, and long-term cost of brand building, you should probably aim lower. The majority of founders, CEOs and CFOs are not comfortable with it. The few who are? They’re the ones who are successful. And as we know, the majority of startups fail - and this is key reason why it is rarely the product (well unless the product is a scam).

There are no shortcuts here. The brands that survive are the ones that never stop reminding their target audience that they exist.

If you are building a company and you want success:

1. Invest heavily in your brand and accept that it is the rent you pay for mindshare.

2. Accept obscurity.

There is no “Option 3” where your product is so good that marketing becomes unnecessary. Even the king of the mountain is still spending $5 billion a year just to keep the crown polished.

If you want to see success, stop treating your brand like an after-thought and start treating it like your most expensive, and most valuable, asset. At the end of the day, people can copy your features. They can’t copy your brand position.

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• What is a Brand: Stephen King - Link

• The inspiration Benchmark for hospitality - Link⁺

• Brands investing in Space - Link

• Becoming a hotel trendsetter- Link

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Did you know: The word "marketing" comes from the noun “market,” which traces back to the Latin word “mercatus” meaning “a trade” or “place of trade.” The addition of “-ing” creates a word for the activity of going to market or buying and selling goods. Over time, the meaning expanded from the act of selling in markets to the complex modern system of promoting and selling products or services. Defined using Lomar Dictionary⁺

⁺ Note, articles that are published by companies or people I work with are tagged with the ⁺ symbol or Partner word. I’m adding this as a transparency. Previously I avoiding sharing content from partners to remain objective, but sometimes they have excellent articles that deserves being shared so to remain transparent, I’ll tag them.