Hotel Marketing Decoded: What Every Owner Needs to Know | Anthony Chiaravallo E42

Is your marketing helping your hotel or just draining your budget?

In this episode, we sit down with Anthony Chiaravallo, founder of Vallo Media, who has managed over $100M in ad spend for brands like Nike, Resorts World, and boutique hotels across the country. Whether you're trying to fill beds or scale a brand, Anthony breaks down how to think about hotel marketing in a way that actually drives bookings.

You’ll learn:

• How to build a full-funnel strategy that drives real bookings
• What makes a great marketing agency vs a waste of money
• How to know if your hotel is ready for paid ads
• The minimum spend and timeline you need to see real results
• The path to 3x Return On Ad Spend 

If you’ve ever felt overwhelmed by digital marketing, this episode simplifies what matters.

Review and share the Hotel Investor Playbook so more people can learn how to invest in hospitality assets the right way.

About Anthony:

Anthony Chiaravallo is the founder and CEO of Vallo Media, a performance marketing agency that has overseen more than $100 million in paid media spend for clients ranging from Fortune 500 brands to hospitality startups. With over 16 years of experience in integrated media, Anthony specializes in data-driven strategies across paid social, search, programmatic, and influencer marketing. He’s a member of the Forbes Agency Council and a recognized thought leader featured in outlets like Forbes, USA Today, and The Wall Street Journal. His work focuses on helping brands scale revenue through measurable, omnichannel marketing.

Connect with Anthony:

LinkedIn: https://www.linkedin.com/in/anthonychiaravallo/

Website: https://www.vallomedia.com/

Connect with Michael on Instagram or LinkedIn.

Email Us at info@hotelinvestorplaybook.com

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Transcript

Michael Russell 0:00

Is your hotel marketing actually working? Or are you just lighting money on fire? Most owners don't know how to answer that. And that's a problem. In this episode, we sit down with Anthony Ciarvallo, founder of Valo Media. He's managed over $100 million in ad spend for brands like Nike, Resorts World, and boutique hotels across the country. We get into when to invest in paid ads, how to track actual ROI, and what makes a good marketing agency worth the spend. You also hear why so many owners waste money on marketing that doesn't move the needle and how to avoid it. Whether you're trying to fill more beds or build a long-term brand, this episode will help you simplify your strategy and spend smarter. Let's dive in. Welcome to the Hotel Investor Playbook, your guide to building wealth and freedom through boutique hotel ownership, hosted by Mike and Nate. Get in the game. On this podcast, we talk story about everything you need to know to make money investing in hotels and hospitality assets. On today's show, we have Anthony Chiaravalo, founder and CEO of Valo Media. Anthony, welcome to the show.

Nathan St Cyr 1:29

Thanks. Happy to be here. Yeah, man. Pumped to have you on.

Michael Russell 1:32

You've worked with some huge brands, Nike, Amazon, Resorts World, and you've also worked directly with some smaller operators in hospitality. I want to start with a story. I mean, you've scaled your agency from a side hustle to managing 100 million plus in media spend. Can you take us back, though, to the moment in your journey, maybe early on at Valor Media, where you weren't sure that this thing was going to work? What was going through your head and what kept you going?

Anthony Chiaravallo 1:54

Yeah, it's a great question. So there was a moment I would probably say six months into the business where we had no momentum, right? I came from the big agency world. I was working in New York City for many years. COVID hit, my job got eliminated, had a client on the side, ended up losing that client within six months. And it was just kind of a wake-up call because I was saying to myself, do I really want to keep doing this? Should I just go back to corporate, get another job? That moment I would say was a turning point because within a week or two, I had a referral come through and we ended up landing Walmart as a client. And not Walmart proper, but actually part of their innovation lab called Store Number Eight, working with this really upstart within Walmart that eventually got rolled up into the Walmart Plus brand. And it was that moment that I said, we really have something here because I came from the big agency world. I saw the inefficiencies that existed with these huge holding companies. And I said to myself, there's got to be a way to do this better, faster, and for less. And that's really been our mission since I started Valo Media is how can we deliver better results, more strategic? We may not be the biggest in terms of the spend and the team, but we'll be the smartest. And that's kind of been our driving force for the last five years. So that was five years ago that we had that sort of aha moment. And for me, it's just been just a really great journey. Right. And I feel like we're just getting started still. And at the same time, working in the hospitality industry has been really rewarding. And uh a lot of our clients that we have on the bigger side have been really great success stories. So I'm looking forward to digging into some of the some of those results as well.

Nathan St Cyr 3:27

We've kind of heard you talk about brand versus performance marketing for hospitality businesses trying to drive bookings. How how do you find that right balance between going with that long-term brand equity and then delivering short-term revenue? Let's just get right into it.

Anthony Chiaravallo 3:45

And this is such an important topic. It's something I'm really passionate about. I wrote a book about it because it's so many brands neglect this. They either go too much in the brand and they neglect performance marketing, or they go too much in transactional media and they neglect building a brand. So in the hospitality world, super important. I was just listening to one of your recent shows about the uh Bolt Farm Treehouse. I mean, that guy built a brand. Like that is an experience, but he's also running paid ads too, right? So he's got the best of both. And when you're building a brand, you have to really put yourself in your target market's shoes. What is it that they would want? What are their interests or pain points? And when you're building a brand, you have to understand your audience. And that's like really the first thing. And so in the world of boutique hotel operators, it's important to know, hey, where do our customers come from? And so when you're building a brand, when you're building a performance marketing strategy, starting with that audience research and doing what I call a data immersion is really, really important. If a brand is further along, right, maybe they are maybe they need to invest more in performance. If a company or a property is just starting out, you have to build that brand first. And I would say lean into personal narratives. You need to understand your audience, like I was saying, but also what is it that motivates them? What's going to get them to come book with you? And if we're talking direct bookings, that's really valuable because you don't have to pay your fees to the OTAs and the booking platforms like Airbnbs. So that's where the performance marketing comes in. Are you able to run social media ads for your property? Are you able to run paid search? And but more importantly, how are you differentiating yourself and your property from everything else that's out there, right? Because it is a very commoditized space, right? Especially in the hotel world where they just want to have, we just got to fill our rooms, we have to make sure that we hit our booking goals, right? And maybe the guest experience kind of falls to the wayside. So I think really, really focusing on that guest experience is really crucial as well. And then your marketing really just supports that, right? Because if someone's coming to your property, they're having a bad experience or the place is not clean, whatever it may be, all the best marketing in the world is not going to solve that problem. So I think starting with your audience, starting with your guest first, build your brand around that. Bring in your personal touches too. Like bring in your personal stories. What does that founder's story look like and bring that to life in your marketing campaigns? And it could be simple, right? It could just be social media strategy to start, right? And then eventually, once you get that brand really dialed in, then the performance marketing becomes like the fuel on the fire. You don't want to invest too heavily in paid ads if you haven't figured out, you know, who you are, who you serve. So if you have for the OTA platforms, look at that data, ask your guests, find out who they are, where they're coming from, why they chose you, and then take that information, then develop your marketing strategy from there, and you'll be in a much better place. You won't be throwing money away on paid ads. They don't really get the results that they want. They've had bad experiences with marketing agencies, and it really comes down to that lack of strategy. And that lack of strategy comes from a lack of the research. So I would say start there, bring those two worlds together, and you'll have success.

Nathan St Cyr 6:54

Okay. This is very common where there's this meshing of the founder story and the actual hospitality assets. But I'm going to be specific, for example. Mike and I have a very unique founder story and a I think a great founder story to follow. But at the same time, if you look at like existing assets that we have with running this really unique award-winning hostel brand, we're very far removed from what that avatar is. We're like the bolts, they are in the moment with their people. They are almost their avatar. Well, Mike and I are opposite of our avatar. So, and then directionally, as we go out and we're looking at our growth. I mean, Mike and I get inspired by walking through the city and seeing $50 to $250 million, you know, branded hotels. And we're like, dude, I want to own that one. It's not always just the independent boutique where a lot of times that's where the experiential stays and the independence where I think the founder story makes more sense. But what about what about for those of us where our founder story, even though we've got great stories, how how do you bring those two worlds together if if maybe it doesn't seem to make sense? Like it doesn't to me anyway.

Anthony Chiaravallo 8:10

Yeah, no, that's a really good point. I would say 100% you're right, right? So there comes a certain point where you grow beyond the founder story, right? And that's when you're building a brand that's a globally recognized brand, right? We work with Resorts World. That was one of our biggest hospitality clients previously. They don't have a founder story that's relevant to any of their customers, right? People know the brand, they know what they stand for, they know what they get when they come there. In that particular instance, it depends again on who the customer is, who the brand is that you're trying to build. Certain brands, they're really, really attached to that founder story, where others, it's like, no, we're actually building a brand in the marketplace where it's completely uncoupled from who we are as founders. And that's totally fine too. But there still is that brand, right? And so you look at these huge properties and there's a brand that people know, they love it, they recognize it, there's loyalty, right? And so I think when it comes to building that on a different scale, there's a lot of value in understanding who you are as a brand. And as a founder, those values might be informed by the things that matter to you. Your customer doesn't have to be exactly like you, it could be someone totally different, right? And so I think it goes back to my earlier point about really understanding who your audience is and then deciding, okay, what is the kind of brand, what is the kind of story and experience that matters to this audience? And then building around that. And when it comes from a marketing perspective, having that very clear, I would say, guidepost as to who you are, what you stand for, what are your values, that's what makes marketing authentic. And that's the marketing that's most successful, is that it really feels that it's something that's building an emotional connection with your audience. It's something that resonates with them. And that's what you need as the foundation before you start pouring that performance marketing fuel on the fire. Because we've seen it a lot where people just they just want to spend money on paid ads. They don't want to invest in that brand, whatever it may be.

Michael Russell 10:00

What I'm hearing is like, okay, marketing, hospitality, there's all these different components. You got to start with understanding who you are, what it is that what product do you have before you start spending money on ads, really understand what your strategy is. We're looking right now at some properties that are commodity properties. They're really not like the boutique, wellness, like that avenue of like marketing, the owner's story and the sensationalism of the experiential lodging, all of that has a place. And I believe, gosh, there's a lot of marketing and efforts that can go into that. But right now, if you've got a hotel that pencils financially that makes tremendous cash flow that has huge upside for investors, and it's not an experiential lodging location, it's really just a commodity hotel. Like, does marketing even have a role in that? I think about the brands that you pay for, like whether it's a Marriott or it could be a Wyndham or a Holiday End, whatever it may be, like aren't they kind of just including their marketing with their brands? And so, like, if someone were to be looking strictly at an investment and they're going through line items of where they're going to budget for adding value and reducing costs, how do they account for marketing in that thesis?

Anthony Chiaravallo 11:24

Yeah, it's a great question. I would say when you're looking at the financials, I would start by saying, what are they investing in marketing right now? Is marketing necessary for them to acquire customers? Are they not spending anything because they're just in a really popular area and people need rooms? Or are they spending marketing? And if so, what are they spending it on and what kind of results are you getting? So I would say start with an audit of their financial statement and then taking it a step further, actually dig into their marketing systems, dig into their customer database, dig into any paid ad platforms or website analytics platforms, dig into their booking engine, look at the data behind where these customers are coming from. Because to your question, is marketing necessary? I believe that it is. The question is to what extent, right? Maybe it's more focused on local SEO and organic marketing versus paid ads. If it's in, for example, an area where there's a lot of demand and not a lot of supply. But if it's in an area where there's tons of supply and there's a lot of competition, then marketing might even be more important, right? Because you'll have to stand out. Now, even if it is commoditized, there's still a lot of value in not creating this luxury experiential experience, but certainly some points of differentiation, I think, are really important. Now, again, it depends on the location. If you're in New York City, there's hotels every block. You've got six other hotels. So there's a huge amount of competition, but there's also tremendous amounts of traffic and demand for those properties and those rooms. I would start by looking really at those financial metrics and seeing exactly what are they investing in marketing currently? What are they getting for it? Is it more just brand awareness? Are they really focused on driving those direct bookings through their paid ads? And then understand, if so, what kind of systems do they have in place to actually track that? So are they able to say, hey, we spent $10 on a Google ad and we drove a booking that was worth $500 or $600? You need to be able to understand those types of things if you're evaluating not only the marketing, but whether or not it even makes sense to continue investing in some of these things.

Michael Russell 13:27

Can I drill down a little bit further?

Anthony Chiaravallo 13:30

Sure.

Michael Russell 13:31

All right. So let's just say paid advertising or even organic search, whatever it may be. What I found is that unlike an e-commerce business where the linear tracking is observable from where someone originally finds you and to ultimately making a purchase. In my experience so far, we haven't found a software that actually can show you where the customer or the guest that ultimately booked, where they originated from, because when they get to your booking platform, they basically at that point the tracking stops. You can track analytics from where they began up into getting to your website, but there's no conversion tracking thereafter. Do you have different information?

Anthony Chiaravallo 14:19

No, there's definitely conversion tracking. So you just have to implement your pixels on the booking engine. So yes, you are moving from one domain to another, so you could implement cross-domain tracking, which is what we do for our clients as well. So attribution is not a perfect science, right? Because again, there's a lot of different channels out there and you don't know what someone is seeing that's influencing their decision, right? And so just because the person came to your website through a Google ad and then completed a booking based on that Google ad, that doesn't mean that the Google ad should get all the credit. Maybe that person saw a social media ad three times before they went to Google and then looked up your property and then completed the booking. So in the attribution model, Google gets the credit, but you're not necessarily giving credit to those social media ads that the person saw. Maybe they even clicked on it and they didn't book, or maybe they just saw it and they didn't click at all. And so attribution, not a perfect science, but that's why we implement what's called multi-touch attribution models. But to your earlier point, it is possible. So you have to get your booking engine talking to the ads platforms. And yes, it is possible. Now, when we were working with some very big hotel clients, they had multiple properties. It was possible with some of their properties, it wasn't possible with some with other properties. So, for example, one of our clients had a Hilton affiliation with one of their properties, they had a Hyatt affiliation with their other, and then their third property was independently owned. All three of them used different booking engines. Because they owned that one booking engine. We were able to actually add our tracking code to that engine and successfully attribute every single paid ad to a completed booking. And we could determine ROI. Hey, you guys spent $20,000 on ads and you booked $150,000 in revenue. Now, the other properties we couldn't because Hilton and Hyatt, they're very strict. They have pretty tight data governance policies. So we weren't able to add our tracking code to their booking engines. Now they have their own, right? But we were doing this through our brand partner who was an affiliate of theirs. Now, the attribution itself is really interesting. And so one cool story about this is we had a client that was really looking to drive bookings at their property in the Catskills. And they said, All right, so that's our goal for this month. We need to really ramp up bookings. Let's spend more money on our hotel campaigns. We're running hotel campaigns on Facebook, on Instagram. We were running hotel campaigns on Google ads. And we said, well, hold on, let's take a look at the data. It actually turned out, once we dug into the data, it wasn't their hotel campaigns that were driving the most number of bookings. It was actually the campaigns advertising their new golf course. So we said, if you want to increase your bookings, let's ramp up spend on these golf campaigns because that's our number one driver right now. And so sometimes the goals that you think you have in mind, the solution is counterintuitive, right? And so that goes back to my earlier point about really digging into that data. It's hard to dig into that data unless you have a clear attribution model. And so getting in that cross-domain tracking, getting your ads platforms and your social media accounts talking to your booking engine, it is possible. Certain booking engines, maybe not, maybe they have more limitations, but it's definitely something that's doable.

Michael Russell 17:30

Hey guys, quick heads up. Malama Capital, our investment arm, is full steam ahead on finding our next hotel acquisition this quarter. If you know of a deal or you're working on something yourself and want to partner up, we'd love to hear about it. We offer a generous finders fee. Or if it's a fit, we can bring you into the deal for a slice of the equity and give you a front row seat to the whole process from A to Z. There's a short form linked in the show notes. Just drop your name and a few quick details. And if it looks like a fit, we'll be in touch. Now, back to the show. Yeah, CloudBeds, right? Does have you worked with Cloudbeds before?

Anthony Chiaravallo 18:07

Not that particular platform, no.

Michael Russell 18:08

They work with a lot of smaller, independent operators. Obviously, as you get into the bigger brands, they've got more enterprise level software, but CloudBeds has kind of carved out a niche for people that are looking to purchase boutique hotels, in our case, hostels, experiential lodging. 10 to 100 unit type properties tend to use cloudbeds, but it's difficult to get them to track the data as you've described.

Anthony Chiaravallo 18:33

Yeah. No, that's interesting. I'd love to dig into that further and check it out because I imagine that they must have some of that functionality where you could add the pixel to the tracking and complete that attribution picture. Because it's so important, right? Because you can't know whether your marketing's working, whether it's striding results unless you have that. And it actually leads into another really quick point because you also need to send quality data signals back to the ads platforms. And so if you're unable to say, hey, this person clicked on an ad and completed a booking, then you have no way of informing those algorithms in terms of, hey, this was the type of user, this was the type of ad and audience and message that worked in driving our desired result. We need to be able to tell that ad platform this is the type of person that we want to go after, and this is the type of person that represents the type of customer that we want, go find more like them.

Nathan St Cyr 19:23

Okay. And for those of us that are more elementary in our understanding, can you just rewind and just from a very simple explanation? What is attribution and what is an attribution model?

Anthony Chiaravallo 19:36

Yep. So attribution is very simply how do we attribute a sale, or in this case, a booking, to a particular ad, right? And the attribution is not always possible. If you're running a TV ad, doesn't it it's hard to attribute hey, did someone see that ad? And then as a result of seeing that ad, did they go make a booking? But with digital media like Google ads and social media. Social media ads where everything is tracked from the point of click, it's much easier to say, hey, this person clicked on my Facebook ad, they landed on my website, they clicked on the book now button, they completed a booking. That's an attribution. So okay, hey, we can attribute this user to this ad that they saw at this time and they completed a booking. Now, attribution model is okay, how are we actually modeling this? So an attribution model could be, for example, last click attribution. Someone clicks on my ad from Google, from Facebook, whatever it may be, they completed the booking at some point after that click within the same browser session. So that's what they call last click attribution. Then you've got multi-touch or multi-click attribution. That's when someone, hey, I clicked on your social media ad, I came to your website, I didn't, I didn't book. But then maybe a few days later, I went to Google, I saw your Google ad. I I Googled your name, whatever it may be, or I'm looking for hotels and Bar Harbor, whatever it may be. And you click on it, you come to the website, and then you complete a booking. And so there are some ways to measure hey, did this person who clicked the booking actually get exposed to some of our other ads? So even though the last click came from a different channel, we can show that, hey, there's actually value in what we're doing over here as well.

Michael Russell 21:22

All right. So you've got all these different forms of marketing that can be effective. And I just want to clarify something. Your agency, are you guys primarily focused on just ad spend and you're an advertising on online advertising agency?

Anthony Chiaravallo 21:35

Yeah, so we are absolutely a performance marketing agency, digital paid media. So paid search, paid social, programmatic strategy, and data is also, just to get back to our very first discussion, is really crucial to what we do as well. So the into what we call integrated media strategy, the analytics, making sure all your systems are connected and talking to each other, because that in and of itself is a huge discipline. But without that, the paid media can't can't be effective. Now we also do creative because the creative that we're running through paid media is really important. And if we're relying on other agencies to do that, that's fine. We do we do collaborate with other with like branding agencies and creative agencies, but we're very specific about what we need. Hey, these are the types of ads we need, these are the sizes, the specs, these are the messages that we want. This is how many versions we need. Something that we do a lot of is ad experiments, ad experimentation, A B testing, testing one ad versus another, emotional messaging versus rational messaging, red background versus blue background, things like that, right? And so these are things that we do for clients is that this is the testing. Because when we're talking about performance marketing, it really comes down to how strategic can you be about the different variations that you're putting out there. Because the more that we can feed these algorithms, the better, because then it's going to help us dial in what is that perfect combination of audience, message, timing, placement, creative, visual, all of that plays a really big factor as well.

Michael Russell 23:03

Okay. So when you audit a properties marketing, you mentioned this earlier that you want to take a look at how much of spending on marketing to begin with. I mean, what's what are you looking for? Like if you're considering taking on a client, what's the process for evaluating whether it's worth taking them on?

Anthony Chiaravallo 23:19

Yeah. So we'll just start with a discovery call and we'll see what are you currently doing, if anything, on marketing? What are your goals? What's the actual business outcome that we're trying to deliver here? And then we'll start by just auditing the systems and we'll say, okay, what do you have? Do you have a website? All right, let's look at your website analytics. Do you have a social media presence? All right, let's look at that. Let's look at do you have any paid ad accounts? And then once we have a chance to dig into those, we have a whole checklist of things that we'll go through. What is the structure? What does your bid strategy look like? What does your audience targeting look like? What are you what kind of ads are you running? Do you have enough variations? Are you taking advantage of all of the opportunities within these ad platforms? So for example, Google gives like image extensions, site link extensions, call extensions. And most clients that we audit, they're not even, they're not even including these things. So the first thing we look at is like, hey, are you taking advantage of every single thing within these platforms that's available to you? It doesn't cost more money for you to add these things, but it gives you so much more real estate on the search engine page. And the same goes for social media. You mentioned influencers. So that is something that we do as well because when it comes to paid ads, it's the influencer content that's doing really well. And so we work a lot with UGC, user-generated content, because using that in our ads in conjunction with brand-produced assets has proven really effective in driving performance.

Michael Russell 24:39

I see. So if someone's going to invest in paid advertising, they ultimately want to understand well, what does the math look like? What are the metrics, right? So when someone invests in ad spend, what should they expect to get as a decent return on that investment?

Anthony Chiaravallo 24:57

Yeah, in terms of revenue, I mean, we we try and look for a return on ad spend of at least a three to one. So for every dollar you spend, you get three back. I would say that's just kind of a standard industry benchmark. Some clients will be higher, some will be lower. And it all depends on the industry, the market, the competition, the audience, right? And there's a certain degree of investment that needs to happen too, because there's some things that we do that are more brand focused, thought leadership. And then there's the more transactional media, right? But it's got to be a balance of both. So I would say don't pigeonhole yourself into a silo of saying every dollar I spend has to produce three or five, right? Because there's going to be some investments that are for the long term. And I would say when we recommend a marketing strategy, we always say think about this holistically. Look at what we call the funnel, right? The marketing funnel, right? When we're talking about running top-of-funnel campaigns, that's what you would consider more brand awareness. We're not just doing it to drive awareness, though, we're doing it to build audiences. And so whenever we're running an awareness ad, let's just say on social media, we have the capability through the ads platforms to retarget users who not only see the video, but actually engage with it for a certain amount of time. In other words, we can then take people that watched more than six seconds of our video and actually parse them out into an audience that we can now retarget with additional ads, pushing them further down the funnel. And so I would say number one, like really think about this through the lens of the marketing funnel because when you're investing in those awareness channels and in those awareness campaigns, it's not just to feel good and drive awareness, it's to actually build those warm audiences because that's what's going to be really important because most people, they're not going to convert the first time they come to your website. They're not going to convert on that first click or that first touch point. Right. It might take seven, 10, 15 different touch points before someone is ready to book. We've got three stages. We've got awareness, we've got consideration, and we've got conversion. A conversion meaning, hey, we made a sale. The person booked a room. And so the most important thing is to have that structure in place and then building a funnel based on what you know about your audience and how users came to you previously, and then building that actual user journey to acquire new customers.

Michael Russell 27:13

Yeah. So look, here's the thing from a broad view, right? Investing in real estate or investing in hotels, I should say, is unique in that you're investing in real estate and into a business. You're wearing all these different hats. And sometimes it's like when I hear what you're saying, I start to feel a little overwhelmed because I'm like, there's so much just in marketing alone, let alone all the other responsibilities that I have when it comes to operations, when it comes to communicating with our investors, when it comes to finding deals, that like I'm kind of like the ostrich syndrome syndrome where I just want to stick my head in the sand because I'm like, holy heck, that seems like a lot of responsibility. Like, sure, you can hire an ad agency, but you alluded to this. If you don't exactly know whether or not they're serving you and providing good value, you can get lost in all of the details of what you're describing. And for someone who's not an expert in this, what are like some very simplified things that if you were evaluating whether or not it was worthwhile for your business to hire an ad agency, what are some of the things that you would just like start with? But like beyond that, like can you just break this down a little bit? Like, who is an ad agency for? And what should they be getting out of it from a high-level outcome?

Anthony Chiaravallo 28:32

I think it's a really important point. From a revenue standpoint, if your business is making enough money that you could spend a few thousand dollars a month, then I think it's it's worth talking to an agency or talking to uh a potential performance marketing partner.

Michael Russell 28:46

Well, that doesn't seem like that much. A few thousand dollars a month? I was expecting like, I thought you were gonna say, oh, yeah, you gotta have like $30,000 of ad spend a month, but $3,000 a month to me, that's not that much.

Nathan St Cyr 28:58

Like, can you actually get I call a timeout? Because here's the part that's hard for me to conceptualize. If you have a proven track record of a return on ad spend of 3x and you're not running 100% occupancy, keep spinning around this thought as I'm listening to all the strategy, and I'm like, it's very exciting because I'm like, oh, this is like chess, like cool. But from a very simple term, it's like, well, why would I not spend $5,000 if I know it's going to bring in $15,000 of revenue? Let's just say through unoccupied space, I've got another $50,000 of revenue to go gain and I have a proven out system. Am I missing something? Like, why don't I go spend $10,000 to fill that $30,000? No, it's a great point.

Anthony Chiaravallo 29:46

And I think in working in this in this industry for so long, there's a lot of agencies that really don't know what they're doing, unfortunately. And so when you when these companies go and they invest money in paid media, they don't get those results because what we're talking about, it's hard. It's hard to do. And I think having the right partner is obviously really important. There's tons of good agencies out there, but there's tons of bad ones too. And it's hard because as a business owner, you're not a marketing expert necessarily. So you don't know what to look for. So hopefully part of my mission is educating people. Hey, here's the questions to ask, here's the things to look for, right? Let's just go through that. Like ask your agency, are we taking a full funnel approach? Show me the strategy, show me the data that's informing these recommendations. Show me that the tracking is working. I think it really comes down to making sure as an owner, as an operator, that you can ask some of these questions and be very upfront about if we invest X, this is what we're expecting in return. And can we do it? Right. And sometimes it's not always possible. Sometimes there's just market conditions that are at play that prevent certain clients from getting a profitable return on ad spend. But for the most part, if you take this strategic approach and it takes time, it's not like, hey, we turn the ads on and boom, you're just printing money overnight. Okay. It usually takes about a month to get everything set up, the tracking, the strategy, the data, and there's an investment that comes with that. So you're going to be investing money in the setup and making sure that everything is built correctly and can and all the data pipes are connected properly. And then it takes about another month for the ads to exit the learning phase. And so we'll usually run ads and we don't spend a lot of money in the beginning. So if if you're if your listeners are evaluating a marketing partner, make sure that they that they look for these types of things, right? So we don't spend a ton of money in that first month because we're just testing the waters. We want to see what works. We want to understand what is that combination of audience message and placement that's going to generate those good results. And then by the third month, okay, now we're ready to start applying some optimizations. We've gathered enough data, our tracking's in place. We're sending the right signals, the right data signals back to these ads platforms to get that quality data. We've set up our behavioral conversions. That's even something that I didn't touch on. Is again to the earlier point, not everyone's going to book on that first visit. So we need another way to qualify them. And we do that through behavioral conversions, which is, for example, how long does somebody spend on the website? How many pages do they visit? There are different conversions that you can set up within Google Tag Manager to not only measure those things, but actually optimize your campaign towards them. And so that helps us really zero in on the quality of users over the quantity. And that's been another huge issue that we've seen in auditing brands is that their paid agency is celebrating the fact that they're driving thousands of users and this and that. But we look at the data, it's like these users are spending less than a second on the website. They're probably not even real people. Right. And so I think the number one thing that you can do is say, okay, let's dig into the quality of these users that we're driving to the website from a paid media perspective. So that way we can qualify them when they're not ready to book and we can bring them back. And that's where that full funnel approach comes in. The awareness, the consideration, the conversion, the retargeting, and having that structure, having that strategy in place is so important because then by month four, five, and six, now we're ready to kind of scale those campaigns. We're ready to pour fuel on the fire. And I think having that strategic approach, but being willing, you know, be willing to invest the time to do it right, because it does take time to build this sort of marketing machine, this marketing flywheel. And that's how you kind of get to where you're looking to be, where we're just like, hey, we put in 5,000, we gained 15 back. And I think building that machine, it's like the holy grail of marketing, right?

Nathan St Cyr 33:32

Okay, that makes sense. There's an investment up front to get the machine dialed and up and running and going, and not everybody's willing to pay that. I got to ask this question. Isn't AI just gonna be able to do this for us?

Anthony Chiaravallo 33:42

So AI is already doing a lot of it, right? But again, it comes back to the human-ledge strategy for now. I mean, who knows? Maybe AI superintelligence will be able to do strategy better. I've been working with AI since the early days, right? And so we use it all the time. The the ads platforms have always used AI, what they call back then machine learning, which is essentially the algorithms that define how and where your ads show up based on your budget and your audience and your bids and all these other things. And at the same time, you've got AI creating content and strategies and all of these things. And so absolutely those should be leveraged to the best capacity that you possibly can as a brand, because it will reduce your costs if you're using AI to help you write your ad copy or create your SEO blog posts, and it works. And so as we progress over the next year or two, we're gonna see just a complete explosion of all of that. Is it going to take over? Probably not, not right away, anyway. I think there's still going to be the need for that human-led strategy to actually connect and look at all the different pieces of your marketing components because again, we're looking at multiple channels. We're looking at multiple and very convoluted attribution models. The AI can't really do anything with that. We need a human to actually go in and connect all of these things. However, what it can do is it actually offloads a lot of the grunt work. So my media buyers aren't just doing thousands of manual optimizations anymore. They could focus on the much more impactful task of looking at the strategy and mining for insights in terms of performance. Now, a lot of that actually will probably start to be automated by AI and actually start has been. So where the AI will actually go into your ads platform, pull out some insights and give you recommendations. AI is also making reporting a lot more efficient. So there's AI tools where if you're a marketing agency, the AI can actually produce a client report for you, things like that. And so it's absolutely going to make our jobs more efficient. It's going to make the performance better because the AI can make decisions instantly in terms of how the ads are showing up. But for the moment, having that human-led strategy is still really important.

Nathan St Cyr 35:55

I just wonder what the difference maker. I just, I just wonder what the difference maker, like, okay, there's going to be the early adopters that are like at the forefront and implement to gain advantage. But ultimately, then things are going to progress and everybody's going to have access, things will become less expensive, just whatever. You can just see it happening, right? So then if everybody's operating the same efficient, effective model, what becomes a difference maker? And is that the ability to execute the human touch of the actual hospitality versus the ad?

Anthony Chiaravallo 36:28

I think so. What we found is not just with AI, but just with machine learning in general, is the algorithm tends to optimize towards the lowest common denominator. So if every hospitality brand that's competing with each other, let's just say there's a competitive set, they're all following the algorithm, their ads all end up looking the same because the algorithm keeps optimizing towards the exact same thing. This is what's working, this is what's performing. And so it becomes just this sea of sameness. And so that's where that human touch, that that in-person experience becomes all the more important. Because in a world that's already dominated by digital and that's only going to get more crazy with the prevalence of AI, people are going to crave that human experience, that human connection because it's going to become just a novelty in the sense that people are are sick of all the digital, right? And so they want that human experience. And the and the brands that can bring that forward in their ads, that can actually build that emotional connection, those are going to be the ones that thrive in this new era. And you've probably seen it, right? When you when you see a commercial that really, or even just a TV show that really pulls at the heartstrings, right, and builds that that emotional resonance, that's I think a key differentiator for how a brand can probably stand out as AI starts taking over everything.

Michael Russell 37:44

So for someone that maybe has one boutique hotel or is just starting out in this journey and not operating with enterprise level budgets, I guess where would you recommend that they put their energy into? Like if we've got a budget of, let's say, three to five thousand dollars a month, what does that look like from a practical standpoint? What are they investing in? What are they getting in return?

Anthony Chiaravallo 38:03

Yeah. So I would say usually the lowest hanging fruit in performance marketing is going to be search and social, but not every social media platform. You need to understand your audience first. So obviously, it just comes back to the research and the strategy. So the first things first is invest in that. Invest in the research and the strategy. Do it right. It doesn't have to take a ton of time. You could spend about a month with a good with a good marketing partner, can help you mu get a lot of insights in terms of your audience, what channels they're on. And that's going to inform your strategy, which is going to inform where you actually spend money. It's like, okay, should I be on Instagram? Should I be on Facebook? Should I be on Snapchat, TikTok, right? There's so many channels out there, and you don't want to spread yourself too thin. And so if you could understand your audience, who they are, where they consume media, which social media platforms are they on, which types of content are they reading. Once you have a cursory understanding, then you can put together a marketing strategy or a channel plan to say, hey, these are the two channels with the three channels where we should be. Organic search is obviously still really important. So making sure your Google places, your Google business profile is fully optimized. That's what we call local SEO. That's really important. Having a reviews strategy, also really, really important. Making sure that you're following up with guests, if they had a positive experience, please leave us a review. If you had a negative experience, tell us how we can make it right, sort of thing. Those things are table stakes and obviously very, very important. And so once you've got that foundation, then you can start thinking about paid search and more importantly, organic search as well. And so organic search is what we call SEO search engine optimization. There's a few different components of that. There's on site SEO, that's everything on your website that you can do. There's off site SEO, that's things that you're doing off of your website, like generating backlinks and PR and earned media, those types of things. And then there's technical SEO, which is how fast. Does your website load? What does the site architecture look like? And then when it comes to your website and the on-site piece, your content strategy is really important. So if you're running a boutique hotel in a certain area, you should have a blog where you're releasing content on a monthly or bi-weekly basis that is relevant to guests who are coming to the area. And so you should have tips about some of the top restaurants or what to do, right? Because then people are going to look at you as this authority and as this source for valuable information about where they want to travel. And it's also just going to bring in tons of traffic to your website as well. So I would say really focus on those types of things.

Michael Russell 40:39

Okay. Well, I got a question that I can't, I just came to me now, but it's like in the era where people are using Google less for their search, how is this affecting paid advertising? Like, I don't even search for things. I if I need a recipe, I go on AI. I say, look up, well, I've got in my kitchen, I've got X amount of ingredients in the refrigerator, and I completely bypass all of the annoying stuff on Google that's popping up. And you go on the website, and it's called the ad stuff that's on the website, and all these areas where they're generating revenue from advertising. It seems like a lot of that is getting eliminated. So how is that going to affect your world in the future?

Anthony Chiaravallo 41:16

Yeah, no, it's a it's a big change, and I'm doing the same thing, right? And so I would say it will have a big effect. Now, Google has evolved already to where they're showing AI in the search results, as you've probably seen. I just got back from the from the Google office a few weeks ago. Their whole philosophy is like we want to be as relevant to the user's search query as possible. And so if you're asking for a recipe, Google's AI is now just going to give it to you in the same way ChatGPT would. If you're shopping for something, that's different. Google wants to show you ads then, because then they're saying, okay, this person's actually in market to buy something. Now, when we're talking about how the AI platforms are actually gathering this information, it's coming from the internet, right? And so we just got our first lead through Chat GPT. Someone came to our website, filled out a lead capture form, and the source said Chat GPT. Now, ChatGPT just didn't make it up. They went on the web and found information about us, who we are, what we do. Where did they find that information? Well, through SEO. We're creating blog content about topics that are relevant to our target audience. We're doing podcasts and doing earned media and thought leadership through different trade pubs, also writing about the marketing industry, trends, what we're seeing, who we are, what we do. And so these AI platforms, they're gathering that information from the internet, from Reddit and all these channels that have always been part of the marketing mix since the dawn of the internet in the first place, right? And so I would say continue to invest in putting content out there about your industry or who you are or what you do, or if you're a hotel owner about the area, because the A's these AI engines are going to pull that information from these internet sources, at least for now.

Nathan St Cyr 43:01

That's so true. Like I we had a very specific land use, urban conversion from this to this. And I'm using Chat GPT. And I'm like, act as my expert consultant. You've been doing this for 20 years and know every single blah blah blah. And you know, I prompt a thing up to give me my best possible answer. But ultimately, it's like it's going out there then and just doing the work that I would have done on Google. And and if you're not doing those, if that if these consultants had not been doing those things then and putting the work and the energy in out there, it at this point would not have been found.

Michael Russell 43:41

Right. So, Anthony, this has been very interesting. There's a lot of good takeaways from this conversation that are helping me to understand, like, okay, moving forward, where is marketing going to play a role in our organization? If our audience wants to follow your journey or learn more about your services, where can they find you?

Anthony Chiaravallo 43:57

They can follow me on LinkedIn, just look up my name. I'm always posting content about marketing and performance media and hospitality, or they could check out our website, valomedia.com. Sweet.

Michael Russell 44:08

Okay. Well, before we sign off, I've got one last plug for ourselves where I'm gonna ask you guys listening to this, if you found one little trace of value, which hopefully you have, that you'll go and just give us a review, a rate review us on wherever you listen to your podcast. It means the world to us, but it helps us to continue to pour into this podcast and get high-quality guests like Anthony Caravallo. Did I pronounce that correctly?

Anthony Chiaravallo 44:32

You did.

Michael Russell 44:33

Okay, nailed it. Anyway, thanks so much for listening to this episode. This is another episode of the Hotel Investor Playbook. We are Mike and Nate, and we will catch you again next week. Aloha, I'm not sure.