18. Marketing Attribution for Short-Term Rentals

Marketing attribution does not need to be perfect to be useful.

In this episode, Steve and Petar explain how short-term rental operators can connect marketing activity to repeat and direct bookings using tracked links, attribution windows, loyalty redemptions, holdout groups, and year-over-year comparisons.

Key takeaways:

• What marketing attribution actually measures
• When an email click or loyalty redemption should count
• How holdout groups show the lift from consistent marketing
• Why repeat bookings can be 30-50% more valuable than first-time bookings
• How one Florida operator built an 80% direct-booking business

Learn more at https://yada.ai/demo

Transcript

SPEAKER_01 0:00

Start from scratch again. Third time is the charm.

SPEAKER_00 0:04

Hello, everybody. Welcome to the fully booked STR podcast. Today we're going to talk about marketing attribution for short-term rentals, probably our wonkiest topic to date, but uh that is where we kind of started, Yana, way back in the day when we first met in Boston at various marketing automation companies. So we're going deep. It's going to be a deep cut today. How are you doing, Peter?

SPEAKER_01 0:26

I'm doing really good, man. And this is going to be a really fun topic because uh there's a lot to there's a lot to unpack here. And uh this is actually one of those things that there's a lot of a lot of really good data about. So we're gonna talk a lot about how marketing attribution works, like what the philosophy is behind it, and then why the data backs up those out like those those rules and and flows that we use to determine whether something was attributed or not. So this is really, really interesting stuff.

SPEAKER_00 0:51

Yeah, I'm gonna start with uh a joke that if you have been in business or marketing for any amount of time, you've probably heard, but it's it's always worth repeating, which is I know half of my marketing works, I just don't know which half.

SPEAKER_01 1:04

There we go. But what I also know is that if I don't do anything, any marketing, then I'm not getting any growth. So, you know, has to be done. Half of it works, half of it doesn't work. And the goal here is to help figure out like which half is working. Um, and then uh yeah, to help, you know, use that to drive future marketing and and get better at it. So, you know, let's let's dig right into it. Let's let's exactly let's get to it.

SPEAKER_00 1:29

So, like I mentioned, Yada was really born about uh 14, 15 years ago while the founders, while we were in Boston working at HubSpot, working at Zoom Info, these business-to-business marketing tools. And in B2B marketing, that was one of the first places where people really sat down and said, What is driving this sale? What is causing this person to make this purchase or take this action? Exactly. So we went really deep with that. What are all the touch points? How do you map that? How do you display it? How do you understand it and make decisions with it? Fast forward 15 years, and we're in the short-term rental space, hospitality space, and it is much more vague. This kind of insight into what is driving guest behavior is almost absent. And so then that was our big inspiration to really move Yada from an AI messaging platform into an actual marketing automation platform and bring the best of HubSpot and you know B2B marketing into the world of hospitality and bring it to that uh, you know, the operators that don't yet have these kinds of tools.

SPEAKER_01 2:39

And I think also, like, even though it was vague when we started, what the data is showing us is that attribution and the marketing funnel within short-term rentals is actually a lot simpler than it is in B2B sales and in B2B marketing. So, in many ways, it has clarified relatively rapidly, uh, which allows us to do some really cool analytics and drive some really cool insights uh around helping our users and our community really understand what's working and what isn't working and how to you know amplify the stuff that's working uh to make it more effective.

SPEAKER_00 3:14

So yeah, where should somebody look to understand their attribution? What where where do we begin?

SPEAKER_01 3:21

Well, I mean, the best place to begin is to understand what attribution really is and what attribution tells you. And attribution at its most basic level is essentially you're you're assigning credit for a conversion. So in our case, that's a booking. Um, you're trying to assign that credit to the marketing touch points that came before that activity. So that's the what you're doing, and the why you're doing it is to answer that question of what actually drove this booking and what actually drove this revenue so that you can decide where to spend your next marketing dollar, what to invest in next, or what activities have the most um the most value to you and your brand. So what needs to happen for marks marketing attribution to to run its course is you you have to capture the initial um touch point or or activation. Uh so in this case, that's the initial booking, something that comes through Airbnb or VRBO or direct book or direct for the first time. Um you need to uh get that get that guest through your through your through their first day and then start marketing to them on the back end. So the email marketing, the SMS marketing, the ads that you're running, etc. Uh while you're doing all of this, you're appending the UTM params, like all of the cookies and pixels and session IDs and things like that to understand their behavior after they've stayed with you the first time. And then once their subsequent booking happens, uh you're taking all of this data that you've uh that you've generated uh from when they first arrived to after they left through all of the messages and the emails and the SMSs that they've got to figure out like which one of those touch points and which one of those um activities that you've done after they leave the first time are primarily responsible for getting them to come back.

SPEAKER_00 5:18

And to be clear, you said uh you applied the UTM params and such. For the most part, it's the tools applying those params. So you use you so you uh the important thing is to use tools that are going to actually pick up those digital breadcrumbs that your guests are leaving behind to assemble a story that you can then understand and make decisions with. Right.

SPEAKER_01 5:45

And what makes it relatively straightforward in in the short-term rental space is that outside of the marketing activities that a platform like Yada does, there's almost no touch points that happen like outside of the context of those automations and those campaigns and those messages that are going out. So if you're a um like us at Yada, for instance, you know, we send out cold, like let's say let's let's let's talk about us as us as a B2B company and why that's a little bit different from STRs and why it's actually a lot simpler and cleaner in STRs. You know, if we send out a cold email blast and then run a couple of ads and go to a trade show and then send a warm email and then a sales email, and then there's a demo call and things like that, there's about 20 different teams or people or activities or touch points that want to take credit for that um for that for that close, for that sale. Uh within STRs, because outbound marketing and because email and SMS marketing have not really been done by anybody up until this point, aside from us, um we're the the math becomes a lot more straightforward because you're not competing with dozens of existing channels to figure out where that repeat booking is coming from. It's generally like if it happens, it's probably because one of the marketing activities that was done. Um so it really makes it like relatively straightforward. So, you know, in in in other worlds, you need to think about like first touch, you know, where 100% of the credit might go to the first interaction, or last touch where 100% of the credit might go to the final interaction, or like you based, where like you know, 40% goes to the first touch, 40% goes to the last touch, and then a bunch of crap lives in the uh in the middle. Uh, for us, like we can simplify it quite a bit um by essentially saying that uh if somebody books a property or somebody books a room based on a Yada automation or a Yada marketing email, uh if they clicked an email and they used that link with that UTM parameter and booked within a month or a month and a half with that persistent parameter and that same like booking link and the UTM param and the session ID and things like that, that's probably an attributed booking because they clicked on the email and they clicked or they clicked on the link, they used that link to book, et cetera. For loyalty, if they redeemed points and if they booked using those points as part of their discount or or their or their booking, then that's always going to be an attributed booking because they're using part of your uh your loyalty rewards program powered by Yada to create that booking. And then if it's uh if it's like you know, six months down the road on a completely different property and the last touch they got from Yada was six months ago or eight months ago, then that's probably not a repeat booking. So the way that we look at it is if you're not doing any marketing prior to spinning up Yada and you start doing a lot of really cool outbound marketing, and you're starting to see these direct bookings come in where they didn't come in before, those are probably going to be attributed to the marketing activity that you're doing. If they're creating those direct bookings through your loyalty program and using those points to get the discounts or the coupons or the extra nights or whatever, those are 100% attributed to the loyalty and the marketing that you're driving. And if it just randomly happens, like half a year after they got their marketing message, then that's not something that we would want to attribute to a marketing activity that we're taking on your behalf.

SPEAKER_00 9:32

But let's be clear if you're sending one marketing message every six months, you're leaving a lot of money on the table. You are yeah when it when it comes to hospitality marketing, you want to be top of mind when a guest's repeat booking window opens. That moment that they have the conversation with their family or their friends, hey, we should go to wherever. You want to be the place that they go to first. They search up that text that they got from you, they search up that email that they got from you, they click on that link, or they just look and remember, oh, yeah, this is their direct booking link. Let me go there.

SPEAKER_01 10:11

Yeah.

SPEAKER_00 10:12

This is where things do start to become a little fuzzier. Marketing attribution can get a bit fuzzy, but as long as your messages are arriving in their world on a somewhat regular basis, what you should be able to see is here's Steve. He received an email from us sometime in the last month. He came and he booked his next stay. It's likely that even if the only thing he saw was our name appearing in his inbox that had some kind of an influence on his recall, like brand recall, brand affinity. These are all the things that you know brand marketers study is like, are we impacting people's consciousness such that they think about us when the purchase time returns? And so those are a little tougher to measure because they don't, there's no UTM parameter on did someone look at our email? But what you should be able to see is did they get a marketing touch from us sometime in their booking window? And the only way to make sure that they do is to make sure that those automations are running, that those campaigns where you think, here's why someone should come back, are being sent. And then you can see we're touching people, people are booking, this is going the way we want it to go.

SPEAKER_01 11:30

Well, I just want to add something to that that'll that'll help illustrate that even further. Uh, for a lot of our customers, like a certain like whether they just haven't gotten around to marketing to that list or they haven't had a chance to activate that list yet, within the same portfolio, like a lot of our companies have holdout lists. So these are just folks that they have not marketed to yet, somebody on a holdout list is far less likely to repeat book than somebody that is on a marketing list. So over the course of a year, if you look at the repeat booking rate on a marketing list versus a holdout list, like the difference can sometimes be like two to 300%. So, you know, if if someone were to say, um, you know, we don't know what the marketing is is doing, like we don't know if it's working, like we don't know if it's effective or not, um that's something that like you could reasonably say that if you if you are just either marketing to your entire list or like not marketing to anybody on your list, but if you're marketing to like 75% of your list and you're not marketing to 25% of your list, and we've done some of these, we've done actually quite a few studies uh to this effect with customers that are using Yada, within the same portfolio, the folks that are on that 75% that are getting marketing messages and marketing collateral, they have like a two to 300% increased chance of doing a direct booking. So out of that 25% that's not getting marketing, they might not like they might still book direct, but they're gonna book direct at a much lower rate and they're gonna repeat book at a much lower rate than the people that are getting marketing messaging. So even if that immediate booking doesn't happen, like even if you you compact, like, you know, let's say a lot of folks, like in e-commerce, the attribution window is often like 28 days, so four weeks. Like booking timelines and purchase timelines and travel are often a lot longer than that. Like for airlines, it's sometimes as long as 90 days. Um so even if somebody, let's say, worst case scenario, somebody doesn't fall within that 90-day window, they're like the fact that they're still getting messages is gonna make them like two to three times more likely to book again than somebody that isn't getting messages. So, you know, the point what I'm trying to say here is that you know, we don't take credit for those because they fall well outside of the window that we want to take credit for things and we and we want to like directly attribute things for uh to, I should say. Um, even if they're not like directly attributed because they fall out of that window, their chance of having a repeat transaction is far higher. So, you know, when you think about it, it's not just like can I attribute something immediately within like two or three weeks to see if I'm being successful with my marketing marketing activities. A lot of it comes down to just letting marketing do its work for six months or 12 months or 18 months, and then yeah, fine, take a cohort. Like if you have 20,000 guests, like put 3,000 of them in a you know, in some sort of like holdout list, a control group, your uh your your A B test. Um so we'll sometimes you know work with folks who we start doing marketing for, and then two weeks later they're like, we haven't seen any direct bookings. Um yeah, and fair, that happens sometimes. Uh often we do start seeing results within the first like week or so, especially if it's a larger list. But marketing always works on the long term. So it's kind of like investing in the S P 500. Like nobody's lost money investing in the S P 500 over five or 10 years. Like it just, it's it's it it compounds, it works. It's just physics at that point. It's it's it's like the inevitability of physics and like going downhill, you know, gravity will pull you downhill. So it's the same thing over here. Like marketing will work over a long enough time span. We do really, really effective attribution to help us understand like what to send, where to send it, and to whom to send it better. But, you know, if you really want to see it working for yourself, like try just doing do outbound or direct marketing for six months or nine months, run a control group and see what happens between that control group and the folks that you're that you're actually sending messages to. Worst case, it's like a 100% increase in direct bookings on the uh on the marketed group versus the control group.

SPEAKER_00 15:57

Yeah. Um, so the control group is the best way to see kind of current state impacts of your marketing. There's also just year over year change. Obviously, there are going to be potential differences in the macroeconomic climate. You know, maybe more people are traveling this year versus last. So it's not necessarily going to be an apples to apples comparison. But that is another way to see is my marketing working? Is this effective? Is comparing you know, the year when I did that kind of um outreach to the year when I didn't, or maybe it wasn't as sophisticated.

SPEAKER_01 16:32

Right. And like you want to, of course, like keep a control, like just use the same listings. Like if you have 20 listings this year, compare it against those same 20 listings next year. Like if you add, like if you know, if you add um, I don't know, 10 listings that haven't had anybody book yet, like that doesn't give you good data because you're you're just comparing like a new sample set against an old sample set. But if you have the same like sample and you have the same um like just constants throughout, like those are the 20 listings that you might have had last year that you still have this year, whereas like last 12 months you did a lot of really good marketing, and the previous the the 12 months before that you didn't do any, those are really good ways to see, like, yeah, like you said, you know, macro trends could impact them uh in in some way. Like I think anybody who looked at their numbers at the beginning of 2019, like you know, 2019 to 2020, would have seen some pretty uh disastrous things happen uh to their booking rates. But you know, absent these like very, very um intense um broad, you know, like wide scale events, you know, whether they're good or bad, uh, you know, you get a pretty good sense of what's going on. Um, and I think the you know, if you just want to drill into it, it's like per customer, like what's their probability of booking again? You know, is that probability like 10%, 5%, 7%? And if it was 5% or 4%, you know, two years ago, and now it's like 13 or 14%, and the only thing that changed is your your marketing activities, that's a pretty good indicator that it's working. Um, and that it's uh that it's making a difference.

SPEAKER_00 18:15

Yeah, and I think so I guess the next question is at what point do you say, you know, kind of covered the waterfront? Like let's say you're doing Facebook retargeting, you're sending people to your direct booking site with Google Ads and Meta ads, you're uh basically you're throwing everything at it. You're doing lead generation, uh, you've got your social content really rocking. Um, you know, you're doing all the Yada uh inquiry, win back, and follow up with past guests. Um how how do you how do you kind of look at that whole mix and say, I'm gonna double down on Facebook retargeting because that's what's driving the most uh fresh bookings? Like, where what's what's the best uh there?

SPEAKER_01 19:03

Yeah, so I think um if you really want to be good, you need to do everything. And you don't really see like good companies that just hyper focus on one type of growth, like they're just pretty good at all types of growth. Um, but the fact is they all they all serve different uh purposes. So something like ads are really good at getting brand awareness. So you typically buy for the first time because of an ad, but you usually buy the second, third, and fourth time because of an engagement from that brand. So ads are not a really good way to get you, you know, to get me to come back. They're a really good way to get me to think about buying something for the first time. So if you're an operator and you have a pretty, you know, like a really good portfolio, then your ad strategy is designed to get somebody to look at your your landing page for the first time and look at your your your your site for the first time and your marketing strategy and your email and your SMS and your WhatsApp and and and your um your outbound marketing is there to drive the repeat booking. So if you look at um, you know, in pretty much every vertical, like a repeat purchase is worth far more than the original purchase. Because if you're spending, you know, $10,000 a month on ads and you're getting like X amount, like your initial investment, like this is the same with Airbnb. Like what a lot of people don't realize is that like your initial investment to be visible on that first page of Airbnb or to have your ad land in the right person's inbox, like your ad might land in like a million people's feeds, but only like four out of like one million will actually book, which means that your like cost per per, like you know, you might have spent like six hundred dollars in ads to get an uh a one hundred like a one thousand dollar booking. So, you know, your delta is like that's not like a one thousand dollar booking that you've you've pocketed, that's a four hundred dollar delta that you've pocketed because of the ad spend. Same with like Airbnb, you know, by the time you get it photographed, by the by the time like you pay your commission out to Airbnb, that's not a $1,000 booking, that's like a $600 or $500 booking. When somebody's already in your ecosystem and you already have like a relationship with them, like the cost to get them back is like infinitesimally small, like marginally. So if you're paying like $500 a month for a marketing tool, but you're getting like $20,000 of bookings out of it every single month, like each one of those, like, yeah, like the booking on that came in from Facebook might look equally as valuable as the booking that came from an email marketing campaign or an SMS marketing campaign because they're both worth $1,000. You really need to think about like what was the cost of that booking on Facebook? That book that cost might have been $600. On Airbnb, that that that cost might be four or five hundred dollars. On email or SMS, if you aggregate it out like across everyone that's getting that, it might be like one dollar or two dollars. Yeah. Get that repeat booking. So well, and do everything.

SPEAKER_00 22:11

Yeah, you have to do everything. And also, I think you're going to grow the smartest if you kind of prioritize, celebrate, focus on those repeat and direct bookings for exactly the reason you mentioned, Peter. Like if your focus is on being the best at the top of the funnel, first of all, you're duking it out against all the big hospitality brands, you're duking it out against Airbnb. Like these are these are almost limitless pockets that you are fighting against to be top of mind for strangers. Yeah. If you are focusing your effort on bringing people back, then you are doing something that is unique to you. And that money comes back to you almost free of that delta, right? It's going to be with the money that you spend on the marketing tools, but it's not going to be those ad dollars, which is a huge difference.

SPEAKER_01 23:01

Well, that's the that's the biggest thing. So you know, if you're thinking about what am I going to do next, like what part of the marketing funnel should I focus on? They all serve different purposes. So the ads, like if you have an option to retarget somebody to come back with ads or with email or SMS marketing, it's always going to be cheaper to get them to use, like to get them back with email and SMS. And this holds true in like every industry, not just short-term rentals, not just hotels, not just hospitality.

SPEAKER_00 23:29

Yep. You got to own your audience and then work that resource as what it is. And um, I had an amazing conversation with an operator just this last week that shed light on the kind of mindset that makes this possible. And this is a 300, a 300 listing operator based in Florida. And he said in 2003, they realized that if they don't own their whole, if they don't own the relationship, they don't really own their business. Right. If they're letting the OTA send everybody to them, they can't actually grow. They have no uh uh control over their destiny. And so in 2003, before you know, before hardly any of these things were even a thing, they said, we are going to grow our direct bookings, we're gonna invest in that guest relationship, we're gonna know who everybody is, we're gonna invite them back directly. And so now, 26 years later, 23 years later, they have 400 properties, they have 80% of their bookings are direct. And that did not happen overnight. That happened over 23 years of focus for the purpose of owning their destiny, and so that's that's the kind of mindset that's gonna make it happen.

SPEAKER_01 24:47

It's it's a great mindset, but I don't think folks should, I don't, I think the takeaway shouldn't be that it takes 23 years because I know some people are gonna have that takeaway. The takeaway is that it works, and if you you're really like aggressive about it and and you really commit to to owning your audience and building your relationships with your customers, then you do get to that 80% like repeat direct rate, which is like in every marginal way and by every metric, just such a better way to grow than than relying on a marketplace or ads to get somebody for the first time. So that's that's like another big takeaway that I want people to to think about is how much does it cost to get somebody through an ad or through an Airbnb booking versus how much does it cost to get somebody to come back and you know agree with the attribution or not? Like, you know, everyone's gonna have their own viewpoint of how things are attributed and why certain things are attributed. Obviously, we feel pretty strongly the way that we do. Other folks feel strongly about the way that they feel about attribution, but the numbers are irrefutable. That if you take a control group across every single one of our customers, the one like the controls that don't do any marketing are significantly less likely to repeat book than the ones that are. And if you look at the numbers for the value of a repeat booking and you strip out Airbnb, you strip out the potential that you might have spent on ads, it is like vastly more valuable, like anywhere between 30 and 50% more valuable than a first-time booking that came through an ad or a first-time booking that came through an OTA or marketplace.

SPEAKER_00 26:27

So I guess the uh the focus then, if you're a leader at a short-term rental or a hospitality grant of any kind, is do marketing to do marketing and to put on your thinking cap around what is effective, what are we doing, what are we not doing, yeah, and you know, put the plans in place to stop not doing it, right? To actually do marketing across those different channels and see what's working for you and for your guests, and make sure that your the systems and the and the teams that you have in place to do it are being responsible to influence those numbers for sure.

SPEAKER_01 27:09

This is a really cool topic, man. I think we could go on for for hours and hours on it, but we're we're getting close to time. Uh and it's exciting stuff. And attribution is is cool because it lets you dig into what's working and really see what's working and what's not. And we'd love to hear from everybody listening on on how they do attribution and how they look at repeat direct bookings and you know what their feelings and experiences and thoughts are around influences, on what influences those the most. Because at the end of the day, we're all here to try try to drive more repeat direct bookings. So, you know, we'd love to hear your thoughts about this topic around attribution and and on you know what what is the primary driver of getting somebody to uh to come back and book direct.

SPEAKER_00 27:56

That's right. And if you want to see what Yada would look like at your short term rental business, how it can help you um be top of mind when that booking window opens for your past guests, head on over to yada.ai slash demo. We'll show you around.

SPEAKER_01 28:12

There we go. Thanks for listening. Thanks for listening.