HSMAI Marketing Review August 2009 - 23

erty received 2,891 affluent consumer click thru’s with an estimated advertising value of $8,700 based on current advertising click thru rates (see Google reference earlier). • The average consumer engaged the brand for 54 seconds (stop and count to 54 slowly—it is a significant amount of brand engagement). • There were 20 winning bidders who spent on average $609. While breakage cannot be tracked—which is a fact of life in charity auctions—it can be reasonably estimated that 14+ of them will ultimately redeem. Of these, the hotel estimates it will typically upsell 20 percent to an additional room night worth $400. • According to the property these 14 paying customers will typically spend on average $210 on the hotel premises at breakfast, the bar, in-room movie, the mini bar, the gift shop that sells branded merchandise, or dinner. • There were 43 losing bidders who will be getting an offer from the property. This is likely to result in two to four additional paying customers. • The hotel is activating an automated item request system that will significantly increase staff productivity while generating leads for the functions department. The property typically gets 30 charity auction item requests per week and this Webbased system will free up 3-4 hours per month of administration time in processing. The best news is the property incurred no upfront marketing costs and minimal overall incremental cash costs (prorated maid and linen washing) for the donated rooms. After reviewing the trial results the luxury property elected to dramatically expand the program to 200+ units. In essence the hotel now sees charity auctions less as a charitable cost and more of a marketing channel with a tangible ROI to be cultivated and optimized. Summary Charity auctions are a unique way to engage the mass affluent through their trusted causes while their wallets are open. To date, this has not really been possible because of the lack of marketing focus or savvy by volunteer groups and the physical nature of events. Moreover, item donors often have their brands mishandled in live events and incur non-trivial administration costs managing inbound requests. Placing excess capacity into online auction environments enables marketers to turn charity auctions into a rational marketing program that extracts the underlying value from this unique promotional channel while reducing the inefficiency from item request management. In the final analysis there is little/no downside risk and relatively strong upside potential. I 50% Off Latest HSMAI Foundation Publications: Demyst Demystifying tifying Distribu ution Distribution 2.0 Proﬁts and ﬁts a alls Pitfalls of line Online rket ting Marketing The Travel Marketer’s Guide to Social Travel Marketer’s Gu uide Media and Social Networks Networks Ord Order now! der www.hsmaipublications.com www.hsmaipublications.com m 23 AUGUST 2009 • HSMAI MARKETING REVIEW

HSMAI Marketing Review August 2009

Table of Contents for the Digital Edition of HSMAI Marketing Review August 2009