The Billboard Effect: 10 Strategies to
Build Your Channel Mix
Travelers who are in the planning phase of their trip will often run into the same properties repeatedly when searching across different online travel agencies. A Yieldify research report found that the average customer starts to research their trip a little over 4 months before they plan to depart, and 41.7% of respondents claim they spend more time researching and booking than they did 5 years ago.
During this long booking process, travelers often go directly to a property’s website to find out more information, especially if they’ve seen the same property on multiple OTAs.
This phenomenon is referred to as "The Billboard Effect" and indicates that a property has built an effective channel mix. Here we’ll cover tips for building the optimal channel mix for your property to achieve the billboard effect and get more direct online bookings.
What is a channel mix?
A channel mix is the selection of OTAs that a property connects to with the goal of gaining increased visibility across its target audience.
With hundreds of online channels in existence today, properties that want to build an effective distribution strategy should prioritize those that align with their hotel brand and attract visitors who they‘ve identified as their target market.
Choosing the right online travel agents for your channel mix can help your property get exposure across different regions and target audiences to increase the occupancy rate without any additional marketing spending. Also, OTA sites often include currency conversions, language support, and tailored experiences based on purchasing habits that are geared toward converting travelers on a global scale. It would be difficult to repeat these features and marketing tactics on your own website without spending a large budget on marketing.
How to build the optimal channel mix
Building a robust channel mix that consists of a wide variety of OTAs is critical to driving more reservations and revenue. Your mix should include a selection of OTAs from the following categories:Global OTAs
Major, global OTAs like Expedia, Booking.com, and Tripadvisor should be the foundation of your channel mix. They attract hundreds of millions of visitors each month, making them a critical channel to promote your property. However, these sites have millions of listings and charge up to 30% commission rates, so should not be the only channels you depend on.Regional OTAs
Regional OTAs are also an important part of a channel mix as they help attract domestic travel within your region, which has increased drastically over the last couple of years due to pandemic travel restrictions, a rise in remote work, and an unpredictable travel landscape. Additionally, regional OTAs can be used to attract visitors from other countries. For example, while Agoda is not a popular booking site in Mexico, Mexican properties can list their property on the site to attract visitors from Asia and the UK, where it is a very popular OTA. Regional OTAs can be especially useful for filling demand during off-seasons, as the seasons are revered and travelers in the opposite hemisphere are preparing to travel during their seasonal break.Niche OTAs
One of the most lucrative strategies for your channel mix is to include niche channels that target particular audiences. Niche OTAs today include surf or ski properties, camping or glamping properties, luxury or boutique properties, and more. Travelers who visit these sites have very specific desires, and if they find a property that meets their needs, they are more likely to be repeat guests.
Different OTAs cater to different property types and audiences, making it essential to understand your target audiences and your unique market position before choosing your channels. The optimal channel mix won’t be the same for every property, so we’ve developed a recipe for success to help guide properties in building their distribution strategy.
Based on our customer data of properties between 21-50 rooms, each additional channel that a property connects to results in a jump in revenue.
Properties connected to six channels saw an average revenue increase of 26.8% compared to properties connected only to one channel.
To increase visibility to potential guests, property owners should incorporate 2 global OTAs, 2 local OTAs (active in your region), 1 target region OTA (targeting travelers from a different regional market), and 1 niche OTA (if applicable).
For properties with 100+ rooms, add at least one additional channel per section for a total of 10 channels to further boost revenue.
For example, a luxury boutique hotel in Mexico may decide to list its property on the following channels:
- Booking.com / Expedia (Global)
- Despegar/Decolar (Regional to Mexico)
- Agoda/Trip.com (Targeting Asia)
- Mr. & Mrs. Smith (Niche - luxury OTA)
What is the billboard effect and how does my channel mix influence it?
The billboard effect happens when a traveler sees a property listed on multiple OTAs and ends up visiting the property‘s website and completing a direct booking.
The billboard effect was introduced by Chris Anderson, Associate Professor at Cornell University, in 2009. This Cornell study, found that hotels listed on OTAs experience a boost in direct bookings due to their presence on OTA websites.
More recently, Anderson released a follow-up study in 2017 titled ‘The Billboard Effect: Still Alive and Well’ and found that while the demand funnel is more complex today with the multitude of marketing efforts such as SEO and SEM, 30% of direct bookers still start their research process at an OTA.The customer journey from OTA to direct booking
OTAs have become the new search engine for travelers, acting as a storefront to browse during the initial phase of research. The 2017 Cornell School of Hotel Administration study found that approximately 75% of consumers who booked directly with a hotel online visited an OTA before purchasing.
Seeing a property listed on multiple channels backed by an optimized OTA profile with high-quality images and reviews helps establish familiarity, relevancy, and trust in consumers’ minds. Cornell University found that, on average, travelers made 25 visits to travel-related sites in the 60 days before booking their trip, making it vital for properties to increase their online presence on OTAs, metasearch websites like Trivago, and social media channels like LinkedIn and Instagram.
More recently, Google Hotel Search has emerged as one of the most important travel research sites and is widely used by travelers to compare accommodations. On Google, users can easily filter by parameters such as location and ratings and compare prices across different OTAs and direct channels.
Ensure that your direct channel has the best deal, promotion, extra perks, as this is one of the main factors determining whether a guest will book directly or through an OTA. Consider offering special packages or add-ons only available to direct bookers – for example, complimentary bike rentals or free breakfast or parking.
Advantages of the billboard effect
The number one advantage of the billboard effect is getting more visibility on your property, more visitors to your website, and more direct bookings.
By being present on multiple OTAs, you increase the chances that travelers will see your property and improve the odds that they’ll visit your website.
Listings on popular global OTAs will ensure a steady volume of traffic to your site, increasing the opportunity of getting a direct booking, and niche OTAs will help drive more qualified traffic to your website with a higher likelihood of conversion. Therefore, developing a channel mix that fits your audience and property will be pivotal in maximizing the billboard effect.
10 tips to increase direct bookings using the billboard effect
Your social media profiles serve as an extension of the billboard effect since many travelers discover and search for destinations using social media. Understand what social media sites your target audience frequents and actively engages on these channels. For example, Instagram is the most popular social media site among those 25-34 years old. By showcasing your property on social media through videos, high-quality pictures, and reviews, you can establish trust and encourage users to book direct.
The hospitality industry is full of OTAs that can you can use to your advantage. Via the billboard effect, you can help your property increase visibility, occupancy, and direct bookings. Large OTAs like Tripadvisor, Expedia, and Booking.com spend millions of dollars a year on marketing and offer an excellent opportunity for properties to leverage their large budgets to showcase their listing. By making sure your property is listed on the right travel sites and your website is equipped with the proper functionality to convert travelers, you’ll reap the benefits of the billboard effect.
The Big Book of OTAs
- Recipe for ideal channel mix
- Top performing OTAs in your region
- Directory of 75+ OTAs