Industry Update
Opinion Article14 April 2011

Hotel Industry Trend: Mobile Proximity Marketing Gives Hoteliers and Their Advertisers an Innovative Way to Reach Guests & Increase Revenues

By Alex Romanov

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Today, hotels and advertisers have a new tool to reach their guests after they check in: interaction via the guests' mobile devices-only now, it won't be by dialing a number or sending a text message. As hoteliers search for new marketing tools to increase interaction with their guests, and advertisers switch budgets from traditional advertising to newer, more interactive "new media", it is clear that the future of hotel marketing is ready to evolve.

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Introducing Proximity Marketing: Interaction at the Right Place, Right Time

Proximity marketing is one of the most effective advertising tools to become available for hoteliers. Not a sign, and not a text-based advertisement, this interactive marketing engagement is the marriage of digital and mobile marketing used to deliver content to guests' mobile devices in a contextually relevant environment - and at moments of maximum influence. You may be wondering: "What does that actually mean?" What it means is this: by using wireless Bluetooth® capabilities-95% of mobile phones, including Smartphones are Bluetooth-enabled - to reach guests via their mobile devices, hotels and their advertisers can now offer promotions to guests after check-in, directly onto their mobile phone. The messages are automatically delivered to the guest's cell phone whenever they approach a certain distance (from 3 to 300 feet) of the TV in their room, or any digital signage in the hotel property, for example in the lobby or waiting areas, in the bar area or even outside. With this technology, hoteliers can also measure the response of their advertisements, and advertising messages can be tailored based on the hotel or advertising partner's needs in real-time, allowing hotels to offer guests: an exclusive offer, rich media, loyalty promotions and incentives and a great deal more.

Proximity marketing offers hoteliers capabilities that traditional advertising never could alone, which is why it is such an effective marketing for hoteliers. Proximity marketing provides a new opportunity for hoteliers to increase revenues by advertising to a captive audience that craves information and interaction – all through their mobile devices and without leaving their hotel room or the property.

Now that you're convinced, let's take a look at this new trend, how it can be implemented, and why it is changing the future of hotel marketing.

Changing Methods of Communications - It's All in the Numbers

The ways that we communicate today are constantly changing. This is evident in the significant increase in penetration of mobile devices within the last few years. By the end of 2011, 91% of Americans will own mobile phones, and Smartphone penetration will double. Of those mobile phones, 95% now have Bluetooth® capabilities, half of which are Smartphones, making the market for proximity market one that is poised for exponential growth in the coming years.

With such an increase in the use of mobile devices, hotels and advertisers are now provided with an interactive and immediate way to connect and engage with their guests. Research shows that 98% of hotel guests turn on the TV within five minutes of entering their room. This means that within the first five minutes of checking in, hotels are provided with a captive audience that is primed for information and offers.

The Guest Engagement

Proximity marketing provides a tool to reach guests beyond just traditional advertising campaigns by adding to existing digital signage and television advertising. Two of the fastest-growing marketing channels today are mobile devices (19.4% growth by 2016), and digital out-of-home (DOOH with 15.2% growth by 2016). By combining these advertising channels, instead of just simply displaying advertisements to guests-hotels can now make a connection, tap guests on the shoulder, and give them something exclusive that entices them to act on the advertisement.

Give Guests What They Want Most

Proximity marketing appeals to what guests want, offering hotels and advertisers increased customer engagement, interaction and exclusivity. By notifying guests of exclusive promotions hotels have to offer through their mobile phones, hotels and advertisers have a greater chance of customers responding to their advertisements, and therefore a greater ROI on their marketing spend. Research has shown that proximity marketing increases the response rate of traditional mobile marketing making it more effective: through mobile advertising, over 1.2 billion in digital coupons were issued in 2010 (over 41% growth) and response rates for mobile location-based couponing was 23-33 percent. By adding proximity marketing into the mix, hoteliers can encourage guests to react to an advertisement immediately, create repeat business, and in turn generate larger ROI for hotel advertisers.

Other statistics of interest:

  • Right now, mobile and digital-out-of-home are the second and third fastest-growing media respectively. A study by Magna Global predicts that they will both continue to grow significantly over the next five years. Forrester also predicts that marketers will increase mobile programs and start investing in cohesive mobile marketing strategies in 2011.
  • By 2015, Borrell estimates that $5.81 billion will be spent in the U.S. by 2015 on Mobile Proximity Marketing ($0.8 billion was spent in 2010).
  • Increased media spending points to 2011 as being a year of tremendous growth for out of home advertising sector, which is increasingly attracting attention from advertisers due to its ability to reach on-the-go consumers. The research firm PQ Media is forecasting growth of 15-16% in DOOH in 2011.
  • Bluetooth interactions are more effective than many other delivery mediums (SMS, WiFi, Social Media, Mobile Apps, or QR Codes) because they provide advertisers with the ability to send rich content and to use hyper local micro-targeting, they do not require external applications or downloads, and they are free of charge to consumers.

Putting Proximity Marketing to Work

Changing technologies provide a new way for hotels to interact with guests. Increased interaction engages the customer in a hotels promotion. Exclusivity generates interest and repeat business, and instant measurement gives hoteliers capabilities traditional advertising never could alone - instant customization and measurable reaction at no cost. With technology that allows digital signs to 'talk and interact' with nearby mobile devices, providing mobile users with information and incentives at exactly the time they need them, hotels and advertisers can transform their in-room TV and digital signage into interactive consumer touchpoints. The result is a true consumer interaction, which evolves in real-time. Hotels can deliver branded content to guests within a certain location.

Proximity marketing has tremendous revenue-producing potential, allowing hotels to deepen their connection with guests, encourage more loyalty and greatly improve the customer experience: all of these factors combine to make proximity marketing a very effective tool to generate higher ROI for both hotels and their advertisers.

You can learn more by downloading The Case for Proximity Marketing: Building powerful customer relationships through advances in digital signage, mobile and location-based technologies

Alex Romanov, President and Chief Executive Officer iSIGN Media Corp | Alex Romanov is an accomplished business executive with a history of identifying opportunities and turning them into high growth and profitable enterprises. Alex has diverse experience in a variety of industries such as consumer electronics, communication, digital imaging, video gaming, and e-commerce. Alex was the CEO and President of Alpine Electronics in Canada for 15 years, building the company to over $50,000,000 in revenue with over 50% of the Canadian market share by 1995. After Alpine, Alex became CEO and major shareholder of Royal Oak Marketing and was responsible for over 100 employees and $120,000,000 in revenue. Royal Oak Marketing was sold for $29,000,000 to an American concern. Alex then co-founded Spherex Inc., which developed and marketed an Xbox gaming audio system. Spherex was then sold to another US concern in 2005. Alex has been iSIGN's Chief Executive Officer since November 2007 and has successfully restructured the company, positioning it for rapid growth worldwide. www.aromanov.com

Alex Romanov

Alex Romanov is an accomplished business executive with a history of identifying opportunities and turning them into high growth and profitable enterprises. Alex has diverse experience in a variety of industries such as consumer electronics, communication, digital imaging, video gaming, and e-commerce.

    More from Alex Romanov

    About iSIGN Media

    iSIGN provides interactive advertising solutions to companies across the globe. Leveraging location awareness with cutting-edge back-end technology, iSIGN enables businesses to engage with their customers where and when it matters most. Its proprietary software, IMS 3.1, features state of the art security measures, multi-lingual capability, and integration with both Windows and Linux operating systems. This allows businesses to transform their static signage into interactive consumer touchpoints, and allows consumers within a certain range (from 3 to 300 feet) to receive relevant and welcome offers through their Bluetooth-enabled mobile devices. Through its solutions, businesses are able to attract and transact with customers, and measure the effectiveness of their actions - efficiently and quickly. iSIGN is publicly traded in Toronto (TSX.V) under the symbol "ISD". Additional information about iSIGN can be found at www.isignmedia.com.

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    Jennifer Rodrigues (for iSIGN Media)
    Phone: 1.647.867.0093
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