With a longstanding legacy of success at online marketing to live up to, travel is working with new technology and newly changing paradigms in the form of programmatic media buying. Big data, real-time bidding (RTB), and an evolving suite of sophisticated platforms and approaches mean that the tools with which ad buyers work, in 2014, stand to function at pace with marketers’ imaginations. Overall, brand spending on data-driven ad technology is up, and key travel verticals are helping to continue that trend.
Online travel agencies, airlines, and hospitality are deeply invested in programmatic, and many brands within those sectors are spending a significant portion of their marketing budget on not only maintaining their positions, but also on pushing the instruments of predictive analytics in new directions. Well-established models of targeting and retargeting are making additional space for increasingly refined up-sell opportunities and more granular product offerings. The deepening importance of mobile apps to the consumer experience is also prompting change within travel’s approach to programmatic, and video and e-mail are poised to play next-step roles.
Meanwhile, analysts say that the predictive capabilities and automation that characterize programmatic media buying are becoming increasingly intertwined with travel’s need to focus on customer relations management and a broader, deeper, and nuanced knowledge of consumers. As multi-device research and a traveler for whom mobile is now second-nature continue to define and redefine online behaviors, how to understand what is being measured — and how to accurately track and attribute different interactions with a brand to the point of conversion across multiple platforms — has never been more critical to the future of travel marketing in the digital milieu.
Predictive analytics within programmatic media buying are changing the way the travel industry wins conversions. Travel’s move toward data-driven marketing represents a new horizon for an industry that carved out its early online reputation with user-generated content (UGV) and an embrace of behavioral and contextual understandings of its audience. The programmatic sea change is well underway.
A recent Lyris/Economist Intelligence Unit study shows the shift in broad strokes: 23% of executives in the travel industry designate customer-data analysis as the lead technology guiding product research, as compared to 18% across all other industries.1 Travel boasts the largest percentage of buy-in among the sectors in the study — surpassing automotive, entertainment, and banking.
Perhaps this comes as no surprise. Travel started the millennium as a leader in the digital and social space.
“UGC was a huge,” for travel, said Eric Ingrand, vice president of content marketing for the EnVeritas Group. “Yes, now you have star-ratings for all kinds of products but travel started this. While everyone was struggling to tweak website graphics and content to gain greater conversion rates, travel found a way to really change the game on the conversion side — it let real people rank the hotels.”
UGC, however, came with a less welcome price in the eyes of some. Negative reviews meant the necessity of damage control — and for many that prospect prompted a braking effect. Marketing departments found themselves grappling with a love-hate relationship when it came to the user reviews that started out as such a boon.
Travel also got increasingly wise, in the mid- and late 2000s, to the value of tracking consumer activity. Gathering data from loyalty programs and purchase histories, agencies and providers saw the potential of capitalizing on information surrounding browsing tendencies.m Travel in the age of Google-fueled search became an even more refined engine for understanding customers and conversions.
Now, with the advent of new developments in data-driven technology — the ability to not only capture visitor data but also to target offers and follow-up pitches — the possibilities of programmatic media buying stand to change approximately everything about how travel picks its providers, wages its ad campaigns, and measures returns.
New search architecture: data-driven ads and travel
A survey conducted in fall 2013 showed that 85% of advertisers employ programmatic strategies.2 Within that context, programmatic media buying is expected to accelerate. Recent reports suggest that its compound annual growth rate through 2016 will be in the neighborhood of 59%.3 And while the data driving programmatic isn’t new, what travel can do with it — newly linking together different kinds of information — is rapidly evolving as well.
Data streams: the programmatic paradigm
Types of Targeting
Embedded code on the buyer’s site(s) allows them to gather unique but anonymous data about a visitor and store that as first-party information. That information allows the buyer to retarget that visitor on other sites.
Buyers acquire distinct sets of third-party data — typically organized by demographics — and market to those prospects.
- Search Targeting
Buyers target consumers based on keywords they’ve used in the past, gathering the data via website search widgets, on-page code, search engines, and third-party data.
Buyers target websites and pages according to the topics they cover. Algorithms identify matches between visitor activity — such as looking at hotels in Miami — and media buyers’ criteria.
- Direct Buys via RTB
Buyers choose the specific sites on which they want their ads to be displayed, and compete for the wanted impressions via RTB.
Source: Marketing Land4
Stemming from the industry’s longtime commitment to search marketing, travel has had two key data streams in place for years: its in-house collection of consumer behaviors and purchases, and its ability to collect information about what customers look at when they browse. As recently as 2009, travel has been able to compare preferred inventory sources with preferred data sources, and that analysis has helped leaders steer efforts to target customers with more elegance — if not with greater ease.
The complexity of the online ad space is growing rapidly, especially among the top 10% of publishers.5 And the impact of travel’s increasing investment in programmatic is making it a more competitive space. A recent study shows that travel professionals have become 57% more competitive as they adopt data-driven predictions into their campaigns.6
The challenge is how to recognize key patterns that help drive conversions. Massive quantities of newly connectible data require efficient and accurate applications if they’re to make money for brands. The pre-programmatic online paradigm was seldom and perhaps never — at its roots proactive: it was about responding to search, rather than predicting what a consumer would want to do next.
“There is a paradigm shift going on, for sure,” said Brad King, vice president of sales for Sojern, in a phone interview. “One that is about being super-proactive in marketing to people, and marketing to them in a way that you know the relevance of it to them is going to be so much better than it ever has been in the past.
“Travel has been good at contextual targeting, and UGC was a great way to get more people involved, but to me what’s really changed is that none of it really leant itself to people who are ultimately showing you intent to travel,” he said. “This concept of now being able to capture intent is massive. You literally, now, have a mechanism to stop going around targeting only proxies.”
By proxies, King is referring to a familiar form of buying prospects. Ad buyers select a set of demographic details they assess to be associated with existing types of clientele — at a hotel it might be males older than 50, associated with certain businesses or travel schedules — and then push ads and offers to those prospects via the purchased data, tailoring the message to the demographic parameters.
“All of this is allowing us to move from proxies to people,” King said. “It’s one-to one marketing. It’s still not perfect, it’s not one-to-one marketing nirvana, but it’s showing somebody an ad in the exact right timeframe, and for the exact right product, in the place that they want to go. It’s just something that we weren’t able to do two years ago.”
Revenue management, bidding, and targeting
At the core of the data-driven shift is the ability to match revenue and inventory with customer actions, enabling buyers to bid in real time for travelers’ attention on a near-instant basis via exchanges. Buyers put ads in front of consumers who are already exhibiting intent to book.
The process occurs in several stages, together taking about 1/10th of a second.7
- As the consumer loads a Web page, a real-time bidding API feeds key data points from ad-exchange operators, such as Google or AppNexus, to the bidder — an advertiser or an ad network. The data includes details about the available ad space, including size, city of origin, and what kind of content surrounds it.
- The advertiser or ad network is typically using a bidding engine. Demand-side platforms, provided by a third-party developer, connect with the ad exchanges. The DSP then uses algorithms to assign a monetary value to the offered impression. The value is based on the data the DSP gets from the exchanges.
- The bid is placed. Winning bids result in ads appearing in the offered spaces.
‘One-to-one marketing nirvana’: envisioning emerging trends
“Say you’re a big hotel chain,” said King. “If you could find a way to literally adjust every single piece of ad buying that you’re doing according to your inventory needs, based on your projections of how you’re going to yield properties in various cities, the ability, then, to really spend marketing where you need to spend it and on the people you really need to spend it on would be great enhanced. Everybody sees that vision, now.
“But there’s still a lot of silos in these companies,” he continued. “Systems are catching up, but this concept of connecting company inventory with customer actions — there aren’t a million great systems out there to tie your yield-management system to your marketing group. It’s amazing how far we’ve come. But I would say, in a baseball analogy, that we’re probably in the top of the second inning, right now.”
What will define some of the next innings for the programmatic marketing landscape? What follow are five candidates for trends within the data-driven advertising space.8
- Cookies will matter less. The mobile device is everywhere and marketers’ audience identification will have to rely upon different tools for measuring segmentation and providing behavioral analysis.
- Paid, owned, and earned: all media types will be touched by programmatic strategies. And the tech will cross hardware and contextual boundaries — screens, devices, and countless media properties. Consequently, advertisers will seek richer and more actionable customer profiles, ones to which predictive analysis can be applied across channels and media properties.
- Key elements of programmatic marketing will be strong management platforms and enterprise governance strategies that assure travel advertisers have access to secure information.
- The digital marketing supply chain will experience pressures to restructure and realign so that it can better aid programmatic execution.
- The number of third-party platforms will eventually shrink to just those that prove the most robust within the programmatic space.
Programmatic trends across verticals
In key verticals, programmatic media buying has captured the imaginations — and the marketing budgets — of ad buyers seeking to reach travelers with exactly the right pitch, at exactly the right moment. One-to-one marketing nirvana may be the goal. The pathways there are trending differently across verticals.
Video and Programmatic
As spending on RTB increases, video is getting wider budgetary play. Recent reports show purchases of video ad impressions on ad exchanges doubling, and estimates of the total video impression count currently point to 100 billion. Spending on video programmatic, in 2013, was $684 million. It is expected to reach $1 billion, in 2014.9
Online Travel Agencies
For at least the past four years, said Chris Stevens, vice president of marketing at Orbitz, the OTA advertising spend that he deals with has been consistently tipped, for the most part, toward programmatic.
“And if you start wrapping in display, and meta-travel research trends, it’s only gone up since then,” Stevens said. “A lot of the hype about RTB, it can make programmatic seem like it’s something that’s really new. But a lot of the baseline trend has been slow and steady. It’s a 15-year trend and not a 4-year trend. One thing that has really changed, and that’s defining the display environment right now — and that’s already transcended most other Internet-marketing channels — is the rise of the auction. And the rise of liquid inventory.”
Different OTAs have different emphases. Orbitz has historical connections to airlines, for example, while Hotels.com places its focus on hospitality. But one thing Stevens points out is “the mix, in programmatic — what you’ll often see is the mix of what you’re pushing and the mix of what’s making you money are not necessarily the same.”
That is, OTAs are bidding to create a short term and a long-term inventory — and there can be a tension between marketers wanting to bolster product categories that perhaps index low for the OTA, while also, alternatively, bidding down on categories where the agency might index well, but a metric — lastclick, for example — suggests less potential revenue per conversion.
Additionally, how OTAs are getting to conversions is in the midst of change. Like most verticals, online travel agencies are encountering an increasingly multi-device type of equation. However, though the expansion into mobile platforms is an upward-trending business model for most OTAs, Stevens said he doesn’t expect apps and dot-com channels to become mutually exclusive.
“The form-factor changing is incredibly important in our industry, but prognostications about it being all one way, or all the other, are less important than understanding that you have to be able to interact with consumers in the ways they choose to interact with us.”
Along those lines, said Brijen Rajput, senior vice president of marketing at Fareportal — which operates CheapOair, among other brands — each device has a function when it comes to the way OTA conversions work.
Dedicated Players in Ad Tech
Profiles of several dedicated players in the ad tech space:
- Intent Media / Offices: New York, NY / Employees: 25+ / Founded: 2009 / Focus: End-to-end solution for e-commerce sites seeking to monetize their website traffic through advertising while still protecting conversions / Sources: Crunchbase; Matrix Partners
- Criteo / Offices: Paris, France; New York, NY; München, Germany / Employees: 800+ / Founded: 2005 / Focus: Generates leads through dynamically generated ads which are personalized with products and services for which consumers are searching / Note: Criteo went public in 2013 / Sources: Crunchbase;Criteo Press Office
- Superfish / Offices: Palo Alto, CA; Petah Tikva, Israel / Employees: 50 / Founded: 2006 / Focus: Visual search company that algorithmically analyzes an image and delivers similar and identical images in real time without the need for text tags or human intervention / Source: Crunchbase
- Sendori / Offices: California, USA Employees: – – / 5+ (CoBe Capital) / Founded: 2006 / Focus: One-click redirect technology and a proprietary ad serving platform to power digital advertising campaigns, driving conversions and lower cost per acquisition / Note: Acquired by CoBe Capital in 2011 / Source: Crunchbase
“Smartphones are a great tool for conversions for the last-minute booking,” Rajput said. “Desktops are certainly very convenient, with much larger screen size, and may [offer] a superior experience for users to make their purchases. Tablets are somewhere in the middle for conversions. Many consumers use it just to shop around for the better price.”
Last, but not least, Stevens said programmatic media buying has been good news for the sellers of ad space as well.
“If you get a healthy and liquid auction with adequate bid density,” said Stevens, “yields, on a blended basis, actually go up. They don’t go down.”
Volume is likely driving that effect: as RTB auctions have become more efficient at filling inventory, sellers see significant premiums — auctions can achieve 100% sell-through. Direct sales, by comparison, according to Stevens, might only see 10% or 25% sell-through.
What are the challenges that OTAs face in the data-driven marketplace?
Cree Lawson, a travel media analyst and entrepreneur (founder of the now-defunct Travel Ad Network), assessed the situation along lines of customer-relations management — an element he predicts will be the predominant factor for successful OTAs going forward.
“OTAs have to differentiate themselves by knowing their customers’ needs better than the merchants,” Lawson said, referring to the customer data into which an individual airline or other company can tap. “The difficulty OTAs face is they have less consumer data than the merchants — who are in this case the airlines, the hotels, whatever — and yet they have to provide more value.
“It does not surprise me that OTAs use programmatic as a primary source for their distribution,” he said, “But because they do not own the product they sell, they have to provide additional value — in the way of discounts or customer-knowledge — that compels the user to book with them rather than booking directly. The OTAs that will win are the ones who get to their customers better than the end merchants.”
If you want a snapshot of what King’s concept of one-to-one marketing nirvana could look like, it may well come from the hospitality vertical.
Take, for example, one direction in which Nor1 has chosen to travel.
Monetizing the Whole Trip
Programmatic marketing and predictive analysis, in the case of inventory such as hospitality packages, are allowing advertisers to potentially reach into the pocket of travelers during the part of their journey when they tend to spend the most. Nor1 provided the following numbers. Most travelers spend 42% of the money they’ll budget for a trip in the period before departure.11 58% of the money travelers spend leaves their accounts during the trip itself.12
Providing travelers with ancillary third-party options — add-ons during trips — is expected to account for 30% of profits by 2015.13
The company works with vast quantities of data, and a proprietary decision-making engine, to help hotels target offers to travelers across the entire timeframe of a reservation. While adding a room booking to an airline-ticket purchase is now commonplace — and even upgrading during check-in flow is familiar — Nor1 wants to push data-driven marketing to an even more granular level.
“If you look at a hotel, for example, in their [product management system] they may have five to 10 room categories,” said Sanjay Wahi, senior vice president of product management and analytics at the company. “But a lot of rooms that are in the same category have different attributes about them as well. For example, you can monetize a better view, or the fact that there’s a balcony attached to a room. We’re really starting to understand what consumers are actually willing to pay extra for — based on what other people like them have done in the past — based on transactions that have looked somewhat similar.”
By Nor1’s measurements, the conversion rates on a dot-com channel, when prompting travelers with these fine-grained choices, jumps to 15%–20%, as compared to industry averages — based on relative stats provided by Google — suggesting that conversion rates hover at about 1.5%.
Southwest Airlines entered 2013 as the world’s sixth biggest spender on RTB ads.14 But it may not be enough for airlines to throw money at programmatic in the same ways that it did a year or two ago. One underlying message is that programmatic is moving away from classic models of simply targeting and retargeting. As it is with OTAs, travel media analyst Cree Lawson sees the success and growth of airlines within the programmatic space as highly dependent upon the “smart intersection of sales and CRM.”
“Ads that say, ‘Remember us? Come back and book’ — that was last year’s story,” Lawson said. “Now, a smart programmatic marketer needs to use their knowledge of the customer to either close the deal or sell a higher-value seat. One of the biggest challenges — and, I strongly feel, missed opportunities — is to use dynamic creative opportunities to give a customer a more compelling message than your competition.”
Analyzing how programmatic works within verticals of the travel industry gets more complicated when it comes to car rentals.
“It is vastly different,” said Cree Lawson, travel media analyst. “Programmatic for car rentals is vexing, because the user can change their mind at any moment until they push down the gas pedal. “There’s a lot of retargeting being done in the rental-car space, but there’s a much bigger opportunity,” Lawson said.
“The rental car companies are focusing on the rates, while the customer really focuses on the car. I’d love to see rental-car companies more often do what auto-manufacturing companies do, which is retarget me with a nice car right before I reserve it, or right before I walk into the airport.”
For example, by changing and tailoring the messaging inside a display creative, based on the ad buyer’s understanding of that individual’s needs, airlines stand to convey something more significant to the recipient than just cost savings and a heightened awareness of brand.
“I think American Airlines was out of the gate early with dynamic creative,” Lawson said. “They’ve been doing it for 2–3 years. At first it was just route pairings — Point A to Point B for 10% less. Now, I’m seeing them focus more on the destination, keying in on the customers’ needs.”
If the approach sounds similar to the Nor1 model, airlines could be taking a similar tack. Brands such as Virgin Atlantic began adding options, as recently as 2011, such as an online spa service or additional amenities once the traveler is onboard — pushing the message via a blend of human, mobile, even seat-back platforms.
Prem Shah, vice president of strategy at Chango, recently suggested several examples of how this could work in other ways, too. Rather than showing all passengers the same ad on a seat-back display — a Lincoln car, in Shah’s example — airlines should show the college-aged woman in Seat A an ad for a summer trip to Paris; the man in his 70s, in Seat B, an ad for a luxury cruise; and the family traveling together, one row forward, a pitch for a trip to a theme park.15
Another factor that may be shifting for airlines is the way that marketers understand the sequence in which travel consumers purchase parts of a given trip.
While recent research by Sojern shows that 51% of travelers still book their flights more than a month before departure, and that the majority (66%) of hotel bookings occur within a week of the travel date, Scott Garner, chief commercial officer at Adara, sees a shift on the horizon.
“One of the things we’re finding — and it kind of challenges a long-held belief — is that travelers always purchase sequentially,” Garner said. “Meaning, you start first with the air, then you go to the hotel, and finally a rental car. But as search tools have become significantly better, people are changing their search and buying-behavior to where they now search simultaneously. And we found that 65% of all the travelers we looked at purchased their hotel on either same day as air — or before air.”
This could affect the way airlines use programmatic, in terms of when they access customers in the travel-booking sequence, opening a door to new approaches. Using data like the kind Adara investigates, airlines could target travelers who do pick a hotel first — bidding for and reaching them with an impression that targets by destination before they find a flight some other way.
Pricing programmatic and ROI: basics and new methods
Travel’s spend on programmatic display increased, in Q3 2013, by 90% over its investment in impressions the year before.16 That comes within the context of the expected overall programmatic spend, globally all industries, reaching $33 billion by 2017.17 Meanwhile, the cost of programmatic across all industries increased in every category except mobile, where high demand may be causing a dip in price.18
To further understand what is happening with pricing and ROI in travel programmatic we can turn to public statistics and some helpful estimates from insiders.
- A Q2 2013 report from Ignition One pegged the average clearing price of a programmatic ad for travel media buyers at $2.41.19
- Recent news articles indicate that the CPM range for programmatic can start at $0.25 and span to some $7–$8.20 Other examinations of the market show that targeting an audience via third-party data can run from $0.25 to $2 CPM, and contextual targeting — looking for pages that align with topics — can range in price from $0.05–$0.10 CPM (plus the cost of inventory).21
- An emerging method of measuring the price of data-driven marketing is to set a guaranteed cost per booking. The brand is counting on a third-party programmatic buyer to secure impressions that it predicts will result in conversions for the client. If the consultancy plays its cards right, it wins by keeping the margin between spend and the promised booking — and the client wins by getting the new booking, and getting it presumably cheaper than it might otherwise have bid.22
When it comes to ROI, measuring programmatic marketing’s effects also starts with what numbers can tell us about ranges and case studies.
- Orbitz sees ROIs that range from “spending $10 to get $1 back, to some pretty extraordinary gains where you spend 30 cents and get a dollar back,” said Chris Stevens, vice president of marketing for the OTA. The variations, according to Stevens, are intertwined with the OTA’s objectives and given strategies for a particular marketing spend.
- Sojern reported that a recent package for Visit Salt Lake, run through its data-driven service, resulted in $57.70 tourism dollars received for every $1 of its client’s programmatic spend.23
- Partnering with Highgate Hotels, Travel Tripper saw a 16:1 ROI on a recent campaign conducted with Sojern. The cost of revenue to generate more than $158,000 in room bookings was 6.4%. The company says that OTAs typically run up an 18%–25% cost of revenue.24
Another question connected to programmatic ROI is that of attribution. To what customer action, or actions, should a travel vertical link a given conversion?
The question is, to a large extent, about last-click — and it is about multi-device browsing. The answers are not yet settled upon. The majority of consumers, according to ExchangeLab, still actually conduct their look-to-book process across multiple kinds of devices. It’s just that they tend to press the buy button from a laptop.
“And while individual travel purchases from smartphones and tablets are significantly lower than those made exclusively on a PC, because a majority of consumers now use multiple devices to complete the purchase process, a multi-platform, multi-channel approach to finding and scaling audience would be fundamental to achieving short- and long-term success for the client,” the report suggests.25
But what channel gets the credit?
“It’s created a situation where companies will focus on just last-click conversion models,” said Scott Garner, at Adara. “But that skews results when what’s been going on is retargeting … did they get to conversion because of the work the prospecting instrument did, or because of the work the retargeting instrument did?”
Programmatic media buyers and analysts are talking about more sophisticated ways of framing attribution — ones in which various platforms get partial credit for what the customer did across the journey of their purchase.
“We do use last click in some scenarios, when we don’t have anything else to work with,” Stevens said, regarding Orbitz. “You know, when you’re using SEM you get a click.
That’s what you get. You’ve got to work with it. But in display you can do a lot better, and you need to do a lot better, to get to the point of measuring a more nuanced attribution.”
Data-driven ads in the multi-device milieu
Case Study: Hotel Tonight
Hotel Tonight worked with Facebook on a mobile-app campaign featuring install ads. According to Facebook, from October–December 2012, Hotel Tonight saw the following results. 10x higher click-to-install rate from the mobile app install ads, compared to standard mobile banner ads 30% lower cost per install in key markets 80% higher return on ad spend from Facebook Offers than average mobile advertising spend (calculated based on booking and registration data)
Source: Hotel Tonight
Multi-device programmatic is driving major decisions by major marketing players in the online world. In March 2014, AOL announced plans for ONE. The new platform is intended to be an automated “integrator of media across every screen”.26 If it works, it may go some of the way toward helping ad buyers apprehending more about of the customer’s journey, device to device.
Facebook is also thinking about multiple devices in the travel space.
Travel Bookings via Mobile Devices
- 18% of American adults who’ve booked travel have done so on a mobile device.
- 12% have booked travel on a smartphone.
- 10% have made a booking on a mobile browser.
- 7% of those making bookings did so on an app. 10% have booked on a tablet.
- 8% have booked on a tablet via a mobile browser.
- 3% used a tablet-based app to make a booking.
“The future is mobile devices, and travel bookings have to follow,” said Lee McCabe, head of Travel at Facebook. “In 2015, in the U.S., 12% of all travel bookings — not just online — will be made through a mobile device. This is incredible, and it’s growing fast.”
The company has worked its programmatic marketing platform into a several-pronged environment, including Exchange, which puts targeted and re-targeted ads into Facebook’s newsfeed, and Custom Audience, allowing ad buyers to compare their customer lists with Facebook’s user base, looking for matches. But with mobile device use increasing, Facebook’s Travel unit is looking to further quantify and capitalize on mobile users within its programmatic strategies.
“Let’s say it’s Hotel Tonight advertising,” McCabe said, describing one ad unit in the company’s Mobile newsfeed. “It will simply say ‘Hotel Tonight: Download Our App’, and there will be a small button, to install, and I click on that … and I can download that app quickly and efficiently.
“Then, we help with keeping people engaged in those apps,” he continued. “We now have different calls to action. We started with ‘Install Now’, to get your app installed. In travel, now you have ‘Book Now. If you’re with Hotel Tonight, say you’ve already installed the app, Hotel Tonight can now target me with specific properties or offers. I click on Book Now and that deep links me to that [hotel’s] page where I can check out very easily.”
Regarding another vertical, a recent Adara study suggests that hospitality, in particular, may be on the front-end of a mobile targeting possibility. In certain cities, mobile may play a larger role in capturing short-notice customer decisions.
“Toronto captures a booking within just 3.5 days of the first search being conducted, the shortest of the nine cities evaluated,” the report reads. “Toronto also benefits from a substantial block of guests who search and book in the same day, indicating that targeted, timely mobile ads may be helpful to attract ‘last minute’ reservations.”27
Insights and strategies
Sociomantic: A Prediction for 2014
The president of Sociomantic in North America is looking at how programmatic assesses its first-party data.
“This means bringing dormant databases forward to try and understand every possible angle of customer behavior and customer lifetime value,” said JB Brokaw, in an interview at Sociomantic’s blog. “Marketers are starting to understand the wealth of data within their own enterprises and the opportunity to create a competitive advantage by mining that data to use across platforms and devices.” 28
- Dig into unstructured data — Purchasing pre-packaged audience data can be an effective way to initiate programmatic media buying, but, at some point, marketers may find that data-driven ad campaigns don’t work exactly like older funnel-based models. Think of programmatic as a tangle of pathways. Clog it with too much material and it’s likely to react poorly. Rather, query your data set to ensure that only candidates who are likely prospects are part of it. If you can’t do that with your data provider — some provide the tools, some do not — try working with unstructured data. The bottom line is to take control of the parameters that matter most to your brand: search history, locations, recency, etc. Eliminate prospects that no longer conform to the inventory with which you’re dealing.
- Real-time bidding isn’t a cookies-only strategy — Cookie-rich first-party data will go a long way toward advancing your programmatic campaign, but don’t disregard the rest of the metadata packed into impressions. Media buyers are still benefiting from tactics such as targeting particular websites. To do this under the umbrella of RTB, you’ll need a DSP that provides you the option of pointing your materials at specific audiences and publishers.
- Dot-com channels: don’t forget your landing page — Remember that all the ad-network and RTB efforts in the world can’t solve the essential problem of winning conversions if your destination isn’t geared toward doing just that. Your landing-page calls to action have to be concrete, intuitive, and designed to work on a first pass after a travel customer clicks that data-driven ad.
- E-mail and programmatic are also a big-data match — E-mail stands to be a platform for marketers looking to turn programmatic into better tools for customer relations management. With an e-mail address, and data-driven sensitivity to that customer’s needs, travel brands can leverage accurate, right-message/right-time moments. Remember, these are consumers already invested enough in a brand to have shared their contact information. Take advantage of that circumstance.
- Transparency is an underpinning of data-driven ads — OTAs and other verticals in travel tend to benefit from programmatic media buying the most when the customers they attract are able to reliably see all of the facts relevant to their trip. While inventory can be a complicated factor, conversions do follow when consumers perceive that they have been provided with all the tools to make an educated choice. This applies to the ad buyer and the publisher as well. Data transparency about impressions — audience activity, user attributes, site contexts, and the like — these are key parts of what drives value.
Endnotes & further reading
- Liyakasa, Kelly. “Some Industries More Advanced Than Others In Data-Driven Marketing, Study Says,” Ad Exchanger, July 30, 2013.
- IAB and Winterberry Group (2013): Programmatic Everywhere? Data, Technology and the Future of Audience Engagement, 4.
- Whitecanack, Laney. “Programmatic Buying and Content Marketing: Strange Bedfellows,” Click Z, June 14, 2013.
- Vidakovic, Ratko. “Programmatic Ad Buying: A Tactical Primer,” Marketing Land, October 18, 2013.
- Kaye, Kate. “Is Online Advertising Getting Too Complex?” Ad Age, November 1, 2013.
- Turn (2014): Advertising Index Report, 3.
- Google+ Your Business (2012): What is Real-Time Bidding? http://www.youtube.com/watch?v=NoGgLxky1FE
- IAB (2013): 85% Of Advertisers And 72% Of Publishers Use Programmatic Auction Strategies, According To A New Survey Of Digital Marketing Leaders.
- eMarketer, “Spending on video bought via RTB to significantly outpace overall digital video growth,” April 15, 2013.
- Schaal, Dennis. “How The Travel Booking Giants Stack Up and Where They Are Heading,” Skift, August 23, 2013.
- Nor1 (2014): Personalized Commerce & Upselling, 7.
- Nor1 (2014): Personalized Commerce & Upselling, 7.
- Forrester Consulting (2011): Cross-Sell You Way to Profit, 24.
- Peterson, Tim. “Real-Time Bidding’s Biggest Buyers,” Ad Week, November 26, 2012.
- Shah, Prem. “Smart Airlines Should Bring Programmatic Marketing To In-Flight Entertainment,” Chango, June 21, 2013.
- IgnitionOne (2013): Digital Marketing Report Q3 2013, 9.
- Turn (2014): Advertising Index Report, 2.
- Phone interview with Lee McCabe, head of Travel, Facebook, on March 26, 2014.
- IgnitionOne (2013): Digital Marketing Report Q2 2013, 3.
- Rice, Kate. “Fueled by data, individualized ads changing travel sales,” Travel Weekly, January 6, 2014.
- Vidakovic, Ratko. “Programmatic Ad Buying: A Tactical Primer,” Marketing Land, October 18, 2013.
- Phone interview with Brad King, vice president of sales, Sojern, on March 25, 2014.
- Sojern. Case Study: Visit Salt Lake.
- Sojern. Case Study: Travel Tripper.
- ExchangeLab (2013): Case Study: Airline Carrier Creating High-Flying Sales, 2–3
- AOL, Inc. (2014): “AOL to Build First Cross-Screen Programmatic Advertising Platform – ONE by AOL,” March 26, 2014.
- Harteveldt, Henry H. “Who’s Sleeping With You? A Detailed Look Into The US Online Hotel Guest,” Adara/Hudson Crossing (2013), 26.
- Kelly, Jason. “14 for ’14: The Future of Programmatic Display,” Sociomantic, December 18, 2013.