The State of Marketing Technology in Travel 2019

by James O’Brien, Haixia Wang + Skift Team - Jan 2019

Skift Research Take

The role of marketing technology in the travel industry has passed the threshold of adoption, but significant attention is still required to bring the technology at work into its true and central role, industry-wide.

Report Overview

In this report, a proprietary Skift survey opens vistas onto the state of marketing technology (martech) solutions in the travel industry in 2019. While 72% of Skift’s respondents said martech is critical to their competitive edge, significant attention is still required to bring the technology at work into its true and central role industrywide. This will require leaders in every vertical to make decisions about whether to bring dedicated individuals and teams into their personnel stack to help steer martech efforts, and it will also call upon them to define the next phase of vendor relationships. On top of all these responsibilities lays the increasingly powerful element of artificial intelligence; when it works, the results in terms of outcomes and lift have been shown to be remarkable. And while the promise of martech is clear, the backdrop against which it is evolving is a data milieu, replete with not only potential for efficient, ROI-focused results, but also the need for consumer data privacy policies and compliance to the coming range of global and regional regulatory changes.

What You'll Learn From This Report

  • An overview of the current state of martech solutions in the travel industry
  • The roles, outcomes, and next steps of martech
  • Martech use cases for airlines, car rentals, cruises, destinations, and hospitality
  • Structural and skill needs for optimal martech execution
  • Vendors and in-house dynamics within martech
  • The artificial intelligence equation
  • Data challenges and regulatory developments

Executives Interviewed

  • Dan Christian - Chief Digital Officer, The Travel Corporation
  • David Bessis - Chief Executive Officer, Tinyclues
  • Kristie Goshow - Chief Marketing Officer, Preferred Hotels & Resorts
  • Peter Giorgi - Chief Marketing Officer, Celebrity Cruise

Executive Summary

Marketing Technology(martech) is a burgeoning element in the marketing and technology stack of many industries, and travel is key among them. Leaders within the travel space are designing their teams and strategies to encompass martech solutions, in 2019 and beyond, but they also recognize that to do so effectively will mean more training, more investment, and more conversations with internal and external stakeholders to tie the outcomes achieved to the expectations attached.

Martech, across travel verticals, is increasingly focusing on the alignment of travel offers during both the trip-research phase and in-trip engagements. Travel leaders responding to Skift’s 2019 survey are working to close gaps in terms of skills and the technology needed to link, normalize, and leverage data, but at the same time — as marketing departments lead the charge — they are seeing email campaigns, customer relationship management (CRM), and analytics grow into revenue lift, and boons to incremental bookings. Personalization and right-asset, right-time opportunities are of capital importance. Powerful features include customer-specific websites, sentiment-specific emails, ancillary in-app moments that make sense in terms of the leg of the trip and the needs a traveler experiences during a journey, and even inventory management by factors of geography and demand. The delivery mechanisms are varied: from chatbots to direct paper mailings to digital out-of-home instances. But all these outputs tie the individual to the travel brand in data-driven, meaningful ways.

In 2019, it’s clear that martech ownership lives in the marketing departments of travel organizations — some 74% of marketers told Skift that marketing leads their martech efforts. However, endemic to martech efforts that score wins will be the presence of dedicated martech leaders and focused teams to accompany longer-standing resources. And while there are changes underway in terms of how marketing leadership — whether dedicated or responsible for martech as a suite of projects — approaches the division of labor, any trend toward in-house staff empowerment will be a more nuanced phenomenon than a simple shift from vendor to staff — expect business leaders to leverage a blend of external, cloud-based toolkits that couple with internal management tools, not a wholesale shift to in-house martech solutions alone.

Across the travel industry, artificial intelligence (AI) driven options continue to multiply as well. Chatbots are one manifestation of AI in the travel space, but so are instances that dovetail with social media, on-property opportunities and points of sale, and app-based experiences that empower deal-finding and queue-cutting. Key to these outcomes will be the normalization, standardization, and linking of disparate data sets. This amplifies AI’s promise as well.

Additionally, now and in the near future, the centrality of data and the way it is regulated will influence the next chapters for martech in the travel space. With the advent of the General Data Protection Regulation (GDPR) act in Europe, and enforcement commencement in 2018 — plus the rise of consumer data protection regulation initiatives in the United States — the ability to respond to consumer demands around anonymity and opt-in requirements only increases.

The role of martech in travel is robust, but so are the challenges that come with it. The trend is toward greater spend, increased adoption, and positive business outcomes. And the engine that will drive that trend is greater investment, deeper-bench teams and skill sets, and an openness to working with consumers to ensure that martech creates only the most relevant and meaningful experiences, before, during, and after every trip.


Introduction: Martech and the Travel Industry

Martech accounted for 25% of the chief marketing officer’s budget for global travel companies in 2018, according to Skift Research’s Digital Advertising in Travel in 2018 Survey (See “Digital Advertising in Travel Trends 2018” for more details). Forty-eight percent of marketing executives surveyed said they plan to increase martech investment in 2019, higher than any other area. The allocation represents a milestone of growth for marketing technology. Today’s martech capabilities are able to centralize companies’ approaches to consumer-facing marketing activities, ranging from emails, social media, website content, and the spectrum of online experiences brands create to paid media on external websites and apps.

Exhibit 1: Marketing Budget Allocation in 2018 and Expected Changes in 2019

Source: Skift Research. Survey conducted in September 2019, n=126

“In 2018, this march of martech shows no signs of slowing down,” reported Scott Brinker at Chief Marketing Technologist Blog, and he evaluated martech to be today’s, “single largest area of investment when it comes to marketing resources and programs.”[1]

SIDEBAR: Glossary

Adtech: Processes and software/technology with which advertisers and ad agencies create, run, measure, and manage online advertising campaigns across external websites or apps. Data and analytics play a significant role in audience identification, targeting, and personalization.

Martech: Processes and software/technology with which marketers use data and analytics to conduct and personalize email marketing; social-media marketing; A/B website (and other messaging) testing; CRM; consumer surveys; and the like.

Drilling down to specific martech capabilities, a 2018 eMarketer article quoting a study by eConsultancy and Adobe reported a focus on mobile experience and analytics, with over 40% of marketing executives in hospitality, transportation, and online travel agencies (OTA) citing mobile experience and analytics as their company’s technology priority in 2019.[2]

Exhibit 2: Martech Priorities for Travel Companies in 2018

Source: Econsultancy and Adobe, “Digital Trends in Travel and Hospitality Sectors,” as cited by eMarketer

The mobile focus is a no-brainer in the context of consumer experiences, as consumer experiences are increasingly mobile experiences. eMarketer estimated that mobile accounted for 40% of digital travel sales in 2017 and forecasted mobile to make up half of total digital travel sales by 2020 in the U.S.[3] For some emerging markets where mobile is the first device for internet access, the numbers are even higher. And mobile experiences are not just limited to transactions. Consumers are increasingly demanding relevant services at their fingertips, at the moment and location. Skift Research conducted a survey in June 2018 asking U.S. travelers about their mobile usage related to every stage of their in-destination travel experience. Travelers turn to their mobile phones for information or service throughout their entire travel journey (See “U.S. Traveler In-Destination Mobile Usage Survey 2018” for more details).

Exhibit 3: Mobile Usage Relevant to Each Travel Stage



Source: Skift Research, n=1671, surveyed conducted in July 2018

The data that travelers create and that travel marketing ingests has become even more actionable, driving lift across a spectrum of measurement streams. Skift’s own survey, in the sections that follow, illustrate the scale and scope of such increases and where and when they have been measured in recent months.

The growth and evolution of martech is prompting travel companies to adapt and adjust as well. As Dan Christian, chief digital officer at The Travel Corporation, puts it in a Skift interview for this report, the martech evolution underway is “constantly changing and forcing us to upgrade our websites … as the martech uses AI rather than rules-based decision making.” Additionally, with a central goal (across industries) being that of personalization in the marketing outreach — in essence, personalization entails the linking of historical consumer data to brands’ present and future offers and invitations — Christian said the industry is at a junction requiring, “more training and hand-holding … to ensure these strategies are implemented as promised.”

As Christian said, also at the core of martech’s evolution within the travel industry is the rise of artificial intelligence layers — increasingly instrumental to sewing together disparate data sets and empowering marketers to derive insights from the scores of information fields that typically populate transaction tables following even a single point of sale. Marketing leaders must also deepen the bench on their teams, ensuring that data science and data-facing skillsets are closer to the foreground.

These goals and challenges are at the edge of where travel is moving with martech. When they work, and travel leadership tells us they do work, martech changes the business-to-consumer conversation.


Travel Martech Survey: Companies Define Roles, Outcomes, and Next Steps

Across industries, martech adoption is on the rise. In a recent Gartner evaluation of martech trends, the uptick in deployment by marketing teams from 2016 to 2018 increased in categories such as personalization applications, A/B testing, and social-media advertising by 21–28 percentage points. Engaging with martech solutions, as organizations in that survey stated it, has been marked by positive outcomes: from healthcare to financial services industries, more than 50% of respondents said their marketing technology stack is proving effective at meeting business objectives. In the travel sector, the outcomes are even rosier: 86% said martech solutions are driving marketing and business success.

In late 2018, Skift surveyed travel leaders and the results of this research illustrate an industry working diligently to incorporate martech solutions, even as the efforts are met by challenges around building deep benches — i.e. bringing aboard the skillsets that facilitate martech success — and achieving the deep insights that stem from measuring and analyzing martech campaign data.

See detailed survey demographics in the Appendix.

The list and the charts below highlight eight key points that emerged from the survey.

1. TRAVEL STAKEHOLDERS SAY MARTECH IS CRITICAL: In the survey, 72% of Skift’s respondents said martech is critical to their competitive edge. There is little question that the technology will be embedded in travel’s future. However, as the subsequent findings show, exactly how and at what pace, remain factors of consideration industry-wide.

Exhibit 4: Martech’s Role in Company Success

Source: Skift Research

2. TRAVEL BUSINESSES ARE STILL SEEKING MARTECH SKILL SETS: As shown in the chart below, by weighted average across a 1–5 ranking of agreement (1=strongly disagree to 5=strongly agree), the majority of Skift’s respondents said martech is still an emerging skill set (the level of agreement ranked 3.6 out of 5) and they also said that martech is harder to deploy and implement than they first anticipated (rank: 3.3 out of 5). This means the martech space is marked by dedication to deployment, but also by a consciousness of needed education — which stakeholders will speak to later in this report as well — and also the need for patience with the learning curves that come with the technology in play.

Exhibit 5: Martech Challenges for Travel Companies

Source: Skift Research

3. MARKETING DEPARTMENTS LEAD MARTECH: 74% of Skift’s respondents said their marketing departments, rather than information technology or business intelligence units, were steering martech efforts at the company. The actual negotiations and purchases were also, in the main (61%), marketing’s job. The two charts that follow illustrate the responses.

Exhibit 6: Martech Decisions for Travel Companies

Source: Skift Research

4. IMPLEMENTING MARTECH IS RARELY A BLACK-BOX PROCESS: Nearly two-thirds of Skift’s respondents (63%) said they partner with a vendor for some of their martech solutions. More than a quarter (26%) said they rely wholly on their in-house resources for all of their martech suite, and only 10% turn to vendors for full martech management. This is another area of transition for travel — later in this report we’ll look at the nuances of movement between vendors and in-house teams.

Exhibit 7: Internal vs. External Martech Solutions

Source: Skift Research

5. KEY MARTECH TACTICS: EMAIL, CRM, AND ANALYTICS: Email marketing was the leader of the pack (80%) when it came to martech priorities in 2018. The next point of focus was analytics and measurement, forming the second leg of the martech tripod, with 76% focus, and then CRM figured closely into the equation as well, at 72%.

Exhibit 8: Key Martech Tactics in 2018

Source: Skift Research

6. MEASURING MARTECH MEANS ROI AND INCREMENTAL LIFT: In the Skift survey, 92% said return on investment (ROI) is the way they evaluate martech’s impact; approximately 62% said it was revenue lift and incremental bookings. Lower on the spectrum were brand lift (38%) and streamlining to the cost of doing business (23%). When it came to anticipated outcomes, 76% of the respondents said they expected increased sales/bookings and 71% expected to see higher brand engagement. These are clear indications that martech investment is increasing tied to commercial outcomes that marketing leaders are responsible for.

Exhibit 9: Measures Used to Calculate the Value of Martech

Source: Skift Research

7. THE CHALLENGE IS MEASUREMENT: More than a third of the Skift respondents (36%) said they found the level of improvement from martech efforts to be “not measurable”. Among those who could measure their outcomes, 29% cited a 5-10% lift and 16% saw a 10-25% lift. The message is twofold here: one, marketers need help — potentially from technology partners — to grasp and analyze the improvements martech brings to the brand-consumer conversation; two, when they do measure their outcomes, the metrics are powerfully on the side of positive outcomes.

Exhibit 10: Outcome of Martech Adoption

Source: Skift Research

8. NEXT STEPS: Personalization and targeting (76%), coupled with analytics and measurement, are the prime focuses going forward in 2019. But so is content marketing (71%) and a 63-65% spread across CRM, email marketing, and marketing automation. Artificial intelligence and machine learning were the least cited points of focus for 2019, at 36%.

Exhibit 11: Martech Focuses in 2019

Source: Skift Research

In summary, travel leaders responding to Skift’s 2019 survey are working to close gaps in terms of skills and the technology needed to link, normalize, and leverage data. At the same time, as marketing departments lead the charge, they are seeing email campaigns, CRM, and analytics grow into revenue lift, and boons to incremental bookings. As the travel industry continues to mature, with smaller companies likely taking longer to create robust systems and larger organizations achieving maturity in the nearer term, personalization, audience segmentation, and targeting capabilities are expected to be key points of focus. The ability to measure all these outcomes will determine the order and sequencing of leaders and followers to come.


Martech Use Cases and Travel Verticals

Martech and the mobile device, as well as the email and social media ecosystems, are creating new inroads to the advertising campaign. The technology is also fueling solutions around ticketing, answering customer questions, and prompting in-trip offers and add-ons. Martech is reinforcing, if not forging, digital links between verticals such as the airline and car rental industries, and it is changing the way travelers relate to the places they visit, going as far as mapping their names and faces to the on-screen, in-destination experiences they encounter during a visit. The following sections highlight what travel leaders tell Skift and others about leading martech use cases across recent months and years.

Airlines

Smarter and more efficient delivery of engagements to travelers relies upon data-driven speed to screen in one vertical like no other: airlines. As passengers move from ground transport to terminal, to gate and then to in-cabin seating, the windows for creating opportunities and anticipating needs are quick to open and close, and they are increasingly opened by the power of technology.

At KLM Royal Dutch Airlines, for example, as MarTech Today reports, the company’s chatbot, branded Blue Bot (aka BB), intersects with passengers at the touchpoints of ticket purchasing, booking confirmations, issuing check-in reminders, and delivering boarding passes. It offers flight-status updates and it answers passenger questions. The solution addresses the equation of volume over time, allowing KLM to divide its resources in significantly more ways than it could via data-armed human representatives alone.

“Volumes will continue to grow,” Pieter Groeneveld, senior vice president at Air France-KLM, told MarTech Today in a statement.[5] “At the same time, customers require a speedy response. We have therefore been experimenting with [artificial intelligence] to support our agents to provide a personal, timely and correct answer. With [Blue Bot], KLM is taking the next step in its social media strategy, offering personal service through technology, supported by human agents when needed.”

Chatbot solutions sit at the intersection of AI and marketing. The martech technology that they represent is also emerging as a tool at airlines such as Delta, Air New Zealand, and Aeromexico. These chatbots facilitate data-prompted insights, prompting passenger input — meal selections, questions about upcoming trips or in-trip details — but also plug the airlines (and airports as well) into social media and voice-based technologies such as Alexa to interact directly with customers.[6]

These advantages notwithstanding , travel leadership must also note that as martech evolves, so do vectors of attack when it comes to hackers in pursuit of travelers’ personal data. In 2017, for example, thieves compromised Delta’s third-party chatbot provider and stole payment information.[7] What is increasingly clear, as technology empowers the travel industry, is that the industry will have to partner with security vendors as well as martech providers. And they must ensure that their martech vendors are working with security providers, too. With data, there comes the attendant responsibility: consumers must be protected.

Car Rental

The intersection of two typical trip legs in particular — ground transport and air travel phases of the journey — represent another opportunity for martech to amplify travel companies’ ability to predict and please passengers.

Air carriers know that a martech-driven experience, typically app-based, that empowers an airline customer to book a rental car alongside their mobile-ticket experience is a loyalty-building event. And martech is also allowing car-rental companies to assign inventory to geography in ways that ensure consumers’ digital experiences are met with actual tires on the road when and where they land. Hertz, for example, uses data to drive car-fleet placement so that vehicles and demand are closely matched by location and by region, remotely signaling years of over-fleeting may well be coming to an end. Meanwhile, Avis has shifted to a mobile-first consumer experience, one that allows them to plug martech-forward solutions into the customer’s on-screen process. Hertz also plugs its customers into destination opportunities, linking what the data tells the company about its drivers and their locations into more than 13,000 curated experiences that it can access based on proximity.[8] And so, when you arrive, there are wheels and ideas ready to be deployed. All of this is reflective of a basic understanding of the traveler mindset, one that data is now able to reinforce.

“Customers today want to transact when it’s most convenient for them,” said Larry D. De Shon, chief operating officer and director of Avis Budget Group, in a recent Skift interview.[9] “For us, that meant we needed to do a better job of offering our ancillary products and services on our website and mobile devices and not rely solely on our counter-sales functions when customers are in a hurry to get their cars. With ancillary revenue on both Avis.com and Budget.com growing in the quarter, I believe we’re on the right path.”

Success with martech tools in the car-rental space is also about dovetailing consumer wants and needs with aspirations.

Travel can be an experience in which the individual adopts and projects activities and traits they might not select at home. Organizations such as Turo, a car-sharing company, use data to tie the aspirational to the actual, according to Robert Glickman, CMO at Arm Treasure Data, in an interview with MarTech Series. Companies like this, he says, are “merging the functional requirement of renting a car with the emotional and aspirational connection people have with cars. They tie it all together with an intuitive, beautiful UI [user interface] and a platform that delivers a great experience.”[10] It’s worth noting that when this analyst visited Turo’s website, in January 2019, the company’s data-driven approach worked well, resulting in inspirational prompts to consider models such as the Camaro and the Ford Mustang … which dovetailed with the writer’s recent online browsing.

Cruises

The travelers to whom the cruise industry advertises are to some extent different from the passengers booking airline ticket or the guests reserving rooms at a hotel. That is, it’s not an alternate venue when flights are unavailable or trains and rental cars are deemed inconvenient or too expensive. The cruise passenger’s intention is specific, to board a boat and engage with a menu of on-board experiences and destinations, and the selection process, according to Peter Giorgi, chief marketing officer at Celebrity, is extended.

When it comes to martech, the dedicated consumers and the virtually closed travel ecosystem of the vessel mean that the data gathered is focused but significant in volume, and verifiably connectible to the cruise company’s onboard activations. In other words, every trip is a data goldmine for martech, but also a bit of a data avalanche.

“In the cruise industry specifically, we have so much data, it’s absolutely crazy,” Giorgi said. “[We have data on] an overwhelming amount of consumer experiences with us, from getting them into the booking funnel, to how they booked, to who they’re sailing with, to then everything that happens on the ship, the shore excursions they buy, the flights they buy. It’s incredibly broad, right? We have all of that, and so all of that helps us create certain profiles, and signals, and different nano-segments and micro-segments. So, we have, I think, about eight different analysts on the business, insights, and analytics team.”

Another benefit of martech is that Celebrity can focus on carving its incoming data into specific and usable modules. Audience segmentation and personalization becomes a primary focus — there’s less pressure to target emails and create awareness because the cruise passenger, to some degree, represents a baseline of self-selection. For Giorgi and his team, attention to consumers evolves along lines of meeting each research phase with heightened specificity. “Like segmentation personalization on the website for example,” he said, “where that manifests as personalized web pages that you’ll see when you land back on the website after you’ve looked at something.”

Furthermore, the cruise-consumer insights that companies such as Celebrity can call upon highlight avenues to direct-marketing experiences that extend beyond the digital realm alone. Connecting martech analytics to business intelligence leadership, Giorgi is empowering parts of the organization to target in the analog space.

“It was kind of like, hey let’s see if this fancy segmentation thing you do can actually pay dividends in the most traditional, and sort of analog, expression to marketing we have … and it’s worked,” said Giorgi. “Personalization, and digital printing. I don’t know if you’ve heard of PebblePost or NaviStone, they’re a couple of partners we’ve worked with that allow us to take a digital signal and respond to that with a postcard — in 24 hours — based on what somebody was looking at. Now, we do about 36 different versions … that have something like a 25-to-one ROI. We vary the output, but the results kind of speak for themselves, right?”

Results were also on marketers’ minds at cruise companies such as Cunard and P&O, where, in 2018, martech drove initiatives that addressed mobile-booking efficiency and omnichannel experiences.

For P&O that meant A/B testing and deep app-experience analysis, allowing marketing teams to accelerate the cruise customer’s ability to get answers about products by pre-populating suggestions based on data insights around what consumers often ask, and what kind of consumers often ask what kind of questions. “Ninety percent of all P&O bookings are done by two adults that are looking for one cabin, so the option for one cabin was automatically selected to shorten the process,” wrote Jens Vang Lauridsen, vice president, EMEA Sales at Monetate, in MarTech Series.[11] “The 10% of visitors for which this was not a good fit could change the option and choose a more suitable accommodation when checking out.”

Those moves drove a 7.8% lift in conversion rates.

“In Cunard’s case, the brand required an advanced e-commerce and A/B testing solution to help drive return on their high-impact, multi-channel marketing campaign,” Vang Lauridsen continued. “This tool allowed the cruise line to create a personalized user- and mobile-friendly experience by testing what the potential shoppers would prefer and targeting them when the campaign went live. The team was then able to provide visitors with an experience catered directly toward them.”

Among the 20,000 prospects Vang Lauridsen said Cunard generated with the martech effort, conversion rates exceed 57%.

Destinations

Perhaps no destination can claim greater name recognition than Walt Disney World, but that hasn’t always guaranteed the House of the Mouse an exclusive spot as the only major Florida resort. As early as the mid-1990s, the destination was working to break down data silos and align marketing with what its customers truly wanted — and also what they would want next — from its properties’ offerings. With the rise of competing regional experiences, Disney knew that what happened in its park(s) would determine ascendancy and permanence at the top of any destination-travel list. “They wanted to know who their customers were and maximize their journey, so they’d come back again and again,” said Kevin Cochrane, CMO of SAP, as quoted in Chief/Marketer. “They wanted to create an experience where families could relate to one another and become emotionally bonded to Walt Disney World.”[12]

The quest continues, even as the 2010s draw to a close. Contextual insights, freeing data from a legacy of silos, and connecting marketing’s abilities around creating meaningful experiences to the consumers who are most likely to respond to relevant messaging are what martech means to the destination vertical still. In 2019, Disney’s martech approach manifests prominently via its in-app experiences: MyMagic+ program members smartphones become hubs for digital out-of-home technologies throughout the park — for example, the customer’s name can appear on a sign as they pass a ride or photos from a recent moment will be delivered to their screens (with further marketing prompts to boot).[13]

It’s not just what happens onsite, however. Pre-trip and post-trip martech strategies are also significant factors in the evolving destination marketing toolkit. As Douglas Karr reported, at MarTech Zone, 30% of U.S. travelers turn to social media for trip inspirations.[14] For marketers, plugging into that segment of travel research means leveraging platforms and tools that can identify, optimize, and capitalize on the digital influencers who account for 46% of travelers posting trip reviews and the 40% who post destination reviews.[15] Martech is expanding the scale and scope of the marketing approach. There is the in-house team and the experts who lead them, but then there is a vast world of ready and waiting individuals outside the traditional marketing space, to whom travel consumers are listening.

Hospitality

Another travel sector in which brands engage with high-touch, data-rich consumer experiences is the hospitality space. Starting at the point of room selection, continuing through arrival, check-in, concierge and porter interactions, in-room requests, restaurant meals, and the like, the hotel industry is ingesting information that speaks specifically to preferences and opportunities to inspire. These are, of course, among martech’s sweet spots.

For Kristie Goshow, chief marketing officer at Preferred Hotels & Resorts, this data-forward environment means directing her teams’ martech-related efforts down to the level of specific commercial outcomes. Marketing can mean numerous activities, she says, but when it comes to martech, she’s steering Preferred toward revenue-first results — in her case with a focus on above-property phases of the interactions, which entail interactions outside the property level, prior and after customer stays with a specific property.

“So, [for instance], as an iPreferred member … living within the iPreferred ecosystem, ” Goshow said. “We will be engaging with them frequently on a messaging level using automated messaging solutions. So, primarily by email, to let them know about offers and events and things that are happening that would be of interest to them. Then, we have a segmented base of customers and we make sure that they get the right information at the right time. Often, we’ve got a little history on them, so we know this time last year they may have stayed in Cabo and we know that they made the booking two months before the arrival date, so theoretically we can go and target them two months before.”

Goshow’s approach highlights some crucial capabilities of martech in hospitality, namely, customer-journey mapping and ahead-of-booking prediction and management of opportunities by applying the right data and analytics at the right moment.

“We do have a dedicated individual who is looking at the data, peeling the onion, slicing and dicing a lot of our activity that we see and all of our data that we collect across different engagement points,” she said. “So, we can make smarter, more efficient investment decisions and appropriate data decisions with very, very different and various consumer groups that we have in our base of customers.”


Further Analysis: Martech Leadership and Other Highlights

Martech Leadership

Among the factors in play when it comes to martech adoption, deployment, and effectiveness, the key to success with any solution is the element of leadership. Peter Giorgi, at Celebrity, noted this in his description of a team dedicated to data and martech. So did Kristie Goshow, at Preferred. More broadly speaking, among the companies that Skift surveyed, it’s clear that leadership lives in the marketing departments of these travel organizations — some 74% of the respondents said that marketing leads these efforts.

That may well make sense, as far as aligning customer outreach and engagement with the technology that these businesses are putting into play, but, endemic to martech efforts that score wins is the presence of dedicated martech leaders and focused teams to accompany those experts.

In the Gartner survey of marketing professionals across various industries mentioned before, 74% of the companies said that marketing carries martech responsibilities, but approximately one quarter of them indicated that a dedicated martech leader and team were involved.[4] The poll showed that, among the organizations exhibiting “advanced marketing maturity,” on a maturity scale of one to five, a dedicated martech leader or team role was most prevalent at more mature marketing organizations (levels 3 and 4, and 29% and 37% respectively).

Exhibit 12: Marketing Maturity and Dedicated Martech Leaders

Note: Percentages within each category. Source: Gartner, n=504, survey conducted in April-June 2018

The above chart speaks to the relative experiences and journeys of the smaller companies at which Skift looked as well. While martech adoption is on the rise, organization size, which often correlates with the scope of a company’s resources, matters as well. So does the relative level of skill sets and data maturity within a company. As organizations increase in revenue and size, the combined insights of the Skift and Gartner studies show a positive trajectory for consideration: travel companies should track toward dedicated martech leadership as their skill sets and data approaches mature, enabling customer-centric capabilities to take shape and driving deeper personalization and analytics.

Vendors and In-House Dynamics

Another factor playing a role across the arc of travel organizations’ relationships with martech is the dynamic of vendor-forward versus in-house initiatives.

Deloitte recently suggested that, across industries, data management and customer-experience strategies and tactics will increasingly move in-house.[16] There are changes underway in terms of how marketing leadership approaches the division of labor. Whether dedicated or responsible for martech as a suite of projects, the trend toward in-house staff empowerment could be a more nuanced phenomenon than a simple shift from vendor to staff. Business leaders are expected to leverage a blend of external toolkits and interior management, not a wholesale shift from exterior to interior martech solutions.

Perspective is everything. As is the case with many technology solutions in the business and marketing world, first approaches often begin with vendors — a spectrum of vendors, probably — and then departments taper toward internal capabilities as new skills are acquired. In other words, brands outsource, they learn from their partners while they outsource, and then the team builds efficient approaches that allows it to bring some or all of the relevant tasks in-house.

“I think we’re seeing some of that happen in our lines of business,” said Peter Giorgi, at Celebrity. “We’re figuring out how to take some of these things internal, which usually ends up making us faster, and is usually more cost effective.”

“Social media is a good example,” he continued, “where, forever, there were all these social media agencies that popped up — and every brand needed one — and then at a certain point they figured out, look, I need my own somebody to monitor these pages; I need an art director, and a writer, and that’ll probably do the job.”

In-house martech as an avenue to greater control is one takeaway, here. From a wider perspective, however, the vendor landscape is getting too complicated. There were some 6,242 unique martech vendors, according to Scott Brinker’s 2018 survey of the industry in chiefmartech.com, nearly 30% growth from 2017.[17] This will translate into an even bigger challenge in finding the right vendor partners.

Meanwhile, as cross-industry spend on martech remains robust, what shifts there are toward internal staff skill sets should not necessarily suggest a move away from third-party external tools. As Martech Today reported, in January 2019, the ongoing desire to incorporate cloud-based solutions, even if in-house staff takes a firmer hand with them, continues to stem from the concept that it is easier (and perhaps less expensive) to change platforms than it is to change staff.[18]

The Artificial Intelligence Equation

An underlying premise when it comes to artificial intelligence in the travel industry is that its applications will accelerate, amplify, and optimize abilities to analyze data and personalize marketing experiences based on the insights derived.

Chatbots are one manifestation of AI in the travel space, but so are instances such as Hilton’s experiments with the Connie robot, powered by IBM Watson’s AI solution, which interacts with guests on-property in a concierge capacity.[19]

Meanwhile, across verticals, services and ancillary opportunities are part of AI’s promise.

  • KLM uses AI to handle inbound social media questions from consumers — the solution scaled, by the end of 2017, to encompass 50% of the airline’s answers.[20]
  • Hotels have turned to AI to identify and adapt to in-room food ordering trends and alter menus accordingly.
  • In the app sector, AI powers assistant-based experiences around bookings, schedules, and recommendations. Consumer-facing apps such as Hopper and TripIt employ big data and machine learning to boost deal finding and queue cutting for travelers, while Google Flights uses AI to push its delay predictions ahead of even the airlines’ capabilities to flag arrival/departure challenges.[21]

Across the travel industry, AI-driven options continue to multiply. A step down in the industry’s strata of processes, AI is streamlining and augmenting what travel companies do at operational levels, somewhat behind the scenes as well. This is also where the martech solutions distinctly intersect with the AI equation.

Tiny Clues is one company working with travel to solve for AI’s best-case applications, industrywide. The approach, said Founder and CEO David Bessis in a Skift interview, is not to replace the extant marketing team with a computerized brain, but to layer digital intelligence onto the stack, making marketing decisions more powerful because they’re emerging from deeper links between data types and deeper insights based on the analysis of information that was previously siloed or unidentified.

In fact, the evolution of martech depends upon AI-driven outcomes, As this report highlighted previously, there is a vast amount of disparate data types, which will only increase in scale. Without artificial intelligence to help, the normalization and standardization is very challenging, in Bessis’ words, “is not just difficult, I think it’s impossible. If you look at what your transaction tables look like — whether you’re a hospitality company, or a cruise, or an airline — you have maybe 40 to 50 fields describing the transactions.” Artificial intelligence is the tool-layer that allows organizations to normalize those varying fields and apply the insights that emerge from analyzing them to actual targeting.

As for the state of AI in the industry, Bessis said travel companies can typically deploy a solution such as Tiny Clues’ within two to eight weeks. When they do so, and the technology begins to work in tandem with the company’s extant marketing resources, results are significant.

“They can see revenue lift of as much as 80%,” he said. “Which is massive. Let’s say you’re an airline and you have a promotion on premium-economy to go to the Caribbean for Valentine’s Day. You promote that to your existing customers — through an email campaign, or a social media campaign, whatever — the legacy approach would be to use some 5% of your database based on existing criteria. If you changed your approach to AI and asked the technology to provide you the best 5%, people most likely to do the booking in the coming days and you run that A/B test … you’re going to see 80% in incremental revenue lift.”

For the travel industry, companies such as Bessis’ and others in the ecosystem as well are constructing pathways to the future of martech and travel. So says Noreen Henry, chief executive officer at Wayblazer, another AI-technology vendor.

“AI can help connect disparate channels and data to drive a more personalized, integrated search and discovery journey for today’s traveler across channels,” said Henry, speaking to Digital Journal.[22] “What this looks like in practice is that brands will be able to gauge a shopper’s behavior and intent through each channel, whether that be advertising, messaging, websites, email, in-app, etc. and act on this data to deliver highly personalized experiences. Each engagement on each touchpoint will be aggregated in one stream and target consumers with the right message and offers at the exact right time. This is the future of the travel journey.”

Data Challenges and Regulatory Developments

If the road to martech-driven success within the travel industry is paved with data — and the experts we’ve spoken to say that it is — then data must be the go-forward focus, and challenge, for leaders in the space. As such, a key avenue to acquiring focus and overcoming challenges will be that of education, and also attracting newly graduated data scientists to the travel space.

“I’m not sure, when you look at the educational system … [that even hospitality] is doing a good enough job in positioning our industry to students and the future talent coming out.” said Goshow of Preferred Hotels. “My personal feeling is that we’re not, and we still have a huge amount of work to do there. We should be telling students who have studied for a data science degree that our industry is one that has arguably more data than most and is a great place to be if you want a future in that field.”

It is also almost certainly the case that the future of the travel journey cannot rest on algorithms alone. The human factor, and the ways marketers in the travel space leverage data are increasingly intertwined with concepts of ethical use cases and privacy. With the advent of the General Data Protection Regulation (GDPR) act in Europe, and enforcement commencement in 2018 — plus the rise of consumer data protection regulation initiatives in the United States — the ability to respond to consumer demands around anonymity and opt-in requirements only increases.

Vectors to which travel companies must now give attention include ID and passport details; email addresses and telephone numbers; photographs and videos; and financial and payment information. Obtaining and maintaining individuals’ consent when it comes to these factors will put the onus on travel companies to even further understand and educate their teams on the nature and (potential) pitfalls of data when pursuing bookings and conversions across verticals.

If there is a bottom line to the trend toward martech and travel’s future, it’s something like this: turning to data and its applications will drive business — and the outcomes cited in this report show that it does — but the complications and challenges that come with martech, and data-driven technology solutions of all kinds, must also prompt an evolution of the travel ecosystem’s approach to data itself, and, most critically, to the consumers it uses data to reach.


Conclusions

Martech is a burgeoning element in the marketing and technology stack of many industries, and travel is key among them. Leaders within the travel space are designing their teams and strategies to encompass martech solutions, in 2019 and beyond, but they also recognize that to do so effectively will mean more training, more investment, and more conversations with internal and external stakeholders to tie the outcomes achieved to the expectations attached.

At the front end of martech efforts, the industry is likely to see email, CRM, and analytics remain significant in terms of tactics. However, strategies around end-of-cycle measurement must be at the core of travel’s martech approach as well. Without the insights that analytics can produce, the ROI and lift that organizations already enjoy risk becoming black-box events that marketing teams will not effectively internalize and use to refine future campaigns.

Going forward, martech skill sets and their development will be a major focus for travel companies. As marketing departments link technology to advertising and consumer experiences, the links to IT and business intelligence will also arrange themselves to reflect these changes. It is a prime moment for data-science experts and marketers with data-science skills to present themselves to the industry — and for the travel verticals that want a prime position in the martech ecosystem to seek out talent and find connections to their future martech gurus at the schools and universities that produce them.

In the near future, while these moves toward dedicated specialists, individual leaders, and also teams, will entail a degree of shift from a vendor-centric ecosystem to one that is weighted differently toward in-house resources, companies will almost certainly remain attached to cloud-based platforms and services, especially in the realm of artificial intelligence layers that augment and amplify the travel marketing stack. It is the externally managed experience of those software kits that is likely to contract.

Finally, as all these factors develop and alter the travel industry landscape, the centrality of data and the way it is regulated will influence next chapters for martech in the travel space, and beyond.


Appendix: Survey Respondent Demographics

 

 

 


Footnotes

  1. Brinker, Scott. “Martech jumps to 29% of the CMO’s budget in Gartner’s 2018-2019 survey,” Chiefmartec.com: Chief Marketing Technologist Blog (November 12, 2018).
  2. Kats, Rimma. “Travel Marketers Plan to Invest in Various Marketing Tech in 2018,” eMarketer (January 31, 2018).
  3. Mobile Drives Growth of Online Travel Bookings,” eMarketer (June 21, 2018).
  4. Yeager, Bryan. “9 Key Insights from Gartner’s Marketing Technology Survey to Help You Prepare for 2019 and Beyond,” SlideShare: from #MarTech East Conference, Boston, Massachusetts, October 1–3, 2018 (September 30, 2018).”
  5. Faggella, Daniel. “How companies are using chatbots for marketing: Use cases and inspiration,” MarTech Today (January 22, 2018).
  6. Artificial intelligence – far more than just a chatbot technology for airlines and airports,” Future Travel Experience (February 2018) and Yamanouchi, Kelly, “Delta tests chatbots and other ideas at innovation center,” AJC (May 2, 2017).
  7. Kan, Michael. “Chatbot Provider Hack Hits Delta, Sears,” PC Magazine (April 5, 2018).
  8. Elliott, Christopher. “Car Rental Companies Are In A ‘Transformative’ Stage. Here’s What It Means For You,” Forbes (September 23, 2018).
  9. Is a Smarter Car Rental Industry Emerging From Its Funk?,” Skift (August 8, 2018).
  10. Ghosh, Sudipto. “Interview with Robert Glickman, CMO, Arm Treasure Data,” MarTech Series (September 4, 2018).
  11. Lauridsen, Jens Vang. “Get on Board with Personalization: How Two Luxury Cruises Improved Digital Customer Experiences”, Martech Series (Auguest 9, 2018).
  12. iverios, Beth Negus. “Disney’s Lessons for Leveraging Data to Build Relationships,” Chief/Marketer (September 6. 2018).
  13. Gilliland, Nikki. “How Disney World has mastered customer experience,” Econsultancy (September 28, 2017).
  14. Karr, Douglas. “Statistics on How Travelers Utilize Social Media Before, During, and After a Vacation,” MarTech Zone (June 14, 2018).
  15. Vacationing the Social Media Way [Infographic],” MDG Advertising (May 30, 2018).
  16. Vaccaro, Angel; Mager, Scott; Groff, Natalie; Bolante, Alex. “Beyond marketing: Experience reimagined: CMOs and CIOs partnering to elevate the human experience,” Deloitte Insights (January 16, 2018).
  17. Brinker, Scott. “Marketing Technology Landscape Supergraphic (2018): Martech 5000 (actually 6,829),” Chiefmartec.com (April 24, 2018).
  18. Levine, Barry. “Marketers react to Gartner finding: Martech spending now exceeds staff costs,” Martech Today (January 11, 2019).
  19. Hilton and IBM pilot ‘Connie’, the world’s first Watson-enabled Hotel Concierge,” YouTube: Hilton (March 9, 2016).
  20. Silk, Robert. “Artificial intelligence driving KLM’s social media strategy,” Travel Weekly (December 20, 2017).
  21. Perez, Sarah. “Google Flights will now predict airline delays – before the airlines do,” TechCrunch (January 2018).
  22. Sandle, Tim. “Travel sector is turning to AI: Interview,” Digital Journal (February 19, 2018).