Ai Editorial: Retailing and CX, are airlines up for it?
Ai Editorial: Airlines are investing in their IT and retail infrastructure, and the NDC, too, has been around for a while. How all of this is shaping up? Hear from experts at this week’s Ancillary Merchandising Conference in Barcelona (20-22 April).
The buzz is unmistakable. The industry – airlines, OTAs, technology companies etc. – at large is working its way to shape up superlative experiences.
From the moment we start planning our next journey till the point we complete it or even get inspired for another trip, each touchpoint is being spruced up to deliver something beyond the mundane. Something that fits in with what we are seeking, what might surprise us and eventually builds a stronger affiliation with the brand.
So as we gear up for this week’s Ai’s 10th Ancillary Merchandising Conference in Barcelona, here’s what to expect, what the cream of the industry is going to discuss:
Personalisation: This is what everyone seems to be targeting – winning me over, my experiences through relevant, contextual content, offerings, service etc. just when I need it. So be it for the device I am using for my digital access or even my interaction with the staff, how easily can I be identified and helped out? A critical area is what does it take to “personalize” and how to do it. Airlines need to collect relevant data about the customer, often from a variety of sources. But is it resulting in a negative experience – say a retargeting campaign going overboard? Yes, it’s happening and it’s annoying.
The industry is also looking at in-flight experience as a key differentiator. The future of in-flight analytics should be able to offer you the rest of the movie you watched (and didn’t finish) on the last flight - recommendations of movies based on what I have watched - this could be applied to food, drink, duty free products, gifts and home delivery products. This is the same outside the cabin - offer me a specific coffee as I am entering the airport to have it available in lounge. Exciting, for sure.
Collaboration/ tie-ups for merchandising: As for the industry, there is lot of discussion around what can be done to present a passenger with relevant content/ offer and importantly, getting the timing right. That is to crack the device, intent, location etc. of a passenger. Farelogix, Sojern, Adara, Travelport, Amadeus, Sabre, ATPCO, IATA etc. are all addressing different aspects of the differentiation merchandising opportunity, each with a healthy respect for common platform and standards. For instance, how a flight shopping platform can be integrated with other platforms that are responsible for other aspects of merchandising innovation — such as revenue management systems and dynamic merchandising offers? As Routehappy’s CEO Robert Albert told me: there is no single system that will transform flight shopping itself. So it’s worth assessing how airlines, distributors, and technology partners need to come together to adopt common platforms and standards to make airline merchandising click.
Distribution: Airlines intend to be in better control, and that’s where the focus shifts to IATA’s new standard NDC. The NDC XML-based Standard follows four guiding principles: it is modular and flexible, it is not mandatory, is business model-agnostic, and can be integrated into existing processes and systems. So how are airlines, GDSs, technology specialists shaping it up? According to IATA’s update in March, 24 airline NDC pilots across five continents have been conducted and 15 of the top 20 airline groups (by revenue), have either deployed components of the NDC standard or plan to do so during 2016-17.
Also, the dynamics of 3rd party distribution are evolving. There are notable developments - booking on Google-hosted environment (or “Book on Google”), airlines offering direct access to its fares to agencies via direct connect, the introduction of a global charge for bookings made through GDS etc. As for GDS companies, we are already seeing that usage of NDC -XML by airlines and GDSs will vary in its shape and form, resulting in a mix of EDIFACT and XML connectivity. A lot to look forward to in this arena, too.
Retailing: Airlines acknowledge the need to revisit their IT infrastructure. But there is a long way to go before airlines come to grips with what’s needed and real differentiation happens. “I sometimes wonder if all this talk about “retailing” in the airline industry is really relevant,” this statement from a senior IT executive exemplified the status. Datalex asserts that unified commerce systems must deliver an unprecedented level of control and agility to support offer and order management across rapidly evolving channels and points of sale. Farelogix states that in terms of an API strategy, the future lies with airline-controlled technology that is PSS, channel and device agnostic. “The biggest disruptor (in airline distribution) is the overall movement toward airline retailing and personalization across channels, which drives the requirement for airlines to control their own pricing and offers. The way this happens will be many and varied ,” says Jim Davidson, CEO, Farelogix.
Also, airlines continue to get more sophisticated in the arena of ancillary revenue, fare families, bundling/ unbundling etc. An interesting area is how processes are being refined for product biasing, bundling, etc. In theory if you have 10 ancillary products, you have 45 possible 2-product bundles, or 120 possible 3-product bundles. However, many of these bundles don't make logical sense. So how to make every retail offer relevant?
So a lot is at stake. We know things are evolving. In this context, the sessions on 21-22 April and the overall event, including the Complimentary MasterClass with Farelogix on 20th April, is a must-attend one.
By Ritesh Gupta
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Ai Editorial: Embracing “Judo Strategy” in today’s information age
First Published, 14th April 2016
Ai Editorial: In an era where CX, data privacy and personalisation are vital to any organisation’s success, airlines need to capitalize on the strength of the likes of Facebook, Google, PayPal etc. Ai's Ritesh Gupta assesses how
Programmatic buying, deep linking, new payments options, progressive web apps, robots, mobile wallets…airlines need to make judicious use of all of this and lot more to attain the nirvana of a superlative customer experience.
Think of what’s all happening today in the world of ad tech, analytics, e-commerce, mobile technology, IoT etc. Organizations have to learn about new technology, test it and optimize the expenditure.
Of course, airlines have to rely on 3rd party sites and platforms in such quest. Here we explore the significance of the likes of Facebook, Google, LinkedIn, PayPal, Amazon, Twitter and others that have bigger grasp over the traffic and transactions (be it for facilitating them or letting users transact on their platforms).
One example
We all dread the idea of creating a new username and passwords, filling registration forms etc. to access a site or an app. I find it laborious, boring at least when I am eager to test out something new or trying to avail a deal or offer. From user experience perspective, travel companies, too, are wary of the “password fatigue”.
So, even for a seemingly simple functionality like accessing a site or an app, travel brands can’t afford to slip up.
Now here social login can step up the CX, be it for a site/ app entry or completing a transaction. So it all boils down to completing something in one-click. Such integration also helps travel e-commerce brands to acquire more data points.
“Google, Facebook etc. are going to continue to provide more information to their users. They’re the backbone of the information age. Also, we’re seeing more and more airlines delivering information to their travellers through these channels (for instance, the recent initiative featuring KLM and Facebook Messenger),” says Michael Roche, VP - Consumer Authentication, CardinalCommerce. “Go with the flow. It’s the Judo strategy (implies that airlines use 3rd party sites strength to its own advantage rather than opposing them) of the information age. Use their momentum to carry your business.”
Plenty to gain
So talking of the Judo strategy and continuing with the example of social log-in, airlines need to evaluate and seek enterprise as well as customer-oriented benefits:
· Improving CX: With social log-in, one can offer an alternative to email registration. In Q4, 2015, Facebook’s market share of social authentications was 62% of the overall social login market, shared Gigya. For its part, Google’s share was 24% in Q4. Google’s major progress has been the unification of its services (Gmail, YouTube, Google Drive, Google+, etc.) under one unique ID per user.
So rather than losing out owing to a cumbersome registration process, companies can come across as a user-friendly platform. “It all comes down to delivering something convenient, familiar and secure to a consumer. The reason you would offer this is because you don’t have that 1-to-1 relationship with that shopper that the social networks have and by providing this option you’re delivering them something beyond transactional data,” said Roche.
KLM’s Meet & Seat app chose social login to offer a new functionality to its travellers around social profile information and seating arrangement.
Referring to outsourcing of the inbound account authentication of a shopper, Roche mentioned the chosen network responds back with all the relevant data needed to create the account and maintain a 1-to-1 relationship. “The benefit you get is that you’re now leveraging billion dollar infrastructure that has a deep connection with that person’s behavior. Airline’s move people across the world, Google, Facebook, Amazon, and PayPal specialize in maintaining that type of relationship they always have had with them,” he said.
· Revenue generation: The same case can be made for the platform payment networks like PayPal and Amazon. It delivers the same convenience, familiarity, and security that the social networks do, but it's combined with a payment option. We’re also seeing the social networks delivering payment options as well.
· Optimisation of spend: Benefits are there from both marketing and IT perspective, too. Travel companies are using unified social API to cut down on integrated related-costs. This means one can avail automatic API updates for social network privacy and policy changes as well. Also, with better profiling and authentic data, message targeting is sharper, too.
· Strengthening data strategy: Another major benefit is related to centralization of profile data. There is a provision to gain access to social profile data from the user’s social account after authentication. So by using permission-based identity data, one lays a foundation for personalized experiences. This is complemented by initiatives related to blending behavioral data — structured and unstructured – to consolidate unified user view.
· Gearing up for the future: User identity has a big role to play in the time to come. According to Gartner, managing identities and access is critical to the success of the IoT. In a release in February this year, it stated: the Identity of Things (IDoT) is a new extension to identity management that “encompasses all entity identities, whatever form those entities take”. These identities explain ties between entities — “between a device and a human, a device and another device, a device and an application/service, or a human and an application/ service.” So identity management would be vital when it comes to managing the data that flows between these identities.
Any threat?
What about Facebook, Google, Amazon, PayPal etc. becoming stronger than ever? As we use our existing social media/ other existing accounts for online registration, is there any perceived threat?
Not really, says Roche, “because they already have a relationship with that consumer on a whole different level that goes above and beyond a log in at a travel site. There will always be scepticism on what they’re doing with the information, but when you look at the policy agreements, they’re binding themselves to strict requirements.” Also, test it out, recommended Roche. “Most people at an airline probably have an account with any of these networks, they should be encouraged to test it, and use it. As a consumer, you’ll know quickly if they’re using the data in ways you don’t like. At the end of the day, you as a consumer will be the first one to see anything that would make your business uncomfortable and then you can remove the option. You’ll still retain all the relevant contact data to keep the account available and in touch with them.”
These networks (established brands) will never become airlines, and airlines shouldn’t try and build their competency. “It’s easy for you to connect the dots when you’re outsourcing the dot creation. Use what these networks have done as a stepping stone to delivering a great travel experience to a traveller,” stated Roche.
Also, realize these networks need you more than you need them. Making it easy for one of their users to travel is nirvana for them. Use this to your advantage, work with them, summed up Roche.
Hear from senior industry executives about how craft a superlative customer experience at the 10th Ancillary Merchandising Conference (to be held in Barcelona, 21- 22 April 2016)
For more info, click here
Ai Editorial: Depicting airlines’ sales offering aptly, distributing it flexibly too
First Published, 4th April 2016
Ai Editorial: Airlines are gaining stronger control over what offers they wish to display, where, to whom and in which format in the era of omnichannel digital commerce. Ai’s Ritesh Gupta takes a look
Air search technology has come a long way. The blend of data and technology is enabling airlines to craft offerings that go beyond only price and schedule.
If we talk of meta-search engines, carriers can avail valuable propositions when it comes to sharing of data. Be it for quality (say complete fare pricing, branded offers etc.) and quantity (not worrying about futile hits, look-to-book ratios etc.), the efficacy of crafting customized sales offers is coming to the fore.
A case in point is the progress that Lufthansa had made in the last 12 months or so.
Lufthansa has been availing a pre-computed pricing offering, putting together what offers to distribute and also decides on the intermediary for the same. A major highlight is swiftness with which amendments can be done in fare, distribution frequency and markets for any existing or new partner. With such offering, the group managed to double the number of meta-search business partners last year.
Pre-computing and live computing
Lufthansa recently credited Vayant for its air search technology that enabled the group to scale its reach in the meta-search category. The group is pushing customized sales offers to meta-search engines without doing a single pricing and shopping hit to its host PSS.
I interacted with Eric Dumas, CEO, Vayant to understand how the blend of live computing and pre-computing pricing can optimize the results for an airline.
As Dumas explained, a live computing transaction means performing an air pricing calculation using real-time data. Such requests return the most accurate flight search results that can be booked by the traveller. Price changes or expired offers – while still technically possible – are minimal.
On the other hand, with pre-computed shopping, one generates flight offers (including branded offers) in advance and then store them in a smart environment that updates in response to changes in the outside world.
“The precomputed concept turns traditional search on its head: for one, you gain sub-second response time. The economics of pricing and search are transformed. You don’t have to worry about look-to-book ratios because looking no longer comes with a transaction cost,” said Dumas. He added that this opens the door to various kinds of value-added shopping tools like affinity shopping, dynamic packaging, long-range calendar shopping, best-price calendars, etc. “The benefits of this approach are significant, in terms of marketing and enabling a richer user experience. It’s perfect for airlines in case they intend to transform themselves into a rapid click-to-buy platform.”
The blend of two
Travel sellers worldwide can choose their own mix of live and precomputed options and find the best balance for their business. The logic of whether to pull results from a precomputed shopping system or to perform a query on the live systems is determined by the airline through a business rules engine, mentioned Dumas.
It’s all about flexibility, enabling travel sellers to achieve the optimum mix of distribution channels, feature richness and responsiveness. Airlines can handle high volumes of search queries from meta-search engines, introduce transaction-intensive applications (such as maps, calendars, various web, social and mobile promotions) and flexible search menus to search by budget, affinity, month and more - without touching their GDS or host.
“It (mixed live-transaction and precomputed shopping model) provides airlines with distribution control,” said Dumas.
Explaining further, he said airlines push custom high-accuracy data and modify the pricing and shopping logic per partner. Search times vary from milliseconds when precomputed data is used to a few seconds when live. For airlines that is crucial in order to enhance their ability to improve the travellers’ shopping experience and satisfaction and amplify their brand equity by offering unique search experience to the travellers.
Signs of progress
Not too long ago options for distribution of different formats and sales offer data through indirect channels were limited.
“NDC launched by IATA for the development and market adoption of a new, XML-based data transmission standard has unsealed the capability for the airlines to become better retailers using dynamic and media rich content,” said Dumas, who added that airlines no longer need to be limited to information such as price and schedule as the NDC standard allows airlines to transmit much more detail on their service offering to their partners.
The inclusion of rich content paves way for differentiation early in the travel buying process, and better description of the services included in the fare. Also, airlines have full control over how their products appear on distribution channels through visual presentations and comprehensive form of content (videos, pictures, description of the product etc.).
Dumas said the NDC will enable airlines to advance ancillary sales and make booking and search process more attractive to customers as well better predict passengers’ interests and likelihood to buy. Also to establish product positioning and time-to-market approach, access to a full and rich air content – all of which will help create a better understanding of their passengers and more accurate personalised sales offers.
For airlines it is vital to stay in control of their sales offers, attune personalization and dynamically craft their offerings to give customers the most relevant choice at any given time, through any point of sale, any channel, direct or indirect and via any device.
Hear from senior industry executives about how airlines are gearing up to be in control of their offers and distribution at the 10th Ancillary Merchandising Conference (to be held in Barcelona, 21- 22 April 2016)
For more info, click here
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Ai Editorial: Packages aren’t just another ancillary product
First Published, 9th March 2016
Ai Editorial: Airlines tend to see packages as just another ancillary opportunity rather than focusing on packages as a different route to market, with a massive long tail advertising opportunity, writes Ai’s Ritesh Gupta
The travel industry is keenly looking at offering a consistent, personalised experience throughout the purchase funnel. But is personalisation an easy proposition as far as leisure holidays or dynamic packaging are concerned?
It’s not that easy or straightforward when compared with booking a seat on an aircraft, says West Sussex, U. K.-based Steve Endacott.
There were a couple of reasons that made me interact with Endacott, a travel and digital non-exec director and entrepreneur, who is currently associated with several organisations, including Teletext Holidays, Holiday Taxis and CWT Digital:
- The first one - the industry is talking about “micro-moments” featuring in our digital activity. To be more precise, it’s about understanding our intent in real-time when we use a PC or a mobile device etc. And at that point of time, how to show an ad or recommend content/ offers that can entice us to click or complete a transaction. So, to what extent the industry can pre-empt the intent of an online user who is looking for a package, for example, a family holiday.
- The second aspect is exploring how the industry is looking at improving the conversion rate, as well as stepping up the average order value or better margin.
A tough nut to crack
Importantly, Endacott points out that the conversion rate for a product, such as airline seat could be 6-7%, whereas as for packages this can come down to less than 1%.
“Personalisation in packaging is very difficult because customer’s requirements vary so much depending on whom they are travelling with and for what reason,” states Endacott.
“Also unlike airline seats, which are often bought several times a year, holidays are bought normally only once or twice a year. Hence, it’s vital to listen to customer buying signal and to react by personalising the booking flow. For example, we change the booking flow to “un-weight” Wi-Fi and two-bedroom apartment filters, once customers tell us they have two kids. Kids see access to social media as a unilateral right. Secondly, shopping for a package is a prolonged procedure (in terms of the number of times a user visits a site). So showing all previous searches is vital to conversion optimisation,” says Endacott, referring to the significance of website personalisation.
Also, re-marketing, be it via display ads or email, are key tools in the leisure sector as once you have a customer lead it needs to be chased to completion to maximise conversion.
But tapping the customer early in the booking funnel isn’t that easy. One can state that the business of packages continues to be search-driven, with destination information directing the results. So yes, when a potential booker searches or shows any intent, it is important to react in a targeted way via ads linking to specific landing pages. Such pages are pre-populated with content that reflects exactly what they have asked the search engine for, with often only dates and party type information needing to be added in order to check availability. The richer the content, the higher the conversion from these pages.
Packages – not another ancillary product
As for airlines’ approach towards packages, Endacott asserts that there is a need to change the mindset.
“Packages can’t be considered as another ancillary product. There is a different route to market (in case of packaged holidays),” said Endacott, non-executive chairman of web development and digital agency CWT Digital, a part of the Zen3 Group. The company currently operates the easyJet Holidays platform. Endacott created the first Jet2holidays site.
Airlines tend to see packages, as just another ancillary opportunity rather than focusing on packages as a different route to market, with a massive long tail advertising opportunity, delivered by individual hotel and destination advertising campaigns.
Packaging also opens up the world of lower prices due to opaque pricing. Many airlines are happy to discount seats to match discounted hotel beds, as long as their competitor cannot see and react to this form of discounting of distressed routes. Packaging provides this opportunity, plus the ability to recover these discounts via the sale of high margin ancillaries, such as transfers. Within the booking journey for a package, airlines know not just the customers’ arrival time but also their end destination, which enables them to provide a one-click to book transfer quote. This boosts transfer uptake from 15% to 85% on a high margin ancillary, claims Endacott.
Technology has made steady progress over recent years, now allowing visitors to dynamically package flight and hotel accommodation, as well as other essential trip components, such as seats, bags, transfers, insurance, and car-hire, with the core flight and hotel elements remaining opaque in pricing. To boost speed, Zen3 caches airline prices and availability on a 15-minute rotation and has complex algorithms to absorb any pricing differences, preventing price movements.
The group can offer an aggregate feed of 22 bed banks to provide both range of hotel offering and more importantly, competitive pressure via multiple bed bank supply per hotel. This, when combined with pre-caching of airline route networks to offer exactly what product is available, can pave the way for conversion maximisation, according to Endacott.
Making diligent moves
Endacott claims it is essential to drive passenger volumes in to a narrower range of hotels to maximise yield. “Customers want Amazon-type recommendations about what other customers are buying within a destination, which when combined with clear user review rating from recognised brands like “Tripadvisor,” give customer guidance as to the best value for money holidays. This quickly concentrates booking volumes with 25-40% of bookings going into “recommended” holidays. This in turn allows a virtuous circle to be created, where better rates via direct contracting of these properties creates lower prices, driving higher volumes. This tends to be the stage two evolution airline driven sites like Jet2 holidays or Easyjet, setting them apart and driving competitive advantage,” explained Endacott.
Airlines also have a natural advantage in holiday spaces, as they tend to be recognised brands offering the reassurance of dealing direct, when customers may be concerned about geo-political disruption and who will bring them home in an emergency.
Although airlines may like the option of a massive range of stock, Zen3 also recommend that this range is tailored to the airlines particular customer base via the use of Zen3’s “Brochure” tools. These tools allow product ranges to be narrowed down by destination, minimum user review score, star-rating, board basis etc. However, the key to success remains the intelligent selection of “recommended” hotels via big data analysis of users search and booking trends, mentioned Endacott. “The popularity of a property counts. But equally important is the overall quality score. There is a need to have meaningful reviews, and yes, the authenticity of reviews on TripAdvisor can be debated, yet one needs to feature TripAdvisor in the decision-making process,” shared Endacott.
All of this contributes to the slickest and quickest route to the customer finding the “right” hotel for their holiday requirements at the lowest possible price, whilst filling aircraft seats and driving higher yields via increased transfer, car hire and insurance sales.
It is definitely not easy to work out profiles of customers and use them to drive packages sales, in the same way it is done for a product like flights. Yes, LCCs can contribute a lot more in terms of data when they have relatively stronger loyalty programs in place. But, at this juncture, personalising the booking flow when a visitor is in the middle of a session is more important than trying to guess what they want before the visit.
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Ai Editorial: Relying on programmatic ads for bookings
First Published, 29th February 2016
Ai Editorial: Rather than delivering ads indiscriminately, with programmatic there’s always a reason that a specific person is seeing a certain ad, writes Ai’s Ritesh Gupta
The world of programmatic advertising moves at a breakneck pace. In this automated process of buying and selling of digital media through software, delivery of ads happens in a flash.
There are a couple of facets that make the whole process interesting.
First is ascertaining my intent and the phase I am in as far as a trip is concerned. So when to present with an option for core flight product or an ancillary offering is one critical question. The second one is to ensure the matrix of device being used, ad format and channel is spot on. So in the moment of opportunity, say I am at the airport contemplating an upgrade, what would it take to reach out to me via an ad?
The best part is programmatic ads can fluidly target a potential traveller in any scenario.
The process features a multi-stage request involving data lookup, bidding, auction and ad serving. And all of this takes place in a split-second.
Akin to stock market
Programmatic advertising is like the stock market in that it serves as a marketplace for ad inventory to be bought and sold at scale without a direct relationship in place between buyer and seller. Large Ad Exchanges, which make up the inventory sources of programmatic media trading, act as a central platform to enable this new way of buying and selling ad inventory (campaigns need not be bought via ad exchanges to be considered programmatic, any automated buying mechanism is referred as programmatic).
But it doesn’t stop there.
Thanks to big data and the ability of specialists like travel-specific performance marketing engine Sojern and others, not only one can buy inventory at scale centrally, but travel brands can use data and business rules to buy specific impressions targeted at defined audiences.
It brings marketers much closer to the concept of 1-to-1 marketing at scale, says San Francisco-based Brad King, VP Global Sales, Sojern. Yes it allows to connect at scale with a specific group of consumers or audiences via digital media, and without a lot of buying friction, but it’s not easy. King says you need to make sure you’ve got all the pieces necessary for success (e.g. travel intent data), and that you’re optimizing those pieces, (e.g., displaying relevant ads at the right time in their path to purchase).
What are airlines missing out on?
The promise of programmatic advertising is luring.
As King says, rather than delivering ads indiscriminately, with programmatic you can be sure there’s always a reason that a specific person is seeing a certain ad. For instance, they searched for flights to the Caribbean, so they’re delivered ads for Caribbean hotels.
King adds, “Buying media programmatically is not the hard part, but buying it at the right price and optimizing it efficiently is where most novice ad buyers fail. For example, you wouldn’t want to display an ad for a Caribbean hotel when the person has been searching for flights to Seattle.” But despite its strengths, airlines haven’t really capitalized on it. “I do think a major miss presently is the reluctance of airlines to use this new tech as a way of boosting their ancillary revenue.” He added that very few airlines are using programmatic ad buying to boost profits via ancillary revenue generation. “Every airline out there that receives direct bookings to their site could use the purchase data they have to serve very targeted ads to their customers enticing them to upgrade their flight, prepay baggage fees, buy club passes, buy mileage accelerators, etc., but they often don’t rely on programmatic to optimize the sales of these products.”
Planning it right
King recommend that a travel advertiser needs to have a clear plan around parameters such as website visits, direct bookings, amount of ancillary sales etc. “In short, set KPIs but be willing to adjust and adapt based on the returns you’re seeing,” he said. At the same, he also suggested that one needs to persevere. “Succeeding in programmatic is a long-term game that requires ever-improving knowledge, skill sets, technology, and rigor. Successful campaigns often take time to set up and optimize.”
King says thanks to advances in media buying platforms and big data practices, marketers are able to use indicators, such as past intent, demographic profile, website visits, to help them purchase the most effective ad space. More than ever, buyers are able to purchase ads and place them in front of very specific audiences at key points in their path to purchase.
Among airlines, Monarch Airlines last year chose to count on programmatic buying to drive direct flight bookings. Sojern targeted, by way of data it receives from many travel specific data providers that allows the team to use their data for powering other airline campaigns, consumers that are in-market or have shown intent for flights that overlapped with Monarch routes. Because this audience was a known entity, and because one was fully aware of the routes they were shopping, it was possible to add very specific and relevant ad copy.
As a result, the team “impressed”over 2.9 million unique visitors with Monarch’s ad. In one month, ads served by Sojern drove over 64,000 flight searches to Monarch.
Various models
Programmatic has many buying models. Decrease in a campaign’s cost per acquisition is a major benefit of buying campaigns programmatically.
Common models, according to King, are:
· Cost per Impressions (CPM) - paying per ad impression, quoted in blocks of 1,000 impressions.
· Cost per Click (CPC) - paying on the basis of a click.
· Cost per Action (CPA) - actions can be different based on the industry, but in travel, actions almost always mean bookings, whether it’s an airline ticket, hotel reservation, or car rental.
· Commission or Revenue Share - a percentage of the revenue or profit that’s attributed to the performance of an advertising campaign.
· ‘Cost plus’ - a business model that makes inventory costs, data costs, and ad serving fees transparent to the marketer and adds a service fee mark-up to the ‘cost of goods sold’.
“From our point of view, there’s no single model that can meet everyone’s needs,” says King.
The main thing to consider when choosing a business model is clearly knowing your objectives, as well as knowing where the risk lies. CPM and CPC, for example, tend to put the risk on the advertiser (e.g., you buy ads without the explicit promise of performance), while the CPA or Commission business models put the much of the risk on the ad vendor (e.g., they don’t get paid if the campaign does not drive bookings).
At the same time, travel advertisers also need to dig deep and learn about click fraud, impression fraud etc. Additionally, in case of mobile devices, there are certain ad formats that hamper the user experience, and can leave a bad impression. For instance, one needs to avoid intruding ads that need a user to click in order to close it and remove it from the screen.
Interested in knowing what's next in the digital revolution for ancillaries? Hear from senior travel industry experts at the 10th Ancillary Merchandising Conference, scheduled to take place in Barcelona 21-22 April, 2016
www.AncillaryMerchandising.com
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Ai Editorial: Google set for a bigger say in travel
First Published, 23rd February 2016
STOP PRESS: Hear industry experts about how airlines, OTAs and other travel companies can deliver a top-notch “Amazon-like” experience at the 10th Ancillary Merchandising Conference, scheduled to take place in Barcelona 21-22 April, 2016
Ai Editorial: It is worth assessing how Google is evaluating data about users, and also shaping up its product, especially for mobile, for a bigger say in travel booking path, writes Ai’s Ritesh Gupta
Mobile devices are now an integral part of us – they are our personal assistants, a source of entertainment, an ally that delivers information, and let us interact with others …we just can’t do without search, mobile sites and mobile apps.
Of course, we plan and book our trips, too. But travel is just one component of our mobile activity, and it isn’t as frequent as some of other activities.
So the point here is if I am being identified for what I all do on my mobile (for that matter even my PC, tablets etc.) - my behavior, my preferences, my location etc., can all of it be stitched together to help me in my next travel trip?
Can Google do it better than anyone else?
If yes, then Google is set to gain a lot.
Whenever I indulge in something or as Google says, micro-moments are being crafted. Then if my intent is understood in real-time Google would probably make me click on ad, click on a deep link to view a page within an app that describes a product offering etc.
But it’s not that easy.
Google recently assessed the complete Internet behavior, and in two months study found there could be 40000 digital moments (searching, watching video, visiting a website etc.) and 87% of moments were happening on mobile. And the attempt is to be relevant when any travel query is being searched for.
Data prowess + search
Google has advantages through services like Google Now, which can identify travel search moments and patterns of travel behavior, and build recommendations for products and services based on this insight.
It is worth assessing how Google is evaluating data about users, and also shaping up search algorithms to make the whole search relevant in real-time.
“Google can stitch unstructured behavioral data like social posts or searches together, providing context and determining intent. This data helps shape the audiences for its advertising network, ultimately enabling Google to only serve up the most relevant ads. While Google does not sell travel services directly to these audiences, it uses its insights to power its interactive marketing business,” says Boxever’s VP – Sales, Ultan O Brien.
O Brien explained that Google defined the customer journey to online purchase through Google Travel and broke it down into steps, channels and then ultimately micromoments. Identifying when someone is having one of these digital micro-moments means the potential to engage with them at the contextually right time with a relevant offer. He says, “As mobility continues to grow across devices and applications, these moments grow in importance when looking for the right time to engage individuals.”
Areas of improvements
Google is moving forward on several counts:
· Making search more meaningful - The span of “moments” or sessions on mobile is decreasing, so the purchase path is riddled with multitude of clues that are being left by a user. So say on a couple of occasions, I have searched for Maldives as a tourist destination. On another session, I am shopping for a passport cover. I am offered a chance to book a ticket to Maldives, I might be interested. This is where Google is also promising to do a lot of elegant work – apt blend of content presentation and page design. A user is going to be shown “bookable” prices, imagery, videos, text (related to weather, ratings etc.) in a way it helps in arriving at a decision. Google is promising to do all this with accuracy, and speed of a sub-second (say for comparing destinations in Asia for the same set of dates). Also, Google is coming up with its “Plan a Trip” feature – shows a price graph featuring available flights and hotels prices pre-computed in “lightening speed”. The core offering of comparing what is available at what price and for which destinations and dates is being improved.
· Cutting down on that one extra click: It needs to be highlighted that Google is also looking at cutting down on the possibility of an additional click. For example, if on Google Flights one is searching for flights, Google is also showing train connections in order to save on extra query. Also, within the “tips” feature, Google works in the background on running pro-active searches around checking dates, alternative airports and possibility of cheaper available upgrades to be more meaningful to the user.
· Conversion: From conversion perspective, Google is looking at being in control. As for the “Book on Google” functionality, the plan is ensure the conversion rate is sustained. The objective is to keep the user in the Google’s environment, rather directing to a 3rd party site. If a user is on a search product, say flights, and chooses an option then the user is going to reach a page hosted by Google, so that’s in the Google domain and it would be partner branded. So the impression one would get is, say, buy a travel product from the airline itself. Google believes being in its environment, logged into its account means the user is already comfortably placed. Behind the scenes, Google is passing on user information and credit card information via APIs directly to the partner. It’s the partner that takes the booking, sends confirmation email and manages the process thereafter.
Lufthansa was the first legacy carrier to which Google Flights offered its direct booking function. The two companies introduced the function ‘Book on Google’ for users in the U. S. in late 2015.
Impact on the rest of the industry
As for the concerns about the way Google paves way for leads through its products, travel advertisers have reportedly raised valid issues. How much of the search results that are being shown are “fair” and to what extent the same are being “controlled or influenced” by Google AdWords or Google Hotel Ads?
Google has maintained that this is not the case.
But one can’t deny intermediaries are being challenged more than ever.
Google is now making the most of available data about us (when we use its services), banking on analytics and blending it with Google’s search algorithm.
“Google’s integration of flight search is a having a large impact on meta-search. People seem to search for everything on Google, why not flights? By enabling organic flight search, they are attempting to displace travel aggregators like Skyscanner and Kayak. The same may happen for hotel and car rental sites, ultimately creating the go-to travel marketplace via organic search on google.com,” says Brien.
End-to-end experience
Suppliers like airlines spend money on building their platforms – mobile, PC website, apps etc.
If a player garners massive traffic, and also facilitates a booking within its own environment, then it’s going to make it tough for suppliers to make the most of their site.
O Brien says this would result in an end-to-end travel planning and purchasing experience.
He says one example is Google and Facebook combining the “Buy Now” button within their own frameworks—being able to make these purchases right through an organic search engine is a potentially a huge “distruptor” to how people search, plan and purchase travel products.
“Airlines are at risk of being positioned as “just logistics providers”,” says O Brien.
“Google’s speed makes it a formidable force: the intent of a searcher can be identified and alternative options can be provided much quicker than any airlines’ site can. Airlines need to find ways to provide more value-added services when searching, and reasons for travelers to book with them. Otherwise, they risk losing out to Google and open the $48b ancillary market to their advertising community in a much more immersive way,” stated O Brien.
To truly compete with both OTAs and the likes of Google, they need to consider the full view of traveller behavior and connect it to context.
It needs to be noted that are a number of providers trying to disrupt the travel search process by making shopping (search activities in particular) more natural and convenient, connecting across a variety of devices. Examples include Facebook M, Google Now, Lola, Amazon Echo, Amazon Alexa and more.
The multi-device focus requires creating a travel-planning workspace linked to your online identity that is available across multiple devices.
Hear industry experts about how airlines, OTAs and other travel companies can deliver a top-notch “Amazon-like” experience at the 10th Ancillary Merchandising Conference, scheduled to take place in Barcelona 21-22 April, 2016
www.AncillaryMerchandising.com
Follow Ai on Twitter: @Ai_Connects_Us
Guest Editorial: SpiceJet misses the mark with new Fly For Sure product?
IdeaWorksCompany, Editorial Comment from Jay Sorensen, President
First Published, 16th February 2016
It’s 2016 and I’m on the lookout for examples of Airline Revenue Innovation Champs. At first glance, the new product announced by SpiceJet provides a compelling first candidate for 2016. But it misses the mark because of too much fine print and ultimately represents a poor value for consumers.
SpiceJet’s “Fly For Sure” offers a guaranteed travel option that pays out in the event the airline cancels a flight or delays it by more than 90 minutes, or if the traveler misses a flight by no more than 30 minutes. For a modest INR299 ($4.40) fee, the airline claims consumers can buy extra peace of mind. Travelers can identify and book their own alternative flight solutions in the event of a delay.
At a minimum, SpiceJet says it will refund travelers the price of their ticket. Or they can buy a ticket (on any airline) and request reimbursement for up to twice the original ticket price. Fly For Sure has been added to the booking path to provide maximum consumer exposure.
However, the idea begins to fall flat when the terms and conditions are reviewed. First, the guarantee exempts “force majeure” events beyond the control of the airline, which is defined to include weather, strikes, air traffic control delays, mechanicals, and even something benignly called “commotion.” So what does qualify as a covered delay? Second, instead of making an automatic minimum payout – perhaps in the form of a travel voucher – the consumer must file a long list of documents within seven days of completing subsequent travel.
What perhaps began as a good idea in SpiceJet’s marketing department morphed into something corrupted by the carrier’s legal department. Instead, the airline should have prevented the addition of all the fine print, performed an actuarial assessment of the risk, and simply charged a higher price for the product. That would’ve earned SpiceJet kudos for creating an inspired bit of ancillary revenue innovation. Instead, the airline created a non-transparent product that gives a la carte options a black eye among consumers and government regulators.
Jay Sorensen, President of IdeaWorksCompany and author of this editorial, will be a featured speaker at Airline Information's Ancillary Merchandising Conference being held in Barcelona, Spain on the 21st and 22nd of April 2016.
Ai Editorial: Assessing a GDS’ approach towards NDC validation
Ai Editorial: How a group of Amadeus’ stature is looking at NDC-XML oriented standard? Ai’s Ritesh Gupta finds out
First Published 6th February 2016
The quest of being in control of what is being offered has meant that airlines are continuously refining their distribution and IT-related aspects. If on one hand, the industry is finding ways to cope up with technology that is inflexible on the other there is talk of adopting a retailing approach that maximizes value for both the airline and the traveller. Amidst all this, it is interesting to assess the role of a GDS.
Are GDS solutions compatible with what the industry is working at? Would the commercial dealing between carriers and GDSs change as there can be provision for additional content? It could be argued that a PSS vendor who is also a distributor has a conflict of interest when it comes to enabling more direct distribution, thereby putting distribution revenue (GDS segment fees) at risk. So how to balance out this conundrum?
Here we assess the current state of affairs, and look at some of the issues from a GDS perspective:
- Control: Airlines, in general, feel that their current technology does not provide sufficient control over what they sell.
“Airlines always have control of their offer. They decide what, when and at what price they sell. NDC as an XML messaging protocol, can help airlines transmit rich content more easily, but ultimately, it is the travel agency that decides what is displayed based on the consumer’s needs,” says Gianni Pisanello, Strategic Marketing Director, Airline Distribution, Amadeus.
Pisanello says with NDC-XML, and any other messaging protocol, airlines control the content they send to travel agencies. “Travel agencies on their side optimise the information they display—be it airline information or hotel information—to maximise sales. This benefits both the airline and the travel agency,” says Pisanello. “In that sense, travel agencies play an important role in selecting what information travellers see at which time, leveraging their retail expertise to maximise sales for the airlines. For example, a travel agent may notice that if a certain picture is shown at a later stage of the buying process, rather than at the outset, sales improve. Or they may see that certain types of pictures work better than others, and as a result they will focus on the former to increase conversions.”
- Strengthening merchandising: NDC-XML is not a constraint in improving merchandising capabilities, and it intends to actually facilitate them. NDC-XML will need time and resources to be invested before it is widespread, efficient and effective.
“In the short term, airlines can already benefit from merchandising capabilities through the existing infrastructure. NDC-XML allows for a lot of flexibility, and this is one of its strengths. In order to deliver the economies of scale that everyone seeks and needs, the industry will need to continue to work closely together to find a balance between that flexibility and effective standardization as NDC-XML gets deployed,” says Pisanello.
- Consistency: GDSs are already working towards making it possible for airlines to merchandize their products via travel agents in a manner more consistent with airlines’ own websites.
“In the first three quarters of 2015, we saw an 85% increase in the amount of ancillaries being sold via travel agencies. When we look at our data, we see cases in which 15 out of every 100 air bookings by OTAs include an ancillary sale, and that figure rises to 30 or 40 for certain carriers and agencies,” Pisanello says.
In addition, there are three times more OTAs with integrated airline ancillaries in 2015 compared to 2014.
Talking of OTAs, these intermediaries offer comparative shopping options on multiple airlines, with focus on letting one compare all flights and associated options and services in full transparency. Pisanello refers to ewo examples:
- Fareportal on their CheapoAir site enable their users to book paid airline seats using seat map displays with prices. Offering a wide range of seat options from a large selection of airlines means a smoother booking flow and the flight experience their customers really want.
- Expedia and fare families: they make it easy for travellers to see all of the options and to feel empowered to make the right decision for them; so that travellers can see all the new options airline partners are offering, with clear choices around all of the extras they might want or need, helping them to select the ticket that’s right for them for their specific trip.
- Standardization: We are already seeing that usage of NDC -XML by airlines and GDSs will vary in its shape and form, resulting in a mix of EDIFACT and XML connectivity.
NDC-XML is in the early phases of its development, stated Pisanello.
He explained: “Work has to be done to make sure that standardization is reached. The industry should not be disheartened however: evolution in technology, in processes, and in behavior takes time and requires a lot of collaboration, and this is normal in large scale projects. The players in the travel industry will have to work together to try many different things, to experiment with different tools, and together we will converge to a formula that delivers value to all participants, especially to the traveller.”
- Commercial dealing: NDC is an opportunity for airlines to start controlling their own content and how it is presented in GDS and other indirect channels. “The major threat is that the adoption will cost airlines a lot of money, but at the end the additional content will be another opportunity for GDS to charge airline extra. It also seems that they are not clearly adopting the NDC XML standard, but building their own XML schemes, which also add complexity related to interfacing and data flow,” share an airline executive.
Commenting on this, Pisanello pointed out that NDC-XML being just a messaging protocol, “the high level dynamics will remain the same”.
“As the industry works together and creates new services and features, opportunities for all parties should arise,” he added.
Avoiding different versions of XML: It is being pointed out that GDSs have integrated airline content using proprietary airline API interfaces for several years and airlines have in fact been employing the principles of NDC, such as dynamic pricing control. However, this is not scalable as each airline’s proprietary API requires custom development. NDC will standardise this approach for airlines wishing to adopt NDC and benefit from GDS distribution.
Pisanello clarified and explained: “Dynamic pricing does not depend on API interfaces. Airlines apply dynamic pricing through their own websites and the GDS all the time. However, proprietary APIs are not always scalable for widespread adoption. NDC-XML will help increase this scalability through a level of standardisation. The industry will need to further standardize the data elements and the booking flows to benefit from full economies of scale.” Explaining further, he said let’s focus on the booking flow. Let’s take the example of selling an additional bag. Two airlines may have different ways of selling that extra bag. One airline might include the sale of that extra bag at the same time as the sale of the flight, allowing for both to be purchased at the same time. A different airline might only offer the sale of an extra bag once the flight has already been purchased. Although the outcome is the same, the purchasing flow is different. This kind of difference means each airline will send a different sequence of XML messages, requiring custom integration for each airline. This in turn limits the level of adoption that the industry can deliver. “NDC-XML provides a strong first level of standardization where XML is used, and avoids many inefficiencies that different versions of XML can create. Based on this foundation, the industry will naturally and in practice further standardize how NDC-XML is applied in order to facilitate the widest adoption. This will involve a process of trial and error.
The industry is looking at a single, standardized set of XML messages that can feed all channels. As Gianni says, proprietary APIs are not always scalable for widespread adoption. NDC-XML will help increase this scalability through a level of standardisation.
So is the industry collectively moving towards working out right API strategy that is PSS, channel, and device-agnostic?
“Over time the industry should converge to NDC-XML when XML is used, as this will enable the widest adoption. Some airlines may opt for different approaches depending on their business strategy,” concluded Pisanello.
First Published 6th February 2016