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.
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
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