Compete effectively with OTAs

For years, hotels and resorts have been at a serious disadvantage when competing with online travel agencies (OTAs) for the same guests through their digital marketing efforts. This is particularly true of search marketing for several reasons, including:

  1. It is harder for hotels to rank organically in search engines when compared to listing websites like TripAdvisor and
  2. Hotels usually have a higher CPC in paid search when compared to travel aggregators, whose ad spend amounts to millions of dollars.
  3. When it comes to metasearch engines, OTAs receive a disproportionate amount of clicks as they occupy the most space.

Finding your best potential customers online and funnelling them through various channels from awareness through conversion follows the same basic premise of traditional advertising. However, with programmatic advertising, hotels can even the odds, creating an unprecedented opportunity to beat the OTAs at their own game.

How is Programmatic Advertising Beneficial For Hotels & Resorts?

With programmatic advertising, you can prospect for cookies on the Internet that look like your higher yield customers, including cookies that other marketing channels aren’t reaching. This process also increases brand awareness significantly. At Cendyn/ONE, some of our campaigns reach over 5 million cookies a month while delivering over 40 million impressions using very reasonable budgets when compared to other media/marketing channels. Best of all, guests are driven to make reservations on your direct channels, making it a very effective digital marketing channel based solely on ROI and ROAS.

So How Does Programmatic Advertising Work?

Programmatic advertising replaces the traditional process of purchasing digital advertising through RFPs and manual insertion orders by relying on Real-Time Bidding (RTB) to instantly purchase digital publisher ad space (an impression) and then serve that ad to relevant Internet users. For Cendyn/ONE, this means in-market travelers to your hotel’s destination. At the most basic level, this method allows advertisers to buy an impression in a real-time auction that takes place in the milliseconds between the time an Internet user enters a site’s web address in the browser and the moment the page actually loads.

As the webpage loads information about both the page itself and the user viewing it, that information is simultaneously passed on to an ad exchange, which signals the platform for the real-time bidding to take place. The ad exchange platform then auctions off the available impression to the highest bidder, with the winning ad appearing on the webpage when it has finished loading. The “auctions” on the ad exchange are composed of aggregate content from a large number of publishers and website placements, making the entire process much more efficient (and less expensive). This process allows marketers to develop more complex campaigns with personalized messaging and an incredible level of granularity.

So instead of having to pay a set amount of money over a set period of time on a single website, advertisers can now target relevant cookies (e.g. potential guests) across a wide range of websites, decoupling the audience from the publisher while managing budgets effectively in real-time.

How Does Using Real-Time Bidding and Ad Exchanges Improve Overall Campaign Performance?

To best understand how ad exchanges and RTB cooperate within the framework of programmatic advertising, we can break down the entire process into simple steps.

First, the bidder observes the signals coming from anonymous cookies. The buyer can then infer who the user is and if he/she is in their desired market, if they are actually buying something and when (without factoring in any personally identifiable information). The buyer then bids on an ad for a specific cookie, not just on one publisher’s ad placement, but across the entire Internet.As a result, the advertiser gets numerous opportunities to target the user across multiple publishers on the Internet at discounted, aggregated rates without being dependent on one particular publisher’s premium inventory.

When you buy an ad placement directly from publishers like Kayak or travel guides, it is not unusual to contract the ad at high double digit CPMs that are incompatible with a positive campaign ROI. With RTB this is not the case at all, you set the bid to work with your targeted CPA (Cost Per Action), such as a guest completing a reservation.

Using Your Guest’s Big Data to Transform RTB Potential Into Conversions

With the Big Data we aggregate at Cendyn, combined with our powerful eInsight solution (which produces a singular view of all your guest data) we can detect the patterns that are used in time real time to identify what’s working best while the campaign is still running. The way we measure and model data allows us to target the cookies that look like your best guests and display a personalized ad at precisely the right time, and at the right price.

Cendyn’s ongoing success with digital campaigns comes from how we gather guest data and make it actionable. We build robust look alike models with 360-degree views of your hotel guests. The look alike model is what allows you to prospect for the same high yield guests and deliver effective campaign ROI, and includes:

  • Information from the entire guest lifecycle, including both pre- and post-stay data:
    • Bookings
    • Ancillary Revenue – Spa Services, Golf or Other Activity Reservations, Dining, etc.
    • Repeat Business
  • Our Data Intelligence is further refined with data enrichment which compiles:
    • Psychographics: demographics, interests, media consumption and cluster data
    • Behavioral Data: previous searches that Internet users have made on search engines, metasearch engines and OTAs
    • Intent Data: in-market buyer, past purchaser and purchase intent data

As a result, Cendyn knows precisely what hotels, resorts and destinations a consumer has been searching for on the Internet, including their preferred travel dates. By defining this critical audience, we can then accurately forecast the campaign in-market cookie pool size that is reachable and the associated number of available impressions.

Why Build a Look Alike Model When You Can Just Aggregate The Data Extracted from The Hotel Website’s Funnel?

When it comes to creating cost-effective, highly targeted campaigns, precision is key. The look alike models will sort through all the white noise to determine the specific attributes needed to reach your higher yield guests, resulting in higher conversions rates and superior campaign performance. Additionally, the models don’t need to be re-trained as often, which saves both time and money. We’ve also found that campaigns built from these models steadily perform well over time, without any shortfalls in ROAS.

While programmatic advertising and real-time bidding can have a dramatic impact on your digital marketing efforts, the key to unlocking its potential is how you utilize your own data to ensure you’re reaching the right people at the right time. At Cendyn we take the headaches out of managing your Big Data with our award-winning, fully integrated CRM solutions that connect the data from your internal and third-party systems to provide a 360-degree view of guest behavior, creating the look alike models you need for increased efficiency and the ability to accurately measure your campaign performance.

Top 5 Travel Brands in Google AdWords Spending

Source: WordStream
With contributions and editorial guidance by Allison Goldstein