New Skift Report: Evolving Strategies in Travel Ad Tech and Bookings


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The latest Skift report examines the online advertising technology driving bookings in an increasingly complex display-ad environment.

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New Skift Report: Evolving Strategies in Travel Ad Tech and Bookings

  1. 1. Evolving Strategies in Travel Ad Tech and Bookings As media buying and delivery technology expands in every industry, travel marketers are competing to identify, reach, and con- vert consumers in an increasingly complex display-ad environment. Their strategies to do so are evolving, as technology provides newly dynamic and newly granular tools across a spectrum of devices and platforms. SKIFT REPORT #14 2014 This material is protected by copyright. Unauthorized redistribution, including email forwarding, is a violation of federal law. Single-use copy only. If you require multiple copies, contact us at By James O’Brien and Skift Staff WWW.SKIFT.COM
  2. 2. Get the twice-monthly Skift Trends Report for the latest intelligence on the travel industry. Each edition in our new series of reports will brief you on a specific trend, providing insight into the current state of the market, the con- text around the trend, and where the industry is heading in the near future. After you subscribe, you will receive 24 reports direct to your inbox for an entire year. Reports are delivered as a downloadable PDF. Subscrib- ers also receive access to our archive. For any comments or questions, email us: Subscribe and check previous reports at: Subscribers have access to the Trends Report archives for the issues covered in his or her subscription Subscribe to the Skift Trends Report
  3. 3. With a longstanding legacy of success at online marketing to live up to, travel is working with new technology and newly changing para- digms in the form of programmatic media buying. Big data, real-time bidding (RTB), and an evolving suite of sophisticated platforms and approaches mean that the tools with which ad buyers work, in 2014, stand to function at pace with marketers’ imaginations. Overall, brand spending on data-driven ad technology is up, and key travel verticals are helping to continue that trend. Online travel agencies, airlines, and hospitality are deeply invested in programmatic, and many brands within those sectors are spending a significant portion of their marketing budget on not only maintain- ing their positions, but also on pushing the instruments of predictive analytics in new directions. Well-established models of targeting and retargeting are making additional space for increasingly refined up-sell opportunities and more granular product offerings. The deep- ening importance of mobile apps to the consumer experience is also prompting change within travel’s approach to programmatic, and video and e-mail are poised to play next-step roles. Meanwhile, analysts say that the predictive capabilities and auto- mation that characterize programmatic media buying are becoming increasingly intertwined with travel’s need to focus on customer- Executive summary 2011 $4,500,000,000 NA $2,800,000,000 NA 2012 $7,600,000,000 68.9% $4,800,000,000 71.4% 2013 $12,000,000,000 57.9% $7,500,000,000 56.3% 2014 $16,600,000,000 38.3% $9,800,000,000 30.7% 2015 $21,900,000,000 31.9% $12,400,000,000 26.5% 2016 $27,300,000,000 24.7% $14,800,000,000 19.4% 2017 $32,600,000,000 19.4% $16,900,000,000 14.2% WORLDWIDE PROGRAMMATIC DISPLAY AD SPEND U.S. PROGRAMMATIC DISPLAY AD SPEND% CHANGE % CHANGE ALL INDUSTRY WORLDWIDE AND U.S. PROGRAMMATIC DISPLAY AD SPENDING, 2011–2017 SOURCE: 2012 $1,920,000,000 13.0% 2013 $3,370,000,000 19.0% 2014 $4,660,000,000 22.0% 2015 $6,150,000,000 25.0% 2016 $7,830,000,000 27.4% 2017 $9,030,000,000 29.0% RTB DIGITAL DISPLAY SPEND % OF TOTAL DIGITAL DISPLAY AD SPEND ALL INDUSTRY U.S. REAL-TIME BIDDING DIGITAL DISPLAY AD SPENDING, 2012–2017 SOURCE: Evolving Strategies in Travel Ad Tech and Bookings SKIFT REPORT #14 2014 3
  4. 4. relations management and a broader, deeper, and nuanced knowl- edge of consumers. As multi-device research and a traveler for whom mobile is now second-nature continue to define and rede- fine online behaviors, how to understand what is being measured — and how to accurately track and attribute different interactions with a brand to the point of conversion across multiple platforms — has never been more critical to the future of travel marketing in the digital milieu. Evolving Strategies in Travel Ad Tech and Bookings SKIFT REPORT #14 2014 4
  5. 5. Predictive analytics within programmatic media buying are changing the way the travel industry wins conversions. Travel’s move toward data-driven marketing represents a new horizon for an industry that carved out its early online reputation with user-generated content (UGV) and an embrace of behavioral and contextual understandings of its audience. The programmatic sea change is well underway. A recent Lyris/Economist Intelligence Unit study shows the shift in broad strokes: 23% of executives in the travel industry designate cus- tomer-data analysis as the lead technology guiding product research, as compared to 18% across all other industries. Travel boasts the largest percentage of buy-in among the sectors in the study — surpassing auto- motive, entertainment, and banking. Perhaps this comes as no surprise. Travel started the millennium as a leader in the digital and social space. “UGC was a huge,” for travel, said Eric Ingrand, vice president of con- tent marketing for the EnVeritas Group. “Yes, now you have star-ratings for all kinds of products but travel started this. While everyone was struggling to tweak website graphics and content to gain greater conver- sion rates, travel found a way to really change the game on the conver- sion side — it let real people rank the hotels.” UGC, however, came with a less welcome price in the eyes of some. Negative reviews meant the necessity of damage control — and for many that prospect prompted a braking effect. Marketing departments found themselves grappling with a love-hate relationship when it came to the user reviews that started out as such a boon. Travel also got increasingly wise, in the mid- and late 2000s, to the value of tracking consumer activity. Gathering data from loyalty pro- grams and purchase histories, agencies and providers saw the potential of capitalizing on information surrounding browsing tendencies. Travel Introduction Evolving Strategies in Travel Ad Tech and Bookings SKIFT REPORT #14 2014 5
  6. 6. in the age of Google-fueled search became an even more refined engine for understanding customers and conversions. Now, with the advent of new developments in data-driven technology — the ability to not only capture visitor data but also to target offers and follow-up pitches — the possibilities of programmatic media buying stand to change approximately everything about how travel picks its providers, wages its ad campaigns, and measures returns. Evolving Strategies in Travel Ad Tech and Bookings SKIFT REPORT #14 2014 6
  7. 7. Table of contents About Skift Skift is a travel intel- ligence company that offers news, data, and services to professionals in travel and professional travelers, to help them make smart decisions about travel. Skift is the business of travel. Visit for more. Executive Summary 3 Introduction 5 New search architecture: data-driven ads and travel 8 Inside the technology: how programmatic advertising works Data streams: the programmatic paradigm 8 Types of targeting 8 Revenue management, bidding, and targeting 9 Video and programmatic 9 ‘One-to-one marketing nirvana’: envisioning emerging trends 9 Programmatic trends across verticals 10 Online Travel Agencies 10 Dedicated players in ad tech 11 Hospitality 12 Monetizing the whole trip 12 Airlines 13 Car rentals 13 Pricing programmatic and ROI: basics and new methods 14 Data-driven ads in the multi-device milieu 17 Case study: Hotel Tonight 17 Travel bookings via mobile devices 18 Insights and strategies 19 Sociomantic: a prediction for 2014 20 Further Reading 21 About Skift 22 Evolving Strategies in Travel Ad Tech and Bookings SKIFT REPORT #14 2014 7