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What Is 'Programmatic Advertising' and Why Should Hotel Marketers Care?

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What Is 'Programmatic Advertising' and Why Should Hotel Marketers Care?

Tambourine

This article originally appeared on Tambourine.

Most hotel marketers associate traditional ad buying as a hit-or-miss strategy.

Buy space in a magazine… pray for an unknown return.

“Programmatic advertising,” which has generated a lot of buzz in the last few years, is data-powered and designed to help hotels target their audience with remarkable accuracy, provide greater insight into who’s responding to the ad and eliminate the guesswork behind hotel ad buys.

What exactly is programmatic advertising?

Simply put, programmatic advertising is a way to automate and scale hotel advertising.

It gives hotel marketers the ability to deploy advertising to specific audiences (ie. Men with a household income of 150K+ that live in Fort Lauderdale) wherever they congregate across a vast global array of websites and networks.

For example, using Programmatic, hotel marketers can:

1. Target an audience (Adults 150K+) that have researched flights to any specific city/destination

2. Create an advertising geo-fence around any given area, so that every-time a person passes within a pre-defined threshold of that area, they can be targeted with relevant messaging

3. Utilize their existing CRM of past guests and target them virtually anywhere on the web, as well as identify “look-alike” users that have similar online behavior profiles

Because it allows hotels to efficiently buy ad space at scale and capture new audiences, many hotel marketers have increased their annual programmatic budgets by 40 percent since 2012. It has become the logical alternative to Google Paid Search advertising (CPCs), which costs continue to dramatically increase, up to $10 per click for non-branded keywords.

In 2017, programmatic advertising endured a lot of obstacles such as ad fraud (which also pre-existed with other advertising methods) and the looming 2018 GDPR Standards.

Despite the bumps, programmatic advertising remains an increasingly popular method to purchase and optimize hotel ads. The benefits are significant: including cost efficiencies, robust reporting analytics and quick turnaround time (campaigns can launch in just 24 hours!).

Here are a few pros and cons for hotel marketers to think about when considering investments in programmatic advertising:

PRO: Programmatic can hyper-target at scale

Programmatic platforms process millions of columns and rows of data about the behavior of online consumers. “This is the type of analysis normally performed by a data scientist, but at a greater speed and capacity,” said Todd Latter, Media Manager here at Tambourine. “Programmatic ads are extremely targeted; hotels can now show display ads to individuals based on their demographic data AND their online behavior.”

Todd Latter, Media Manager at Tambourine

For example:

Mary and Joan are neighbors, both fall within the same demographic parameters: They live in the same zip code, with children who attend the same school and have similar household incomes and ages. However, Mary and her family love skiing and winter getaways, while Joan’s family only books cruise vacations.

A small Florida hotel located near a cruise port is looking to attract 1-2 night pre- or post-cruise bookings won’t want to waste precious ad dollars on Mary, who represents their target demographic, but who has no history of traveling to Florida for a cruise.

PRO: Programmatic can tap new markets

Consider the case study of a major branded hotel in San Francisco which had a goal of generating more direct online bookings from Asian Pacific markets. Programmatic advertising enabled the property to target individuals from key Asian Pacific markets who had already searched for flights to San Fran for a multi-day trip.

Campaign Results

Duration: 60 Days
Investment: $2,700
Impressions: 461,000
Total hotel ecommerce Bookings (not including call center): 17
Revenue Generated: $16,200

ROI: 6-to-1

CONS: Fraud and inappropriate content

While programmatic gives hotel marketers massive scale and efficiency, it has also attracted significant fraudulent activity as well.

According to a recent Adweek article, “Programmatic open exchanges were discovered to be rife with all sorts of bad ad inventory issues. Threats include ad fraud, such as bots and domain spoofing, as well as brand safety issues (think your brand’s commercial next to a jihadi training video on some obscure website pretending to be The New York Times).

The third annual Bot Baseline report said that the economic losses due to bot fraud are estimated to reach $6.5 billion in 2017 worldwide.”

“That point that nobody is really making is that, even if you can avoid bots or extremist sites, the long tail of the internet is teeming with boring, irrelevant and crappy content, which aren’t great platforms for consumer engagement. While well-known, established sites offer good content, programmatic display networks all too often serve up disruptive, annoying consumer experiences with annoying pop-ups, takeovers and autoplay videos with audio.”

About Tambourine

Tambourine uses technology and creativity to increase revenue for hotels and destinations worldwide. The firm, now in its 34th year, is located in New York City and Fort Lauderdale. Please visit: www.Tambourine.com



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