From keeping on top of big trends (think the rise of metasearch, holiday rentals and homestays) to skilling up and spending in the right place, analytics teams must be statistically minded and strategically focused. Ahead of EyeforTravel’s upcoming Smart Travel Analytics North America 2014 show which will take place in New York next year, we hear some tips, as well as some of the trends and challenges that are shaping this important travel niche.
1. Metasearch: threat or opportunity?
Priceline’s acquisition of Kayak, Expedia’s of Trivago and then its later investment into Room 77, all point to a growing trend towards metasearch, says Bill Beckler, former head of innovation at Travelocity and lastminute.com and now the founder of a new website alltherooms.com. For the ‘super-optimiser’ group of customers - those that spend multiple days looking at dozens of different options, this presents a huge opportunity, says Beckler.
For example, suppliers and online travel agents can now look to measure how users are ‘comparison shopping’ and reading reviews on metasearch sites before coming to the brand’s own site to book directly.
For Google’s Travel Industry Manager Michael Librizzi, an analytics team may, for example, find that metasearch is very powerful in assisting consumer research and booking. However, just because ‘meta’ is becoming an increasingly global and meaningful source of traffic for partners in the industry, an analytics team probably doesn’t need to adjust their overall strategy. “Rather they can incorporate ‘meta’ into their model like any other traffic source,” he says. “Ultimately, teams need to ask: how is ‘meta’ driving last-click bookings and how is ‘meta’ assisting in bookings?”
In terms of direct impact, today metasearch mostly affects B2C companies. However, as B2B companies like Carlson Wagonlit Travel (CWT) look to become more consumer-oriented, it is something this company increasingly expects to come across. “I think it [meta] represents a great opportunity, as it allows analytics teams access to more content,” explains Catalin Ciobanu, Director, Global Product İnnovation at CWT. “However, this does come with challenges, as the increased amount of content requires more analysis, which can have an impact on the real-time response that is desired in today’s world.”
2. Technology spend: in house or outsourced?
One of the biggest challenges facing analytics’ teams is how to maximise their budgets so that any investment delivers greater profitability. For OTAs like booking.com, Expedia and Travelocity, Google is the biggest drain on a budget. “Most of these guys spend more on Google than on their own travel technology,” says Beckler. And in many cases this technology piece is outsourced to agencies. As head of innovation at lastminute.com, Beckler quickly learnt that “agencies don’t live or die based on travel trends or for tweaking data and integrating a Google strategy with other technologies or information from elsewhere”.
Recognising this, he helped to bring the paid search team in house. As a result, Beckler says the firm was “able to squeeze out a lot more value from the money we spent on Google”.
If you are in any doubt about whether to invest in analytics, take note. While at lastminute.com, Beckler helped to grow the in house analytics team from five people to 30. As a result, the company was able to make substantial savings on the back of a multi-million dollar investment.
3. People Power: skills don’t come cheap and are hard to come by
Speaking of investing in people, both Ciobanu and Beckler argue that one of the biggest pain points in analytics is finding the right people. The wide variety of skills required including an understanding of maths and statistics, the ability to write code on a daily basis, sound business sense and strong communications skills, are a complex combination. “It can be tricky to find the person with the right mix,” says Ciobanu.
In addition, people with the right skills are often really expensive as their skills are very much in demand in the financial sector, which has higher margins and can pay more. “Starting salaries for good predictive modelling people in financial services can start at around £100,000,” explains Beckler. This was a challenge he faced at lastminute.com. To address this a decision was taken to go partly offshore in order to establish the right skillset. Today, half of lastminute.com’s analytics team is based in Krakow, Poland, and the other half in London.
4. Access to data and knowing what to focus on is essential
For Ciobanu, another major pain point is getting access to data. “Analytics often requires fast and repetitive processing of full datasets,” she explains. “When I say this, I mean hundreds of times a day! And in most companies today, this is not the norm.” So the challenge is in changing some of the existing thinking and IT processes. For Beckler qualitative studies should precede everything. “For any company the focus has to be on how to win,” he says, “but to understand how you go about this requires more than focusing simply on the numbers”.
Brands should be asking: How should we focus our data so we are coasting closer to that final goal? “That is a very qualitative task,” he says.
5. Data integrity: do we need standards?
For Beckler the answer is a resounding yes. In the hotel business, he would like to see a clear hierarchy and uniform approach to tracking properties. Unlike the airlines, hotels have no global standard. “This is not about giving away free data, but rather collaborating, sharing and agreeing a common standard that can be used across companies. “With the rise of metasearch, we are exchanging data all the time and that can be very complicated,” he says. “That has a big impact on analytics because if you are working with multiple providers, you need to know how hotels are performing and which you should be promoting. But right now this data is very hard to use.”
For CWT, however, the implications of such protocols and standards and their adoption have a wide reach within the travel space, so the bigger picture needs to be considered. “Analytics is, and would be, only a small part of any protocol considerations,” argues Ciobanu.
Meanwhile, Google holds the view that the best thing teams can do is to focus on developing a ‘user-centric’ view of data to develop their strategy. “This is something everyone can start putting in place today,” says Librizzi who argues that in the current analytics world too much is built around segments of visits, which is only a partial view of the user. “In a user-centric world, analytical teams can think about the architecture of the data that will enable smarter business strategy. For example, looking holistically at CRM data, website data, and marketing data can enable optimised marketing budgets and more relevant user experiences, something Google is hoping to address with universal analytics.
6. Measuring the multi-device, multichannel world
“Often when speaking with marketing analytics teams, ‘X-strategy’ is an important topic,” says Librizzi, explaining that X-strategy includes the measurement of cross device (smartphone to desktop), cross product (air to hotel), and cross media (video to SEM). “In each of these buckets the industry is working on solutions,” says Librizzi.
Specifically with cross-device behaviour, an Ipsos & Google survey showed that among smartphone users approximately 47% of travel research sessions are started on a smartphone vs 38% starting on a desktop. In October, Google announced estimated total conversions to help measure cross-device activity. This can help brands to measure when a user researches on a smartphone and then, as a next step, purchase on a desktop or other device. When advertisers in the travel industry use AdWords estimated cross-device conversions, they are able to measure 8% more conversions, on average, than they did before.
7. Mobile is going to be hugely disruptive to travel teams
In the future we are going to see the majority of traffic coming from mobile. What is more, as EyeforTravel’s latest research highlights, the proportion of consumers using mobile to book has been growing year on year to a quarter of all travellers in 2013. Over two years from 2011 to 2013, 63% more travel suppliers saw mobile booking volumes increase. Beckler believes that there can be little doubt that the majority of traffic in the future is going to come from a mobile device. “So we need to find ways to understand this,” he says. And that isn’t easy because right now the tools available are general purpose and not specific to the travel industry.
To join the debate around the case for standards and to find out more about how you can make data and analytics work for your business join us at Smart Travel Analytics show in New York (February 11-12).
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