Earlier this year, United Airlines claimed to be an airline industry first with the launch of a media network, entering a commerce media space already occupied by online travel brands, hotel groups and ride-hailing companies.
Widely seen as an evolution of retail media, travel commerce media allows companies to leverage brand advertisers’ customer data to deliver targeted ads on websites and other channels. We monetize traffic from.
Travel companies such as Expedia, Booking.com, and sister brands Agoda, Priceline, Marriott International, and Uber have established media networks in recent years and generated significant revenue from them.
Koddi offers services that help some companies monetize on-site traffic through these commerce media networks, a trend that has become increasingly popular in the travel space in recent years.
Eric Blackman, vice president of commerce media at the ad technology specialist, talks about the early days of display advertising, the subsequent enhancements driven by Google’s search data, and the further refinement of Facebook’s demographic data. , said there has been an evolution in targeting.
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“Now we’re in an era where we’re using commerce data to do really relevant targeting and create better experiences for consumers and travelers. “It opens up a whole new revenue stream for operators in this sector,” he said.
Blackman believes it’s a win-win for travel companies, as it increases advertising margins and ultimately increases profitability. He is excited about the potential of commerce media in travel, given the prevalence and proliferation of loyalty programs and associated data, the industry’s increasing digitalization, and the way travel brands are already excelling at content creation. I am.
Uber’s ad network, announced just two years ago, is now a billion-dollar business. More broadly, one in five media dollars will be spent on commercial media this year, according to Blackman.
consumer experience
Koddi’s Brackmann shared an example from a traveler’s perspective. Ads that are “generally relevant to you as a consumer,” such as restaurants or activities in the city you just arrived in, will appear at the bottom of the Uber app when users try to book. get on.
And once a ride is booked, different content can be targeted to who the traveler is, where they are, and whether they are traveling for business or personal travel.
“For example, in the case of Uber and Marriott, which have a deep partnership, there are some interesting unlocks: If you arrive late at night and are on your way to the Marriott, Uber arranges for an Uber Eats meal from a restaurant down the street. It may be available to you in one click,” Blackman said.
“Travel starts to feel more natural, natural, and more end-to-end. What we generally see from the data is that consumers are satisfied with these experiences. It’s a true win-win scenario, as it gives restaurants the opportunity to monetize and get orders during times they wouldn’t normally get them.”
Marriott launched its own media network in 2022, initially partnering with Yahoo before moving to Google. As guests progress through the booking process, relevant offers and promotions are provided based on their data.
Using Marriott as an example, Blackman said: Maybe if you’re going on a beach vacation, I might start showing you swimwear brands that might make sense as an example. ”
Travel will feel more organic, more natural, and more end-to-end. The data generally shows that consumers are satisfied with these experiences.
Eric Blackman – Cody
Expedia, on the other hand, has had recent success with its media network and destination marketing organization. The online travel giant has been in the advertising business for more than a decade and announced a travel-focused retail media business earlier this year. The company recently collaborated with Destination Canada on its “Where to Canada” campaign.
“Many DMOs don’t have anything to sell on their sites,” said Rob Torres, senior vice president of Media Solutions at Expedia Group.
“In fact, their job is to get more people to choose one destination over another. We work with brand teams to enable them to target bookings with inspiration. We created this amazing content.
When Expedia measured results on bookings, it found that DMOs increased by 18%.
core strengths
But with Uber making $1 billion from its network and Expedia making $145 million in revenue in the first quarter of 2024 from display advertising across about 200 sites, travel companies are more than just their core businesses. Can you make money from your media network?
Torres said advertising is not the core business of most of these commerce media networks.
“Their main business, and even our main business, is to run retail travel stores. That’s what we do,” he said.
“Walmart and Amazon are selling products off their shelves. Their main business is the retail element, and that’s how it should be. What’s happened is people are starting to realize the value of it, and I think they We’re going back to this data that we haven’t really used much in the past, and I mean, we’ve really expanded and intensified our efforts on the retail side, and of course the margins are very high on the retail side, whereas on the retail side. The profit margin is not necessarily (high).”
Expedia, with its rich customer data, can help travel companies find customers and maximize opportunities, he said. Certainly, it’s so valuable that it could take over in terms of margin dollars. We’re working very closely on the development of these media networks, and what’s really important is expanding the data that they already have, leveraging it, and extracting value from it. They have been collecting this data forever, and to this day no one has developed a strategy to stop them from using it. ”
Expedia has also done some testing with United, and Torres said he was surprised more airlines weren’t doing something similar.
“They see the value and are actually shocked that other airlines haven’t jumped on this. I haven’t heard of anyone else that actually paid attention to this. They have so much data about their customers, so many members of their loyalty program, so much data. They probably have other issues to deal with right now.”
Blackman is also excited about the potential travel loyalty programs bring to the commerce media space.
“There’s a tradition of loyalty data in travel. Loyalty programs in this space are phenomenal. They have great penetration and longitudinal data (collected) over decades.” he said.
However, despite the promise of increased revenue and improved customer experience, there are also pitfalls that travel companies should be aware of.
Toby Corner, senior vice president of digital marketing at Priceline, said his general advice is for companies to constantly evolve their commerce media strategies.
“To continue to grow and evolve as a network, we must continually test, iterate and innovate to bring new opportunities, insights and value to our partners, and choice to our customers. ” he said.
Resource and data challenges
More specifically, Blackman believes the biggest challenge is getting companies on board, echoing Torres’ point that it’s non-core products.
“It’s a different operating model,” he says.
“A lot of brands have spent time, money, and energy optimizing the path to purchase, optimizing the booking experience, and making sure it works. I’ll put something else next to it.” That can be a headache, especially for some product salespeople.
Blackman says teams that are good at selling travel may not have as much affinity when it comes to selling media, so finding the right skill set is also important. Additionally, there is a war for talent, and it’s not just limited to travel, creating additional challenges for companies looking to build a commerce media network.
Daniil Duckevich, associate vice president of travel distribution and media solutions at Agoda, also said it’s important to have the right team with the skills to stay up to date with technology developments.
“Building a strong team of professionals such as sales professionals, campaign managers, designers and analysts is essential,” he said.
“While strong campaign performance is important, it’s the support they receive every step of the way, from sales to reporting to invoicing, not to mention the flexibility and responsiveness of our team, that keeps our clients coming back. It happens often.”
While Torres also noted that resource issues are a concern for some companies, he cited data protection and technology architecture as two further areas that companies need to approach carefully.
He said businesses need to be prepared to adapt to the latest regulations and ensure they have “robust strategies in place to maintain data in a privacy-protected manner.”
“What I do know is that this data is so valuable that if our customers feel protected and advertisers engage with us, then we can use that data to actually devalue it. Because we need to be convinced that we’re not going to deal with it.” What are they trying to do and embarrass us? That’s number one,” Torres said.
And if that wasn’t enough to address, there’s also the potential impact of artificial intelligence on commerce media. On that point at least, online travel experts are unanimously excited.
Blackman said he is excited to see how the combination of generative AI and commerce media plays out.
“There are a few things we are working on bringing to market that I think are going to be even bigger. The ability to customize your travel itinerary around a set of experiences, a set of hotels, a set of restaurants. It works really well with generative AI. It’s very bespoke, natural, organic, and there’s a lot of content that can be monetized. It’s a vision.”
