Does Programmatic Make Sense For Travel Marketers?

Originally published on MediaPost.

In the last few years, there has been a lot of discussion around "programmatic" or "advanced" TV advertising. Lots of companies are coming to market with the promise to make TV advertising more efficient. But for those not steeped in the tech world, it can be a confusing landscape to navigate. You may be asking, “What exactly is programmatic TV and does it make sense for me as a travel company?” 

Well, let’s try and clear up some confusion. 

 

What is advanced TV? 

First, let’s define what we’re talking about. For this article, we’re going to focus on "audience-buying" or "data-enabled" TV buying, as opposed to addressable TV buying, which is a topic for another day. 

It’s important to note that the word "programmatic" can be confusing. The value proposition of programmatic has always been increased efficiency through the use of data, technology and automation. And while that value prop does apply to many of today’s modern TV solutions, my colleagues and I prefer to not use the phrase given its history with real-time bidding. The programmatic advertising industry was first built around display advertising, which relied heavily on auction models where the highest bidder wins, regardless of any other factor. TV doesn’t work this way, and likely never will.

Yes, we’re now able to layer data on top of TV ad buys, which makes them more targeted and efficient. And yes, we’re also using technology platforms and machine learning to do the heavy lifting on making these decisions, which makes things more automated. But, TV still has highly constrained inventory—ie, there’s not that much of it—and it’s most often bought upfront in deals negotiated long before a campaign is ready to go live. And because of that, the "last-and-highest bidder-wins" model we knew from display advertising simple doesn’t work. 

So, instead of programmatic, let’s refer to these new capabilities as "advanced TV." 

 

So how do you use it to affect my bottom line? 

Now that we have a baseline on what advanced TV is, let’s look at a few examples of how it can be used. 

  • Applying first-party data: Many travel marketers have a treasure trove of first-party data about their customers. Using advanced TV solutions, brands can use that data to generate a TV advertising plan optimized towards and reported against that data-set. So, for instance, if an airline brand knows that a certain customer group is more likely to advantage of special fare promotions based on historical information they collect through their CRM database, they can now leverage their CRM data against a TV viewership and then buy across networks, dayparts, or even specific shows, that index highest for that audience. 
  • Reaching new prospects: While many travel brands maintain loyal audiences through rewards programs or special offers for existing customers, there’s still a lot of growth opportunity for getting new customers into their ecosystem. Now, technology makes this existing-versus-new segmentation possible. So, for example, a hotel chain could suppress customers that have already stayed with them from their TV buy in order to focus on only driving new-customer revenue. By only reaching new prospects, they’re able to allocate a specific budget entirely towards new-customer goals. 
  • Maximum reach of a strategic audience: This scenario is especially helpful for travel brands with niche audiences or constrained budgets. In this case, the brand would define their most strategic audience (the profile of consumers most likely to convert). They would then leverage third-party data segments that index most highly for that customer profile. By buying only TV ads that are very targeted towards this profile, the brand can ensure they"re spending their budget with precision accuracy to accomplishing goals. 

 

However you slice it, deeper understanding of audiences through the use of data is a big win. Travel marketers have been embracing these possibilities in digital for years, and now we’re bringing that efficiency to TV. Change is good.

Aleck Schleider

SVP, Client & Data Strategy

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