Charles Deyo of Cendyn joins us today to explain how hotels and guests can benefit from targeted behavioral advertising. Listen to the full program here, or read the summary below:
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Josiah: Can you explain to us what behavioral advertising is and why it’s so important for hotels?
Charles: Basically, behavioral advertising looks at web users and determines their behavior relative to where they’re going on the internet, and sends them relevant communication to make their web experience better.
In the case of hotels, we might look at somebody who’s going to airline sites as an example, and put them in a bucket with someone that’s potentially looking for travel options. With the new technology that we have today, with some of the ad serving platforms, we can put that individual into a bucket and start doing things like advertising to that person through messaging, or we can actually change the messaging to make that more relevant to the user.
Josiah: From the perspective of the hotels — the people doing the advertising — this gives us a much higher level of targeting. Are you seeing conversion rates go up as a result of this?
Charles: Yes, absolutely. One of the metrics that we use in the industry is “return on ad-spend”, and we’ve seen it go up significantly. Not just on display, but across all integrated campaigns. For example, someone’s doing a display campaign and a paid search campaign on Google; the combination of those are greater than the sum of the parts. We see a lift on both the paid search and on the return on ad-spend on the display campaign.
It’s a great win/win for the hotel and to the web user who gets more relevant content and a better web experience.
Josiah: Can you give us some of the top things that hotel operators need to know about behavioral retargeting? For someone brand new to this, what do they need to know?
Charles: What you need to know is how the process works, so that you can make the messaging very relevant to the end user. Then, you need to have what’s being advertised correlate to the targets that you’re going after.
For example, if I’m looking at potentially geotargeting and time-based targeting — the location of the individual and time that they’re looking at information — that would dictate the type of offer or messaging that I want to put on the display ads. You need to understand not only how the process works but also the different attributes that would make sure that the messaging is very relevant to that particular campaign.
Josiah: Are big brands interested in this or is this something you can only do on a small scale?
Charles: No, big brands are investing a lot of money into this technology now. They’re doing it more at the brand level. In many cases, when you look at some of the big chains, you’re not seeing a lot of retail-oriented ads, you’re seeing a lot more brand-oriented ads where, “Come stay at any one of our hotels; click here to learn more about our special offers”, and that’ll bring them to a webpage with multiple properties listed as an example.
With individual properties, we’ve seen great success with targeted retail ads, so what you see is a combination of both. You see the big chains investing in brand oriented campaigns, and we’re seeing a lot of investment from retail properties. For example, with big casinos or big resort destinations, they’ll do very retail specific advertising.
Josiah: Is Google Advertising where most of the behavioral targeting is used or are there other options?
Charles: There are a lot of different networks out there. A lot of them can access the same websites, and a lot of the ad serving platforms all have retargeting capabilities built into them. What’s happening in the online advertising space is that we’re seeing less focus around the networks and more emphasis, now, on the data.
When we talk about data in the online advertising space, we’re talking about the anonymous cookies that are used to really track those behaviors that people move around the internet. We’re seeing opportunities where you can build a proprietary cookie pool.
For example, we’ve built a proprietary cookie pool of people that we know are frequent travelers. We have the ability to track those anonymous cookies across the internet so we can send them very relevant advertising that should make their web experience better.
Josiah: You had an article published in Hotel Online in June 2010 where you said you had 200 million of these frequent traveler profiles. How detailed is the information you have on these people?
Charles: These are anonymous cookie profiles –we don’t have any information about who they are, but we do know in most cases the sites that they’ve visited. And then in other cases we’ll have other attributes that are more useful for more complex targeting.
For example, if there’s registration data associated with those cookie profiles, we might know gender, we might know income levels, different things that the user has filled out as part of a registration process on a website that is then linked on a cookie profile. But, anytime that occurs, we take it as a prompt to send out an email, where somebody understands that the information is used to provide them more relevant product information that would be useful to them.
Josiah: Is this something you’re building proprietary to Cendyn?
Charles: It is proprietary to Cendyn, relative to what we’re doing with the cookie pool, but it’s not to say that other companies aren’t doing something similar. What’s proprietary around Cendyn, is we’ve got a 360 degree marketing platform, and I think the big difference with us — aside from the cookie pool — is that we look at how we don’t only send the right message to the right user at the right time, but also through the right channel.
I think the most important thing is not only having the right data and using it for the purpose of targeting, but also understanding that an integrated campaign always works better.
Josiah: What’s the best way to targeting groups or audiences together? What are some of the different attributes that you try for effectiveness?
Charles: What we do, is we have a first ring — this large pool of people that we know — for the purpose of discussion, very travel oriented, and based on the campaign, we look at the behavior of how those cookies interact with our ads so that we can take them out of the big pool and put them “in market”, so they’re “in market” for that campaign. That’s how we create those subsets.
Josiah: From that article, you also mentioned a “game over” mechanism and making sure that if people want to stop the ads from following them around there needs to be a place to stop. How does that look practically?
Charles: The way that it works is, of course, someone can turn off their cookies, and the process doesn’t work. A lot of the networks now are also building in capabilities for people to opt out of some of the retargeting and behavioral advertising process.
For example, Google just announced recently that they’re doing behavioral advertising and are making available a preference page that somebody can go in and adjust the settings relative to their web experience.
Josiah: Can you tell me a little bit of what you’re working on to take advantage of this platform?
Charles: One of the things we’re doing is continuing to make our 360 degree platform more robust and creating the ability to provide this behavioral targeting across any channel – whether that’s social media, mobile advertising or display advertising, it doesn’t matter. We should have the ability to send the right message via the right channel.
The other thing that we run is a product called Insight which is like a customer analytics and campaign management tool that we market to hotels. We have all the guest history data out of our property management system, and then we’ve got a lot of information about somebody, and we’re actually interfacing that as part of our 360 degree marketing platform so we can plan a sort of “best customer” profile and use that to go out and find additional customers that fit the “best customer” profile for a particular property.
Josiah: Is there any push-back from guests or people seeing the ads?
Charles: My personal opinion — but of course, I am a marketer — is that it makes the web experience better. People want relevant information. We learned this many years ago through the email campaign process. All of us in the email marketing world strived very diligently to make sure that we’re sending the most relevant content we can to a recipient, and the same philosophy applies to the advertising space. If we’re doing our job of sending relevant content, we will make the web user’s experience better.
Josiah: Can you give me a specific example of a hotel that’s taking advantage of this technology in a good way?
Charles: We did a case study not too long ago, because we really wanted to get some firm metrics on what the overall value of this type of technology would be. To make sure that our case study was very empirical, we not only tracked online revenue, but we put the voice tracking in place so that we could record the phone calls associated with the campaign, and had somebody listen to the calls and key in the revenue values associated with that.
We also tracked, not only hotel online bookings, but also RFPs — requests for proposals — for meetings, that type of thing. What we found was that we had a significant return on ad spend - 17 to 1, where every dollar spent on an ad was returned 17 times. It’s very significant, and I think that’s representative of what you can expect when you’re running these types of campaigns on an integrated basis.
Josiah: Thank you very much, Charles, for explaining this for us.
Charles: It was a pleasure, and I look forward to talking to you in the future!