An in-depth understanding of consumers sits at the heart of what we all need to do, but we know it’s not always easy to uncover insights that will unlock a true innovation opportunity.
“Programmatic is this intersection of creativity and data science, and at Expedia we merge these two things together to use creativity, but empower it with data science,” Expedia’s head of brand marketing, Vic Walia, claims.
Speaking at the Programmatic Summit 2016 in Sydney, Walia revealed that in the past 18 months, Expedia has focused on understanding the potential of programmatic in order to become more creative with its branding, marketing and advertising strategy.
“When trying to use data in a real-time , bidding ecosystem, things can become very complex very fast,” he told attendees. “But I like to simplify things. So at Expedia, we use creativity as a base and then usedour tech stack to really make the creativity work for us.”
The emotional and functional connect
Walia said the travel category is a competitive space full of great brands with highly functional sites, built for a very rational decision-making process of deciding where do you want to go, when and how much do you want to pay.
“These sites are very good at making you go through that binary process,” he explained. “But the problem is that travel is not rational at all, it is very emotional and there is a lot at stake. So you want to make sure you get it right.”
In order to differentiate, Walia said Expedia is trying to merge these two things by having a rational website built for a very functional process, along with a category truth that people are very emotionally-driven.
“We call this intersection making travel personal – and that is our strategy, it’s about making travel personal,” he said. “After all, it is impossible for a brand to truly stand for something and not in due course, stand out.”
Power up creativity with the right data science
According to Walia, the next step is to power all of that with the right data science. This can be broken down into two parts: Adtech and the data that makes that adtech work.
“From an adtech perspective, Expedia is investing millions of dollars in getting our adtech solutions right,” he said. “This means building all the links into the DMP [data management platform], so we can house it, we can synthesise it and then make some key decisions.
“We’re effectively building a decision engine to help us understand which ad we should serve to which customer. As a result, we’ve now learnt who to target and what to tell them.”
For Waliea, programmatic is a creative, dynamic optimisation tool to help build decision trees that allows the brand to understand which customer to serve the relevant creative to in real time.
“Some of these ads are being funneled through a DSP and some of these are direct – whether it is on a mobile app, email or site,” he added. “But all of this stuff only works with a robust data layer.
Expedia is sitting on a treasure trove of data, with 7 billion flights searched via the site last year and 40 million unique visitors per month globally.
“The users coming here are telling us a lot of information,” Walia said. “They’re telling us who they are, where they live, where they want to go, whether or not they have kids, what activities they like to do when they go to visit different cities – we get all this information from them. “
One of these segments is Expedia’s ‘power elites,’ who Walia said are the wealthiest households. These individuals enjoy travelling for one or two weeks at a time, often internationally. Another group, known as singles and starters, incorporates young families and young adults who take a lot of trips that are shorter in length, such as weekend stays and last-minute getaways.
“These two groups response very differently to advertising, so if we were to build an ad unit that tries to cover those two groups it would be too generic,” he said. “What we do at Expedia is we have appended our entire database with the segmentation flags. And we’ve build microsegments, so we can go out into the world, finding cookies that match these segments and deliver the right customised ad to the right people.”
Experimental design and incremental testing
In order to quantify how all of this works, Walia said Experia focuses on experimental design, or test and learn.
“This is a core part of our business, it is part of our DNA and permeates through everything we do,” he said. “It’s the idea of gathering insights, building a hypothesis, developing some experiments and then testing them along the way.”
According to Walia, the company currently has thousands of these kinds of tests running, whether it is the site, whether it is via email, offline or online advertising. He claims that through all the data Expedia, currently has, he can predict when any person will travel next.
“Now that’s pretty powerful,” he said. “But this means we have a great culture of trying out new things and if it doesn’t work, we take it on board and move on. It’s about test and learn, but also accepting the opportunity to fail and moving on.”
As an example, Walia explained Expedia knows people in Los Angeles like to book vacations to Las Vegas, San Diego and Palm Springs. The company then does an incrementality test, where a customised ‘test ad’ is placed in front of potential customers, and then a’ control test’ is run with no direct ad from Expedia.
“When we showed people in LA that we have Vegas on sale, we saw a 10 per cent lift in transactions, versus people who saw no ad from Expedia,” he claimed. “We then decided to optimise the test and learn method and take it one step further, changing the creative, the image, the price, the location and a few other variables.”
In another test, Expedia ran a Expedia ads showing Palm Springs, but only one had the destination name.
“As a result, we saw a 2.4 per cent uplift in bookings from those who saw the test ad mentioning the actual destination, compared to those who saw the control ad,” Walia said. “Again, it was about being relevant and personal.”
As another example, Expedia found by showing two versions of an ad, one with the price clearly stated and one without, it saw a bookings lift of 7.4 per cent from customers that saw the ad with the price.
“These may sound like small numbers, but for me, these are amazing,” Walia said. “Because now I have data that is statistically significant in driving our brand forward. So I know where to move my marketing dollars.”
For instance, Expedia found holidays like ski, beach and theme park packages are popular and wanted to test where people would book next.
“The question was whether we could be more efficient with our spend if we knew in advance where our customers where most likely going to travel,” Walia said. “We ran an experiment where we ran cookie pools for these different package interest groups when showing them customised ads.”
As a result, Expedia found it had far higher engagement with its ski customers, which Walia saw as a great indicator to direct where more of the compay’s marketing and ad spend would be.
“That’s because we now know we can get more lift and more transactions when focusing more on ski,” he said. “And we can only determine that by focusing on experimental design and incremental channels.”
The power of dynamic content
In order to make programmatic work even better for Expedia, Walia said the company is starting to do a lot with dynamic content, which is about serving dynamic information with an ad unit in real time.
“In retail, when purchasing a product like a show, a product can easily be replaced and you have more clarity on what inventory is available,” he said. “But when it comes to travel, none of those things work. So we’re playing with dynamic content a lot. We’re building APis that show price and availability in real time.”
Expedia has also implemented cross-screen planning, using digital, programmatic with TV as a way to really engage with the audience.
“Where all this is going, I think, is that we’re moving beyond this retail mind into a service mind, so we’ll be using advertising more as a service or solution offering,” he said.
An example of advertising as a service could be a scenario where you book a trip, but if the price goes down following the booking was made, Expedia could programmatically reach you and credit your account with the difference.
“I think this is a great future and I’m pretty excited about where programmatic is heading, especially when we start thinking about service oriented marketing,” he concluded.
Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu