CRM and marketing automation aren’t natural bedfellows but Virgin Holidays thinks they should be and is plotting its first programmatic strategy in the hope it can use their combined benefits to reduce its reliance on search-driven traffic and online travel agencies.
But the travel agent can’t do this on its own and has appointed The Exchange Lab to help after a successful year working together. During this time, cost per acquisition (CPA) was 29.3 per cent below target and retargeting CPA was 30 per cent below target, which were enough to convince Virgin Holidays that it should scale the approach across the majority of its display advertising.
It has stopped short of pushing all its display programmatically because Tripadvisor has significant share of inventory in the travel industry and it only trades directly. However, it does expect to place media such as video and content programmatically as they become a more central part of its marketing. For now, the company will look at how it can expand automation for formats like immersive mastheads in order to make its rich-media buys more effective.
Like other advertisers moving into programmatic trading, viewability is top of mind for Virgin Holidays. So much so that its viewability target is 70 per cent minimum for all its bought impressions, which is more than the average within the travel sector as well as the industry standard.
Alex Adamson, marketing planning and efficiency manager at Virgin Holidays, said its programmatic buys would be weighted toward desktop for now. “Personally, I’m trying to find what we should be doing in mobile from a wider online marketing perspective including display,” he continued. “I need to answer that question before I start looking at how to buy [on mobile].”
It represents Virgin Holiday’s first step on the programmatic path and as such it is not sure how much of it will handle itself or brief out to experts. And yet it is exploring the advantages of building its own data management platform (DMP), which would give it more control over the third party data needed to target audiences and allocate spend accordingly.
“It’s hard to say whether we’ll outsource the bulk of our programmatic activity,” said Adamson. “What we recognise is that programmatic shouldn’t be a siloed media channel within the business. In terms of how that’s dealt with moving forward, I wouldn’t want to put any constraint on that moment. I would say that we’re looking into the DMP space at the moment. We have a marketing technology manager who’s exploring the best routes to market and depending on the output from that he may influence how we work at the moment.”
The travel industry is one of the toughest markets to cut-through, a marketing challenge compounded by its tendency to deliver low margins. Despite this, its high volume of holiday makers searching and purchasing trips means it is rich data pool capable of fuelling broader campaigns beyond search and online travel agents. It is why programmatic is becoming a key destination for many travel brands now as they look to drive efficiencies with more targeted buys, spanning more channels like video and mobile.
“We want to replicate the CRM model but within advertising,” said Adamson. “Programmatic is a place we needed to be so that we can trade more efficiently as a business in the here and now as well as safeguard ourselves for the future as more media becomes advertised and more of that media becomes traded programmatically.”
The Exchange Lab began working with Virgin Holidays last September when it was one of the brands rolled into its global programmatic offering - Proteus.