Why content is key to Lastminute.com going all in on programmatic
If Lastminute.com wants to be top of mind for those advertisers seeking holiday goers then much could rest on how the company can give its burgeoning publishing business a commercial edge.
Why content is key to Lastminute.com going all in on programmatic.
It might sound like an exaggeration for a business that derives a tiny amount of its total revenue from ads but its chief commercial officer and head of media and partnerships Alessandra Di Lorenzo readily admits to the importance of getting the content right. Get it wrong and people are less likely to want to log-in to access a service they view as needless, which in turn robs Lastminute.com of rich data
The ecommerce site doesn’t just want to people “to come to our sites and buy their holiday”, Di Lorenzo reveals. It wants them to read stories so that they get inspired for the next one. By doing so, the business could gain the type of data it needs to thrive in a post-cookie measurement battleground.
“The publisher monetization strategy is actually about enabling a new type of targeting around passion,” explains Di Lorenzo, who joined last year to mastermind its programmatic evolution.
“The purpose of the content hub is to serve as an inspiration engine. Our customers are always looking for ideas – from where to go on holiday, to what they do when they’re there, and what to pack once they’ve booked – so we want to offer that inspiration through curated content across the lastminute.com group, and bring it all together under one hub, “adds Di Lorenzo.
“This will also offer brands the opportunity to connect, inspire and serve our customers throughout the entire travel lifecycle. However, the hub will give us valuable insights into how people engage with and share our content. Overlaying this with our first and third-party data will help shape our understanding of our customers.”
Having gone all in on programmatic since Di Lorenzo’s arrival 17 months ago, Lastiminute.com now must contend with how the advertising and content parts of its commercial strategy coexist without cannibalisng one another’s revenue.
“We’re doing a lot of work to understand how we could recognize the customer who is likely to come direct and buy a ticket from the one who will not buy a ticket,” she muses.
“We have built our own trading desk, which serves both the sell-side businesses of lastminute.com group (the Travel People) as well as the buy-side for our brands,” she continues.
"On the buy-side, this means that our marketing departments have greater control over where our ads are placed, and how our budget is spent. Bringing our programmatic in-house also means we can make the most of our first-party data and optimise re-targeting, safe in the knowledge our customers’ data is protected.”
The development of Lastminute.com’s own adtech stack over the last 18 months, complete with SSPs, DMPs, and DSPs, suggests important things from its advertising, especially as it chases growth overseas. The model is rooted in the waterfall model “with a good dose of dynamic allocation”, whereby a publisher passes its inventory from ad network to ad network in descending order of importance until all impressions are (hopefully) sold. Despite having the ability to earn from real-time bids using dynamic allocation, Lastminute.com’s waterfall model is still – in parts – prone to delivering lower yields because the auction isn’t happening in real-time, with every impression offered simultaneously to every interested bidder.
It’s no surprise then that the business is experimenting with header bidding – which brings all the demand sources together simultaneously and allows them bid on the available inventory at the same time – alongside audience extension and intelligent yield management. On the latter point, it means that ads with a higher viewability – which are arguably a publisher’s best ads - are priced higher than the ones that less in-view on a page.
“Viewability should be built into the capability of the ad server …as a buyer but also as a publisher we’re moving into that direction where we want to make it a hygiene factor for how we work with media,” Di Lorenzo continued. “One of the things we’re moving into is intelligent yield management. As a publisher we will have higher viewability and lower viewability ads and I think if a brand has 100% viewability then they’re buying our best assets then the pricing needs to be reflected because the wastage is less.”
Unlike many other advertisers, Lastminute.com is trying to manage its burgeoning adtech stack internally. As enticing as it sounds to do away with the agency middle men in favour of in-house programmatic, it is easier said than done. For the business, its commercial goals rendered it the right move and Di Lorenzo’s side of the business has been set up to fail quick to stay on top of a market flooded with similar and sometimes vastly different solutions to the same problems.
It’s a logical step for an online player keen to carve a niche around travel data as it looks to grow its advertising business. In 2015, revenue from ad services accounted for just 6% of its total annual earnings, an amount not too surprising given the business makes most of its money through bookings on the site. Consequently, tipping travel content into that mix could give advertisers more of a reason to spend more with Lastminute.com, whether it’s on sharper targeting or potentially on sponsored posts.
“Through the data management tools that we have and also intelligent analytics we can target people based on their travel data and then we can also predict what they may be interested in based on that intent and I think that’s what makes us different, especially when we take that data and we then go outside of our own inventory,” adds Di Lorenzo.
A sales pitch built on what is essentially a single customer view becomes even more important amidst the current backlash against the duopoly of Google and Facebook. And so, amidst questions about media transparency and the veracity of metrics, Lastminute.com hopes the influx of data from people reading articles can help secure its role as a purveyor of “travel intent data” that the likes of Google and Facebook don’t specialise in.
It’s an intriguing prospect for a publisher made all the more so against the backdrop of the brand’s attempts to turn TV into a performance channel. Tests are currently running in Southern Europe where the brand is dipping its toe into the addressable TV space. Despite being run by Lastminute.com’s top marketer, Di Lorenzo offered a glimpse into the thinking behind the move and why it could just be the start.
“We’re trying to see how we can use TV as a performance channel in Southern Europe where we’re working on TV to digital attribution, which is difficult,” she adds.
“A key driver behind the decision is how as an industry we have a very high dependency on Google and AdWords and we need to find different ways, especially as Google’s desktop traffic is decreasing and the algorithm is changing, while on mobile its [advertising] is less effective. We need to look at the next performance channel after Google.”