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Big Data, Unique IDs and Prescriptive Analytics: Revolutionising Online Travel Marketing

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Some of the most interesting recent developments in travel technology concern big data and prescriptive analytics. The convergence of these technological developments and the possibility of identifying online consumers through unique IDs are going to be some of the most significant factors affecting the online travel competitive environment in the next few years.

Big data analytics will increasingly enable companies to target consumers in a more personalised and effective way through the whole marketing mix. This will mean higher conversion rates for companies and a better consumer experience for customers. But these developments will also see some companies gain ground in the online travel competitive environment thanks to their superior ability to collect and analyse consumer data, and other companies to become less competitive, not being able to target consumers in a more customised way.

From mass marketing to 1-to-1 marketing: Providing a personalised consumer experience

Today, companies have the possibility to collect a wealth of information about consumers which was never available in the past. This information is collected through internal sources, such as company websites and sales records, and external ones, such as social media, smartphones and tablets. This vast amount of information on consumers is increasingly referred to as big data.

When a consumer visits a website for the first time, a cookie is sometimes uploaded on his browser containing a unique ID, making it possible for the company to identify him during his next visits. Once identified, it will be possible to link the consumer to all the information the company stored about his profile, which makes personalised marketing possible.

A further step consists in the way data on consumers is analysed and used. In order to provide consumers with a personalised experience and ultimately increase conversion rates, companies need to move from descriptive to prescriptive analytics of the information they own on consumers.




Real-time prescriptive analytics to increase conversion rates

Descriptive analytics tell us what happened (in terms of consumer behaviour) and why (diagnostic analytics), while predictive analytics go one step further, providing predictions on future consumer behaviour. However, it is the following stage, prescriptive analytics, which enables companies to use information to suggest personalised options to consumers based on their past behaviour, enhancing the consumer experience and conversion rates. Today, thanks to prescriptive analytics models embedded into their operational systems, websites and apps can analyse consumer information in real time in order to offer personalised travel options instantly.


Revolutionising online travel marketing as we have known it so far

Travel marketing, and marketing in general, today mostly targets, according to the type of product, the general public or specific segments of consumers. This will be soon considered old fashioned and not effective enough in the online travel sector, and, given the importance of the online channel in travel, in the travel industry in general.

In the next few years, we will witness a gradual move to 1-to-1 marketing in the online travel category, with each consumer treated in a different way in terms of the whole marketing mix and therefore of: 1) the type of promotion and adverts targeting him when he is online; 2) the industry players targeting him more aggressively; 3) the products he is presented with when shopping online; and 4) the price ranges of the products he is presented with.

This will mean a revolution in online travel marketing as we have known it so far. Technology companies, which are able to collect the largest amount of information on consumer profiles, are expected to benefit most from these developments. However, all travel companies will have the chance to take advantage of the personalisation of online travel marketing.

Technology companies at the forefront of new developments

Technology companies are able to collect plenty of information on consumer profiles through multiple sites and devices, and use it to offer more sophisticated marketing tools.

Google certainly leads the way in this area, owning information collected from its own site and from web searches on external sites such as Google Analytics, AdSense, DoubleClick, Google+, Maps, Hotel Finder, Android and YouTube. Facebook is also able to collect vast amounts of information on consumer profiles through the database of the world’s most popular social networking site, which currently has over 1.1 billion members, as well as through Facebook Connect, which receives data from millions of sites using it. Apple is particularly active in collecting and using information about consumers on the go: Apple iBeacon, for example, allows companies to target consumers in their surroundings through coupons and promotions.

Google and Facebook are currently using personalised online marketing tools to allow companies to choose which consumers to target. Through unique IDs, Google allows (although with some restrictions) companies to place higher advertising bids when a search is made by their best customers. Similarly, Facebook, through its Custom Audiences programme, allows companies to cross check their internal data with Facebook data to specifically target their customers through advertisements.

From standardised to personalised deals

The rising importance of big data analytics will have a significant impact on all types of travel players.

Firstly, it will mean that their relationships with technology players will be increasingly crucial, given the larger access to data on consumer profiles by technology and advertising companies.

Secondly, it will mean a different way of marketing travel products. This will be less standardised compared to the current travel offer, which is very similar for all travel players, including both direct suppliers and intermediaries. In the next few years, personalised deals will become gradually more important and it will be increasingly useful for travel companies to partner in order to offer consumers the specific products and services they need. Partnering will be more important between direct suppliers and intermediaries, between direct suppliers in different travel categories, and between travel companies and technology companies.

For example, online travel agencies, meta search engines and technology companies will closely cooperate with hotel companies to offer personalised deals to their customers, based on their preferences and offered at discounted prices or with the inclusion of some of their favourite activities.

Expedia CEO Dara Khosrowshahi discussed these developments in an interview he recently gave to TV channel CNBC where he said that the company is “going to be able to offer hoteliers the possibility to show very specific deals to small segments of the population whether they are Facebook fans or tourists coming from Indonesia, for example.”

Mr Khosrowshahi also mentioned in the same interview that rate parity agreements are going to be much less important in future. The era of ad hoc prices, products, promotions and distribution platforms, ie personalised marketing, appears to be quickly approaching.

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