By Chris Heike - Koddi | April 6, 2021
The term “Big Data” hit the mainstream back in 2013 when the Oxford English Dictionary included it for the first time. Since then, data has become all-encompassing, and in the world of marketing and advertising, it is the driving force behind virtually every investment decision.
But as we enter the peak travel season, marketers are faced with a question that most are not prepared to answer: How should I account for the lack of data I gathered in 2020?
When the pandemic hit, most travel advertisers either shut off their programs entirely or reduced budgets to just a trickle. The world entered a historic phase where the prospects of short-term and long-term term success were uncertain at best.
Since travel is such a seasonally heavy business, marketers can typically depend on trends and historical behaviors. These patterns make it a lot easier to allocate budget and almost guarantee effectiveness. But now, they're walking into a situation where comparative data sets are no longer effective, and seasonality doesn't matter as much as the current climate.
The lack of travel and minimal advertising programs pose a huge dilemma for advertisers for two main reasons:
They have a full-year gap of data that algorithms must account for in their historical models for price, activity, etc.
There is no historical period of time that advertisers can reference for guidance.
Now, marketers must rethink the way that they optimize and deploy strategies to be effective in 2021. We believe their approach should be guided by three pillars:
1. Hit the reset button
The first task is to define what success looks like. There are typical standards for performance marketing and expectations for a certain level of efficiency. However, right now, because there's a minimal amount of activity happening, both cost and return expectations need to be reset based on where the market sits on the recovery spectrum.
As a result, targeting strategies need to be recreated and budgets have to be deployed to go directly against actual need periods. Hotels are willing to take less of a guarantee when deploying budgets, so really understanding what success looks like today and how it differs from the historical norm will require patience and a new set of expectations.
2. Follow the market
Our second pillar of guidance is to pay attention to the market. Typically, in the travel industry, there’s a predictable uptick in destination bookings around Christmas, summer vacations, etc. In years past, spring months would yield a number of bookings around air travel, beach resorts, etc.
Conversely today, we are seeing more activity in drivable markets. Marketers should seek to identify where these pockets are most active and which geographies line up well from those origination points. From there, a marketer has to figure out the right way to deploy dollars to attract the audience who can get to that destination.
As a result, these vectors (destination and origination) are coupled with the activity of driving, which has become much more important. In-state travel becomes a critical opportunity, and marketers must ensure that their strategies are in alignment. Marketers have to remove the historical assumptions that worked in the past and look at what the market is saying.
3. Adjust focus
The last and perhaps biggest pillar is that marketers must narrow their window of focus. Instead of looking year-over-year or at a seasonal trend, as they have in the past, they should take a 90-day approach to viewing performance.
Judging current performance against recent activity has proven to be much more effective. For example, January 2021 looks more similar to December 2020 than it does to January 2020. This method provides a look into where destinations are opening back up and where advertisers are deploying budgets. Using this data, marketers can plan effective, impactful investments.
Marketers will have to play through these sorts of strategies over the next several months because once we get into the peak travel season, these comparative sets will change. We have an idea of what recovery looks like, and in the end, that’s where marketers should shift their focus. It’s no longer about the seasonal or annual comparison that the industry has historically relied upon.
What lies ahead
Over the past 12 months, we’ve seen pockets of recovery for the travel industry. Last spring and early summer showed what the trajectory of recovery could look like, but until we get back to pre-pandemic levels, marketers need to have a different mindset into how they approach data.
The lack of data from 2020 will cause some marketers to throw up their hands and guess at how to deploy budgets. However, they shouldn’t feel like they are operating in a vacuum or without guidance. The prudent ones will reset their thinking, listen to what the market tells them and adjust their focus.
About the author...
Chris Heike is vice president of operations and program management at Koddi.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.