According to ABTA, 64% of people do some form of online research before booking a trip, and 86% of holiday bookings are now made online, a 10% increase since 2016.
These stats prove that for travel retailers, the majority of your customer base is now online. The problem is, so are your competitors.
Rather than increase the percentage of your marketing budget dedicated to digital in an attempt to beat your competitors, you can spend smarter. With the help of Data Driven attribution, travel retailers can spend their digital marketing budget more efficiently and increase conversions and ROI with the same media spend.
What is Data Driven Attribution?
You’ve decided that you deserve a break and you are going to book yourself a holiday. You unlock your phone and type into Google ‘Best Holiday Destinations 2018’. You read an article and it suggests a holiday to X. You refine your Google search and type in ‘Holidays to X’. You click on an affiliate site and have a look. A few days later, you are on Facebook, and you see a display advert for the holiday. At the weekend, you decide to switch on your desktop and do a bit more research. You type ‘Holiday to X’ and the name of the travel site, and go to the retailer site through a click on a Paid Search Ad. You’re ready to book, but you better check with work first. By Wednesday evening, you have been sent an email reminding you of the deal. Later that evening you go direct to site and book.
Which marketing touchpoint was responsible for your conversion? The affiliate site? Facebook? The paid search ad? The email? Direct? Or did all of these channels influence your decision to some extent?
Companies largely measure their conversions using a Last Click rule based attribution model, which assigns 100% of the conversion to the one touchpoint the user interacted with directly before converting.
In this case, Direct would be assigned 100% of the credit for the conversion, and media budget may be pulled from the other channels, but the users journey was more complicated than that.
Data Driven Attribution looks at all converting and non-converting customer journeys. It takes into consideration every touchpoint, click or impression, and then applies an algorithm to assign a value to each touchpoint. The algorithm assesses how much of an impact each touchpoint had on the consumer in their path, by assessing the likelihood of conversion if a particular touchpoint had not occurred in the path.
Unlike the commonly used Last Click Model, the entire journey totals 100%, and each touchpoint is assigned a portion of the credit for the conversion.
Data Driven analyses the entire customer journey, and enables you to see where exactly each of your paid media channels are performing so that you can assign your media budget accordingly. Yes, it’s great to know that a Display ad received X amount of impressions, but data driven attribution allows you to see the real impact that impression had on your conversions or sales. Assigning media budget using Last Click conversions is like booking a holiday without knowing the information on your flight, transfer or hotel, just the destination. You don’t have the knowledge of the entire customer journey, and therefore your budgeting decisions are not accurate or informed.
Why is data driven attribution so important to travel retailers?
Holidays are high value purchases
For your customers, not only does purchasing a holiday involve financial cost, but it involves using up holiday allowance, and often involves the decision of more than one person.
According to Mintel’s Travel Industry report, people tend to purchase domestic or short breaks within a week, but this time lag increases to 1-3 weeks for overseas trips.
Data driven attribution allows insight into these paths from prospecting to conversion, and gives insight into how your customers are behaving, and how your channels are working together to drive conversions, while the Last Click model ignores this path data.
The reports that we provide for our travel clients have highlighted that even during promotional or sale periods, where our clients anticipated users to book quickly, the time lag between first interaction and conversion does not necessarily decrease, and customers still wait to book. Our research also unearthed a positive correlation between length of time a user takes to convert, and AOV, showing the longer a user takes to convert, the more money they are willing to spend, as they reassure themselves that they are making a good purchase decision.
Our research consistently highlights that Display is also the most interacted with channel in converting paths, a channel that is frequently overlooked by Last Click data. Using a Data Driven Model, Display conversions will increase for our travel clients by a minimum of 400%. Last Click data doesn’t provide you with the insight to target your users effectively, and with average order values standing at thousands of pounds, getting this wrong can cost your business, while using Data Driven insights can increase the accuracy of your targeting and prove more lucrative.
Data Driven attribution is about spending your paid media budget more efficiently
Data driven attribution shows the real impact of your digital campaigns, and the insights that we produce involve reallocating spend between channels or campaigns to drive performance and efficiency, not spending more.
Few people purchase their holiday directly through a display ad, but that’s not to say that display doesn’t play a crucial role in user’s paths to conversion. When was the last time you bought a holiday without seeing a picture of the hotel?
One of our travel clients has demanding promotional periods which require quick turnaround on insights to adjust display and paid search budgets. Using a data driven model, we produced budget optimisations resulting in +46% in display conversions and 12.3 ROI of the attribution project.
Which Creative worked for what Audience? Attribution knows
Travel is a highly seasonal industry, and marketing managers will spend enormous budgets attempting to target as many audience segments as possible during these seasonal windows.
Attribution can help you to make sense of this spend, and understand what creative worked for a particular audience, and what didn’t.
The analysis we provided for one of our travel clients highlighted that one of their creatives was receiving the majority of their Display spend, and was returning an extremely low ROI. Our optimisations allowed them to decrease their spend by 10.77% MOM, while increasing their ROI by 325%.
For any high involvement purchase, attribution can help you understand your customers, and the impact of your media. Once you understand this, your digital marketing can really take off. Your budget is spent more efficiently, and this will have a positive impact on your key performance metrics.