Anti-patterns in Travel Marketing

In software, an anti-pattern is a poor but frequent response to a common problem. Recognizing and understanding anti-patterns can save advertisers a lot of pain by curtailing losing behaviors before they negatively impact the business. Our unique position in the travel marketing space gives us the opportunity to see the most and least successful strategies for dealing with anti-patterns. In this article, we’ll introduce the five most common anti-patterns that we see in travel advertising today.

Result-Optimization Incongruity

When an advertiser starts to optimize on activity that is not directly related to the desired outcome, we call it Result-Optimization Incongruity. This often happens when multiple data points are introduced and they are out of alignment. One common cause of this is an advertiser using multiple data sets that are out of alignment, for potentially good reasons. A smart tactic that can lead to Result-Optimization Incongruity is considering consumed data in marketing decisions. Advertising and booking activities typically take place on a similar timeline, within a range of days or weeks. Consumption activity – when the hotel stay actually happens – could be many months into the future.

This misalignment becomes problematic when short-term optimization activities contradict long-term stay activities or vice versa. Imagine a campaign where the volume has increased sharply, with many bookings coming in the future. If the advertiser looks into short-term net profit, it may be an unattractive number. If, after reviewing this data, the advertiser makes the decision to pull back, they will recover net profit in the immediate term. In the period ahead, the advertiser will likely experience a boost in net profit, which could then lead to overinvestment, causing the cycle to start over again.

This behavior is risky because it causes short-term reactions that prevent long-term success. The risk can be mitigated by collating the data correctly, aligning data sources by time series, and leveraging a forecast to smooth out any spikiness in campaign investments.

Misdiagnosing Price Parity

Hotel price parity (or disparity) has become a hot topic in our space. Advertisers are getting better data than ever on the competitiveness of the itineraries in their portfolios, leading to the potential for better insights on campaign and business performance. There are many arguments brewing between marketing, acquisition, and distribution teams as analysts struggle to understand the true picture of price parity. Misdiagnosing Price Parity happens as a result of not understanding price parity data, relying on a data source prone to measurement error, or ignoring the scope and scale of the problem.

One of the most concerning issues we see regarding price parity is when advertisers ignore the data or decide not to do anything about it because of the level of complexity involved. This can lead to worsening results over time, which creates a significant drag on revenue potential. Another common cause of inaction with price parity is exclusively utilizing a provider that scrapes for this data. Scraped data can be valuable, but it cannot be relied upon exclusively because it can frequently over or understate the true level of disparity in the wild at any given time due to the inherent limitations in collecting such data.

The Top Anti-patterns in Travel Marketing

A successful approach with price parity has been to calibrate this data across multiple sources to account for any directionality that is inherent to one source. Tying this data directly to marketing performance takes this approach to the next level, helping advertisers prioritize exactly where they should focus. Finally, this tactic has become a specialty unto itself; advertisers creating functional teams that can efficiently address parity issues have an edge over the rest of the market.

Marketing as the Golden Hammer

In many organizations, marketing is the fastest tool to deploy in order to try to achieve an important business objective. This is especially true when there is some short term pain being felt, like an important KPI being missed. This is called Marketing as the Golden Hammer and is often the result of needing to move fast and not having the ability to pull other – potentially much more valuable and efficient – levers in due time.

When business performance is at risk, it is common for advertisers to approve a supplemental fund to boost visibility and revenue performance. This tactic has its place, but almost always comes at the cost of efficiency. The long term problem with this behavior is that it causes inattention to the impacts of other extremely important things, like pricing strategy, distribution strategy, customer experience, consumer demand, and market dynamics.

Advertisers must consider the compounding negative results of ignoring a core problem in another part of the business and seek to address those proactively, lest they risk hurting the business long term. By quantifying the long-term impact of these activities and proactively addressing problems, advertisers will be able to reduce their almost exclusive reliance on marketing funds to solve non-marketing problems.

Incrementality Red Herring

By measuring the net lift of additional marketing dollars or activity, advertisers can make better decisions about what channels to invest in and drive more revenue for the business. The Incrementality Red Herring happens when this net lift – the incrementality – becomes a stumbling point and prevents smarter and more effective travel activity from being done.

Incrementality is incredibly important. When it’s used as an excuse for not improving some important part of the business, it becomes an anti-pattern. The reason that this happens is that often incrementality is difficult to truly measure; doing it correctly requires alignment across many parts of the organization. Complexity and speed become barriers to getting the answers to smart questions, leaving inaction as the most likely result.

The Incrementality Red Herring can be tough to diagnose because often advertisers cannot answer the incredibly important question: “Is this truly incremental?”. When this becomes an issue is when advertisers don’t take action in an area of extreme importance because they are stalled in the question itself. If the website conversion rate is below par, yes, there’s a good chance that users will book through another channel. That doesn’t mean that the right thing to do is to take no action on improving conversion rate. Advertisers won’t win in the long term if users can’t book seamlessly.

Anti-patterns in Travel Advertising

Advertisers can work to correct this by understanding the long-term impact of inaction as well as any ancillary and unintended side effects. Often in large campaigns, technically simple but politically complex projects go undone and create tens or hundreds of millions of dollars in opportunity loss. Clear business cases can be the differentiating factor in getting these important projects done.

Stovepipes

Finally, Stovepipes cause important information to only move up and down throughout an organization. Ideally, information moves both horizontally and vertically across teams and levels in a way that drives the best experience for the end customer. Stovepipes are often a result of large, mature, or legacy organizations, but they can also be created culturally at younger companies. In both cases, they point to hierarchical or regional power centers or disconnection.

Regardless of how they come to be, Stovepipes can prevent the right information from reaching the right people, or the right people from helping to solve the right problem. The structure runs the risk of inaction or incorrect action, which often drives short-term and long-term losses. Travel marketing organizations that don’t openly share data, learnings, insights, and results with their counterparts in distribution, strategy, data, finance, customer relations, and others, will underperform because of this anti-pattern.

While stovepipes can be damaging to results, they may be the easiest of the travel marketing anti-patterns to address. Reciprocal information sharing between related (and even distantly related) functions within a hospitality organization can start with small education and collaboration efforts. Rotating resources through role types in purposeful tours can also bring additional context and perspective, driving better, more profitable solutions.

These five activities contribute to real loss. From the data we see, this may be in the range of billions of dollars in transactions missed each year. There is a bright side, though, in that these are often behavioral deficiencies and travel marketers have great control over whether they impact the business or not. Hopefully, putting a name to these anti-patterns helps advertisers recognize them, take action, and drive better results going forward.