How airlines can use big data for more efficient online targeting

09 Feb, 2015

By Etienne Bell, Head of Audience Analytics, Crimtan

Airlines are no strangers to the use of data, and have been making the most of it for years; segmenting their customer bases and using predictive models to forecast everything from sales and revenue to customer retention. This allows airlines to tailor and customise their promotions and frequent flyer programmes to each audience segment, maximising profits and guaranteeing revenue streams. Nevertheless, the explosion of big data in online advertising is a relatively recent phenomenon, which is yet to be exploited to its full potential by airline marketers. By working closely with their partners in digital advertising, airlines are able to extend the customisation and insight methodologies to the realm of digital campaigns. These can be applied not just to existing customer bases, but also to prospective customers. By leveraging their own data and combining it with third party data used by partners, airlines can greatly maximise advertising return on investment, increase brand awareness and deliver a tailored experience to customers, from their first interaction with the airlines to landing at their desired destination.

Working with technology partners

In digital display marketing, third party technology providers offer data that can complement the data that the airlines already hold, allowing them to tap into previously unreachable prospective customers and gather new insights on their audience. Furthermore, by using the correct advertising partners, airlines can reach audiences cheaply, and with greater reach than with traditional online networks.

It’s worth noting that not all technology partners are equal: data quality, methodologies and attitudes to data protections and privacy can vary. As such, it is important to understand what potential partners can offer from the outset, by asking the right questions in relation to their technology, data and privacy policies.

Good partners are likely to have built their our own technology stack from scratch, allowing them to see all online users in each market, and use algorithms to classify them into socio-demographic and behavioural intent and interest segments. Why is this important? By being able to split these audiences into segments, marketers are able to target potential customers successfully by showing them the most relevant ad.

Proprietary technology also allows for the incorporation of airline data seamlessly into a partner’s system, allowing the ability to optimise digital campaigns to these parameters, and generate insights that incorporate airline-specific data. For example, by splitting customers into segments and overlaying airline data, subtle differences across travel class and routes can become apparent, enabling more efficient targeting of prospective users and higher ROI.

On the issue of data protection and privacy, it’s worth checking that prospective partners are affiliated with associations like the IAB and key steering groups like the Behavioural Targeting Council; that they are members of the EU Framework for Online Behavioural Advertising; and  that they are audited by recognised independent bodies. As privacy continues to dominate headlines, knowing that your technology partner takes such concerns seriously provides peace of mind.

Leveraging airline data and insights

Airlines typically have strong analytical departments tasked with analysing every bit of data. While this is absolutely essential for the core of the business, and used to its full potential, only a tiny part of the expertise and insights trickle down to advertising agencies and technology partners, making it harder for advertising agencies to leverage their clients’ data. By sharing such information and working closer with third party technology partners, airlines and media agencies can solve bigger challenges affecting the whole digital strategy. This is especially valuable as third party technology providers can layer in their data and provide an additional dimension to insights.

For example, one of Crimtan’s airline clients relied on a price-based creative strategy for their online campaigns. By analysing how pricing varied from one destination to the next, and looking at how far customers were willing to travel to their origin airport, we proved that the creative strategy should rely mainly on origin airport rather than price. While the agency suspected this was the case, our analysis, incorporating our unique data, enabled them to make a compelling case to the airline, leading to a change in creative strategy across the whole marketing strategy. This was only made possible by sharing our data across the chain and involving all partners in tackling a key problem.

Becoming more dynamic

By using a combination of first and third party data, with the right technology partners, airlines can create powerful dynamic advertising solutions catering for their marketing strategies both efficiently and at scale.

For example, it’s possible for data scientists to model this data to predict where a prospective user might want to fly.

This can be done by looking at each destination and segmenting existing customers that have bought a ticket into socio-demographic profiles. These profiles are typically built using partner data, such as age, salary, gender, location and behavioural interests, and airline data, namely where they flew to, when they bought the ticket, which travel class they booked on and so on. Prospective customers who share the same profile but haven’t visited an airline’s site can then be targeted with a specific advert. Based on their profile, the creative can specify the destination they will most likely fly to and an origin airport nearest to their location. One campaign that used this approach predicted, the correct combination of departure and destination airport for over 60% of cases for customers that bought a flight and saw an ad, even though these customers had never been to the airline’s site.  This led to an ROI increase of 287% when compared to a campaign with static creatives.

Such campaigns are powered in part by manual analysis and machine learning, and supplemented by automatic feeds that push into the creative, such as the origin and destination airport, the price and other variables such as the resort, the images displayed and so on. Doing so ensures any price changes are instantly reflected in the thousands of variations of creative generated.

Ultimately, such scenarios can only work by using data creatively and by trusting partners to work with it to create innovative, compelling and efficient digital campaigns. As businesses are waking up to the value of their data, it is easy only to focus on the pitfalls of data leaks and misuses. However, by partnering with the right partners, and not being afraid to share data, airlines can unleash its full potential. These partners can offer new layers of data to complement what airlines already have, and can offer new perspectives and solutions to solve old problems.

This article first appeared on Warc.com