Travel Ad Network finds the right audience

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manyadnetworks_small.jpgADOTAS — The Travel Ad Network’s audience in the United States has grown to 12 million and is 20 million worldwide – larger than TripAdvisor, Yahoo Travel, or AOL Travel. Recently, The Travel Ad Network passed Travelocity (the online travel agency – OTA) in reach becoming the first non-OTA to break into the Top 3 in the Travel Category. I asked Scott Cherkin, VP of Business Development who oversees Travel Ad Network publisher network as well as behavioral applications the secret of its rapid success:

1. We know what ad networks generally do but how is your approach different as a vertical ad network?

Before there was a notion of a “vertical ad network”, we saw an opportunity to represent travel publishers who built niche audiences for advertisers if we could aggregate them and offer meaningful scale. We know that advertisers and advertising agencies are only going purchase a handful of media outlets for their campaigns and with over 10,000 sites in travel (source: hitwise), we knew there were plenty of sites out there who would not be able to justify the expense of their own sales team and were being underserved by the broad, horizontal ad networks.

Central to establishing the collective Travel Ad Network audience’s value proposition to advertisers was acquiring exclusive rights to sell the inventory so that there was never a back door for a low CPM or any channel conflict at all. We field a very professional, experienced sales team that understands how to sell the value of this affluent, passionate audience that has a buying power index in the top 10 of all audiences with over 1mm unique users per month (source: comScore). Our model has become so successful, we have become the 3rd largest travel audience in the US and globally reaching 12mm unique users and 20mm unique users per month respectively (source: comScore May 2009).

2. Do you offer different products than the general ad network?

We have built travel specific advertising capabilities that uniquely suit our marketplace. Clearly, we are leaders in contextual display opportunities and have scale in subcategories such as adventure travel, cruise, travel commerce sites, etc. We have also built best of breed behavioral capabilities that leverage our exclusive access to data and media and marry dynamic creative on the fly based on the consumer’s interest in destination, supplier, price, etc.

Strength in display advertising products is core to TAN but what may surprise some is our strength with CPC-based performance advertising products that don’t use the display space at all. For example, we are selling CPC-based search ad products on sites capturing origination, destination, dates of travel and number of passengers and deep linking to advertiser’s sites to book the transaction. Cross all of our sites with this Fare Search Referral product, they are collectively delivering nearly 10 million of clicks per month to advertisers and, while it has been well-adopted by the OTAs (Orbitz, Expedia, etc), we believe that a big area of growth for us is selling airline suppliers into the mix where the ROI is often the same or better than other search-based products.

We also represent email lists that reach 5 million users on a monthly basis and have newsletter and standalone/solo advertiser options for this too. If you were to look at our media kit and rate card, you’d see that we have productized our network of over 250 sites to operate as any large publisher would and have similar offerings including display, CPC-based contextual offerings and email.

3. With announcements from Havas, Publicis and others, are agencies becoming ad networks or exchanges? Are networks becoming agencies?

We have aggregated a very large travel audience that is attractive to advertisers and in order to reach this audience, our clients must work directly with TAN. None of our inventory is available on exchanges or any third party network or other seller. It is our exclusive access to our publisher’s rich data and media that makes us a very valuable partner for advertisers and ad agencies. We are also quite consultative about travel and can suggest best practices on recency and frequency for different travel products from air to hotel to cruise which further instill our value with our clients – especially in regard to behavioral solutions.

When we layer in dynamic creative services on top of our access to data and media, there are elements of what the traditional agency would do but we do this in consultation with the agency. Without leveraging dynamic creative, the agency and TAN would need to traffic hundreds of individual creatives to support all of the route-pairs an airline flies to or where a hotel chain has locations. While we all know that a targeted offer will perform better than a generic offer, the resources required to manage hundreds of creative line items is very hard to support and we have technology in place to solve for this.

TAN, the lines are very clear – we are the exclusive sales representation for our best of breed travel content/audiences – being a client’s AOR is not our goal. There are some very interesting gray areas that start to emerge when agencies start repackaging remnant/unsold inventory and we see more and more of the large agencies building tools to do this but if you were the ask agencies the same question, I believe most would see the need for a mix of contextual and behavioral placements and will always rely on media partners to help them provide solutions for the clients.

4) TAN has grown to an audience size bigger than any other travel site and bigger than some online travel agency sites. How did that happen and how does your audience different from folks who book flights and hotel through OTAs (online travel agents)?

When the company started, we recognized that travel audiences were uniquely valuable and that all of the third party monetization services (networks and rep firms) were underserving them. The broad, horizontal display ad networks were yielding travel publishers less than $1 CPM net running flashing/blinking ads and other distracting advertising creative that took away from the user experience. These are consumers planning the best few weeks of their year and are about to spend a significant amount of money on a trip. The TAN audience is an affluent, passionate audience that, when compared to the average Internet user, is 249% more likely to purchase based on comScore’s buying power index making us #1 ranked against the top 100 ad supported media across the Web. Running low value advertising was contrary to the value our publishers knew they were creating that many were strictly using Adsense or other text-based monetization at the time.

Our approach was markedly different from the conventional wisdom. We knew that this audience had great value but running a daisy-chain of low yielding horizontal networks was never going to be effective. We needed to create a wall around niche travel audiences and make sure there was never any possibility for channel conflict so as to maintain the proper value for the publishers. We found a handful of publishers who recognized how underserved they were and packaged them together to provide enough scale for advertisers.

We brought on senior media sales talent, some with direct travel advertising experience in fact, that knew how to articulate the value of this travel audience using all the research we could compile. We grew very organically at first but have since gleaned a ton of learning for how to build this business and now have a great forecasting system balancing advertiser demand and publisher inventory allowing us to quickly scale our business. There are a couple OTA audiences that rank larger audiences in comScore but they tend to place onerous restrictions on how a travel supplier engages while all of the clicks generated from TAN go directly to the client’s site allowing them to build the direct relationship with the consumer. This has been a huge advantage for our advertisers and allowed us to scale our exclusive reach with publishers at the same time.

5) What have you got in the works coming up in the next six months?

We have been aggregating mostly mid-size publishers between 500k-2mm unique users per month with a couple small exceptions and we are currently alpha testing a more automated, self-service platform that allows us to engage with smaller publishers and allow us to grow from over 250 travel sites to 1000s of sites. We are also pursuing more brands like the announcement we just made with Virgin Atlantic’s vtravelled.com.

We will continue to develop our ability to synchronize advertiser creative including dynamic pricing on fares based on origin and/or destination to anonymous audience in-market segments and fully expect we will be able to improve our performance even further. We are also evaluating social graph data and other sources of data besides in-market shopping data to test for our advertisers and gauge its effectiveness to meet advertiser goals.

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