Tour operators

Hotels seeking results-driven alternatives to OTAs and meta driving Sojern growth

Posted by Lee Hayhurst on
Hotels seeking results-driven alternatives to OTAs and meta driving Sojern growth

Data-driven programmatic media buying platforms are increasingly being used by hotel chains and property owners as an alternative channel to OTAs and meta-search.

According one of the leading exponents of these next-generation marketing platforms Sojern, this has been fuelling its growth as it expands in core markets and internationally.

Last week Sojern reported it delivered a record $1 billion worth of travel bookings for its clients from 3.5 million reservations worldwide last year.

It says it also added new strategic data partners taking it to 350 million anonymised traveller profiles and allowing it to nearly double revenue on the Sojern Travel Platform.

Sojern partners with many leading OTAs and meta-search sites, using their data to give them a new revenue stream from business it generates as well as providing market insights.

But where it has seen particular success with its marketing platform, according to vice-president and managing director international, Stephen Taylor, is in the hospitality sector.

“With the clients who are really driving growth in our business we are seen as another distribution channel,” he said.

“Because we are doing clever things with display this is driving performance and they see it as in addition to their OTA or meta strategy without the intermediary brand.

“Increasingly with big hotels, core hospitality groups and independents we are in an ‘always on’ model where we never stop advertising for them.

“That links to the second point where we are increasingly being paid on a commission basis as opposed to charging CPM (Cost per Impression) for advertising or CPC (Cost per Click).

“We are saying we will take the risk, cut out all of that and just pay us as another distribution channel. It’s how hotels work with OTAs anyway.

“This hasn’t been a surprise in the sense that we always thought to be successful in the travel vertical we would need to be very, very performance based.”

Taylor said Sojern works on marketing with other players like OTAs because they have their own challenges, but hotels are having to contend with the phenomenal growth of OTAs.

“We are not saying we are competing with Booking.com, but we are saying if you look at the volume of data we have, and the really granular data points, we have as many people we can talk to as any OTA.

“And we can talk to them in a more targeted way and it’s going to going to be your hotel brand that’s in front of them, not someone else’s.

“That clearly resonates with hotels. It’s particularly hotels that have that distribution problem.”

Taylor said clients are perfectly happy for Sojern to continue with their ‘always on’ advertising strategy as long as it is delivering business.

He said this is being driven by data science and as the model gets more and more refined the firm “may as well go the whole hog” and shift in that direction as more clients move from more short-term, strategic campaigns.

“There is a question of hotels having a proper understanding of their true costs of acquisition – their net revenue per available room – which links with a second issue, that of incrementality,” said Taylor.

“If I spend £1 I want to get £5 back, that’s a good deal, but I also want to know that’s £4 I would not have got had I not spent the £1.

“One of the things we engage a lot on with our clients is lift studies so we can say that bed night booked was something that would not have happened had that ad not been there.”

With Google increasingly getting into direct booking, like rivals TripAdvisor and Facebook, how does Sojern the threat from the world’s biggest search engine?

“There is a discussion topic on what Google is likely to do and how successful they will be.

“It’s successful at many things, however, the areas it’s not particularly successful in are when it takes on a full-on direct customer proposition because it tends to undermine the other things it’s doing.

“But putting Google to one side, the general proposition is this can only be done by people who truly understand the data and the challenge for any individual hotel is you can only really understand your own data.

“The thing you really need to know is what that person wants to do next because what they have done in the past in travel is not a really good guide to what they want to do next. It becomes data driven but any one hotel group does not have access to the data.

“When it comes to data Google’s in a good place but then there are people like us who are aggregating that data. We do not put our brand or portal in the way, we are simply saying how do we make that work for our clients.

“Owning the customer – that’s absolutely the challenge. Mobile is a massive opportunity for hotels to directly relate to customers but clearly the big intermediaries are piling very aggressively into that because an aggregated model is also powerful in mobile.

“The one thing we are not trying to do is build our own proposition. All we are trying to do is create a marketplace and put it at the disposal of whoever wants to use it. That way we can build more data than any one OTA.”

Sojern believes it is its focus and expertise in travel that will help it stand out in an increasingly crowded adtech scene.

“One of the challenges in adtech is there are a lot of players around. The programmatic industry has spawned lots of companies coming in to the market quickly.

“There are hundreds and they burst on the scene and then disappear because they do not have anything uniquely different in what they do.

“The second thing is, what a lot of companies in adtech are doing is really fairly basic retargeting.

“That can work but they are a lot of companies doing that. If you have really powerful intent data you can make retargeting really smart.”

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