Personalisation at Scale: A Win-Win Alternative to Flight Hacks, for Airlines and Passengers?

Article by:

Benedict Hayes, Managing Director, South East Asia and India, Sociomantic Labs

 

Search for ‘flight booking hacks’ on the Internet and you’ll be fed with pages of search results with titles like ‘17 Little-Known Hacks for Finding Cheap Flights’ and ‘5 Flight Booking Hacks That Airlines Don’t Want You to Know’. One 22-year-old was even sued by an airline and online travel agency (OTA) for exposing a cheap flight hack. Does travelers’ easy access to hacks spell bad news for airlines’ profitability?

It doesn’t have to—at least not if we can resolve the root of the perceived need for cheap flight hacks: information asymmetry. It is public knowledge that flight ticket prices can fluctuate by the months, weeks, days, and even hours. As far as the regular traveler is concerned, ticket prices can be unpredictable. On the other hand, mostairlines do not know the motivations behind a traveler’s trip, and hence a traveler’s individual price elasticity is also a mystery.

In reality, different types of travelers exhibit different behaviors when searching for and booking flights, depending on the reason for travel. Business travelers tend to make more last-minute searches for flights, whereas vacation-goers tend to plan trips further in advance. Business travelers are less price-sensitive given the necessity and urgency of their trips, while vacation-goers make greater efforts in price comparison and tend to be more price sensitive. Searches for short-haul flights also tend to happen closer to departure dates compared to long-haul flights. Airlines are making a mistake if they continue to address all travelers as a single unit instead of as individuals.

The information asymmetry between both parties can result in price and/or product offers that do not match the traveler’s needs and wants. Thankfully, there are marketing technologies available today that can airlines find that sweet spot in creating demand and balancing revenue, and ultimately converting searchers to bookers through personalized offers. One such example of data-driven advertising is programmatic display—a channel that, like email (but not limited to inboxes), enables airlines to leverage their proprietary booking curves, on-site behavioural data, passenger name record (PNR), and revenue management systems to create personalized experiences for potential customers that span the web.

Programmatic display advertising is an automated way of buying online media. Using an advertising protocol called “real-time bidding”, the optimal price for each ad impression, based on a traveler’s possible value to the airline, is calculated. Hence it allows advertisers a precision in targeting the right users for the right media price. In addition, programmatic display can help airlines or OTA’s to optimize the ads shown to potential passengers. Advanced programmatic platforms use streaming technologies that make it possible to send real-time data signals—such as flight prices or load factors—from an advertiser’s e-commerce website to its advertising creative. This makes it possible for airlines to create personalised ad creative showing offers unique to each individual passenger—automatically, and instantly.

Airlines should not underrate the ability to customise each ad dynamically using smart data. Ads personalised in real-time can help mitigate flight overheads by prioritising the promotion of flights that are less filled to get more passengers on board. It also encourages quick conversions by displaying real-time availability messages such as “just four seats left at this price!” or “20 minutes left to the end of fare sale!” to drive urgency in booking. Programmatic display can even drive incremental and ancillary revenue given each passenger’s booking data. For example, if records show that a passenger has booked a long haul flight, an ad to up-sell additional baggage allowance can be dynamically created based on this information. This is especially relevant to budget airlines with various add-ons to offer.

Ultimately, programmatic makes it possible for airlines to stretch their marketing budgets further and make their ads more effective. On the one hand, the cost of reaching each traveler matches their value and has the possibility to drive more returns, in the form of up-sell/cross-sell revenue or mitigating flight overheads. On the other hand, each personalised banner ad also becomes more effective in driving conversions and quality engagement with potential passengers. For travelers, this means that instead of having to search for cheap flight hacks, they now see an ad banner that shows the real-time availability (e.g. ‘only five seats left at this price!’) and real-time price (based on analysis of data such as passenger load factors), for their searched routes, on the intended departure dates. They are addressed by airlines in a manner that is more respectful of their individuality and their needs.

With programmatic advertising, airlines and travelers can find a win-win solution that at least reduces the information asymmetry between them, and at best render the need for cheap flight hacks obsolete, all while improving the overall customer experience.

 
Benedict Hayes, Managing Director, South East Asia and India, Sociomantic Labs

A recognised industry maven, Benedict Hayes brings with him deep expertise in the digital marketing ecosystem gained from over 15 years of experience. Hayes joins Sociomantic from iProspect, where he spearheaded digital innovation, technology and providing strategic direction to the agency’s Indian and offshore businesses as its Executive Vice President for nearly five years. A multi-skilled, award-winning digital strategist, Hayes has a vast knowledge of technologies, solutions, systems and tools that he draws upon to help clients achieve their business goals. His client exposure has spanned everything from global giants to small start-ups, from e-commerce to FMCG.

Ben joins Sociomantic during a period of rapid growth: in the past twelve months, the company has launched operations in Belgium, China, Indonesia, Vietnam, and Taiwan, bringing its global presence to 23 offices serving advertisers in over 70 countries.