HOW HOTELS CAN LEVERAGE AI-BASED PROGRAMMATIC ADVERTISING

As the hospitality industry becomes increasingly competitive, hoteliers must look for new ways to reach potential customers and maximize conversions, as Lovetto Nazareth, managing director of Prism Digital, explains.

Programmatic advertising is a form of digital advertising that uses AI to automate the process of targeting consumers based on intent rather than interest, as well as the real-time bidding process for buying and selling of online advertising, allowing hotels to target audiences more effectively and efficiently. It enables hotels to customize their marketing efforts based on customer data, including demographics, preferences and behavior. AI-based programmatic advertising allows hotels to further personalize their outreach and ensure that the right message reaches the right customer at the right time. In addition, it allows hotels to adjust their tactics in realtime, ensuring that they are always up to date with the latest trends and customer needs. By utilizing AI-based programmatic advertising, hotels can reach more customers and increase conversions at a lower cost, thus leading to greater return on advertising (ROA).

Benefits of AI-based programmatic advertising for hotels

- Better targeting: programmatic marketing enables marketers to reach people who have a high chance of converting. This can be done through demographic targeting, psychographic targeting and behavioral targeting.

- Programmatic buying: it’s common in programmatic advertising for a seller to buy ads through multiple ad exchanges at once. By doing this, hotels can take advantage of higher demand. If an advertiser wants to run a campaign on a specific ad network, it can bid on impressions. The price of the ad impressions will depend on how many ad networks are running that campaign.

- Real-time bidding: real-time bidding is a feature of programmatic advertising that allows advertisers to receive a price for their ads in real-time.

- Lower cost: programmatic advertising is generally less expensive than other types of ad campaigns because of their high volume.

- Improved ad quality: AI-based programmatic advertising can be used to select the best media sites to appear on, as well as determine the best ad format for each site.

- Increased automation: AI can be used to manage ad campaigns, choose the best media sites for ads and make mediabuying decisions.

How AI-based programmatic advertising works

The first step in implementing AI-based programmatic advertising is establishing a data-driven marketing strategy. Data is essential in giving marketers the insight they need to develop a strategy that meets their business goals. With data, marketers can determine who their target audience is and how best to reach them. They can also determine what tone and message to use to ensure that the campaign is effective. Once marketers have developed a strategy, they can begin building their media plan. To build their plan, advertisers can use platforms that integrate AI algorithms. These platforms allow advertisers to upload their customer data to create audience segments. Based on the information in these segments, AI can make real-time bidding decisions. For example, it can determine the best price to pay for an ad impression, where to place the ad and what the ad should say.

Data-driven targeting

One of the hallmarks of programmatic advertising is the ability to target customers based on their interests and behavior. This process is more effective when conducted with AI-based programmatic advertising, as AI offers more precision and control than other data harvesting techniques. Datadriven targeting allows advertisers to reach customers based on their demographic information, what websites they frequent, what content they engage with and more. AI-based programmatic advertising allows advertisers to put specific parameters around this data to ensure that their campaigns are as targeted as possible. This can include everything, from specific interests and websites to behavioral data, such as how long a customer browses for a specific item before purchasing.

Automation and real-time optimization

By using AI-based programmatic advertising, hotels can automate many of the processes involved in ad buying and ad distribution. For example, AI can be used to decide on the best ad distribution channels, such as websites and social media platforms and the best times to distribute ads. AI can also be used to manage ad budgets and make buying decisions based on realtime data. This enables hotels to use their budgets more wisely and improve their ad campaigns. Hotels can also use AI to schedule ad distribution. By scheduling ad distribution based on customer data, hotels can ensure that their ads are running when customers are most likely to engage with them. They can also use AI-based programmatic advertising to perform realtime analysis of customer and competitor data. This allows hotels to adjust their tactics based on changing market conditions and customer needs.

Strategies for leveraging AI-based programmatic advertising to reach more customers

- Research your customers: before implementing an AI-based programmatic advertising campaign, hoteliers should research their customers and understand what makes them tick. By understanding their customers’ demographics, interests and behavior, marketers can create more effective campaigns that reach the right people.

- Be specific when targeting: while general targeting can be useful in some situations, most marketers use specific targeting. This includes targeting based on customer data, such as what websites they visit and what content they engage with. This allows marketers to reach people who are more likely to become customers.

- Use multiple channels: it’s important to reach customers where they are. By targeting customers across multiple channels, such as websites and social media, marketers can reach a wider audience and improve their campaigns.

Strategies for increasing conversions

The importance of data accuracy

Any AI-based campaign will fail if the data used to create that campaign is inaccurate or incomplete. The data used to target customers and create ad campaigns must be clean and highly accurate. If the data is not accurate, customers may not receive the right message and the campaign may not be as successful as it could be. If data accuracy is subpar, customers may receive irrelevant ads or ads that don’t appeal to them. Even worse, they may not see any ads at all because the targeting parameters are too broad.

- Test different ads: when creating ad campaigns, marketers should test different ads to determine which ones are most effective. This is particularly important in AI-based programmatic campaigns, as it can help marketers determine the best ad types and messages for their customers. Testing different ads will also allow marketers to see which channels are most effective, enabling them to focus their efforts on the most profitable ads.

- Test different ad copy: after testing different ads, marketers should use the data to determine the best ad copy for those ads. This can include the headline used in the ad, the price and the offer.

- Test different targeting parameters: once marketers have determined the best ad types and ad copy to use, they should test different targeting parameters to reach the maximum number of customers possible.

- Create a focused campaign: when creating ad campaigns, marketers should aim to identify the key psychological markers that drive the target audience to take action and then create data-based flows that will allow the AI to start tracking the behavior of these data groups. Based on the learning from these activities, which are highly dependent on time and quality of the input, the AI will project the correct buyer persona for each target segment and be able to target the correct consumers with the right kind of ads that they respond to.

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While these examples relate to food services, it is easy to see how they would apply to the wider hospitality industry, or indeed any service-based industry.