5 Ways Travel Tech is like Ad Tech
When I restarted the company DashBid as a Video SSP (supply side platform), we had one critical asset, a great publisher on our network and it allowed us to develop relationships with buy side partners like Google Adx, Brightroll, Spotxchange, and others. Double sided marketplaces are difficult because of the obvious chicken and egg dilemma, so this publisher plus a few buyers gave us the market liquidity needed to analyze the markets, understand their strengths and weaknesses as well as the opportunities for us to improve performance on real transactions. Within a few months we had generated a whole lot of market intelligence and found ways to differentiate ourselves. Growth followed and we continued to stay ahead of the market based on endless analysis of the marketplace we were participating in. Now at Jetsemani, I’m building a new kind of SSP, but this time for the hospitality industry. I’m constantly amazed at how similar the challenge is and how many of the lessons from ad tech apply to the hospitality supply market. First, Jetsemani is also in a double-sided marketplace with suppliers of hospitality services on one side (tours, activities, house rentals, boat rentals, scuba lessons, etc.), and the equivalent of DSPs on the demand side (Expedia, Booking.com, AirBnb, Meta Search, etc.). Here are some of the learnings I think carry over from Ad Tech to Hospitality Tech:
Get closer to the endpoints: The closer you can get to the supplier (publisher with ad inventory or in hospitality the owner of the rental house, boat, or tour guide), the fewer middle men, cleaner the data, and lower the latency which all mean more liquidity and money.
Lower Latency: In Ad Tech in 2012 we were pushing from 10 second latency between and ad call and a video ad returned to sub 1 second. The better your demand relationships and the tighter and closer your integration, the lower the latency which translated into more money for the publisher and a better experience for the consumer. In Hospitality Tech, we’re working to reduce latency from 4 hrs or often more than a day, to 10 seconds. If try to book a rental property on a site like AirBnB, there are some instant book options, but many properties give you a message saying thanks for your booking request, we generally confirm your booking in less than 4 hrs. Obviously, 4 hr latency would be considered unacceptable for a hotel, car or airline reservation, but in the Activities and Rentals spaces, it’s quite common. This latency leads to lost sales as travelers move on and search for instant bookable inventory, just like in Ad Tech where a 10 second delay results in video abandonment.
It’s all about the data: in Ad Tech, especially as video advertising was taking off in 2012, we knew relatively little about our inventory and buyers didn’t ask much. But the more we knew, the better the chances of selling it and/or selling it at a better price. Was the inventory VAST or VPAID, Flash or HTML5, pre-roll or out-stream, and most obviously, what web site or app was it REALLY in… The same is true in hospitality, it’s just the data is different, it’s about quality of room, number of beds, physical address, view, cancellation policies, breakfast included, etc. The more you know about the buyer and seller (as an SSP), the better job you can do of quickly matching the right supply to the right demand.
Diversity of Demand: As an SSP, it’s always a struggle to find new buyers, agencies, DSPs, and Exchanges which will take your inventory. The question buy-side partners ask before they will integrate are: how much do you have, how is it different from everyone else, can I get the same inventory anywhere else and/or at a lower price, what makes you unique…? Again, the same is true in hospitality. When we go to one of the top travel apps or OTAs to see if they’ll integrate our supply, they ask us what we have that they don’t already have. This is why we selected an under-served, but hot, new tourist destination as our first supply side market. Generally, when we lead by explaining we have all the supply side inventory from Cartagena, Colombia for every activity, lodging, and hospitality vertical in the city, and that we’re the only ones and our relationships are direct with the supplier and reliable (“closer to the endpoints”), we get the meeting. And once we are integrated at an API level, we can generally sell our inventory from other geographies without further convincing or negotiations.
Here’s one thing which is different: Fraud…. In Ad Tech, a lot of the data analysis and the advantage of size and scale was built on the ability to identify and remove bot nets and other types of fraud. Because the supply in hospitality is a real, tangible product, it’s harder to create fake inventory. Or, I should say, EVENTUALLY the customer is going to realize that they got sold something which doesn’t exist because when they get there, the hotel won’t exist… While standard ecommerce fraud does exist in the hospitality industry, it’s a much simpler problem to solve.
I’ve enjoyed the transition from ad tech to travel tech. It’s nice to be buying, selling, and promoting something so tangible and to be focused on day to day issues other than fraud prevention. I think there is tremendous value to any bricks and mortar business, like a travel agency, to bring on staff with the analytical, data driven, process oriented skills honed in the trenches of digital advertising. As Ad Tech continues to consolidate, there are a lot of traditional businesses that will benefit from the ad tech skills available in many of our industry veterans.