Intent Media: How ex-Travelocity transaction guys monetize non-bookers for OTAs
Picture this: Three Site59 co-founders and ex-Travelocity transaction guys gather at Soho House in Manhattan in early June 2008 to brainstorm about launching a travel startup and what business problem to tackle.
The trio — Richard Harris, Josh Feuerstein and Damon Tassone — knew that Travelocity and other online travel agencies convert perhaps 3% to 5% of site visitors, possess databases full of intent data about consumer shopping behavior and give a ton of money right back to Google when non-bookers continue their searching elsewhere.
None of them knew him personally, but Richard Branson, Virgin Group chairman, happens to be sitting at a nearby table and they ask him for any advice he might want to pass along.
The chance encounter produces no epiphany as Branson merely tells the boys to have fun and make a lot of money.
In the interim, Intent Media, which offers an advertising platform combing consumer intent with predictive analytics, has raised $28 million in funding.
Investors include Matrix Partners, Redpoint Ventures and Reid Hoffman (LinkedIn), Dwight Merriman (DoubleClick), David Rosenblatt (DoubleClick), Brian O’Kelley (AppNexus), Kevin Ryan (Gilt Groupe) and Brian Swette (eBay).
Harris, Intent Media co-founder and CEO, recalls that the three Site59 and Travelocity alums had been focused on “immediate results” and transactions in their former roles and saw the OTAs spending increasing amounts of money to advertise on Google.
“We [OTAs] had so much intent data and we thought we could monetize the advertising value,” Harris says, recalling the idea for the startup. “But they question is, how do you do that safely?”
So Intent Media, with its advertising products, has entered two very sensitive arenas — online travel agency flight and hotel paths.
And, the company combines each OTA publisher’s consumer-intent data with Intent Media predictive analysis to serve up competitors’ ads to consumers who are deemed unlikely to convert on the initial publisher’s site.
Here’s a screenshot of how Expedia is using Intent Media’s Ads for Travel solution to display ads from Virgin America, Travelocity, Priceline, Travelation and CheapOair to consumers — and only certain consumers — on Expedia.com’s flight-shopping pages.
”It’s a classic Big Data play as we interpret thousands of signals in real-time and then in milliseconds we are able to make a decision whether it is the right thing to do and serve an ad, or not to serve an ad when appropriate,” Harris says.
He says that more than 20% of the time, the decision is not to serve up a competitor’s ad to the consumer.
Intent Media has to fight resistance among OTAs to this kind of approach because many may be reluctant to entertain the prospect of displaying competitors’ ads out of the fear they might distract from conversions and benefit rivals.
In addition, potential OTA publishing customers have to be convinced to share their consumer intent data with a third-party such as Intent Media.
Harris counters that Intent Media demonstrates Ads for Travel’s effectiveness to publishers through A/B testing and doesn’t share an OTA’s intent data with others.
And, he claims the click-through rates for Ads for Travel are about 10 times greater than for standard display ads.
Intent Media is also active on the hotel side of things with Hotel Sponsored Search. Publisher customers include Orbitz, CheapTickets and Travelocity.
In the above screenshot from Orbitz.com, The Cosmopolitan of Las Vegas has successfully bid to get the top listing in a sponsored ad for a particular hotel search.
Unlike Intent Media’s Ads for Travel, with these Hotel Sponsored Search placements, the landing page remains on Orbitz.com so the hotel leverages its ads to increase its share on the OTA site.
Again, only certain consumers would view The Cosmopolitan of Las Vegas sponsored listing atop Orbitz hotel search results pages.
And, Harris explains:
For Hotel Sponsored Search, it’s all about the relevance of the hotel. We use predictive analytics (which ultimately generates a ‘quality score’ for the ad, akin to search) to assess how relevant a given hotel/ad will be, given the search a user has done.
We use the analytics to not only predict how effective the ad will be, but which variant of the ad will be most relevant and generate user engagement. We encourage hotels to create multiple versions of the copy in their ads, and then the machine figures out which one will perform best. As we mentioned, we also auto-optimize which photo will perform best.
Regarding the optimization of hotel photos, Intent Media claims Courtyard Kauai in Hawaii, for example, increased its click-through rates more than 60% on Orbitz by using the photo labeled Test 2 in the image below.
”It can have a dramatic effect,” Harris says, referring to his company’s photo optimization analysis for hotel advertisers.
For both Ads for Travel and Hotel Sponsored Search, advertisers bid for placements in “second price auctions,” Harris says, and Intent Media shares revenue with the publisher.
Harris acknowledges that Intent Media’s proposition can be a tough sell to some publishers.
“It is not a no-brainer that you should show ads in your shopping path,” he acknowledges. “But when using the right decisioning tools, it is very profitable.”
Harris believes that OTAs currently have a lot more intent data on consumer travel-shopping behavior than Google and can be taking better advantage of that data.
On the other hand, as Google gets heavier into travel with its own products, including Google Flight Search and Google Hotel Finder, any perceived OTA data advantages, if they truly exist, may be diminishing.
Dennis Schaal was North American editor for Tnooz.