New digital ad model boosts Starwood

14 March 2013

NEW YORK: Starwood Hotels and Resorts, the leisure group, is making greater use of targeted advertising and big data, based on the key learning that when it runs ads is just as important as who sees them.

The firm runs over 1,100 sites in almost 100 nations, and boasts nine brands, including Sheraton, St Regis, W Hotels and Le Méridien. Its marketing goals are thus both broad, but also highly specific.

"We're driving engagement, and then there are the immediate needs of driving heads in beds at a profitable rate," Grazia Ochoa, Starwood's director, global digital marketing, told AdExchanger. "We're always looking for better ways to put our marketing dollars to work."

Big data has an increasingly vital role to play in helping the organisation achieve each of these aims, not least thanks to a tie-up the company formed with Sojern, a firm providing targeted ads to travellers.

Sojern leverages anonymised information about 100m people sourced via an alliance with carriers like Delta, United and US Airways, letting it serve brand messages to consumers about to travel.

These ads are relevant to the specific destination, like a certain city, of the individual concerned. There are also customisable elements, such as exposing web users to ads for hotels that broadly reflect their budget, as set by the price of their flight ticket.

"We can say, 'Give us everyone who is traveling over the weekend," Ochoa said. This move has also meant the company was less reliant on TripAdvisor, the user review and price comparison site.

"We still use TripAdvisor but if you think about it, people might just be searching around. We know some level of their intentions, but we don't have complete insight into their intentions," Ochoa added.

The current approach marks a step-change for Starwood, which previously built custom models in-house that aimed to identify the "best" customer and serve them targeted ads, without much success.

"[They] didn't behave any differently," said Ochoa. "In fact, they actually performed less well because the cost of the medium was higher since we paid a premium to the portal in order to target them."

"We thought trying to find the right customer would be the conversion winner … what we learned is that sending the message at the right time ends up making them the right person," Ochoa said. "In travel, 'who' the right customer is, is largely tied to 'when.'"

Data sourced from Starwood Hotels & Resorts; additional content by Warc staff