Radisson Hotel Group wants to take control of its programmatic spending, but rather than leaning on its agencies, it’s turned to a consulting company.
Radisson is working with Accenture Interactive, which has been growing its ad tech expertise. Radisson wants to own the licenses to its ad tech, especially its demand-side platform or a data management platform, so it can be agency-agnostic, said Remy Merckx, vp of digital at the hotel chain.
Merckx’s concern is that the rise of programmatic will leave advertisers stuck with technologies that can’t yield profitable ads or worse, with less data on customers. The agency groups Merckx would normally use are often inhibited by their operating models from providing those services. Consulting firms may have their own conflicts of interest, but they’re designed to show advertisers how to choose technology rather than doing it for them.
“Too many hotel companies thought they could build their own tech, but what we really need are partners who can help us identify the best platforms,” Merckx said.
The hotel group began taking control of more of its programmatic operation 12 months ago when it hired a specialist. The company was worried it would buy more media than necessary to hit its goals for return on investment if it relied on agencies. Other advertisers have similar reservations; they worry that if agencies are feeding the same audience segments to different suppliers that don’t necessarily talk to one another, they’re basically bidding against themselves. Advertisers in turn continue to purchase more media to hit their ROI goals, often reverting to cheap impressions to boost ROI, which Merckx said leads to more waste.
To that end, the company hired a data scientist eight months ago to help predict how much revenue ad campaigns will generate. Having that internal expertise will also help Radisson avoid potential conflicts stemming from Accenture Interactive’s commercial relationships with tech vendors. Consulting firms often have commission arrangements with vendors such as Salesforce and Adobe that they don’t disclose, media experts say.
“We need to move to a 100 percent-performance marketing model, and a business like Accenture Interactive can help us identify the best platforms to do that,” Merckx said.
The questions ahead for Merckx include whether to have one global DSP like Duracell does or multiple ones for different markets. He is also assessing how the company should set up a DMP, given the challenges of accessing third-party data under the impending General Data Protection Regulation. Radisson wants to use its existing customer database to target new customers so it can reduce the cost of acquisition. GDPR will make that harder to do because the data needed to create those lookalike profiles from a DMP will be scarcer.
Merckx, however, has a plan that will — at least short-term — help to insulate its targeting from the regulation. There are 13 million members in the Radisson Hotel Group reward program, but 80 percent of those are inactive. That leaves up to 10.5 million members the hotel chain can try to convince to start sharing their data with the company, which would increase its first-party data and minimize the amount it has to buy from other companies to come up with audience segments, said Merckx.
“We’re never going to have enough resources to do all the programmatic ourselves, so we need to come up with a strong automation process that allows us to get a better a return on what we spend that we can track properly,” he said.