The Increasing Role Data is Playing in Travel Marketing Bruce H. Rogers Chief Insights Officer and Head of the CMO Practice Forbes Media
Computers are incredibly fast, accurate and stupid. Human beings are slow, inaccurate and brilliant. Together they are powerful beyond imagination --Albert Einstein
Main Themes Senior travel and tourism marketing executives recognize the importance of Big Data for driving marketing strategies and improving products and services But they do not feel their staff has the relevant skills to make effective use of Big Data Despite the fact that senior travel and tourism marketing executives do not believe they have the right team or skills in place, Big Data still holds big influence over marketing initiatives, suggesting its influence will only continue to grow There are more opportunities than ever before to gather information about customers (more than customers may even realize) and marry digital and in-person interactions, but just 12% are using it to its fullest potential, even though they know they need to The uses of Big Data in marketing are expected to grow significantly across a variety of areas over the next 12 months, as travel and tourism marketing executives report ramping up their capabilities during that time
Best ranked countries in the Travel and Tourism Competitiveness Index 2013 Worldwide The 50 best ranked countries in the Travel & Tourism Competitiveness Index in 2013 Index score 5.66 5.39 5.39 5.38 5.38 5.32 5.31 5.28 5.24 5.23 5.17 5.17 5.14 5.13 5.11 5.10 5.10 5.04 5.01 5.01 4.98 4.95 4.93 4.92 4.91 4.90 4.88 4.86 4.84 4.82 4.78 4.75 4.71 4.70 4.59 4.58 4.54 4.51 4.51 4.50 4.49 4.47 4.47 4.46 4.45 4.44 4.44 4.43 4.39 4.38 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Switzerland Austria United Kingdom France Sweden Australia Netherlands Hong Kong SAR Finland Ireland Denmark Luxembourg Korea, Rep. Barbados Cyprus Czech Republic Taiwan, China Croatia Panama Hungary Qatar Thailand China Costa Rica Lithuania 2013 Source: World Economic Forum, The Travel & Tourism Competitiveness Report 2013, page xvi
Affluent Americans: share who vacationed in Australia within the past three years 2011-2012 Share of affluent household members in the United States who vacationed in Australia within the past three years in 2011 and 2012 Share of respondents 1.60 in % 1.40 1.30 1.40 1.20 1.00 0.80 0.90 0.80 0.60 0.40 0.20 0.00 2011 2012 Household income $100,000 or more Household income $200,000 or more Source:Ipsos, 2012 Mendelsohn Affluent Survey
Digital ad spend growth in the U.S. from 2011 to 2017, by industry United States Growth of digital advertising spending in the United States from 2011 to 2017, by industry 2011 2012 2013* 2014* 2015* 2016* 2017* Media 36.9 25.2 23.3 18.8 14.1 10.8 5.1 Automotive 25 18.1 18.9 14.3 12 10.7 8.5 CPG & consumer products 25.5 19.1 16.8 13.8 11.5 11.5 8.1 Travel 30.4 22.7 14 16.6 10.2 9 5.6 Entertainment 33.8 20.2 14 14.9 12.5 9 9.1 Financial services 27.7 14.1 13.1 12.4 9.3 8.1 6.9 Computing products & consumer electronics 18.6 13.5 12.5 12.4 10.2 9 6.9 Telecom 15.1 9.4 11.1 10.5 9.2 8 5.9 Healthcare and pharma -11.9 7.8 6.4 4.8 5.5 4.6 6.9 Other -6 4.2 5.8 3.6 3.5 6.5 4.4 Source: emarketer, emarketer.com
Data-Driven, Real-Time Marketing Model
Data Overview: 3 surveys of Senior Marketers (Director+) Total of 661 senior travel and tourism marketer responses Large companies/organizations 83% had revenues of $1 billion or more All fielded in September 2013 The Customer Experience: Priority One for CMOs In September 2013, Forbes Insights conducted a survey of 321 U.S. senior executives about the evolving role of marketing in a world where the customer is king. Respondents included C-suite executives, VPs and directors, who held roles in marketing, information technology (IT), operations, finance management and strategy. 7% had revenues of $500 million to $1 billion; 30% had revenues of $1-$4.9 billion, 32% had revenues of $5-$20 billion, and had revenues of $20 billion or more. The Big Potential of Big Data: A Field Guide for CMOs The Forbes Insights survey of 211 senior marketers gauged perceptions about the success of their marketing initiatives, as wellas their use of and the benefits of big data. The survey also considered the challenges to using big data and the growing importance of artificial intelligence for staying in front of Consumers. The companies had revenues of at least $500 million and marketing different industries, with the largest segments in banking and finance. Due to their size, resources and the industries they encompass, these organizations tend to be leaders in the use of technology and data. The Promise of Privacy: Respecting Consumers Limits While Realizing the Marketing Benefits of Big Data In September 2013 Forbes Insights executed three related yet distinct surveys: one for business-to-consumer (B2C) customers, one for business-to-business (B2B) customers, and the primary or main survey for executives from sellers to both of these segments.
Big Data Remains a Marketing Challenge 63% of senior travel and tourism executives say harnessing Big Data is driving many of the major challenges their organizations will face in the next 2-3 years, with respect to changes in the customer landscape Potential Benefits of Using Big Data in Marketing Decisions 70% 60% 65% 60% 58% 56% 54% 50% 44% 40% 30% 20% 10% 0% Optimize the channel mix Integrate initiatives across all channels Improve advertising efficiency Measure effects of Optimize customer multi-channel response initiatives Deliver options to customers based on real-time data Source: Forbes Insights, October 2013
However, Big Data s Influence Over Travel/Tourism Marketing Initiatives is Notable 23% say that more than half of their marketing initiatives are created and managed with the help of Big Data What percent of your marketing initiatives are created/managed with the help of Big Data? 2% 21% 36% 14% 27% Less than 10% 10% to 24% 25% to 49% 50% to 74% 75% to 100% Source: Forbes Insights, October 2013
The are more opportunities than ever before to gather data on customers more than customers themselves even realize Which of the channels below are primary touch-points for customer interactions? In-person sales forces 69% Online brand website 65% Customer call center 55% Social media (Facebook, Twitter, Pinterest, etc.) 52% Mobile app 43% Direct mail 43% With third-party partners 37% Online e-commerce site 35% Newsletter or e-newsletter 28% 3rd Party or Partner Sites / Online Communities 14% Presence on third-party e-commerce sites 13% Catalog 12% Mobile coupons 11% Source: Forbes Insights, October 2013
But capabilities to use the data from these touch-points lags somewhat From which of the following customer touch-points are you able to gather and analyze data? Company or brand website 54% Point-of-service 53% CRM systems 46% Call and fulfillment centers 46% Social networks 42% E-commerce site 37% Email systems 32% Mobile apps 30% Other websites 12% None of the above 3% Other 2% Don't know 2% Source: Forbes Insights, October 2013
Travel/Tourism Marketers use a wide range of data gathered from these touch-points to direct their marketing 100% What Types of Data Do You Use in Your Marketing Efforts? 80% 60% 40% 64% 63% 52% 52% 50% 46% 46% 42% 20% 0% Customer engagement Customer satisfaction data Customer service data Digital interaction data Demographic data Offline purchase behavior E-commerce data Social media interactions Source: Forbes Insights/Rocket Fuel, October 2013
But many challenges make it difficult to act on that data What do you see as the main challenges to your company using Big Data? Lack of technology resources to collect enough information Lack of technology resources to analyze volumes of information Lack of buy-in from senior mgmt to invest in the right resources Uncertain which metrics would be most helpful to our initiatives Daunting to bring disparate streams of data together Lack of understanding of what Big Data is and how it can help us Lack of the right person in our organization to lead a Big Data initiative We do not see the cost benefit of Big Data Daunting nature of creating the right infrastructure 17% 16% 26% 25% 24% 21% 38% 36% 33% Source: Forbes Insights, October 2013 0% 10% 20% 30% 40%
Source: Forbes Insights, October 2013
but few say it s because they don t see a need for it Why do you believe your organization is not fully leveraging Big Data or analytics? We lack the manpower and people capabilities to fully leverage the data we gather 42 % We lack advanced analytics capabilities (e.g. predictive modeling) 38 % We have too much data, not enough insight 32 % We lack buy-in and support from our management team to properly invest in analytics 27 % We lack the tools needed to perform analytics 23 % Lack of capabilities, technologies or infrastructure 20 % We gather a great deal of data, we just don't know how to use it yet 20 % The analytics and data competencies are in a different group limiting the speed and effectiveness of analytics 19 % We do not have good baseline analysis of the drivers of our business 16 % Analytics strategy is not a strategic objective 16 % The analytics function is outside of the business areas that need it making it too difficult or too long to use analytics usefully 14 % We don't see a need for it in our industry or line of business 11 % Source: Forbes Insights, October 2013
Almost half of travel tourism executives can provide distinct offers by customer segment; within 6-12 months, 70% plan to use analytics to evaluate marketing effectiveness by channel Which of the following capabilities or priorities apply to your approach to marketing? We can do this currently We planto do this within the next 6-12 months We plan to do this within the next 12-24 months We have segmented our customer base and design distinct offers for each 47 % 25 % 21 % Can respond to customer question on social media in less than a day 43 % 23 % 17 % Shifting from customer acquisition to managing existing customers 42 % 32 % 15 % Increased focus on personalizing experience based on behavior 40 % 26 % 21 % Can use data as a feedback loop for product enhancement 40 % 28 % 20 % Launch offers on social media 39 % 21 % 17 % Use analytics to evaluate marketing effectiveness by channel 37 % 33 % 19 % Ability to make offers in real-time to rapidly test 30 % 30 % 22 % We are adding advanced analytics capabilities 29 % 30 % 22 % We are adding advanced analytics personnel 24 % 33 % 19 % Source: Forbes Insights, October 2013
What are some marketing priorities for Big Data? To what extent are following areas are a key focus point in your marketing strategy? Promoting brand and product awareness Improving customer retention/loyalty Developing new tools to interact with the customer Incorporating changes in customer behavior into strategy Developing programs to increase spend per customer Providing seamless experience across channels Optimizing customer interactions in every channel Increasing presence on social media Developing a new business model for customer satisfaction Redesigning the customer experience online Redesigning the customer experience via mobile Redesigning the customer experience in-store 34 % 58 % 55 % 55 % 52 % 51 % 50 % 50 % 48 % 47 % 43 % 68 % 0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % Source: Forbes Insights, October 2013
Source: Forbes Insights, October 2013