Behavior advertising – sifting the good from the bad.

The advent of behavior advertising a few years ago promised to put an end to the conundrum (and trite joke) about fifty percent of advertising working for clients but not knowing which fifty percent.  The promise of behavioral advertising was highlighted, among others, by an October 2005 study which found that not only did behavioral advertising convert at
a significantly higher rate than contextual advertising, but that CTR (click through)
rates were also lower. That meant that advertisers needed fewer
ad impressions to generate a conversion. Further, those users that click through were
prime candidates for sales conversions or potential customers.

However, the Wall Street Journal and others report that underlying privacy concerns have spurred federal legislation "could hamper the ability of Yahoo, Microsoft Corp and other companies to entice advertisers with the potential to follow
users around the Internet in order to tailor marketing messages."  A reuters report notes that " behavioral advertising, where a user's online activity is tracked so that ads can be served based on the user's behavior, was cited as a particular concern:"Tracking people's every move online is an invasion of privacy. Online behavioral tracking is even more distressing when consumers aren't aware who is tracking them, that it's happening".

In the hospitality field it is resellers like Expedia who have been most active in attempting to cash in on the benefits of behavioral advertising. In Expedia's words the Passport program takes "the wealth of high-intent behavioral
data generated in-store and moving it "outbound" by applying it to ad
targeting."
Expedia is basically selling
advertisers data from consumers' Internet cookies without any
personally identifiable information to enable target marketing as clients surf around to major travel and non-travel websites.

The hotel majors are yet to embark on any major behavioral campaign of their own based on website visitation but they most hospitality firms likely will be beneficiaries of the approach. The curbing of behavioral advertising could stifle a still nascent effort by advertisers to maximize their ad dollars at a time when contextual advertising, as in travel publications, are fast becoming obsolete and, arguably, ineffective. More relevantly, behavioral ads empower smaller hotel firms giving them clout and visibility that, heretofore, the prerogative of the big hotel names. It behooves hotel firms to band together to work across industries with others who are similarly situated to moderate the rush to draconian curbs that ostensibly will ensure privacy but more likely will kill a viable advertising medium.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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