• by Paul Knegten , September 13, 2010

I talk a lot about using real-time bidding with behavioral targeting data to make display advertising work for travel marketers. While this approach is a great place to start to drive profitability in display, I'm reminded of a question asked at a Fixing Advertising event I hosted earlier this year -- asked by a former airline executive.

"But what can you do to get me new customers?"

Great question. With all the discussion around behavioral targeting (and its privacy implications), have we forgotten that most of us are here primarily to bring new customers into our pipeline? Lest we have, I'll devote the remainder of today's column to a couple ways travel advertisers are utilizing technology to generate new customers.

Flash Sales & Group Buying

I love flash sales and group buying (à la Groupon, LivingSocial, Ideeli, et al.) for one big reason: their entire raison d'être is to get people who have never bought from an advertiser to try them out with an offer they can't refuse. While we try to figure out ways to show someone a banner ad that somehow will convince them to buy in (and future columns will explore just how), flash sales such as last week's Virgin America / Loopt two-for-one deal on tickets to Mexico are giving consumers the equivalent of hundreds of dollars in discounts to convince them to try something new. It's no wonder this deal was the fifth-largest sales day in Virgin history.

A word to the wise: expect cost per acquisition to be very, very high in this channel. But, a lot of these deals occur only when a minimum amount of people commit to them, providing advertisers a volume guarantee to offset the high CPA. And, of course, smart marketers consider the total customer lifetime value when evaluating CPA, especially when generating new customers.

Social Media Advertising

This channel isn't there yet -- but watch. I've said here before that all the ill-fated Facebook Beacon had to do was to give users a reason to allow their online purchases to be broadcast to their friends -- 10% cash back, for instance. Nevertheless, social media advertising is evolving. Zynga has got it nailed -- think of how many FarmVille users joined because they saw a post about a friend's farm in their news feed?

It's word-of-mouth on steroids, and travel advertising is clearly well positioned to take advantage of this channel. Plenty of travelers choose their destination based on recommendations from friends, and social media is the perfect conduit for these recommendations. My guess is services like TripIt that already broadcast travel plans in Facebook news feeds are going to switch on deals that relate to those destinations: "Paul is planning a trip to London. You can, too, for as low as $599."

It Shouldn't Be an Ad

What I love about these two approaches is that they get consumers' attention by giving them a truly relevant value proposition instead of something that looks like an ad. As display advertising evolves to do the same, I'd expect to see more of "what's in it for the consumer?" during campaign planning. When we start there, we can't go wrong.