Building Media Networks in the Travel Industry

Discovering untapped revenue sources is the dream of every travel industry executive, especially given the airline industry’s low 1.2% net profit margin.

There’s no shortage of creative ideas for upselling or cross selling passengers and hotel guests with more legroom or early check-ins. But there is a not-so-obvious potential for revenue waiting for you: a media network. 

Media networks, leveraging robust first-party data and sophisticated technology, are a revolution in revenue diversification. With over 80% of spending on retail media networks stemming from net-new budget sources, rather than reallocating existing advertising budgets, it’s clear that these networks are tapping into previously untapped incremental revenue. 

For the travel industry, this isn’t just about selling ads; it’s about creating new economic ecosystems that enrich customer experience and significantly boost the bottom line.

In this article, I’ll show you how to leverage your data, set up the technological foundations, and develop monetization strategies for your media network.

What Are Media Networks in Travel?

A media network is an interconnected system or platform that distributes content across various channels to reach a wide audience. For companies outside the traditional media industry, becoming a media network means leveraging their resources, reach, and data to create and distribute content relevant to their audience. 

A travel company could use its website, email newsletters, in-flight or in-hotel entertainment systems, and social media channels to deliver travel-related content, sponsor ads, and personalized recommendations to its customers. 

Leveraging First-Party Data for Media Networks

Let’s take a major airline, for example. Their core business is selling airline tickets and travel packages. However, they have a huge revenue potential with their extensive assets beyond just planes.

Airlines possess a wealth of first-party data and deep insights from their loyalty program. This data includes detailed profiles of frequent flyers, their travel habits, market preferences, and more. This high-intent data becomes a powerful asset for targeted advertising and personalized marketing.

Moreover, major airlines serve as publishers with assets like main websites and other owned sites. They can also creatively use their physical assets, incorporating digital out-of-home screens on the backs of airplane headrests and lounges. 

These platforms allow airlines to dive into media using its data and inventory, helping diversify and boost their revenue streams. This strategic move positions them as more than just an airline, transforming them into a dynamic media network in the travel industry.

Travel companies can use their first-party data to create highly-targeted advertising campaigns with businesses in related industries. For example, if a traveller books a flight to San Juan, it would make strategic sense for a hotel chain to target that traveller with engaging advertisements for their location in San Juan, aligning the ad with the specifics of the traveller’s itinerary. This approach enhances the relevance and impact of the ad.

Similarly, Uber has effectively used its platform to integrate ads from airlines like KLM or British Airways that correlate with a user’s travel plans. When a user books a ride to an airport like LaGuardia or JFK, Uber might display an ad suggesting the traveller’s next potential destination, thus using the data to directly address the traveller’s current needs and behaviours without entering into direct competition with other brands.

This method of leveraging retail media allows advertisers to creatively tailor their messages to specific audience segments, ensuring the content is pertinent and non-competitive. This strategy increases the effectiveness of the ads and maintains the integrity and confidentiality of personally identifiable information.

Monetization Strategies for Travel Media Networks

Launching your media network means you need a solid strategy to attract advertisers. This begins with building a capable sales force. Recruiting the right talent requires significant time and financial investment, especially in an industry that might be new to you. 

Instead, consider leveraging experienced digital sales professionals who operate across various markets, which could streamline your entry into the space.

Next, you must determine the underlying technology supporting your media network—whether for an airline or a hotel chain. 

The decision to develop proprietary technology or purchase existing solutions involves cost and expertise considerations. To find your fit, it’s crucial to assess the digital ecosystem, including supply-side platforms (SSPs) and ad networks.

Finally, decide on the assets you want to capitalize on—perhaps starting with data monetization before expanding to inventory. This approach requires navigating technical and market challenges to build a platform that effectively monetizes your resources.

Let’s continue with the airline example to illustrate these options.

An airline’s strategy could extend beyond just leveraging the data and inventory within its own ecosystem. The real growth potential lies in forming partnerships with adjacent brands, allowing the use of its data outside their traditional spaces. 

This expansion taps into SSPs and accesses broader inventory through demand-side platforms (DSPs) in an anonymized manner, creating a robust media business that spans both on-site at the airline locations and off-site across the web.

The challenge now would be monetization and structuring. Here are some options they could go after: 

1. Building proprietary technology and sales teams—a long-term benefit, but resource and capital-intensive, especially in an unfamiliar market. 
2. Partnering with an SSP to streamline processes by linking the airline’s assets directly to multiple DSPs, though this might limit control over the demand and narrative of the ads.
3. Working with a DSP, possibly in conjunction with an SSP. This approach provides technological solutions—often white-labelled to appear as part of the airline’s offerings—and allows the airline to act as its own sales force. 

In my opinion, working directly with a DSP is the best option. This would harness first-party data and inventory, enabling an airline to manage both on-site and off-site monetization opportunities effectively. This method offers a balance, allowing the airline to maintain demand quality and brand alignment.

As a DSP, for example, StackAdapt does all the heavy lifting for its travel industry partners, offering:

1. A white-labelled, customized programmatic advertising platform that travel companies can present directly to advertisers. 
2. A sales force solution—partnering with an SSP, creating an in-house sales team, or a hybrid approach.
3. A creative studio team—designing their media assets and managing client services efficiently.

The StackAdapt team helps you with the complexities of hiring a sales force, managing technology, and maintaining control over advertising quality and messaging. That way, you can establish and scale your media networks and leverage your valuable assets for optimal media monetization.

Technological Foundations for Media Networks

To establish a media network, travel companies need tools and platforms for launching and managing advertising campaigns. 

As mentioned above, they require an advertising technology platform, like a DSP or a SSP. These platforms allow them to execute ad campaigns and manage the inflow of their first-party data for targeted advertising.

From day one, you should also integrate a portal that allows customers to execute their campaigns seamlessly and onboard data efficiently. This portal serves as the operational backbone for managing the supply of inventory—such as website ad spaces, in-lounge screens, or seatback displays on planes—and the precise placement of ads through these channels.

Moreover, an ad server determines the optimal placement of ads, so they reach the intended audience. This technology is vital for managing the delivery and tracking of advertisements across the network.

Beyond the technical infrastructure, control over the advertising content and partnerships is critical. Major airlines have spent decades building their brand reputation and must ensure that any media content aligns with their established brand values. This includes controlling the type of advertisements shown and the partners they collaborate with to maintain brand consistency and to protect brand equity.

These elements—technology for campaign execution and data management, ad serving for precise ad placement, and stringent controls over content and partnerships—are foundational to transforming a traditional business into a successful media network. This ensures the technical capability to run a media network and safeguards the brand’s integrity in every ad displayed.

The Future of Travel Media

The future of travel media is headed towards greater integration and convergence with advertising technology (adtech) and marketing technology (martech). 

As travel companies morph into sophisticated media networks, the distinction between being merely a travel service provider and a dynamic adtech player is blurring. This evolution sees the merging of various distribution platforms, where the channels used, the audiences reached, and the publishers involved are increasingly interconnected.

This convergence aims to streamline performance and automate marketing processes, setting clear and attainable conversion goals that are easier to achieve through advanced technology. For instance, some new technologies offer tools allowing travel entities to work collaboratively with brands in a one-stop-shop capacity. This helps them meet their conversion and performance metrics across diverse audiences and via multiple channels.

The ongoing transformation suggests that the next phase for travel media might involve establishing more comprehensive adtech platforms, representing a significant shift in how travel brands operate and market themselves. The specifics of this trajectory are still developing, indicating a nascent yet rapidly evolving sector that could redefine the interface between travel and technology.

In this article, I’ve outlined the considerations and steps you need to take to become a successful media network. At StackAdapt, we have the technology and the expertise to guide you through this process. 

Interested in learning more? Request a demo today, and let’s discuss your flight plan to profit.