In September, Adara, maker of a business intelligence platform for the travel industry, nabbed $23 million in Series C equity financing. It claims 90 major travel brands as clients.
To get the latest on the company's plans, Tnooz caught up with Scott Garner, president, data & analytics, while he was attending the Phocuswright Conference. (This interview has been edited for brevity and clarity.)
Tnooz: What's new?
Garner: For the last five or six years, we've been primarily a data-driven media solution. Building up a very large data set with significant amount of customer behavior data, search data, booking data, profile data, and using that to power our media solutions.
That continues to be a very important part of our business.
But now that we've grown our database to a very significant size, we're up to 380 million unique active profiles or travelers globally.
Tnooz: How many different data points?
Garner: On average 25 to 30 data points per profile: destinations they've searched, bookings, origin city. There's profile data in there so frequent flyer status, too.
It's a really huge data set, and we've had a lot of our partners ask us, "What else can you tell us, beyond running media, which is important, but what else can you tell us about a traveler? You probably know quite a bit that we don't know."
As we look at that data and as we've worked with many of our advertisers, since typically most travelers will visit a number of different sites before they actually book something.
Most travel companies, whether you're a supplier or a distributor, you're pretty much limited to that view of that customer which just the activity they have on that side. What Adara has is visibility to that customer before they reach that site as well as after that site.
We've been connecting all those interactions that that customer has with a lot of different sites, so we've been able to create a more complete view on that customer's search and booking behavior....
Tnooz: One goal with the financing is to scale up? How well will Adara be able to bring its solutions worldwide?
Garner: There are nuances. Japan's a little bit different, China's a little bit different, but we think that the model scales quite well. The attributes that we're measuring are fairly standardized.
Tnooz: To focus on the Impact analytics product that DMOs might like to use, does a law of diminishing returns set in for tourism marketing organizations? If, say, Fort Worth, signs up to use the tool, and then its neighbor Dallas signs up to use the tool, does the benefit go down once everyone starts using it?
Garner: No. I can't envision how that law of diminishing returns happens here, especially in this case. Here's why. A big challenge departments have, and we see this with tourism like Chicago. Chicago advertising budget, because the state of Illinois and the city of Chicago has tremendous budget issues.
Garner: Where do you go to cut? You've got this big advertising budget for tourism.
Tnooz: They're asking: What's the return on investment? Can you attribute the awareness campaigns to bookings.
Garner: Exactly. They're spending all this money, "we don't know if it works or not," so they cut it. It's not isolated cases; this happens all the time. There are other factors that are going on in that state or that region. One of the reasons it's so easy to cut that the benefits of spending that money are not empirical. They don't always have good data to support the return the state or region is getting on that investment.
If Forth Worth can now actually demonstrate why this money should be invested, because here's the return we're getting, and we think it's a good return, and Austin can now do that, and Houston can now do that.
Even though they might compete against each other to some extent on visitors coming to the region, it's a significant help to them to be able to support the return they believe they're getting on the advertising that they're investing in with the data.
That benefits everybody in tourism, because the competitor in that is not other tourism departments, but it's other government agencies or other uses for those funds that are competing against the tourism budgets.
Garner: That's what you're competing against. You're not competing against other destinations, you're competing against other people that are trying to take your money away. And you need to have something to show them why they shouldn't take that money away. We spend a million dollars, we're going to get ten million dollars back in development.
That's a good return. Where else are they going to get a 10X return on the money? That helps preserve and hopefully expand and grow more tourism dollars to be able to attract those kinds of returns.
Tnooz: I'm going to push back on that a little bit so that I'm not putting words into your mouth, and I'm getting it from you. You said that one of the things is that customers have come back to you, clients have said, "what else can you provide, to get out of that data?"
And you're talking about the story that Adara connects the traveler not just the visits on hotel brand X site or destination site X, but you can see where that traveler has traveled before and after, plus connect some profile data, maybe it's hotel status.
But when we talked previously that seemed to already be part of Adara's story. What shifting in emphasis, what kind of products are going to be new? Is it more self-service information on an extranet?
The clients may say they want it, but you dump a bunch of data on their desk and they may not necessarily know what to do with it. I don't know if there's anything in terms of how you interface with the clients that's also a new product or service or anything.
Garner: Sure. I think there's two things. One, we've been building that view, how a customer moves through the purchase path, and we've used that information primarily to power our own marketing solutions for them. That's really been our primary focus.
What we're adding to that is this level of analytics that this customer can subscribe to that's independent of tying it to a marketing activity. They could use it to develop better insights into their own customer segmentation, product development with the company, obviously it continues to support marketing, but it can also be used if you're a hotel company.
Which market should I be buying hotels in, which market should I sell hotels in? If you're an airline, how do I plan my capacity better with those types of insights. Things are not a marketing-driven decision, but rely on robust analytics and insights, that that company may not have access to today.
Tnooz: If you wouldn't describe it as a marketing decision, what category of decision does if fall under?
Garner: It depends. If you're a hotel it could fall under property development. How do I expand my footprint of properties and where; what markets are important to look at? Being able to look at trend data, specifically using-
Tnooz: It's business intelligence?
Garner: It is business intelligence. Sure, no question. How it's applied into the company. For an airline it would be applied into the network planning groups to help them be smart about how they evolve their networks. That's all pulled off of the business intelligence, using a data set that has not been in the marketplace before.
Tnooz: Because it hasn't been in the marketplace before, everything you're saying intuitively makes sense, but operationalizing ... How the sales team has to explain it to the front-line people to get them to do it, and then the front-line people have to get the people who are in operations to actually use it and be educated and use it. Adara has to make sure the information is presented in a way that's intelligible. Maybe I'm not understanding process at all, do you have any color on how people are actually typing the keyboards and getting the results?
Garner: Right now our first primary product in this suite of analytics products is targeting tourism groups. The DMOs. And that product is what we call Impact. Let's take as an example Fort Worth, Texas.
Garner: Fort Worth came to Adara. We were running media with them but they don't have any visibility into what level bookings are associated with the media campaigns they're running with Adara, as well as other media companies. How are they doing, how is their media performing? They don't really know. They don't have a booking agent, they don't do bookings. They promote a market but they can't measure in real time-
Tnooz: So it's about brand awareness and trying to attribute the return on investment?
Garner: It is, absolutely. What we did with Fort Worth with our Impact product, this is analytics for DMOs-
Garner: We were able to tell them how many hotel bookings were made in Fort Worth, and we could even compare that against hotel bookings in neighboring cities around Fort Worth, so Dallas and Irving and Grapevine. They could actually see how they're performing relative to their competitive set.
Tnooz: And maybe ones they don't realize are in the comp set.
Garner: Exactly. Where are their customers, where are those people coming from; which markets?
Garner: Which states are they primarily coming from? Maybe they thought most of their visitors are coming from Texas, but in this case we actually showed them that California was their largest source of visitors to Fort Worth. They could see what other states and regions were primary source markets for them. We were integrated into their media partners, so we could measure media partner A, media partner B drove X bookings, Y bookings, Z bookings.
Tnooz: I see.
Garner: So now you've got an attribution by a media partner with real booking data behind it. For the first time Fort Worth could actually measure the effectiveness of their media partners using real hotel bookings in their market and compare themselves against their peers. That was with our impact product.
Tnooz: If I was the skeptical Fort Worth person who this is a new product for me, what would be a comparison tool they have direct access to, so they can compare the correlation between what Adara is claiming, based on its 320,000,000 unique visitor profiles and its enormous analytics; is there something that they do have, maybe a hotel partner of their own, that they can see yes we're noticing that as you adjusted the mix between that media partner and that media partner this local hotel chain that we do a lot of business with is also noticing an uptick. Is there a way that they can cross-check?
Garner: No, it's not easy for them to cross-check in the short-term, because there's really not another good data source for that.
Garner: They can get access to arrival data, how many people flew into Dallas Fort Worth.
Tnooz: I see.
Garner: But that data is usually lagged depending on how frequently they purchase that data. But when you're trying to measure the effectiveness of your media it's very critical to be able to do that in in real time. If you spend a bunch of money on media and you don't find out until three or four months later that it was not performing, you've just wasted a lot of money.
Tnooz: Is it hard to target this market? And Are Adara's products only aimed at particular size companies?
Garner: I think we've implemented this in both large and small DMOs at varying levels of sophistication in terms of their knowledge of data, and I think it's probably the really attractive attributes, that it's a relatively simple concept and simple integration. Yeah, what does this product do? It measure performance. We're using hotel bookings as that performance indicator, we're measuring that performance by media partner in the market.
Garner: That's a very simple concept. Much harder to actually do, but they don't need to know how it's all done and it's built; we explain at a high level. Much harder to have a data set that's credible and comprehensive enough that it's meaningful. We explain that, and it's fairly easy to test as well. We could implement, we could run a test, and they could start seeing whether the data makes sense to them or it doesn't.
Tnooz: Is the model that this can scale up because the solutions are whether it's small or large, it does scale globally?
Garner: Sure, absolutely. It does scale, absolutely. Right now we've got a very comprehensive data set in North America, so within North America it scales incredibly nicely. Within Europe we have a very large data set, so there will be some markets it will be very strong. In the UK market we've got a lot of data, it's very strong. UK, Ireland, France, Germany, we've got quite a bit of data.
Garner: Some other markets where the ability for us to obtain data is just a little more challenging. That product is not going to be quite as effective, but that will change as we continue to expand into other markets and add other data.
Tnooz: Has Europe's rules and other regulatory regime's rules about privacy and internet usage, does that impact your ability to collect data?
Garner: No it doesn't. In part because data privacy, data protection is an incredibly important part of our business. We've architected our platform and we've put in place functionality to not only protect the data, protecting the data should be a given, and we have a phenomenal track record in that way. But we've also added functionality to give the data owners complete control over how the data is used.
Garner: We also don't collect any personal identifiable information. Because of those three things, we have not had really any challenges in Europe, where there's been a lot of discussion on data privacy, more so than the US, certainly partners that they asked questions, they do the due diligence, they want to make sure what we say is accurate, but it has not in any way been an impediment to collecting this type of data.
Tnooz: Last week we spent a day at Bellevue with Expedia Media Solutions to learn about their product and everything. It seems like in a Venn diagram, there is some overlap between what Adara is offering tourism and small DMOs and what Expedia offers. They claim they are unique among median advertising agencies, and that they can show you how it results in a transaction funnel; they have them all across the brand.
Garner: Transaction funnel within the Expedia world.
Tnooz: Within their portfolio.
Garner: That's right.
Tnooz: To what extend is Expedia Media Solutions part of the comp set for Adara?
Garner: There are some areas where there may be some overlap in what we do and what Expedia does, but there is a lot of space where there's no overlap and opportunity to work together. We are exploring that all the time. I think one of the key differences is when we look at our data set ... We really are a neutral third party, in that our goal is to collect and manage a significant amount of data across all companies. We do have OTAs that provide data to us, metasearch, we have GDSs, we have hotel suppliers, airline suppliers. It's pretty comprehensive in that way, that really helps give that customer or DMO or whoever the customer is access to industry data, and not just company data.
Tnooz: Who is compsat? Is it tech companies like quinteo and double-click, or travel companies like travel click, which while it doesn't have a suite it's similar to what you're doing, does do a lot of digital marketing on behalf of hotels, so they can have some overlap.
Garner: The compsat varies depending on what the product you're talking about is. If you're talking about the impact product, the analytics product we've been talking about, then yeah there's a couple different companies that have different types of analytics products, but I haven't seen, maybe it's out there but I haven't seen it yet, I haven't seen a company yet that's been delivering this data, this booking attribution data for DMOs that Adara is. I just haven't seen it in the marketplace.
Garner: DMOs buy other types of analytics, there's a variety of players that do that.
Tnooz: Is it door-to-door sales to get to these DMOs? Do you really have boots on the ground in order to get in the door, or are they coming to Adara because the word is spreading?
Garner: Both. Certainly you do have to have some boots on the ground, no question. But we do spend a lot of time at events, we have leadership efforts to help be able to get our message out.
Tnooz: Mm-hmm (affirmative)
Garner: Which has been very effective. A lot of people already know us from the media side of our business, so we get a lot of customers that come to us that way as well.
Tnooz: What other practical side to the impact analytics suite we make sure we mention?
Tnooz: Do you have the funding helps add rocket fuel to being able to scale up, expand the model geographically? Or is it to either partner with or be acquired by some larger player, is that the only way to scale up globally or do you feel like the Facebook model you guys can build to grown and be a standalone brand?
Garner: No question. We're a strong standalone brand as it now. I think we have the assets, we have the team to be an even stronger standalone brand going forward. We always look for partnerships, and we've build our business off of strong partnerships with many of the largest travel companies in the globe.
It's not at all something we feel is necessary, that we have to be acquired by somebody to be able to fully grow to where we want to be. I don't think that's it at all.
Garner: When you think about geographic expansion, there's always investment you're going to work. It takes time to get that money back. Nothing unusual about that.
As you launch new products, like our analytics products, you're going to do a lot of development up front, you're going to do a lot of selling upfront, and again it takes time to get that money back. But we've had a very healthy media business that also contributes to the funding of new initiatives, and we do that. But again, we always look for very strong partnerships because I think we have a lot to offer other companies in this space, and vice versa. That's what we've built our business around.
Tnooz: Two last questions. If tourism people prefer to see something hands-on is there any event upcoming that they will be able to see you guys at, either ITB or high tech or something that they might be the next GBTA. Do you guys expect to be there that they'll be able to find you at?
Garner: Absolutely. ITB is a big show for us. We'll absolutely be at GBTA, too.