It’s no secret that Amazon is extremely well-positioned to disrupt digital advertising, with a massive global customer base, hundreds of millions of Prime subscribers, tremendous data assets and large-scale investments in ad tech infrastructure.
With the latest news that it will be placing Echo devices in hotel rooms across the country, starting with Marriott hotels, there’s now potentially even a bigger implication for travel advertisers. Amazon is not thinking about launching into the travel industry - Amazon is in the travel industry.
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Amazon has already done a tremendous amount to strengthen and diversify its advertising capabilities. A few years ago, Amazon acquired its own server-to-server bidding platform as a response to the growth of header bidding. Likewise, the Amazon Advertising Platform has quickly risen in popularity among programmatic advertisers, surpassing Google’s DoubleClick Bid Manager (now the Google Marketing Platform) among the group of advertisers surveyed in this AdExchanger study from 2017.
In fact, advertising was by far the fastest-growing segment for Amazon in Q1 of 2018, generating more than $2.03 billion, an increase of 139% from Q1 in 2017. Up to now, Amazon’s advertising has been mostly related to search and product promotions that happen on Amazon.com. But Amazon has the capability to do much more.
Upping the guest experience
We don’t see many travel advertisers using Amazon’s demand-side platform. But, that could change. What Amazon has done by placing Echo in hotel rooms is put themselves in the center of the guest experience. Echo will be used to adjust the temperature of the room, or set the lighting, operate the TV, order room service, etc. For example, Amazon may know what your preferred room temperature is, and might have a record of your 3 a.m. room service order.
And since many of us will log into our Amazon accounts for the convenience and personalization it offers (for example, accessing Amazon Prime Music playlists), Amazon will begin to learn our purchase intent and preferences as we travel vs. our buyer intent when we are at home.
Amazon is not thinking about launching into the travel industry - Amazon is in the travel industry.
This type of rich data could be used to create targetable audience segments to power programmatic advertising, or used to make better predictions about what travelers may be like or what sorts of products, services or experiences they may be interested in. Marriott could potentially benefit by targeting customers who are more closely aligned with their hotel offerings, or finding new and better ways to personalize hotel experiences for their guests.
That said, voice data isn’t going to suddenly unlock a ton of new personalization capabilities that are easily or immediately useful. Frankly, we have to remember that hotels already have a ton of rich guest data, but many times are only scratching the surface of using that data to personalize the guest experience.
Most of the time, guest data is fragmented, decentralized and not easily connected, even from one property to the next. This means that very few hotels create opportunities to surprise and delight their customers by better personalization of an experience, and there is a strong need for this.
Marriott is already among the best in the industry at delivering great guest experiences, and their loyalty program consistently receives high marks. Providing an Echo in every room and finding new ways to potentially extend better, more personalized guest experiences could go a long way to making stays with Marriott properties even more memorable and enjoyable.
Time will only tell if the travel industry is ready for Amazon to enter the market and just what that will mean for all of us moving forward.
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