Koddi helps digital marketers max out their Google Hotel Price AdsNewsBy Sean O'Neil | August 27, 2013Share This article was originally published on Koddi is a B2B travel technology start-up in Texas that has created a management, reporting, and optimization platform for travel marketing campaigns.The start-up provides an enterprise solution for online travel agencies (OTAs), large and mid-sized hotels chains, data integrators, computer reservation systems (CRSs), and channel managers. It claims to provide all of the tools marketers expect in advanced keyword search or programmatic display campaigns.For now, Koddi is focused on Google’s Hotel Price Ads (HPA), which entices consumers to book directly on a hotel’s branded website by showing real-time hotel prices and availability next to organic results on Google search results, Google Maps and Google+ Local Business Pages, and Google’s Hotel Finder search tool.Koddi's platform aggregates spend and activity data from partners; visitor, conversion, and performance data from a client’s analytics platform; and first- or third-party contextual data. It gives a marketer a view of a campaign without him or her having to do reporting or crunch numbers in Excel.Says the company: We add efficiency for already-live campaigns. The marketing team from one large OTA in the US was able to increase Google Hotel Price Ads revenue by over 60% while increasing marketing return on investment by more than 17%. Koddi was able to do this not only because of our features to prevent loss, expose opportunities, and automate core management tasks, but also because using Koddi unlocked a key asset: their time and focus. The OTA was able to solve bigger, more strategic challenges, create complex tests, and create growth within the program. We just bolt on without getting in the the middle -- another plus. There's no additional client-side development. We offer integration within two to three weeks.Share this quote Since launching in June, and with almost no marketing, the privately-funded company has gained two clients, who are going through onboarding. Koddi also claims a handful of commitments at various stages and a "very healthy qualified pipeline".The company has three full-time employees in Texas, plus two others who are contract-to-hire -- for a total of four coders plus an account manager with a background in analytics and working with large travel advertisers.Q&A with Nicholas Ward, president:What makes your start-up stand out? At Koddi, we support the specific needs of digital marketers by providing custom reporting, visualization, bulk and algorithmic bidding, custom alerts and triggers, and data management.Knowing that sophisticated advertisers benefit much more from customized solutions than a one-size-fits-all-approach, we’ve also modularized key aspects of the platform that enable bespoke implementations.If a client needs data transformed prior to loading, wants to create custom metrics, or wants to report on margin or profit instead of gross revenue, we can support it.Why should people or companies use your startup? Enterprise advertisers should use us when they can create competitive differentiation by running smart, efficient, well managed digital campaigns. We enable our clients to focus on the areas of their business that provide the most growth.Koddi allows travel organizations to scale their metasearch campaigns, automate reporting, and get access to powerful tools that enable them to perform in depth analysis accurately and quickly.When their talented employees are spending time generating, QAing, and manually uploading files – and we see this across the most sophisticated organizations – it means there is a great opportunity to leverage our platform and get their people on projects that will grow the business, versus just maintain the business.Revenue model and strategy for profitability? We charge licensing fees and a percentage of media spend. Our strategy for profitability is focused on creating a flat and agile organization with heavy reinvestment back into product development.This has been our approach since day one, by building upon the success of core clients that we already have in place.We’re not attacking a mass market that requires us to scale up and make a big bet before the revenue materializes.What inspired the creation of this product?Working on digital campaigns for some of the biggest brands in the world for the last 10 years, I consistently saw two things: 1) great technology is a huge differentiator and provides competitive advantage to digital marketers, and 2) when brands and agencies hit a certain size it becomes really difficult for them to quickly release and support the kind of technology that gives them a significant edge.I wanted to create a product that addresses these issues.Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?One of the great – and sometimes tough – things about the digital advertising industry is that it’s a very small world. Travel is an even smaller ecosystem.One of our key assets is that we already have strong existing relationships with many of our potential customers. If we haven’t directly done business together, we’re usually only one degree apart.Beyond that, you’ll see us doing some very basic navigational search and social advertising, publishing thought leadership pieces on our blog, and getting involved at the major travel industry conferences. We'll do the occasional LinkedIn campaign, too.By the way, our name Koddi is Icelandic for 'pillow,' which we feel is appropriate because our HPA management platform enables advertisers to more efficiently put 'heads in beds'. We hope our name allows for positive branding.Is Google okay with Koddi?I want to be careful not to speak for Google. From my perspective we enjoy a very positive and productive relationship with their Travel team. I believe they appreciate having partners like that in the ecosystem, whether they are clients or service providers. We push hard on their product and engineering teams and try to provide helpful feedback, even when it's tough to give.Koddi was invited to Google's Travel Executive Forum as a technology partner, helping clients push HPA campaigns further. From my perspective we enjoy a very positive and productive relationship with Google's Travel team.How did your initial idea evolve? Do you have a Plan B?The biggest evolution so far has been our extreme focus on metasearch, vs. tackling the broader channels. The opportunity was there and so we seized it; it allowed us to build a foundation, create momentum, and secure relationships with the opportunity for growth.If something catastrophic happens and the original vision fails, we’ll come out of it having built a great team, client relationships, and a very strong set of learnings. That seems a lot more like launchpad than a failure to me, though.Where do you see yourselves in 3 years?In three years, I hope that we will have helped up the technology standards for hotel marketers.Today, it’s a bit surprising that a lot of complex advertisers still have to rely on relatively old technology to run and inform multi-million dollar campaigns. Some large partners today operate on e-mail instead of API. Reports that are days old instead of near real-time. Insights that are directional at best, spurious at worst.I hope that we will have increased the expectations of the hotel industry, by being a great partner to advertisers as well as publishers. I hope that meta search advertising is much more standardized and that we’ve contributed to that through technical and thought leadership.A digital marketer can run a campaign with full transparency, real-time reporting, and have all the levers they need to optimize across all of their partners.I see us at the head of that evolution, not only with the platform we’ve built, which is already blazing that trail for for sophisticated advertisers, but also with a suite of other solutions that enable our clients to give their customers incredible experiences through travel purchases.What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?Channels are becoming increasingly complex and fragmented. As a supplier in the industry, you are set apart by the experience you deliver to the customer. Improvement in that experience pays many, many multiples.So if it’s not core to improving the customer experience, why invest in being great at pushing hundreds of thousands of bids or creating dynamic clusters for statistical analysis?Tnooz view: Koddi estimates the size of its target market is $240M in technology and management fees, assuming $8B digital spending from travel vertical globally, and $4.8B (60%) going to search and display. The start-up believes it has little "realized competition" because of its specific focus on enterprise travel marketers and maximizing metasearch. It's an area of technical management that is not currently available for in-house solutions and/or hospitality solution companies. There is potential upstream competition from companies that focus on independent hotels and small chains, such as Pegasus Solutions, whose Open Hospitality product is offering Google Hotel Price Ads to participating hotels. It also may face competition from digital marketing specialists, such as HeBS Digital and Sabre Hospitality Solutions. But Koddi doesn't plan to do websites, SEO, etc., so hopefully it can avoid competing directly with Open Hospitality or HeBS -- two companies that offer a suite of services and tools for the individual hotel or the small group of hotels. If Koddi does its job well, companies like Open Hospitality and HeBS may use it in some cases -- the same way that many advertisers and agencies utilize bid management platforms like Marin and Kenshoo to supplement some of their campaigns (even when they have proprietary technology). In its first year, the founders should do much of the selling because they need customer feedback to refine their product and their pricing. Eventually, they'll also need to be careful in choosing which investors to invite in to the company.Share this quote NB:TLabs Showcase is part of the wider TLabs project from Tnooz.