Luxury Hotels Aim to Get Smarter About Which Ads Work Best

The Philadelphia department store magnate John Wanamaker said that half his advertising was wasted — but he wasn’t sure which half. A century later, luxury hotels face a similar problem.

Travel magazines, social platforms like Instagram and Pinterest, newspaper websites, TV, and other mediums often display photos of plush guest rooms and gleaming, turquoise swimming pools either as advertisements or journalistic work. But hoteliers can’t be sure which content tipped a customer from being “a looker” into being “a booker.”

Rising to the challenge, several companies are attempting to help luxury hoteliers crack the puzzle of measuring so-called “downstream attribution.”

Exhibit A is Curacity, a New York-based data analytics company that launched in 2015.

This week, Curacity said it had topped up its seed financing with an additional $1 million led by Revel Partners, with participation from angel investor Asaf Evenhaim, CEO of Crossix. The company previously raised $2.3 million in equity financing, plus a contribution from the CEO, to bring the total for the seed round to $4 million.

The smallness of the financing and the smallness of the company, which has only nine full-time employees, underlines that offline attribution is a hard problem to solve.

But the promise of identifying what types of advertising actually work is tantalizing for some.

How It Works

Hotels share the startup guest email addresses with Curacity. The publishers, in turn, share their readers’ email addresses. They also share information on those people’s online behavior on their platforms, such as whether they opened newsletters with articles on a particular day or clicked on an article while they were logged in as a member of a publication and voluntarily shared their email address.

The startup matches activity on hotel content and bookings with email addresses on rolling timeframes of six months to a year.

When there’s a match, the middleman arranges for payments between the hotelier and the publisher, taking a cut along the way. The company didn’t disclose fees. But it’s safe to say the total cost to hotels is less than the typical cost of commissions paid to online travel companies, CEO Mike Keriakos said.

So far Curacity works with U.S. publishers like Afar Media, A Hotel Life, and Fathom. It has access to about 4 million email addresses as a result.

For example, one of the 90 hotels the company works with is a five-star property in New York City that asked to remain anonymous for this article.

The hotel essentially stripped out any bookings that came from customers that were booked via online travel agencies because it already had to pay fat commissions to those third-parties and didn’t want to pay any more.

It also stripped out the emails of past paying customers it already had past relationships with.

After all that, Curacity said it could attribute $226,000 in revenue over the last half of 2017, attributable to messaging in publisher platforms like Afar, Fathom, and Surface Hotels. Overall in the first three months of 2018, it claimed to have generated $1 million in revenue to its hotel clients, which include publicly-held hotel group Loews and La Mamounia in Morocco.

What’s Next

The company has two bigger U.S. publishers than Afar “under contract,” Keriakos said. Presumably, that statement means they have signed Travel + Leisure and Conde Nast Traveler, but the company declined to say.

In any event, the company projects that its partnerships will boost its email database to 16 million by the end of 2018.

The startup is now talking with Facebook with a plan to integrates one of its products with Instagram by the end of this year.

Other Players

Critics said Curacity is a glorified affiliate program, where an upscale hotelier might pay to embed links in content on publisher websites and promise to make payments depending on how consumers click and if they eventually book a room.

The startup instead attempts to infer an article is persuasive even if the customer doesn’t complete a booking after reading an article or seeing a social media posting. But its method is imprecise, critics said.

Some skeptics criticized its data exchange method with hotels, which has relied primarily on revenue managers pulling reports and emailing files once a month.

Curacity responded to criticism by saying that by the summer it hopes to roll out an automated method of pulling data from Oracle Hospitality’s Opera — the property management system used by an overwhelming majority of U.S. luxury hoteliers. It plans to make similar connections for other systems operational by yearend.

One thing all digital marketing companies have in common is that each one says its service takes a unique approach.

Tracking “Dark” Consumer Behavior

But many companies are interested in two twin trends. One is capturing how marketing can stimulate offline or other hard-to-track behavior. The other is unifying data with master data management services.

“Many travel companies are looking for technical solutions to trace how advertising that’s higher up the transaction funnel in the inspiration and research phase can be attributed to transactions downstream,” said Lisa Lindberg, vice president of product management for Expedia Media Solutions in an interview late last year. Her unit at Expedia Group is working on products and services to address the issue.

Kabir Shahani, CEO of technology vendor Amperity, noted that his is one of many companies across sectors beyond travel that are building so-called customer data platforms. “The infrastructure has to be put into place so that you can create unique customer profiles and IDs on top of your existing systems for what you might call persona-centered marketing.

This perspective was echoed by Layton Han, CEO of Adara, which is building what he calls “a travel data cooperative” that pulls together, or “federates,” profile data on traveler browsing behavior, loyalty program information, and other relevant details in a way that enables different travel companies providing different services across a trip to have a unified view of a customer.

A Curacity survey claimed to have found that about 50 percent of consumers said that travel media “heavily influenced” their purchase. But which 50 percent and which decisions? It will still be some time until more light is shed by various startups on how consumers behave across devices, channels, and trips.

CORRECTION: This story original stated that Auberge Resorts Collection was a client of Curacity. It is not.