Is monetizing hotel guest and loyal member data a good thing or a bad thing?
Marriott recently launched the hospitality industry’s first global omnichannel media network, the Marriott Media Network, which will allow advertisers to broadcast “curated experiences” to millions of Marriott loyalty members.
There are more than 164 million members in Marriott Bonvoy, the company’s traveler loyalty program, and Marriott plans to leverage this strong audience to fuel the media offering.
Marriott’s Media Network will first launch in the United States and Canada, before expanding globally.
For brand advertisers, the Marriott Media Network will offer a combination of large-scale and personalized media reaching in-demand, high-intent traveler audiences. The multimedia offering will provide the opportunity to reach specific customer segments with targeted content across Marriott-owned channels, including display, mobile, video, email, and screens and TVs in the rooms.
The Marriott Media Network uses a unified ad stack technology platform developed specifically for Marriott by Yahoo, and will be supported by Yahoo’s global ad sales team and Yahoo’s demand-side platform to lead the generation demand and sales worldwide.
The question is whether such monetization of customer and loyal member data is good or bad for the industry and will other hotel chains follow suit?
In my opinion, this is a natural progression of leveraging an engaged audience to provide them with greater opportunities. Today, most companies pursue a program of building a database of contacts and associated behaviors to grow their business and extend their business value.
The unspoken contract of loyalty is that the customer has bought into the brand, based on a level of trust in the value provided, continuing to deliver future value and opportunities that align with that value.
If Marriott, or anyone else pursuing a similar strategy, can stay true to that promise, without breaching the trust, it will prove to be a happy customer relationship.
The customer today receives information from a wide variety of channels, sources and inputs. Trust makes this source of information more valuable to this group of customers.
“If people believe they share values with a company, they will stay with the brand.”
I expect major hotel chains to be trying to monetize their massive website and mobile app traffic and loyalty data for some time now. In the past, membership data was primarily monetized through co-branded credit cards: Ex. Marriott Bonvoy Visa and Amex and Hilton Amex.
In this particular case, Marriott wants to monetize its huge first-party and zero-party traffic and data, and especially its loyalty membership of some 165 million Bonvoy members. I don’t see anything wrong with that. Many OTAs, airlines and car rental companies have been doing this for many years now. By monetizing its massive Prime membership, Amazon has become the world’s third-largest ad publisher with annual ad revenue of more than $31 billion, after Google and Facebook. Expedia Group’s advertising revenue in 2021 topped $603 million.
Contrary to some initial comments, Marriott’s initiative is not “sell customer data” to advertisers, since we are talking about native and programmatic ads served on the Marriott branded website and apps where targeting will be done through cohorts and audiences categorized by interests and any PII (Personal Identifiable Information) will be anonymized.
Marriott is obsessed with protecting customer and member data and never will “sale” customer data. Additionally, Marriott must adhere to recent Google and Apple privacy measures, the upcoming death of the cookie, and strict privacy laws in the EU, California, and around the world.
I’m sure all the other major hotel brands will follow.
Curated experiences are always a tricky thing because what is curated today may not be tomorrow and there is a very blurred line between curated experiences to truly benefit the customer and enhanced curated experiences based on the algorithm pushing “curation”.
All in all, a move towards more hyper-personalization in all areas of our lives and yet still with the same problem of going down a rabbit hole.
Monetize on it? if it really benefits, the customer will be happier because the media will pay for it, reach the customer properly and they, on the other hand, will buy – hence a symbiotic cycle. We’re going into muddy waters, but once that doesn’t work and its workforce is lost + of course, privacy and data protection are two things that could open up a huge Pandora’s box for everyone involved.
I think the Marriott Media Network, the hospitality industry’s leading global multi-platform, omnichannel advertising media network, is a brave step. Despite the demand for guest monetization and consumers seeking personalization, the hospitality industry had not reached this next level. Marriott is now leading the way.
We have had great success with retail chains such as Walmart and Macy’s developing media networks to monetize customer data. This is the first time that a hotel company has moved forward in the same way. I’m sure Marriott will experience equally explosive growth, as their loyalty database is huge.
Today, companies are considering alternative solutions to track user engagement and work directly with customers. Web browsers such as Google and Safari now prevent third-party cookies from tracking user data. This could be the reason for the inflation of programmatic advertising over the past decade, as it now accounts for 78.4% of display and video ad spend in the US (McKinsey).
According to Hospitality Network, millennials make up more than 50% of all hotel guests globally. 57% of millennials would be happy to trade personal data for personalized vacations, tips and advice. Today’s travelers use virtual platforms to seek digitized and curated travel suggestions and enhanced stay experiences.
Hotel chains that are serious about using loyalty programs and rewards to retain customers should also explore media networks. According to a study by Hotel Champ, 68% of millennials are most loyal to programs that offer the most rewards and experiences.
The level of intrusion into customers’ privacy will determine the success or failure of this system. For example, while customers prefer a holistic travel and stay experience through the Marriott app or in-room TV, they wouldn’t appreciate targeted marketing in their office once they return from vacation. As Susan Grossman, executive vice president of Mastercard Services, advises, “Brands need to navigate carefully between respecting privacy and leveraging information to surprise and delight customers. a winning personalization strategy that provides your customers with more value and memorable experiences.”
There would be the risk of data leaks, questions about the ethical use of data, and government legislation on citizen data. However, all of these are for legal departments to worry about. There is no harm in monetizing data if it is used for exemplary purposes and to improve the customer experience. Aren’t we already monetizing customer data through platform upgrades, cross-sells, and up-sells? Organized and personalized experiences can only strengthen customer loyalty.
While they may generate short-term revenue, Marriott’s move to monetize their customer data will likely come back to haunt them over time. Consumers today have become very protective of where and how their personal data is used, and the growing awareness that their data is being used to target them with third-party advertisements will likely erode trust in the Marriott brand in the longer term. And without trust, what are we left with?
Technology allows companies to reach a mass target audience with personalized information, but the judicious or appropriate use of technology depends on the ethical decision of the business leader. I consider Marriott Media Network a good thing unless the company starts to abuse the power of technology.
Suppose Marriott only uses the network to provide its loyal customers with the useful information they want, such as anything related to a trip they are planning. In this case, this advertising technology platform will be great for Marriott and its loyal customers. Marriott will also use the platform as an advertising channel for other non-Marriott but “relevant” products. The trick is that Marriott should only release information deemed useful to its target customers. I strongly encourage Marriott to let customers opt-in/opt-out or vote on the types of information they want to receive. This can help minimize their negative feelings about being “forced” to receive ads.
Marriott Media Network will become a bad thing when its guests and loyal customers start getting annoyed by its ads, which is probably the last thing Marriott wants to see. Ultimately, I applaud Marriott’s efforts to try something different. I expect other hotel chains to follow suit, learning from the examples of Marriott and other retailers.
A good or bad thing for the industry, yes both, depending on which part of the industry you are referring to.
Hotel chains: If incremental revenue can be sustained and increased without negatively impacting guest experience (Yahoo technology is a concern), then that’s a good thing.
Hotel guest: Depending on the importance or relevance of guest segmentation data, this will determine whether targeted advertising on mobile devices, video and in-room will be a positive or negative guest experience. Poor segmentation and irrelevant ads will become annoying to the customer very quickly and that would be a bad thing.