The Digiday Podcast: How to Expand Programmatic Advertising Up the Funnel, with TripAdvisor’s Matteo Balzani

Release Date: December 10, 2024

Episode Overview

In this insightful episode of The Digiday Podcast, host Tim Peterson delves deep into the evolving landscape of programmatic advertising with Matteo Balzani, Senior Director of Acquisition and Retention at TripAdvisor. Balzani shares TripAdvisor's strategic pivot from a predominantly lower-funnel, retargeting-focused approach to a comprehensive full-funnel strategy aimed at capturing and creating demand earlier in the customer journey. This shift is crucial for maintaining competitive advantage in an increasingly crowded digital marketplace.

News Highlights

1. Omnicom and IPG Merger

The episode kicks off with breaking news about the imminent merger between Omnicom and Interpublic Group (IPG), as reported by The Wall Street Journal. This merger signifies the unification of the third and fourth largest agency holding companies by revenue, potentially reshaping the advertising agency landscape.

• Tim Peterson explains, “Omnicom and IPG are the number three and number four largest agency holding companies by revenue. This merger would position them as the number one agency holding company.” (04:47)

The merger aims to enhance scale and leverage in negotiations with major media players like Disney, Netflix, Meta, and Google. However, challenges loom regarding cultural clashes and potential conflicts of interest among clients. The merger's approval is pending, influenced by regulatory environments and potential opposition from influential figures like Elon Musk.

• Tim Peterson notes concerns about the merger possibly being opposed by key industry stakeholders, stating, “Elon Musk seemed to very much signal he doesn't like a consolidation of power on the advertiser side of things because that could work against his company X.” (12:35)

2. Ad Spending Dominated by Big Tech

Drawing from GroupM's latest ad spending forecast, Peterson highlights a significant consolidation where over half of the anticipated $1 trillion global ad spend is funneled through five tech giants: Alibaba, Amazon, ByteDance, Google, and Meta.

• Tim Peterson remarks, “We talk so much about the duopoly of Google and Meta, or the triopoly of Google, Meta and Amazon. Now you have a quintopoly with Alibaba and ByteDance added into the mix.” (15:26)

This concentration raises concerns about market dominance and the potential marginalization of other players in the ad ecosystem.

3. TikTok’s Potential Ban in the U.S.

A pivotal discussion centers around the U.S. Appeals Court's decision to uphold the ban on ByteDance's TikTok, mandating its sale or removal from the U.S. market by January 19.

• Tim Peterson explains the stakes, “TikTok is pretty huge in the U.S., and so that's still billions of dollars that would effectively be up for grab if TikTok ends up being banned in the US.” (16:24)

The ban not only impacts advertisers but also jeopardizes the livelihoods of countless TikTok creators who have built careers on the platform. The potential void left by TikTok's absence could reshape how cultural conversations and travel recommendations are disseminated, directly tying into TripAdvisor's strategic adjustments.

Main Discussion: Programmatic Advertising Up the Funnel with Matteo Balzani

Shifting from Lower to Full-Funnel Approach

Matteo Balzani outlines TripAdvisor's transition from a lower-funnel, retargeting-centric programmatic strategy to a full-funnel approach aimed at capturing demand at earlier stages.

• Balzani states, “We need to find a way not only to capture the existing demand but to create some demand.” (02:50)

This shift involves engaging customers earlier in their travel planning journey, utilizing signals from engagement tools like TripAdvisor's AI-powered travel planning tool and the mobile app to identify and nurture potential travelers before they reach the booking phase.

Challenges in Measurement and Attribution

Implementing a full-funnel strategy necessitates robust measurement frameworks to attribute value correctly across different funnel stages. Balzani discusses the limitations of traditional attribution models in capturing the incremental value of upper-funnel activities.

• Balzani explains, “When you go into the upper funnel, you cannot measure in the same way. So we are actually exploring MMMs and this kind of tools.” (41:43)

TripAdvisor is exploring Media Mix Models (MMMs) and incrementality tests to better understand the impact of their broader advertising efforts. This involves collaborating with data science teams to ensure measurement accuracy and reliability across different campaign channels.

Success with Paid Social Advertising

Balzani highlights TripAdvisor's success in utilizing paid social advertising on platforms like Facebook and Instagram. Initially focused on retargeting, these efforts were expanded to test the incremental value of social ads in driving engagement and bookings.

• Balzani shares their findings, “We were surprised not to see an incremental value because we knew it was there, but the size and the scale of that incremental value…” (36:48)

These tests revealed significant upside, leading to increased investment in social channels despite initial attribution challenges. The ability to demonstrate incremental value provided the confidence to scale these efforts further.

Creative's Role in Upper-Funnel Campaigns

As TripAdvisor aims to engage audiences earlier, the importance of creative content becomes paramount. Balzani acknowledges that upper-funnel campaigns require more tailored and engaging creatives to effectively capture and retain audience interest.

• Balzani emphasizes, “The further you go up the funnel, the more creative becomes important and can make or break the success of a campaign.” (39:17)

This focus on unique, TripAdvisor-specific messaging is intended to differentiate their campaigns from generic, templated ads and better resonate with potential travelers.

Exploring New Channels: The Case of TikTok

Recognizing the cultural significance of platforms like TikTok, TripAdvisor is actively seeking strategies to integrate TikTok into their programmatic advertising mix, despite measurement challenges.

• Balzani remarks, “Our strategy is really to try and be where our customers are, where travelers are. And if travelers are on TikTok, we better figure out how to reach those customers.” (40:19)

This entails developing new measurement techniques and creative strategies to harness TikTok's vast, engaged user base effectively.

Looking Ahead to 2025

Balzani outlines TripAdvisor's roadmap for 2025, focusing on:

1. Expanding Programmatic Channels: Moving beyond Google and search affiliates to incorporate diverse channels like CTV and podcasts.
2. Enhancing Measurement Frameworks: Implementing robust MMMs and incrementality tests to accurately attribute upper-funnel activities.
3. Leveraging AI and Data: Utilizing AI-powered tools to gain deeper insights into customer behavior and optimize campaign performance.
4. Creative Innovation: Developing unique, engaging creatives tailored to different funnel stages and platforms.

• Balzani concludes, “This is not a matter of if, I would say it's a matter of when and how much, because there is conviction at every level in the company that that is the right direction.” (46:13)

Key Takeaways

• Scale Matters: The impending Omnicom and IPG merger underscores the importance of scale in negotiating with major media platforms and managing large advertising budgets.

• Ad Spend Concentration: A significant portion of global ad spend is controlled by a handful of tech giants, highlighting the need for advertisers to diversify their media strategies.

• Platform Stability: The potential ban of TikTok in the U.S. could disrupt advertising strategies and creator ecosystems, necessitating adaptability from brands and platforms alike.

• Full-Funnel Strategy: TripAdvisor's shift to a full-funnel programmatic approach demonstrates the evolving nature of digital advertising, emphasizing the need to engage consumers earlier in their decision-making process.

• Measurement Innovation: Accurate attribution and measurement are critical for validating the effectiveness of upper-funnel campaigns, driving the adoption of advanced methodologies like MMMs.

• Creative Excellence: Successful upper-funnel campaigns require innovative and tailored creative content to effectively capture and retain audience attention across diverse platforms.

Notable Quotes

• Amy Fox, Chief Product Officer at Bliss: “We want to make sure that the average income of our control group is similar to the average income of our exposed group... they’re neutral and they’re distinct.” (00:00)

• Matteo Balzani, TripAdvisor: “We need to find a way not only to capture the existing demand but to create some demand.” (02:50)

• Matteo Balzani: “The further you go up the funnel, the more creative becomes important and can make or break the success of a campaign.” (39:17)

• Tim Peterson: “If travelers are on TikTok, we better figure out how to reach those customers.” (40:19)

• Matteo Balzani: “This is not a matter of if, I would say it's a matter of when and how much, because there is conviction at every level in the company that that is the right direction.” (46:13)

Conclusion

This episode of The Digiday Podcast offers a comprehensive exploration of the strategic shifts in programmatic advertising, emphasizing the necessity of moving up the funnel to engage consumers earlier. Through Matteo Balzani's insights, listeners gain a clear understanding of the challenges and opportunities in expanding programmatic strategies, the critical role of measurement, and the imperative of creative innovation. Coupled with the latest industry news, the episode provides valuable perspectives for brands, agencies, and publishers navigating the complexities of the digital advertising landscape.