How Icelandair Increased Reservations Using Programmatic

Icelandair encountered two issues.

First, according to Anjlee Majmudar, vice president of programmatic at the airline’s digital marketing partner Brainlabs North America, “they had to change a lot of flight routes because of border rules after the pandemic.” Because of this, “they had trouble ensuring that every seat was occupied. In addition to scheduling flights, make sure every seat is occupied and functioning at its best.

Furthermore, Jóhann Benediktsson, the digital marketing manager of Icelandair, stated, “We’re one of the biggest companies in Iceland.” “We are a relatively modest player with a budget that is a fraction of what our competitors have in the markets where the majority of our marketing is conducted. Thus, every dollar matters.

To put it briefly, they had to maximize reservations while keeping costs low. For this, they opted for an unconventional medium: programmatic advertising. The company had focused mostly on search and social media up until that point.

Programmatic shortcomings
According to Benediktsson, “programmatic is kind of the shotgun approach, where you’re trying to reach a large enough audience to build brand awareness.” “Both the number of clicks and conversions per click are significantly lower on it.”

However, Brainlabs recognized an opportunity there—a chance to establish a connection with a new audience at the time of their travel decision. Their initial goal was to get past those who would have booked a flight otherwise. They were looking for individuals with greater incomes who expressed a desire to travel, especially abroad. This required taking into account business travelers and extending the search beyond those who found Icelandair by accident.

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But utilizing programmatic advertising the conventional way—that is, putting a brand’s name and value proposition in front of a large audience—wasn’t going to work. Brainlabs aimed to achieve this by focusing on the one KPI that really counted: reservations.

For that, it was necessary to present dynamic creative to the target audience at the appropriate time. And doing so is not a simple task. Brainlabs then resorted to Scibids, a tech partner. Scibids uses AI to enable the custom bidding function of DSPs.

individual bidding models
“We are able to create custom bidding models that are buying on behalf of that advertiser and the advertiser only when you put an AI provider like Scibids over the bid function,” stated Nadia Gonzalez, CMO of Scibids, a DoubleVerify company. Therefore, it’s not the same as the pre-packaged optimization that a DSP would offer you, which is fantastic news for the majority of marketers. However, to have greater success—like Icelandair—you must be able to articulate your needs by stating, “I want an outcome or a KPI that’s not found in the DSP.”

She continued, “They wanted to optimize online flight reservations at the lowest price.” “This is not an easy task because you need to gather a lot of data and information from what you’re seeing online when examining the buying funnel from the top of the funnel to the conversion.”

According to Anjlee Majmudar, two elements were crucial to carrying out this campaign:

Prior to putting AI or machine learning into practice, create a very thorough audience framework. You are able to fully utilize such capabilities as you are aware of the audience.

close collaboration with the planning and strategy departments to uncover the intent signals that will help Icelandair determine who its future ideal customer base is.

According to Majmudar, “the real challenge was ensuring that the audience and the bidding match together.” We considered that to be the secret ingredient. By using automation and artificial intelligence (AI), we were able to locate that combination and permutation much more quickly because the system was continuously consuming that information and those indications about when the user was going to act.

Reservations take off.
After approving a test run in 11 markets, Icelandair expanded the initiative to include all of its programmatic offerings a few weeks later after receiving the findings.

Benediktsson stated, “We’re seeing more direct effects of our media spend in programmatic on flight bookings.” “We benefit more from it as a result of a decreased cost per transaction. We can now allocate our budgets with greater flexibility.

More specifically, this has resulted in a 70% drop in the price per flight reservation over the previous 12 months. “When compared to the benchmark cost of implementing artificial intelligence ourselves, this level of efficiency represents a 10x return on investment for the brand,” Benediktsson stated.

How Icelandair Increased Reservations Using Programmatic

Icelandair encountered two issues.

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