Is monetization of hotel guest and loyalty membership data a good or bad thing?
8 experts shared their view
Recently Marriott launched the hospitality industry's first global omnichannel media network, the Marriott Media Network, which will enable advertisers to deliver "curated experiences" to millions of Marriott loyalty members.
There are more than 164 million members in Marriott Bonvoy, the company's travel loyalty program, and Marriott plans to leverage this robust audience to power the media offering.
Marriott's Media Network will launch initially in the U.S. and Canada, before ultimately expanding worldwide.
For brand advertisers, the Marriott Media Network will offer a combination of scale and personalized media reaching an audience of in-demand, high-intent travelers. The media offering will provide an opportunity to reach specific customer segments with targeted content across fully-owned Marriott channels including display, mobile, video, email and in-room screens and televisions.
The Marriott Media Network utilizes unified stack advertising tech platform developed especially for Marriott by Yahoo, and will be supported by the global Yahoo ad sales team and Yahoo's Demand Side Platform to lead demand generation and sales across the globe.
The question is, is such monetization of guest and loyalty membership data a good or bad thing for the industry and will other hotel chains follow suit?
While Marriott's announcement is worth noting, it's a difference in degree, not in kind. Hotel loyalty programs have had partnership deals for years, giving partners access to their members to cross-sell, in a perfect world, valuable services. As we move towards a cookie-less world, that access is a variable asset for Marriott — and for its potential advertising customers.
As to whether these deals are a good thing, the key questions are “How is it implemented?” and “Good for whom?”
If the offers are relevant and engaging to guests, then these programs can benefit everyone, satisfying guests, increasing loyalty, and driving revenue for hotels, the advertisers, and, of course, the brand. If implemented poorly, not so much.
More than anything, Marriott is a two-sided market, connecting guests and franchised hoteliers through its loyalty program. The late Arne Sorensen once stated that Bonvoy is the “umbrella brand… the most important thing” the company offers. It's in their best interests to do their best to make this work for all parties. If this is to be a positive trend, let's hope any other brand pursuing a similar strategy keeps that in mind as well.
Although they may make some revenue in the short term, Marriott's move toward monetizing their guest data will likely come back and haunt them in time. Today's consumers have become very protective about where and how their personal data is being used, and the gradual realisation that their data is being used to target them with third-party advertising will likely erode trust in the Marriott brand in the longer term. And without trust, what are we left with?
Technology empowers businesses to reach a mass target audience with tailored information, but whether the technology is used wisely or in a good way depends on a business leader's ethical decision. I see Marriott Media Network as a good thing unless the company starts abusing the power of technology.
Suppose Marriott only uses the network to feed its loyal customers with the helpful information they want, such as everything about a trip they are planning. In that case, this advertising tech platform will be terrific for both 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 distribute the information deemed to be valuable to its target customers. I strongly encourage Marriott to let customers opt-in/out or vote on the types of information they want to receive. That can help minimize their negative feelings about being "forced" to receive the advertisements.Marriott Media Network will become a bad thing when its guests and loyal customers begin feeling annoyed by its advertisements, which is probably the last thing that Marriott wants to see. In the end, I applaud Marriott's effort in trying something different. I expect other hotel chains will follow suit as they learn from Marriott's and other retailers' examples.
I have anticipated the major hotel chains to do try and monetize their huge website and mobile app traffic and loyalty membership data for quite some time now. In the past, the membership data was monetized primarily through the cobranded credit cards: Ex. Marriott Bonvoy Visa and Amex and Hilton Amex.
In this particular case, Marriott wants to monetize its huge traffic and first-party and zero-party 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. Monetizing its huge Prime membership, Amazon became the third largest ad publisher in the world with annual advertising revenue of over $31 billion, after Google and Facebook. Expedia Group's advertising revenue in 2021 exceeded $603 million.
Contrary to some initial comments, Marriott's initiative is not "selling customer data" to advertisers, since we are talking about native and programmatic ads being served on the Marriott brand website and apps where targeting will be done via cohorts and audiences categorized by interests and any PII (Personal Identifiable Information) will be anonimyzed.
Marriott is obsessed with protecting its customer and member data and will never "sell" customer data. In addition, Marriott has to abide by the recent privacy moves by Google and Apple, the upcoming death of the cookie and strict privacy laws in EU, CA and around the world.
I am positive all other major hotel brands will follow suit.
In my view this is a natural progression of leveraging an engaged audience to provide them with greater opportunities. Today most businesses are pursuing a program of amassing a database of contacts and associated behavior to grow their business and extend commercial value.
The tacit contract in loyalty is that the customer has bought into the brand, based upon a level of trust in delivered value, 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 abusing the trust it will prove to be a happy relationship with the customer base.
The customer receives information from a wide variety of channels, sources and inputs today. 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 loyal to the brand".
Howard Schulz
Curated experiences are always a tricky thing as what is curated today might not be tomorrow and there is a very blurry line between curated to truly benefit the customer vs enahnced curated experiences based on the algorythm pushing "curation".
Overall a move into more hyperpersonalization across all areas of our life and yet with always the same issue of going down a rabbit hole.
Monetizing on it? if it truly benefits then the customer will be happier as the media will pay for it, reach the customer right and them on the other hand buying - so a symbiotic cycle. We are going into muddy waters though once it doesnt work and its effectifness is being lost + of course data privacy and prodtection are two items that could open a huge can of worms for all people involed.
I believe the Marriott Media network, hospitality sector's first global omnichannel cross-platform advertising media network, is a brave step. Despite the demand for guest monetisation and consumers looking for personalisation, the hospitality industry had not reached this next level. Marriott is now leading the way.
We have seen great success with retail chains such as Walmart and Macy's developing media networks for monetising guest data. This is the first time a hospitality company has moved forward in the same way. I am sure Marriott will have similarly explosive growth, as their loyalty database is immense.
Businesses today are considering alternative solutions to track user engagement and work with customers directly. Web browsers such as Google and Safari are now blocking third-party cookies from tracking user data. This could be the reason behind programmatic advertising inflating in the past decade, as it now accounts for 78.4% of spending on display and video advertising in the USA (McKinsey).
According to the Hospitality Network, millennials make up more than 50% of all hotel guests worldwide. 57% of millennials would be happy to exchange personal data for personalized holidays, tips, and advice. Today's travellers use virtual platforms to search for digitalised, 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 done by Hotel Champ, 68% of millennials are most loyal to programs that offer the most rewards and experiences.
The level of intrusion on guests' privacy will determine the success or failure of this system. For example, while guests prefer a holistic travel and stay experience through the Marriott app or room TV, they would not appreciate targeted marketing in their office once they return from their holiday. As Susan Grossman, Executive Vice President of Mastercard Services advises, "brands must carefully navigate the fine line between respecting personal privacy and leveraging insights to surprise and delight customers. Get the combination right, and you will have a winning personalisation strategy that offers your customers more value and memorable experiences."
There would be the risk of data leakages, questions about ethical usage of data and governmental legislation of citizen data. However, all of those are for legal departments to worry about. There is no harm in data monetisation if it is used for exemplary purposes and to enhance the guest experience. Are we not already monetising guest data through upgrades, cross-sell, and upsell platforms? Curated, personalised experiences can only enhance customer loyalty.
A good or bad thing for the industry, yes both, depending which part of the industry you're referring to.
Hotel chains: if incremental revenues can be sustained and grow without negatively impacting the guest experience (Yahoo tech is a concern) then this is a good thing.
Hotel guest: depending how meaningful or relevant the customer segmentation data is, will determine whether targetted advertising across mobile, video and in-room devices will be a positive or negative guest experience. Poor segmentation and irrelevant ads will very quickly become annoying to the guest and that would be a bad thing.
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