Democratizing Marketing Mix Modeling for Travel Industry Analytics
Marketing mix modeling (MMM) was once the exclusive domain of large CPG companies with $250,000 to spare for a couple of PowerPoint decks each year. Today, software solutions have democratized this powerful approach, making it accessible to brands across industries including travel and hospitality companies with unique measurement challenges.
In this conversation, we explore how 85SIXTY, a digital marketing agency specializing in travel and lifestyle brands, is implementing modern marketing mix modeling to help clients make smarter decisions in environments characterized by seasonality, long purchase cycles, and complex customer journeys.
Key Takeaways
- Modernize Your Marketing Measurement Approach
Traditional marketing mix modeling has evolved from bi-annual exercises into continuous, software-based solutions that enable monthly adjustments. As Lounge notes, “What we’re seeing with the tools today now is we can look at it in a very short increment and then we can make adjustments monthly or even on shorter increments depending on what makes sense.” - Embrace Multiple Measurement Methodologies
No single approach tells the complete story. Combine marketing mix modeling for strategic planning with platform-specific tools for tactical optimization and incrementality testing for validation. “We believe that each one of those tools, MTA, incrementality testing, various analytics, they all have value. We don’t believe that any of them represent the truth.” - Account for Travel Industry’s Unique Challenges
Seasonal businesses require models that incorporate environmental factors, long purchase cycles need proper attribution for upper-funnel activities, and promotional concentration demands understanding the customer journey beyond final conversion. For luxury travel, “you have to plant the seed in many cases, many months before you can reap the crop.” - Prioritize First-Party Data as Privacy Changes Accelerate
With cookie deprecation and privacy concerns growing, Lounge emphasizes “the mandate truly is for businesses to know who their customers are, own a rich data set, connect as much of that data as you can.” This data foundation enables both better measurement and more relevant customer experiences.
By applying these principles, travel and hospitality brands can overcome their unique measurement challenges and make smarter, more confident marketing decisions that drive sustainable growth.
The Evolution of Identity in a Privacy-First World
Travel and hospitality brands typically build deeper relationships with their customers than purely transactional businesses. This makes relevancy and customer experience crucially important and increasingly challenging in today’s privacy landscape.
The New Mandate for First-Party Data
Cookie deprecation and increased privacy concerns have created an urgent need for brands to invest in their data infrastructure. Travel and hospitality companies now must focus on owning rich first-party data sets, building connected ecosystems, understanding customers across all touchpoints, and creating automated data streams that enable activation.
As Lounge explains, this shift has practical implications beyond marketing: “Some of the work we do on the technology side is not purely ‘buy this, buy this.’ It’s also facilitating that people have the information they need so they have a better experience and then your NPS score goes up. NPS then correlates to recurring purchase.”
Marketing Measurement Approaches for Travel Brands: Finding Truth in Multiple Methods
Complementary Measurement Frameworks for Travel Analytics
When it comes to marketing measurement, no single approach tells the complete story. For travel and lifestyle brands, the measurement toolkit provides complementary perspectives that together create a more accurate picture.
As Lounge describes it: “We believe that each one of those tools, MTA, incrementality testing, various analytics, even just one-off types of modeling, they all have value. We don’t believe that any of them represent the truth.”
Three Views of Marketing Attribution for Travel Marketers
Lounge describes how they approach measurement with clients: “There’s often a kind of unduplicated conversion values. If I take every conversion event that every platform has taken credit for, here’s what that looks like. And we believe generally that’s hyperinflated. So those are the most generous version of the truth.”
He continues: “The least generous is usually something that looks like a Google Analytics post click last touch. And so we generally will show something like that. And then there is a modeled version that is a blend of those things that can come from a variety of different types of methods.”
This approach gives clients a range of perspectives on performance, which helps guide better decision-making. As Lounge explains, they “represent these different views into the truth and then have discussions with our clients about what we think that indicates in terms of real performance.”
The Marketing Measurement Maturity Journey
Marketing measurement has evolved similarly to how chefs develop recipes. Lounge describes how marketers progress: “Many marketers, they start kind of like the freewheeling chef in the kitchen who’s just throwing stuff in the dish and it tastes good. And then eventually they get to the point that now, I’ve got to start measuring how much I’m doing.”
Unique Measurement Challenges for Seasonal Travel & Hospitality Businesses
How Travel Marketing Analytics Differs from CPG Measurement
CPG brands selling cereal at grocery stores face different measurement challenges than travel and hospitality companies. Here’s what makes MMM different for these brands:
The Impact of Seasonality on Travel Marketing Measurement
While some environmental factors like snowfall are easily quantifiable, the real challenge comes from disentangling natural seasonal demand, marketing investment patterns that follow seasonality, and environmental factors that drive awareness.
Lounge explains their interesting insight about how environmental factors impact marketing needs: “If you think of snowfall, snowfall is like a media channel. It’s like media, right? Because when it snows a lot, everybody talks about it. It’s on television. So you almost can use like a big snow year as a form of advertising. So when it snows a lot, you almost don’t have to advertise as much.”
This creates a counterintuitive approach to seasonal marketing: “When it doesn’t snow, you actually have to create demand more. And so the role of advertising becomes… when demand is high, your desire is to spend into that. But the reality is you’re better represented to spend into weakness.”
Long Purchase Cycles in Luxury Travel Marketing
Travel purchase decisions, especially for luxury offerings, can span 45+ days from initial research to booking. This requires models that account for upper-funnel activities weeks or months before conversion.
“In luxury travel, we know that there are a ton of touch points and in many cases, it’s kind of a 45-day from first starting to think and investigate it to I actually purchased,” shares Lounge. “We have clients that may have a very significant amount of promotional activity against a very small window of time. And so that’s going to drive a ton of conversion volume, even though it was all of the media that ran up to that played a really important part.”
Managing Promotional Concentration in Travel Marketing
The challenge becomes identifying “how do we make sure that we’re thinking about the contributions of those things that were 30, 60, 90 days, and is there a different signal then versus transaction that we need to start to think about to understand the contribution of media to the final event?”
Modern Marketing Mix Modeling in Practice: From Annual Exercise to Dynamic Optimization
The Evolution of MMM for Travel and Hospitality Marketing
The biggest change in MMM for travel brands isn’t the concept itself but the implementation approach. Software-based solutions have transformed how these models are built, used, and maintained.
“Historically, most of the brands that we were working with, they would do some form of exercise on maybe annual or semi-annual basis,” Lounge explains. “It was interesting that would potentially inform the types of investments that decisions that they were making. But it was more of like, we talk about it, we’d use that for planning, we’d come back six months later and kind of run a new model. And the new model generally was not as related to the old model.”
Traditional vs. Modern Marketing Mix Modeling Approaches
The shift to software-based solutions has dramatically changed the MMM approach: “What we’re seeing with the tools today now is we can look at it in a very short increment and then we can make adjustments monthly or even on shorter increments depending on what makes sense.”
This creates new possibilities for optimization: “When we were building media mix models previously, it was just a lot harder to tune them. And so it’s much easier for us to run multiple models and to think about different factors in different ways so that you can look at different outcomes.”
Lounge summarizes: “Media Mix modeling is kind of like a hypothesis. And we would have kind of one theory every six months. And now we can actually tune that quite a bit differently.”
From Optimization Insights to Budget Decision-Making
The real value comes in applying these insights to marketing budget allocation. When asked if clients are actioning the findings, Lounge is emphatic: “Absolutely. In terms of like budgeting decisions, absolutely.”
There are still strategic considerations beyond the model recommendations: “Sometimes we just say, or the advertiser says, we understand why the model is saying that because let’s imagine like in travel, you’re in a competitive environment and the model is saying you might be over invested in search. And again, search is not necessarily causing incremental conversions, but you might be in a highly competitive environment where the OTAs are on your keywords. And so you have to bid on those.”
Platform Evolution and Modeling Challenges in Travel Marketing Analytics
Adapting to Changing Digital Marketing Platforms
One ongoing challenge is the rapid evolution of advertising platforms. As Lounge points out: “What was the YouTube of two years ago or even six months ago is different than the YouTube of today.”
Key Challenges for Travel Media Mix Optimization
These changes create significant modeling complexities that 85SIXTY works to address with clients:
“If you think of Performance Max, demand gen, YouTube, discovery… you had all these products and they used to be separate products and now they’re kind of blurred together,” Lounge explains. “What used to be YouTube and bodies YouTube and labeled as YouTube is now embedded inside Demand Gen.”
This creates practical categorization challenges: “When we run a model and it says, hey, you should invest more in YouTube, we’re kind of like, hold on, is that YouTube YouTube or is that Demand Gen YouTube? Which, again, also has a whole set of different mechanical constraints.”
The fundamental issue is that “the inventory that underlines the label that we’re putting on it is changing over time,” requiring constant vigilance to ensure that models are actually measuring what marketers think they’re measuring.
Implications for Media Planning in Travel Marketing
Lounge highlights the gap between what platforms sell and what advertisers actually receive: “You’re not really buying Performance Max. That’s not what you’re getting, right? You’re either getting search or YouTube or a different type of inventory.”
This requires sophisticated approaches to understanding the actual media mix beneath platform products, especially as those products continue to evolve rapidly.
