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Travel bookings alone on mobile were an $8 billion industry in 2013. As smartphone adoption rapidly grows, alongside with growing revenue from bookings, travel companies are doubling down on mobile and cloud services, fueling the rapid adoption of programmatic buying among travel brands.

As the consumer’s purchases segue to mobile, travel brands, which require transparent data-driven insights and targeting capabilities, have been early adopters of programmatic mobile ads.

First things first, what’s programmatic?

“Programmatic” as you can guess has something to do with programming and coding. In context with mobile advertising, programmatic buying empowers brands to deliver targeted mobile ads automatically based on a set of guidelines dictated by an algorithm developed by the advertiser.

More specifically, mobile ad networks can integrate an advertiser’s programmatic algorithm, which is used to guide these mobile advertising network in instantly identifying to whom the ad network should show an ad to and at what cost to the advertiser.

Delivering quality customers with hyper-local targeting

First and foremost, travel brands want to know that their message is being delivered to the right mobile users. This is where hyperlocal targeting comes into play.

On mobile, hyperlocal targeting can only be fulfilled by programmatic buying, which makes this type of mobile ad buy an obvious choice.

To understand the scope of programmatic targeting capabilities, hyperlocal targeting encompasses demographic, location-based, and behavioral targeting. Advertisers can target longitudinal and latitudinal coordinates of the target user in real-time, the user’s age, income, sex, interests and mobile usage habits to name a few characteristics.

For example a travel brand might set the profile of an ideal target who’s likely to become a customer as the following: a female iPhone 5 user who works at a white-collar job that pays $75,000 a year, is a frequent clothing shopper, and tends to takes her holidays at exotic islands (like the Maldives).

Programmatic buys are cost-efficient

While travel sector mobile budgets are on the rise, the industry is generally known as a high-volume, low-margin business. That goes to say that cost efficiency is critical for an industry that’s as margin-conscious as travel.

Fortunately, programmatic’s targeting capabilities help to minimize ad spend wastage. Programmatic not only empowers advertisers to only spend as much or as little as their budget allows, but the impact of each dollar spent is maximized.

Bids for users in the programmatic buying system are made based on a sliding scale – how much the advertiser decides to pay for a user or potential customer depends on how closely that user fits pre-set profiles of users that the advertiser wants to target.

For instance, if the ideal customer profile was the aforementioned female iOS user with a $75,000 salary, the travel advertiser might pay a premium of $0.75 to deliver an ad to that user. However should the advertiser come across a male iPhone 5 users with a $45,000 salary, they might still want to bid on this user but would bid just $0.30.

Mobile video is a quintessential showcase for travel ad creatives

Ad creatives are the foundation of any mobile ad campaign. Creative and impactful messaging to convey emotions associated with relaxation, enjoyment, and wanderlust drive the travel industry’s marketing initiatives. Not surprisingly, video ads tend to be a favorite among travel advertisers.

For the budget that’s pumped into the conceptualization and creation of a video ad, travel brands will want to see a return on their investment. Fortunately mobile video ad formats garner high conversion rates and provide the ideal platform to deliver a very visual ad in an appealing package to those mobile users identified to be high-potential customers.

How to start a mobile programmatic buying campaign

Fortunately, if you’re a travel brand or advertiser, getting started with a programmatic buying campaign isn’t difficult. All it takes is to identify mobile ad networks that offer mobile real-time bidding campaigns like on AppFlood. Then reach out to the network’s account manager who can first help you identify your target user, and later integrate your targeting requirements in an algorithmic format that would be added to the network’s RTB system. Once that’s done you can be on your way to picking up new high-value, travel-loving mobile customers.

Si Shen is the founder and CEO of PapayaMobile, a global mobile company with products including AppFlood and Kiwi Calendar. PapayaMobile is headquartered in Beijing, China and also has offices in San Francisco and London.