Inside Kayak’s Journey To Bring Programmatic In-House

When metasearch travel site Kayak decided to take programmatic in-house in the spring of 2016, it needed to select a group of vendors that could help it buy media both more efficiently and effectively.

After settling on DoubleClick Bid Manager for display buying, Kayak realized it didn’t have an automated or transparent way to buy and sell cost-per-click (CPC) ads with other travel booking sites, which represents a sizable revenue stream for the company.

Because there was no programmatic marketplace priced on a CPC basis, Kayak bought ads from black-box networks that aggregated inventory at an undisclosed price and gave no insight into where ads eventually ran, said Marek Lacina, senior display manager at Kayak.

“We don’t know where the ad is being displayed or how many players are in the auction,” he said. “Kayak is a very data-driven company. We want to know where we are spending and how efficiently.”

After evaluating several vendors, Kayak came across MediaAlpha, a platform that operates a programmatic ecosystem priced on CPC specifically for clients with meta and native search engines.

While programmatic marketplaces are geared to handle trillions of impressions and low click-through rates, CPC ads often have click-through rates in the 10-30% range, which could be flagged as fraudulent by the exchange, said Steve Yi, CEO of MediaAlpha.

“I’ve heard things [from exchanges] like, ‘We just can’t price things on a CPC basis,’” Yi said.

“Their systems just aren’t geared to be able to handle that type of media.”

Kayak signed on when it saw that MediaAlpha’s platform could create a transparent programmatic auction to buy and sell CPC media.

“We can see what’s going on, have more insight on the auction and be more efficient,” Lacina said.

More transparency in the auction – such as ad prices, placements and sellers’ names – and the ability to adjust bids for different inventory also helped Kayak buy more efficiently, Lacina said. After implementing MediaAlpha, Kayak’s ROI on performance campaigns increased 120%.

“When you see where you spend and how you spend it, you can optimize and you can make smarter decisions,” he said.

But while Kayak was lucky to find the right platform that could bring more transparency to its performance media, bringing media buying in-house as a function was no easy task.

“It was difficult,” Lacina said. “It took us almost a year to find the right people, to optimize the team, optimize the channels and to be happy with the results.”

It was not, however, difficult to get the go-ahead from Kayak’s C-suite. The company has been very protective of its data and looks to bring things in-house as much as possible for added control.

“This is just the way that Kayak does things,” Lacina said. “We always try to have people in-house, to understand everything that we do.”

Two years after Kayak’s in-housing initiative began, it’s building an in-house agency with talent from its July acquisition of travel metasearch site Momondo. The two companies bring together analysts, designers, media buyers and production teams to handle media and creative in-house, Lacina said.

“Having people in-house is just faster and more effective,” he said. “We know the business. Whenever there is a red flag we can spot it instantly and act on it.”

And while there’s nothing wrong with working with an agency, “there is a point in every business’s life cycle where the business is big enough to handle all of this stuff in-house,” Lacina said.

Kayak, however, will still rely on a few agencies as it works out the kinks of launching an in-house team, including Accordant, the Dentsu Aegis-owned programmatic shop.

“[Agencies] just help us to cover all the workload,” he said. “In terms of automation, we are still not where we want to be.”

Agencies also help Kayak tame the programmatic Wild West as it learns to keep up with the rapidly changing ecosystem and prevent against fraud and other issues.

“There are still so many things to tackle,” Lacina said. “The programmatic business is changing every day. With these challenges, with new features and new players, I don’t think we will ever be finished.”

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