A little over a month ago I interviewed Marcos Issac regarding a recent research report on using third parties to drive new revenues for travel industry participants. One of the topics in that report was the rise of the media model for airlines. As I wrote at the time:
One of the predictions coming out of the report is that in future “Airlines becomes digital marketing and media firms.” This is the so called media model – OTAs have gone down this path, and some airlines are starting to think in this direction but will the airline website of the future be plastered with third party ads?
What does this really mean? As with so many things e-commerce related, one need to look no further than Amazon to get a clue on what other merchants are likely to adopt in future. Below is a screen shot from a recent search on Amazon for luggage, but look closely and you can see Amazon is actually selling space on the site to retailers outside of amazon.com.
Peter Hammer at United Airlines has been appointed to run an area that is tasked with making the media model a reality at the airline that is currently in the process of merging with Continental.
And in one of the emails I did not unsubscribe from recently, I saw this example today from Qantas pushing an ad for mens suits in the same email promoting flight offers.
The media model is here to stay, but I’m sure it will not be an easy model for most airlines to implement. There will always be the conflict of balancing how much space to give to flight related information, how much to give to trip related third party ancillary revenue partners, how to implement a media model that does not damage the airline brand or distract potential flight segment sales within the booking path, plus a host of other challenging factors to manage.
How long before we see an airline as bold as Amazon actually putting third party links within the booking flow? Implement that one incorrectly and the knives will be out in no time.
February 28, 2011 at 2:22 pm
Hi Martin,
say hi to Marcos.
I don’t think the media model applies to airlines as much as it applies to OTAs. When users are on an airline site they know exactly why they are there, while on an OTA site there are both a transactional and a just looking around element.
Instead of placing ads left and right, I think an airline site should better focus on ensuring the user can easily find the flight or fare they are looking for, and then be smart about cross-selling relevant stuff depending on the initial choice.
My opinion, of course.
February 28, 2011 at 6:45 pm
Opinions are exactly what this blog is about, and not just mine, so thanks for the comment. Previously I would have agreed with you 100%; I’m still not advocating airline websites immediately jump into showing ads on each page, but as we have seen time and time again, what Amazon does first, so many others end up following. So I just think the media model will become more prevalent on airline websites and in airline communications to passengers over the coming years. And I’m sure many who try it won’t get it right the first time.
February 28, 2011 at 10:44 pm
I think two success factors for this media model are:
1. Dynamic packaging to avoid drop outs (why shouldn’t an airline sell clothes, after all?)
2. Relevance – this media model only proves beneficial if highly targeted. Otherwise it’s just another banner, which we all learned to ignore ten years ago.
Needless to say, this last factor requires refined and accurate customer intelligence.
March 1, 2011 at 10:29 am
Good point re Relevance, as this is something the the Amazon example has, but that airlines will almost certainly find more difficult to manage.