March 24, 2011
Tnooz have put up an article written by me looking at data from six airlines and the various bounce rates from different mobile phone operating systems. The results highlight wide differences not only between phone types, but also between different airlines – a good indication of how mobile friendly (or unfriendly) their web sites really are.
Click here to read the article in full.
March 22, 2011
I know I have done an about face and become one of the cheer leaders of the mobile web in the past six or eight months, but is it really 15%? I saw 10% quoted only a few weeks ago. I got the 15% number from a recent Google report, but I suspect that like in a previous report, Google are counting a lot of the Maps traffic as travel related. This is definitely a grey area – local versus travel as readers of this blog would define travel are very different things. That said I think Google Maps is one of the stickiest mobile apps around with a ton of upside to disrupt travel, especially the destination content space. But whatever the true number for the proportion of travel search being done on the mobile, there is no question that it is growing at an incredible rate.
Regarding mobile, it is a nice change from all the Silicon Valley news to start to see stories such as Africa leading the way in mobile emerging from the recent SXSW conference in Austin, and I also noticed recently that Adobe’s Omniture May Build, Acquire or Partner Its Way Into Mobile Even More – Omniture being a company very familiar to many readers of this blog.
Finally, hat tip to Brett Snyder for alerting me to the site of Indonesian carrier PT. Tri-M.G. Intra Asia Airlines. The fact that you are reading this means there is an extremely high probably you have some interest in airline website design. In order to get the day of to a great start, turn up the speakers, imagine yourself jumping into the hot tub time machine, and now click on this link to experience an airline website like no other you have ever seen before. Remember to turn those speakers up loud.
March 20, 2011
In the past I’ve looked at the question of to whom the head of online sales in an airline should report, but I’ve never really thought that much about the most suitable background for someone taking on the role leading ancillary revenue initiatives. That was until I was recently alerted to this current position available at Ryanair.
Reporting to the Deputy Chief Executive & Chief Operating Officer and managing a small team, you will be expected to build on Ryanair’s pre-eminent position as the number one airline for ancillary revenue per passenger with continued development of existing revenue streams and innovative and imaginative growth of new sources of ancillary income.
The most interesting sentence in the job spec is the following one:
Preferred background will be in the FMCG sector, ideally with experience of internet sales and marketing.
One of the main problems I’ve seen in the years I’ve been keeping a very close eye on the airline ancillary revenue scene has been the lack of understanding of the technological implications of implementing crazy ideas. This problem mainly comes from people outside of the airline industry hired as salespeople for vendors who see their “innovative” product as a natural fit for airlines hungry to grow ancillary revenue, but who have absolutely no idea of what it takes to implement such a product for both online sale and fulfillment.
On the other hand, I’ve also at times been a little surprised by a lack of imagination on the part of some airlines, even though I for one know that the challenges in turning these ideas into reality is not always a road without bumps.
That said, I definitely don’t fall into that camp I see all too often – the camp which says that unless you have work experience mirroring my own, then you are the problem and not part of the answer. The sentence usually goes something like, “The problem with this company is that they don’t hire enough of X” with X either being “people with extensive airline experience” or ” people from outside the airline industry with fresh ideas.” Whichever one you insert as X always seems to be the one that matches your own CV!
If there is any airline where airline experience is less relevant for the current role Ryanair want to fill, then Ryanair would be the one. They operate very much as their own island, so the technological understanding of processes related to ticketing, revenue accounting and interlining etc insofar as they relate to ancillary revenue really fade into the background. Instead you can spend more timing thinking about to how to implement previous wishes from your CEO such as coin operated bathrooms and stand up seating!
Without thinking too hard, airlines like Delta hiring from Target, Alaskan hiring from Microsoft / Amazon and TAM hiring an ex brewing executive come quickly to mind as all having looked outside the airline in recent times when it came to finding someone to head up online sales.; likewise, there is no reason why an airline hiring from the fast moving consumer goods sector for an ancillary revenue director shouldn’t do well with this approach. But it is a one way path? The head of online at US Airways recently announced he was leaving, but rather than show FMCG types how to do things, he is off to do a similar job at Etihad.
If you want the job with Ryanair in Dublin, you’ve got about 10 days left to apply.
March 15, 2011
The title of this post comes from the takeaways slide at the end of a comScore webinar I was on earlier today. I’ve lifted the two most interesting slides from that presentation (or at least ones I didn’t see in the original report) and added them below.
There is no doubt that when I sit on a train here in Chicago there seems to be a growing number of people each and every week using their phones to connect to the web, and the most common thing I see is people using this time to check out Facebook. Too bad I’m closer to the News demographic above. At least when it comes to my BlackBerry OS I’m using version 5.0 so this puts me back in touch with a more technologically hip younger crowd according to the next chart.
I had a regular reader of this blog ask me recently why there seemed to be so much on mobile and less here on ancillary revenue these days. Apart from the fact that mobile growth is going through the roof and all airlines I talk to seem to be struggling to keep up with the pace of change, the real reason is that the industry discussion on ancillary revenue seems to have moved away from third party sources and more towards GDS standards – a topic I never intended to cover here in any great detail. All feedback is good feedback.
March 13, 2011
A few months ago I was given a book by Frank Grasso, CEO of e-channel search, and the subject really hit home with a topic I am always interested in; debunking old wives tales in marketing and replacing them with real science. Long time readers here will know that this is especially true when it comes to questioning insights gained from marketing driven customer survey data from some of the dubious press releases masquerading as market revelations. I finished the book in question this week on my flight to Brazil – it is by Byron Sharp and is called How Brands Grow: What marketers don’t know.
Firstly, any marketing book that cites Karl Popper is immediately going to get at least one star from me. Popper was potentially the greatest philosopher of the 20th century, but how does his advancement of the scientific method or this book from Byron Sharp have any applicability to airlines? Popper held that every scientific hypothesis must be testable, and the way to test it is to search for circumstances in which it does not hold. Sharp’s book picks apart many so-called marketing theories and in the process goes head to head with marketing gurus like Kotler and Aaker. The end result is a thought provoking book that takes a very different view on brand loyalty and loyalty programs in general – a topic of interest to any airline these days.
Loyalty certainty exists, but it is tempered by opportunity. People who buy from a category less often have less opportunity to be disloyal. Similarly people who shop from stores that stock fewer brands also appear more loyal (e.g. people who live in smaller towns).
The second sentence above is interesting as airlines always perceive top tier frequent fliers to be more loyal than non program members or those in the lower tiers. But one of the things that differentiates airlines from the supermarket loyalty program Sharp despises so much is, in my mind, the fact that for one of these the most active members are typically not spending their own money. Similar to what I wrote recently about the IBM booking duration data, it is much easier to be loyal when you are spending someone else’s money.
Back at the Phocuswright conference in November last year (where I first met Frank Grasso), one of the most profound on-stage comments that I recall came from Rich Barton when he said something like:
Don’t spend money on advertising because it lets companies get lazy about product
It definitely hit a note with me, as too often the lack of science in marketing leads to so much money being wasted, money that would have been much better spent on enhancing the product. If an airline website has enough compelling functionality and a UI layer that stands out from its peers, then maybe this is like the quote from the book about people buying from stores that stock fewer brands appearing more loyal – maybe spending less on generic airline branding and more on website (ie. store) functionality is a much better use of scarce resources.
Most of a brand’s customers think and care little about the brand, but the brand manager should care about these people because they represent most of the brands sales; the brand needs these people if it is to increase sales.
I’ve put another contentious quote from the book above, but in the video below, the author Byron Sharp uses a great example to debunk the often claimed story about how much Harley owners love the brand. Even more compelling, he illustrates how little profit these so called “loyal” customers actually represent.
Maybe it is a tenuous link to discuss this book on a blog site dedicated to the airline direct channel, but I would challenge anyone to show me an industry where so much is spent on advertising aimed at influencing our perception of brand attributes and product differentiation with so little apparent impact. A little more science in marketing would do the airline industry a world of good.
March 7, 2011
Sometimes people mistakenly complain about unbundled airfare pricing when I believe they would be better off focusing their attention on the advertising and display of non-final airline ticket prices – that is, fares that it is simply impossible to purchase for the displayed price. Carol Pucci in the Seattle Times has a piece looking at this practice in the US by comparing the websites of all the majors with what is being displayed on the main OTAs.
Federal laws require airline and online travel sites to disclose the total price (base fare plus taxes and fees), before customers click to buy a ticket, but how and when the airlines do that varies. Most travel websites quote a bottom-line price in their initial fare displays. Some airlines don’t, making it appear their price may be lower than it is.
I suspect one reason why this is not a more contentious issue in the US is that it is common to not know the final price when buying just about anything in a shop here. Most merchants add sales tax at the cash register, so this makes it more difficult to sustain an argument against airlines, even if the so called taxes assessed are far from identical across airlines. Angus Kidman at Lifehacker writes that the competiton regulator in Australia has been taking a more dim view of this practice.
Now the airline industry has come under fire, after a review of the sites for several of the most active airlines in the local market — Jetstar, Tiger, Air Asia, Air New Zealand, Malaysian, LAN, Etihad and American — found that they were not displaying prices in accordance with the law. (You’ll note that the dominant local players, Qantas and Virgin Blue, aren’t on that list.) Each of the airlines was told to change its sites so that all international airfares out of Australia, plus any domestic activity, clearly displayed a full price. That’s happened, but ACCC chair Graeme Samuel made it clear that any further non-compliance will be costly
So just when most markets outside the US appear to have forced airlines to show final prices at every stage on the website and not just on the payment page, a new idea comes out of left field:
There is actually a very good interview with Andrew Levy, president of Allegiant Air in today’s Las Vegas Sun. In the article he goes into quite a bit of detail about how his airline (considered to be one of the leaders in ancillary revenue) will take it to the next level. He talks about plans to launch a fee for carry-on cabin baggage in the first half of this year, the tax advantages of ancillary revenue versus putting it on the ticket, and even whether the airline might introduce a loyalty program.
February 28, 2011
Hat tip to my colleague Eric Olesen for pointing me in the direction of today’s post. Last week I wrote about Ryanair signing a deal with INK to show ads on their boarding passes: (the media model is a hot topic right now). I’ve reproduced part of that post below:
With much of the world apparently moving more to a Groupon-like model, maybe the Ryanair idea of concentrating more on airport offers than on destination content might result in a better take-up (and definitely better trackability) of the offers. In the article, the CEO of Ink (company behind the solution for Ryanair) seems to be implying this, claiming that initial contracts are already being signed with advertisers priced at several times the rate for similar web ads.
Speaking of Groupon, I recently received a new home phone number and it turns out to be the old number of one of the many Groupon clones in existence. Now my home phone is running off the hook with bizarre enquiries which I am sure you can appreciate is a far from my ideal way to spend evenings at home! But back to INK. It seems not everyone is happy with the Ryanair deal. The text below was posted on a Linked-in forum in response to a comment by the ancillary revenue manager at Spanish LCC Vueling, Maria Cardenal.
Mark Scott: Maria, You are right airlines have been doing this but not in a dynamically targeted way ie most messages are fixed. Sojern does something like this on Passes but not on all document types, eTicket Confirmations, mobile and Print-at-Home. Securidox does and introduced INK to the proprietary concept when they sold advertising on VLM’s confirmation. We are currently taking legal advice
This is the same Mark Scott as quoted below in an April 2010 press release about Qantas and their mobile boarding passes.
Mark Scott, Managing Director of Securidox, explains “Research shows that traditional check-in systems cause significant dissatisfaction at the airport with the process being too time consuming and stressful. The mobile check-in system offers a convenient solution for passengers and positive brand reinforcement for the airline. There are also excellent opportunities for revenue generation through advertising targeted to the passenger profile.”
So Securidox are on the record with this idea almost a year ago, and maybe they’ve had it for longer than that, but it seems whenever the topic of ads on boarding passes comes up, everyone finds the need to refer to Sojern. I asked Patrick Fisher who is their VP of Business Development to respond:
Sojern has strategically partnered with the leading airlines and travel industry organizations to deliver dynamically targeted and useful destination information and offers for Travelers since 2008. In essence, every boarding pass with Sojern content is customized in real-time based on the trip details of each particular trip. Sojern’s innovative approach also allows advertisers to reach audience segments throughout the travel continuum and increase campaign performance on premium web sites as well as impactful airline space such as print-at-home boarding passes and itineraries.
But with all this bickering over who was first to really understand the potential of segmented promotions in passenger communications (and to implement!), please read this link from a few years ago, as it was none of the companies mentioned so far in this post. The funny part is that Eric Olesen actually played a big role back then in making it happen.
February 26, 2011
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 22, 2011
The Sydney based full service carrier Qantas is an airline I have quite a bit of time for, partly because in the past I worked very closely with their online efforts. Recently I had heard some whispers about how they were moving forward in the right direction with mobile, but I never discuss or comment on stuff like that until I see the airline itself is happy to publicize the fact. Today The Australian newspaper has a profile on Stephen Wilson who runs technology at Qantas, and he makes a few interesting points:
“We’re looking at mobility as a key driver. It offers us significant opportunities to engage with our customers and add new, valued services,” Wilson says. “We believe mobility solutions will enable us to improve the experience for customers end-to-end.” Wilson rates the consumerisation of IT and adoption of mobile devices as reasons for the push in the mobility space. Plans are afoot to enhance its online and mobile check-in channels so the pre-airport and airport experience can be aligned, he says. More than 25 per cent of domestic check-ins are done online. Qantas is looking at “multiple areas” to integrate mobile devices and mobility into internal and external environments.
My other friends down under (Virgin Blue) have been having no end of bad luck recently, with another recent outage. Whether it is Navitaire going down, power supply problems, or flood impacted data centers, I remain positive that the guys in Brisbane will turn their luck around soon.
On an unrelated note, I saw this interesting story in the LA Times.
Almost 20% of travelers spent five or more hours shopping and booking flights, according to a survey by a division of technology giant IBM Corp. of more than 2,000 business and leisure travelers. Business travelers were generally more efficient in booking a flight than leisure travelers, but almost 40% of business travelers spent at least two hours shopping and booking.
I’m not sure the takeaway there is that booking tools for business travelers are better than B2C (actually, I’m positive this is not the case), but the real reason is more likely to be that it is easier to find a suitable fare when you are spending somebody elses money!
Marketing VOX has a good roundup of some of the companies vaguely similar to Sojern (although they don’t actually mention Sojern) in a piece on the partnership between Ink and Ryanair that will see ads printed on boarding passes.
Ryanair, however, is tweaking the model to concentrate on retailers at the airport of departure – as opposed to the destination
With much of the world apparently moving more to a Groupon-like model, maybe the Ryanair idea of concentrating more on airport offers than on destination content might result in a better take-up (and definitely better trackability) of the offers. In the article, the CEO of Ink (company behind the solution for Ryanair) seems to be implying this, claiming that initial contracts are already being signed with advertisers priced at several times the rate for similar web ads.
Finally, if you are interested in the travel inspiration space, USA Today has a piece inspired by the recent move by Southwest and their new GetAway Finder. It covers the pros and cons of companies like Wanderfly, Goby, Tripbase and Cheapflights who are trying to influence where you take your next vacation, and thereby get a cut of the revenue along the way. I’m still hearing a number of airlines say they want to get more deeply involved in this space, but it seems most are preferring to stay on the sidelines or only dip a toe very gently into the water for now. The potential is big, but unlike mobile which lends itself (or at least has up to now) to a more incremental approach, travel inspiration by an airline really needs to have a clearly defined strategic plan upfront as this is not an area where you will just stumble upon the right answer.
February 21, 2011
In the past month or so I’ve been writing more on mobile than on any other topic, culminating in last weeks piece for Tnooz on a perceived underinvestment by airlines in mobile enabling their existing website or sites. Today I’ve gone for something a little different by publishing a guest post by Daniele Beccari, VP at Isango.com and a travel technology consultant. He has recently returned home (to Paris, France) from the Mobile World Congress in Barcelona where he tells me was impressed with the Blackberry Travel strategy, Android’s omnipresence, and the size of Ericsson’s booth. Over to Daniele:
“Mobile is changing everything”, and by 2011 everyone agrees with this statement in
some form or another. When it comes to airlines, mobile represents not only a strategic channel, but also an opportunity to transform the way airlines interact today with travelers, generate new revenue streams, and hopefully create value for the whole ecosystem.
Today is already Tomorrow: We must assume that, sooner rather than later, everyone will be on smartphones: “mobile” will include any device that a user can interact with, at any
time, anywhere. The numbers are amazing. Smartphone penetration has just grown from 4% to 15% in the past 18 months (73% growth only in Q4 2010. Source: Asymco). Today, mobile means smartphones, laptops and ipads. Tomorrow, mobile will mean everything except desktops and servers, and including tablets, game consoles, cars, ebook readers, and watches. But maybe more important, smartphone sales in Q4 2010 have surpassed PC sales for the first time ever (101m against 92m units shipped. Source IDC). Make sure you understand this right: there were more mobile OS units shipped than good old Windows and Mac PCs!
Airlines are getting there. I see three levels of evolution in the way airlines are approaching the mobile ecosystem. These are stages indicating the level of service and integration offered to travelers, not directly related to technology. In fact, almost all of the services in all stages are relatively easy to implement even today.
Level 1, the basics: providing mobile versions of existing web services.
Level 2, additional “anytime, anywhere” services: enhancing user experience with specific services for people on the road.
Level 3, contextually intelligent services: understanding a traveler’s context in real time and proactively building the service experience around it.
Level 1, the basics: adapting existing services to mobile devices
Every big and small airline is establishing a mobile presence, almost always as an extension of services already available through their web channel, either through dedicated apps or mobile web portals. Users on the road can conveniently perform the same tasks they could have performed on the website: check schedules, flight status, gate, loyalty program status, book, cancel, check-in, use paperless boarding passes, search and find loyalty program partners, get flight alerts, and more.
It’s worth mentioning that services on mobile are being made available in a simplified format, which some users actually seem to prefer. The bare essential nature of mobile apps removes all the clutter, confusion and useless advertising often found on “modern” websites.
Some airlines have started playing with other features, or tools aligned with their brand values. Virgin Atlantic has apps to handle jetlag and fear of flying. Qantas has an augmented reality app to help people find their local partners’ venues. Lufthansa has a social flying application where travelers can interact with other LH travelers with similar interests nearby, and find pals to share cabs. Alitalia allows users to track lost luggage. American Airlines provides very useful terminal maps (oh, and mobile sudoku, if you’re really bored).
Level 2 – additional “anytime, anywhere” services tools and services
The mobile ecosystem can play a key role to fuel a number of core airline strategies.
More direct. Mobile is the most direct channel one can dream of. It’s more than the web: it follows users everywhere, it’s always available in their pocket. Even if the user had booked a seat through an indirect channel, access to an airline app or mobile site remains just a tap away for any additional needs – and this is direct. The big battle for directness is just starting.
More unbundling. Unbundling is a necessary evil in a world of transparent price comparison engines, where only the cheapest fare wins – whatever the service actually included in the fare. Marketing a seat at the cheapest possible unbundled fare, today, means having to offer all possible options during the initial booking process, and through a few e-mail reminders before departure. Mobile allows an airline to keep that upselling door permanently open. As passenger needs evolve between the booking and the travel date, they must be able to access and book additional options at any time.
More cross-sell. Mobile is also an ideal channel to cross-sell additional services at the right time. Travelers expect to be able to reach information and interact with remote services anytime, anywhere as soon a need arises: impulse can be a strong business driver. Some examples.
More loyalty. Building loyalty has several components, starting with service excellence, understanding travelers’ needs, and being able to successfully communicate the benefits of a long term relationship. As loyalty is the key to personalization, the loyalty account will become the central customer intelligence repository with all interactions logged and analyzed there. Mobile interactions add a lot of data which must be integrated in the right way – is the customer using mobile touch points frequently? How can “good” loyal
behavior be incentivized?
More customer service. Being closer to travelers also means being easy to be reached when needed. Click-to-call, click-to-callback, video calls and other customer service touch points can find a natural fit in mobile apps. The apps/sites should be smart enough to offer help when a user is visibly having problems, or getting stuck while trying to perform some task. Technology also allows agents to actually view remotely the display of the customer in order to be able to provide more efficient guidance.
Level 3, contextual intelligence: understanding a traveler’s context and building services around it
By combining PNR data, location, time, and loyalty data, the airline is in a unique position to make educated guesses about the context of each traveler. By looking at the party size, child ages, time of arrival at a destination, length of stay and many other parameters, it is possible to identify and offer relevant services and push them at the right time.
Some examples:
The first good news, for airlines, is that they already have plenty of trip data, without the need to ask. The second good news is that few other partners actually have the same data. In other words: the airline can understand what a traveler needs, and no one else can. The airline is in a micro-monopoly situation.
This leads to three areas opening up innovative thinking
1. Using location services to optimize operations. Access to traveler location through on-device apps or through the mobile network API (see note below), can enable a flurry of new applications. Sure enough, this needs strict privacy policy control mechanisms, and most mobile carriers are in the process of implementing solutions.
Note re first bullet point: What’s the benefit of using network location from the mobile operator API? Two main reasons: 1. it works even when the phone has no GPS, when the GPS is off or not in reach, when there is no active location application running to use the GPS data, or when there is no data connection at all; 2. it works with all devices, even old ones. For the services described above, network triangulation accuracy is more than sufficient.
2. More real-time feedback. Operations can be streamlined thanks to quality forecasting of traffic data. With the ability to interact directly with the user at any time, many situations can be handled more easily.
3. Fraud detection. Double checking data owned by the airline with other data available from the mobile carrier makes it possible to detect fraud situations.
Some examples:
Think different: Every airline will find even more creative ways of improving services to travelers through the mobile ecosystem, in line with their own strategies. Some of the services described above are actually very simple to implement even today, but they demonstrate how completely new thought processes must be applied to building mobile use cases.
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