February 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.

Advertisements

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.

United Airlines quietly created a new in-house media operation a few months back that’s designed to sell potential marketers integrated, multiplatform ad campaigns throughout its fleet of planes and terminal locations. The effort is similar to what Walmart and other giant retailers have done with the use of TV monitors and aisle displays to convert their stores into media outlets for hawking products and providing consumers with some content as they shop.

 

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.

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.

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.

  • If a traveler is tired and longs for an upgrade to a better seat while in the cab to the airport, allow them to do so, right there on the spot, in one tap.
  • If a traveler is actually carrying extra luggage, allow them to pre-book the extra piece directly through mobile, without queuing up at expensive in-airport check-in kiosks.
  • If a traveler needs to book a cab upon arrival, allow them to do it in one click while in the departure lounge.

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:

  • If a traveler arrives early at the airport, they’d be interested in special offers for a lounge pass or to cafés/restaurants near their departure gate. But they would not like any of these offers if they arrive late – you would just annoy them.
  • Someone arriving very late at the airport after a long business day (the airline knows they were on a red eye flight the same day), on the other hand, is most likely tired and might be interested in a good offer to get an upgrade to a better seat or class. If the flight is half empty, the airline could yield manage the offer price tag and make a very good offer.
  • A family spending a few days in a foreign destination will need to exchange currency. Why not give directions and a discount to a currency exchange desk at the airport.
  • A couple spending a romantic weekend in Paris is very likely to be interested in boutique hotels, shopping coupons, and a nice dining experience.
  • If the traveler is on a flight on their birthday, why not offer a surprise gift of a few thousand miles announced just when the flight lands for the best impact.

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.

  • No more ‘last call for Mr Jones’: detecting user location can enable gate personnel to decide whether they should wait for missing passengers or not. If the pax is detected 200 miles away from the airport, a decision can be taken – let’s call the customer and see if he’s maybe forgotten the phone in the cab. If he can’t make it, let’s give the seat to someone on the waitlist and take off.
  • Gentle reminders: if the user is detected very far away from the airport a few hours before departure, they can be sent a quick reminder that they should leave for the airport. This could be sync’ed up with local traffic situations, and therefore sent only when relevant.
  • Gaming and competitions: “get 200 bonus miles if you reach the airport 60 minutes before check-in time”. “Visit our new partner hotel and get a 200 miles bonus”.

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.

  • Severe traffic disruptions can be better handled with broadcasting relevant instructions and updates to the right people without creating confusion for others.
  • Travelers can be asked to rate their flight satisfaction within minutes from landing. Real-time satisfaction data can help take proactive actions towards valuable travelers, depending on each airline’s target level of service. On a larger scale, satisfaction data can be plotted on a chart to see exactly where service needs improvement: either on specific time slots, specific city pairs, or specific aircraft.
  • Luggage problems can be shared with customers more proactively, thereby avoiding bigger problems or at least saving the passenger some time.

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:

  • when a customer books on a website with a name different from the name registered as the phone owner, or if the billing address does not match the phone owner address. This, combined with other data, will increase the efficiency of fraud prevention algorithms.
  • Real-time and one-time SMS based authentication, already used today by some banks to authorize wire transfers, can also help ensuring the user requesting a transaction is a legitimate user.

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.

It’s been a while since my last contribution to the site which seems to be going from strength to strength lately, Tnooz. Today I’ve rectified the situation with a piece exploring a topic I’ve mentioned before on this blog, at my recent Eye for Travel conference presentation, and in countless meetings with airline executives. Click here to read the article in full. The question I’m asking in that piece is how should airlines assess the relative importance of investment in mobile apps versus the browser based mobile web?

In the Tnooz article I’ve relied heavily on a recent comScore report on mobile, but there were two things in that report that I found interesting and which didn’t really fit the theme of apps vs mobile web.

The first was this sentence from the report: In December 2010, 9.8 million mobile phone users in Japan made a purchase using their mobile wallet, accounting for nearly 10 percent of mobile subscribers. That number is impressive – mobile payments certainly look like an interesting area going forward if other markets follow the lead of Japan, as I expect they will.

The second interesting thing I saw was the chart below. Did I hear someone use the term f-commerce?

Google hosted an event in New York yesterday called Think Mobile, and whilst I unfortunately only caught the early part of it on a livestream, I heard from people who sat through the entire event that it was a very worthwhile set of presentations. I did search online to see if any video of the event was available, but instead came across something of much more interest to readers here.

Apparently a similar event was held in London late last year, and Katie Stitson from Easyjet marketing gave an impressive presentation – all the more impressive as she was only two weeks away from giving birth!  The image on the right shows some of the results she discusses in the presentation. I can’t believe that when I just sat through this seven minute clip that it only had 53 views in the more than four months it has been online. If you work for an airline that has not yet fully embraced mobile (ie. just about everyone reading this), then forward that youtube clip (or even better, this post) to your colleagues and your boss, as seven minutes now might just be the wake up call needed to save a lot more than seven minutes of pain down the track when it becomes apparent that the horse has already bolted. In her presentation Katie talks about this exact same point – get started now and learn as much as possible whilst the absolute numbers are still relatively small.

At the New York event Jason Spero of Google showed a chart that I have been waiting a long time to see. I’ve used UK data previously showing the growth in search queries from mobile devices, but yesterday was the first time that I saw that same data for the US.

Apart from that chart above, the interesting takeaway from Jason’s presentation was when he said that large touch screen mobile phones have 50 times the search queries as that coming from a Blackberry. All the growth predictions seem to point to the fact that bigger screen mobile phones (not to mention the growth of tablets) are the way of the future, so if your airline website is not mobile enabled yet, today might be as good a day as any to get to work on it.

I saw a headline from the McKinsey Quarterly saying information overload can sap executive creativity and effectiveness, so I hope that isn’t happening with me! Not as a result of that headline, but purely a co-incidence, I had earlier decided to unsubscribe from a number of email subscriptions I was receiving.

The two worst (unsubscribe processes, not emails) would have been Kayak Alerts and the Spanish LCC Vueling. The Kayak unsubscribe link took me to a totally blank web page, and two attempts with the Vueling link took me to a nearly blank web page, the only text on that page reading

Connection failed: SQLSTATE[00000] [1040] Too many connections

Maybe just an unlucky day for both these companies, but that is the curse of e-commerce. You rarely get praised for doing a good job, but once the site is down everyone is lining up to put the boots in.

Next on the hit list is Spanish OTA Rumbo. Their link took me to a page which read.

Acabamos de enviarle un correo electrónico con las instrucciones que debe seguir para darse de baja de los boletines.

The Spanish wasn’t the issue as I’d originally subscribed in that language, but what they are basically saying is that they will send me an email with instructions on how to unsubscribe. I wonder how many people don’t follow through with their intention to remove themselves from the email marketing list at this point as it is too much hassle?

The promised email did indeed arrive and it contained a link to a page allowing to me uncheck the boxes showing the types of communication I no longer wanted to receive. Interesting thing about Rumbo was that 30 minutes after sending me the unsubscribe link email, but before I had got around to acting upon it, I received another promotional email from them. Was this a last ditch effort to show me an amazing offer to change my mind about unsubscribing, was it a chance to just have one last go at annoying me, or was it simply a very timely coincidence – I will never know.

UK metasearch company Skyscanner (a company I’ve long admired for their leadership in map based travel search – maps are a big part of the future of travel search, but that is a very different topic to today’s post!) had a very clean unsubscribe page with an easy way to opt out immediately from the types of publicity I no longer wanted; but the best opt out process goes to Australian travel agency chain Flight Centre. Not only did they make it easy, but they tried to gain some insight into the reason for why I was leaving them. Part of that page is shown below.

I’m not sure having the best unsubscribe process is an award you would want to be telling the whole world about, but it does show a commitment to treating customers with respect. Just because someone is leaving your marketing database does not mean that they do not want to use the services of your company, so don’t risk turning them off as they attempt to unsubscribe.

We spoke a lot about email marketing best practice at the recent Eye for Travel customer centricity conference, so following with the same theme, I saw this recent announcement that British Airways had won something called the prize for Innovation in E-mail Marketing in this year’s Econsultancy Innovation Awards

The campaign targeted British Airways’ Executive Club members to drive application downloads based on the user’s specific smartphone. It combined an understanding of historical user data of e-mail on mobile devices, to make sure that members received the news of the application in the format best suited for the device they most commonly use to check their e-mail. The award recognises the success of the campaign, which saw British Airways achieve more than 70,000 clicks and which doubled download targets over the course of the marketing campaign. e-Dialog worked with British Airways’ other creative agencies, Agency.com and OgilvyOne, on the project.

Before posting, to be fair on Kayak and Vueling, I went back and tried to unsubscribe once again, around half a day after originally trying this process. The Vueling page was working again, but the process still is not easy as I have type in my email (rather than it being pre-populated in the form) and then they tell me they will send me an email with the next step! The Kayak problem was a little different, as on the email they had two options written as Manage price alerts and Unsubscribe to all price alerts. The latter link still gave me a blank page, but the former enabled me to unsubscribe. Originally I had only tried the Unsubscribe to all price alerts link which still appears to be broken.

Next Page »