1. Air France:
Internet Advertising and The
‘Search’ For Answers

2. Objectives
• Determine if Air France needs a uniform or tailored strategy for
search engines
• Evaluate search engine KPIs, bid strategy, keywords and groups
• What will increase ticket sales and improve ROA?
• Which search engine delivered the most value to Air France?
• Potential future strategies Media Contacts should consider for
increasing AF’s market share and profitability in the U.S.

3. Background
• Born from merger of 5 French
transport companies, 1933
• Paris to New York route inaugurated,
July 1946
• Listed on the Paris Stock Exchange,
February 1999
• Merger with KLM to become largest
European air transport group,
2003-2004

4. Strategies
• Target international passengers with the concept of “One Group, Two Airlines”
• Strategic Growth through fleet management
• “Rationalization” - similar aircrafts for easier training and maintenance
• ”Flexibility” – utilizing “progressive operating leases” to receive new aircraft
and retire old aircraft as fluctuating demand necessitated
• The strategies were very instrumental in bringing positive financial results from
1999 to 2007
Planning international growth strategy and looking to increase
their share in the U.S. air travel market, 2007

5. Airline Industry
• New Trends, 2006
Profitability within $500 million of
break-even
International travel became the fastest
growing market
7.4% growth in economy tickets (+4.3%
premium)
• E-commerce
Uniquely suited to direct online sales
Intangibility of travel as a product

6. Landscape
150
• 64% of U.S. households have broadband
112.5
• Media Contacts had a partnership with
Double Click (later acquired by Google)
75
Broadband Households
Total US Households 37.5
(in millions)
0
2000
2002
2004
2006
2008
2010

7. The Expanding Internet
• A new medium that unified all the things traditional
outlets did singularly
• The internet turned the advertising world upside
down
• 3 distinct advantages
• Leveled the playing field
• Reach
• 2-Way Communication

8. Competition

9. International Travel
2006 Scheduled Travelers
41 50
38
30 37.5
29
(in millions)
22 25
22
21
12.5
Ryanair
Lufthansa
Air France
British Airways 0
KLM
Easyjet
American Airlines

10. 2006 Total Scheduled Passengers
(in millions)
0 25 50 75 100
American
100
Southwest
Delta 96
United 71
Northwest 69
Lufthansa 54
Air France 51
49

11. Scheduled Passenger Revenue by Destination
13% 28%
Caribbean and Indian Ocean
North America 7%
South America
Asia
Africa and Middle East 14%
16%
Europe
France
7% 15%

12. Key Players and Rankings
• Media Contacts needed to determine who was going to help
increase ticket sales and improve ROA
• Rank each Search Engine and determine the leaders in:
Brand Awareness (Impressions and Clicks )
Conversion Rate (Purchase)
Revenue per booking
Volume of bookings
Net Profit Per Order
Net Revenue

13. Keywords and Improvement
• Google is the premium player, high costs but
those can be managed
• Careful keyword selections, bid strategy, and
positioning
• Indexing is critical and keywords are a major
ingredient
• Utilize additional metrics: impressions and conversion
rates

14. Publisher Comparison - Summary
Average
Average Total Revenue Sum of
Publisher Sum of Net Cost Per Volume of Per Probability Click Cost/
Name Revenue Click Bookings Booking ROA of Booking Charges Booking
Google - US $1,391,841 $1.84 1550 $1,126 394% 0.04% $353,641 $228.16
MSN - US $165,451 $1.49 140 $1,297 1,028% 0.08% $16,098 $114.99
Overture - $205,457 $1.19 289 $1,202 145% 0.00% $141,976 $491.27
US
Yahoo - US $836,091 $1.01 662 $1,333 1,810% 0.07% $46,198 $69.79
Grand $3,906,597 $1.47 3939 $1,184 517% 0.01% $755,316 $191.75
Total

15. Metasearch
• Kayak is a must
• People look for bargain niche sites (Orbitz, Travelocity)
• Not using metasearch engine utilization is like watching a foreign
film without subtitles
• Website indexes are connected to SEs and read via the HTML code
• Utilize sponsored links, cookies, and additional advertising on Kayak
as real estate is available

16. Sponsored Links - Air France
Search Total Total Net
Clicks Media Cost Avg Ticket
Engine Booking Revenue Revenue
Kayak 2,839 $3567 208 $1124 $233,694 $230,127

17. Making The Cut
Overture - US Grand Total
Sum of Impressions 3855689 170120 17062488 933345 22021642
Sum of Clicks 192109 10808 119323 45598 367838
% Impression 17.51% 0.77% 77.48% 4.24% 100.00%
Average of Trans. Conv. % 41.48% 73.15% 9.49% 182.88% 62.19%
Average of Avg. Revenue per Booking $909 $941 $1,132 $1,273 $1,012
Total Volume of Bookings 1550 140 289 662 2641
Sum of Net Revenue $1,391,841 $165,451 $205,457 $836,091 $2,598,841
Sum of Total Costs $353,641 $16,098 $141,976 $46,198 $557,913
Total ROI 393.58% 1,027.74% 144.71% 1,809.81% 3,375.84%

18. Objectives
• Determine if Air France needs a uniform or tailored strategy for
search engines
• Evaluate search engine KPIs, bid strategy, keywords and groups
• What will increase ticket sales and improve ROA?
• Which search engine delivered the most value to Air France?
• Potential future strategies Media Contacts should consider for
increasing AF’s market share and profitability in the U.S.
“(SEO/SEM) is really about getting the right ad to the right
person at the right time and having them click on it.”
Google CEO E. Schmidt

19. Conclusion
• Must continue to use Google,Yahoo and MSN for unique SEO /
SEM campaigns
• Need a customized approach for each tool
• Each has a distinct search format, different CPC rates, and
booking probability
• Demographics and reach are separate as well
“...the internet had the greatest effect on the travel industry, more than
other. It changed the way we travel forever.” B. Bearden