1.
Online Advertising Strategy
Ecotic Case Study 2013/2014
Vincent Gabillet, Guillaume Foucher, Arthur Marot, Claudia Schwägele

2.
Brief Overview
•
•
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New value proposition for Air
France : Book at anytime from
anywhere
Online advertising : Marketingmix
Tools and strategy
Key performance indicators and
optimization
Case study

3.
Industry (traditionally)
• Dominated by several big companies:
American Airlines as biggest airline
SkyTeam Global Alliance main actor in
Europe
• Not yet profitable (1996-2006)
Average airline industry ROIC = 5,9 %
Average US industry ROIC = 14.9%
• Airline traffic growth > global economic
growth
• Increase in demand for air travel (+50%
between 2000 and 2006)

4.
Competitive Landscape
• Low Cost Airlines -> prices decrease ->
shift to price or service competition?!
• Powerful Suppliers
– Aircraft industry: mainly dominated by
Boeing and Airbus
– Pilots Unions: highly qualified
workforce
• Intensive lobbying
• Government policies
• Important barriers to entry
=> highly competitive Industry

5.
Internet impact on the industry
• Internet is an appropriate medium for airline
industry
–
–
omnipresent, fast
multitude of advertising tools and possibilities
• Obsolescence of travel agents -> now Direct
Distribution Channel
Bargaining power shifts to consumers
• Enhanced the development of Low Cost airlines
• Emergence of different kinds of online flight
sales platforms: travel aggregators and travel booking
alternatives (Kayak, Orbitz, Expedia)

6.
Air France Online
•
•
•
•
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A reassuring place to purchase
online
Integrated high performing search
engine
Additional services and information
Promotion and discount
information of flights
Branding and differentiation

7.
Online advertising initiative
•
•
•
•
•
Relatively cheap and
accessible
Targeting on search
Targeting on topic
Data analytics
Continuous optimization

8.
Search engines market shares
US Share of searches
August 2007
Source: Nielsen NetRatings

9.
SEO : Visibility on search engines for
“free”
o Organic search results
o Long-term process
o Essential marketing tools for web-site
SEA : Visibility by buying keywords in
order to appear in the paid search results
o Allows to reach top of search’s result on very
popular keywords
o Immediat result
o Better target audience and attract "best
quality" prospects
o Googel’s Adword is a greater PPC market share
than 70%

10.
Internet marketing
Display : Advertisements appear on web pages in
many forms often as banner
o Main objective : promotional branding
o Easy targeting of the demand and tracking of the campaign
performance
o Short time campaign using CPM model : Cost Per Mille
Affiliate marketing : a performance-based
marketing
o Create a sustainable network of partners over the time
o Buyer commission’s program on sales
o Prospects : pay per form receive - CPA (Cost per Action)

11.
•
Online advertising•
•
Fantastic tool to increase the ticket sales
Online sales represent more than 50% of
overall sales
Airline market is optimal for online
advertising
•
•
•
•
•
ticket printing
already built system to communicate with travel
agents
Qualified and optimize advertising cost with
a great return
Decreasing prices
Customers can book everywhere & anytime

12.
Air France web-marketing campaign
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•
•
•
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In 2007 online ticket revenues continues to
grow
Due to succes of affiliation campaign
The competition in Search Engine advertising is
increasingly strong
o $9,4 billion expenses in the SEM channel in 2006
Efficiency optimization in using more effective
mix of tactics
Had to analyze the SEA campaign results to
optimize future campaign performance

13.
Key Performance Indicators
•
•
•
•
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Click Through Rate
Conversion Rate
ROA (Return on advertising)
Average revenue per booking
Probability of booking
=> Comparison of different tools and
geographic zones in order to
determine the online marketing tool
portfolio

14.
Search advertising campaign
In 2007 :
4500 keywords
24 campaigns
4 platforms

15.
Investment for each publisher
-
Most of the budget is
spent on Google
Adwords
-
The agency allocated a
weak budget on Yahoo
despite of an excellent
conversion rate
- Overture has a low cost
per click and a
ridiculous probability
of booking
- MSN has the highest
cost per click in the US

16.
Efficiency for each publisher
- Overture: a wide traffic
which is not qualified
- MSN: a good
conversion rate and a
good potential
- Google: great visibility
and colossal
audience
- Yahoo: by far, the best
performance in
proportion of
investment

17.
Efficiency for each campaign
Branded exact keywords
are the most
profitable
(ex: “airfrance”)
Branded keywords with
destination are
profitable (ex:
“airfrance to paris”)
Geo-targeted and generic
terms are not
profitable
(ex: search from NYC)

18.
SEA recommendations
•
•
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Air France must invest more on MSN
and Yahoo due to the weak competition
on these
Air France must maintain strong
investment in branding, less in generic
keywords (ex: “cheap flight”)
Air France must improve his website
features and price policies in cities with
larger airports

19.
Key Facts
• Internet made substantial
changes in the industry
• Online Marketing is a valuable
tool for Air France but requires
specific know-how and
important investments over the
time
• Optimization of search of Air
France

20.
Changes and Outlook
• Airline industry today:
– Air travel in emerging countries is rapidly
growing
– Luxury airlines are rising
– Low Cost Airlines are upgrading
• Air France today:
– Increasing importance of affiliation via
booking platforms
– “New” Marketing tools : SMM, Retargeting,
RTB, etc.
– Big Data
– Increased competition

21.
Thank you for your attention!
We hope you enjoyed our presentation and we
would be delighted to welcome you on board of
our next Air France flight!