Eyeblaster Research Note Airline Advertising

Eyeblaster
Research Note
March 2010

Digital Advertising for Airlines
Book Every Seat – Even the Middle Ones!

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Highlights
• Rich Media doubles airlines’
traffic and conversions,
as compared to Standard
Banners.
• For every conversion
generated after a click, 6.7
conversions are generated
after an impression but
without a click.
• For Standard Banners, the
optimal direct response
frequency for airlines is ~4
impressions, which makes
82% of users underexposed.
• Homepages, news, travel
and finance are the most
effective placements for
direct response in terms of
Conversion Rate.
• News, travel, finance, and
instant messaging are the
most effective placements
for branding in terms of
Dwell Rate.
• Online marketing spend on
Travel will double by 2014.

Airline Advertising:
Prepare Your Online Media for Takeoff

Online Spending:
Upwards Trajectory
While the business of operating an airline has remained directly from airlines, or sitting side by side through metadata
more or less the same in the last decade, the business of engines such as Kayak, passengers can make sure that they
selling airline tickets and filling up the seats has changed receive the best value. With this information overflow, airlines
dramatically. Of the many industries affected by the need to make sure that they have enough share of voice, in
proliferation of the Internet, few industries have been as order not to be left behind.
impacted as the travel industry – and airlines in particular.
In a survey by Ad-ology Research, 34% of US internet users
In the past, travel agents typically acted as intermediaries indicated that they used the Internet to research airfares.
between passengers and airlines. Nowadays, many ‘in the According to the survey, this is the most popular travel
flesh’ travel agents have been replaced by browsers, online related research done online1. PhoCusWright study indicates
travel agents and airline websites. Furthermore, online that 2007 was the first year in which online spending on
competition for passengers has increased significantly, travel in the US has exceeded offline spending2.
as information on flights and airfares became easily
When travelers spend most of their dollars online, marketers
accessible. Prospective passengers have the perfect
follow suit. This explains the rapid growth in online marketing
amount of information to commoditize the airline industry.
spending in the Travel vertical. Forrester Research projects
With a combination of information about price, destinations,
that the spending on online marketing in the Travel vertical
schedules, amenities and even remaining seats coming
will more than double in the next five years.

Chart 1: US Online Marketing Spending – Travel

Note: Includes online display advertising, search, e-mail, social media and mobile marketing.
Source: Forrester Research, Interactive Advertising Forecasts, October 2009. Cited from eMarketer.

1
Ad-ology Research. Travel & Vacation Services-Summer 2009. Cited from eMarketer.
2
PhoCusWright. Consumer Travel Trends Survey. Cited from eMarketer.
3 EyEBlASTER RESEARCH NOTE


Furthermore, Forrester expects the shape of the growth curve an empty seat for a flight that is about to take off at nearly
to be exponential, such that growth will actually accelerate any price makes business sense. Many airlines responded
from one year to the next. Based on this projection, Travel by building space-age mathematical models for their yield
is expected to be the third largest vertical in terms of online management systems to adjust prices for each passenger
marketing spending by 2014, outspent only by Retail and according to supply and demand for seats. These models
Wholesale Trade and Financial Services3. At Eyeblaster, the slash prices for empty flights and increase them for flights
airline industry is the largest segment in the Travel vertical, with only a few empty seats.
accounting for 28% of impressions.
In addition to adjusting the price, airlines generate demand
Chart 2: Travel Segments by soliciting as many prospective passengers as possible.
As so many passengers start their journey by researching
flights online, online display advertising plays a significant
role in targeting these prospects. There are two major
Tourism Boards Transport avenues that airlines follow to drive tickets sales:
• Direct response: These campaigns are typically
designed to drive traffic and reservations to the airline’s
Hotels Other
website, or their loyalty programs. Many direct response
campaigns note prices on the ad itself.
Airlines
• Branding: Such campaigns have three main objectives.
First, to promote new routes and service classes. Second,
to position the airlines such that passengers will be willing
to pay a premium for convenience or service. last, to
elevate awareness of the airline and perhaps keep it top
of mind when passengers are planning their next journey.
Note: Share of Impressions.
Direct response campaigns are particularly appealing for
Source: Eyeblaster Research. Data: Q4 2008 to Q3 2009, Worldwide.
airlines, as they allow them to drive demand for flights where
the supply of empty seats is high. Direct response display
Sale of travel services and airline tickets in particular is advertising has the advantage that ads can be changed with
a good fit for online, as it does not require any physical a short lead time to accommodate any changes in supply
exchange of goods. Passengers can simply print an e-ticket and demand.
at home. Online retail has also made it easier for airlines to
Another reason for the popularity of direct response
control seat inventory. Airlines can use the internet for yield
campaigns is that it is easy to measure their results.
management by adjusting two important variables – ticket
Conversion tags embedded on the airline’s website can
price and demand generation through advertising and
indicate how many users have responded to the ad and
promotion.
have taken an action. Actions tracked by conversion tags
The dominance of online airline ticket sales has significantly may differ, but airlines can assign a monetary value to them
increased price competition between airlines. In the past, and calculate overall campaign ROI.
agents chose which flight to solicit to their clients based on,
Considering the economics of airlines, it makes a great deal
among other things, the commission that they were earning.
of sense to use advertising to help demand meet supply on
Comparing prices between agents required significant
empty flights. Online advertising has the ability to change
legwork. Today, comparing airfare between airlines is
prices quickly and easily on the ad. Eyeblaster’s Smart
instantaneous. If the schedule and connection factors
Versioning is an easy-to-use tool for both media and creative
are largely the same, passengers are likely to opt for the
pros to quickly produce the perfect ad creative to optimize
cheapest option.
and boost relevancy. Airlines can dynamically change ads
The industry is notorious for its brutal economics. Once to promote empty flights and generate demand instantly.
a flight is scheduled to takeoff, the variable cost of filling a Smart Versioning allows swapping assets on live ads without
seat may be reduced to the cost of a soft drink and a bag of re-trafficking. It handles any image resource, audio, video,
peanuts (for those airlines that still serve them). Thus, selling language, branded font, character set and other features.

3
Forrester Research, Interactive Advertising Forecasts, October 2009. Cited from eMarketer.



Sequencing, serving ads in a particular sequence to the
same user, can also help usher users through the purchase
Direct Response Campaign
funnel, by delivering messages as a story to the user, or just Performance
altering between messages, rather than repeating the same
message again and again. Sequencing allows advertisers to Throughout this analysis, Eyeblaster Research uses two
serve different ads every time the campaign is served, and try metrics to analyze the performance of direct response
different messages on users that have not responded to the campaigns – Click Through Rate and Conversion Rate.
first message – if you do not want to go to San Francisco, Click Through Rate (CTR) measures how many impressions
then how about Miami? The advantage is that advertisers can were clicked on out of total impressions served.
solicit different destinations and push a range of their offering
to users, taking the maximum advantage of every exposure. Conversion Rate measures the total number of conversions
from the advertiser’s website, divided by the number of
impressions served. Conversions are not necessarily

Talking Business at a monetary transaction, but signify an action that the
advertiser would like users to take, such as downloading

Emirates brochures, submitting forms, as well as completing the
purchase of an airline ticket. Conversion Rate may vary
between advertisers based on the placement of the
Emirates were looking to promote their special business class conversion tags on the airline’s website.
fares and encourage bookings with an exclusive one week
offer. The aim of the campaign was to raise awareness to its Conversion Rate can be further divided into two types of
business class in an offer that would increase accessibility, conversions. The first type is Post Click Conversion Rate,
but would not compromise the business class experience. which measures the conversions following a click on the
ad divided by total served impressions. The second is Post
The main challenge was that the creative team had only Impression Conversion Rate, which measures conversions
eight days to execute the campaign, which included after viewing the ad without a click, divided by total
dozens of different options to promote reduced business impressions. The sum of both is the Conversion Rate4.
class rates. Emirates needed a solution that would enable
them the flexibility to change ads and promotions on the fly.
Enter Smart Versioning, Eyeblaster’s solution for rapid
modification of ads, for increased relevance. Using an
editable template, the agency could easily change the
price, takeoff and destination cities to reflect the airfare
specials. Without Smart Versioning, the agency would have
had to build and upload dozens of different ads – a time-
consuming, costly and painful process.

Want to know more? Click here for the full case study.

4
Conversions are attributed to an impression up to 30 days after serving.



Travel sites are looking beyond CTR
Chart 3: Click Through Rate by Placement – Airlines


lifestyle, homepages, instant messaging, weather and is a clear example where CTR and Post Click Conversion
travel have average or above average CTR performance. Rate is relatively low, while Post Impression Conversion Rate
News and homepages also have higher than average Post is relatively high. Thus, clicks and post click conversions
Click Conversion Rate (see chart 4). However, CTR and underestimate the actual contribution of ads in travel to the
Post Click Conversions provide only a partial picture of the actual success in terms of driving sales. Users are arriving
effect of an ad. While many users do not click on an ad, at the airline’s website without clicking – just by browsing or
they are browsing to the advertisers’ website by typing the after conducting additional research.
URl, using search or methods other than clicking. In fact,
for every conversion generated after a click, 6.7 conversions
are generated by browsing to the advertiser’s website after
viewing the ad without clicking.
Chart 4 demonstrates why CTR is only a partial indicator
of performance. The travel placement, which includes both
sites dedicated to travel and travel sections of general sites,

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Chart 4: Conversion Rate by Placement – Airlines

Post Impression Conversion Rate


Optimal Frequency:
You Again?
Homepages and news placements are located in the upper Beyond the richness of the creative and the environment
right quartile of chart 4, and are high on both post click in which it is placed, users are influenced by the average
conversions and on post impression conversions. Finance number of times that they see the creative. Theories in the
has a Post Click Conversion Rate similar to the travel field of marketing assert that individuals require multiple
environment, but a higher Post Impression Conversion Rate. exposures to the marketing message in order to retain the
The travel environment does produce a high conversion message and act on it.
rate when combining the effects of post click and post
The optimal frequency of a campaign depends on many
impression conversion, but the Post Click Conversion Rate
campaign specific variables. Such variables may include prior
component is lower than average.
familiarity with the brand, exposure to off-line advertising,
Travel placements tend to draw a very high proportion of vertical, country, level of interest and many others. Therefore,
travel and airline related advertisements. Thus, the number any attempt to calculate an optimal frequency should be
of travel and airline related ads per page increases, and the regarded as a rule of thumb rather than a silver bullet.
relevant share of voice for each advertiser decreases. A best
To analyze the optimal frequency of Standard Banners, we
practice here would be to use synched ads – two or more
calculated the average CTR at every exposure for airline
ads on the same page with a synchronized creative that
campaigns. A summary of this is presented in chart 5. For
elevates the marketing message above the clutter. Synched
example, at the first exposure to an ad from a campaign, the
ads have Dwell Rate of 9.33%, as compared to 6.05% for
CTR will be 0.18%, at the second exposure to an ad from
other Rich Media – an increase of 54%5.
the same campaign the CTR will be 0.20%.

5
Eyeblaster Research. Data Q4 2008 to Q3 2009, all verticals, worldwide. Dwell Rate measure the proportion of impressions that were engaged with by
touch, interaction or click.


The aim of the model presented here is to find the optimal frequency that will increase the campaign’s overall CTR. In order
to do that, the frequency should increase up to the point in which the expected CTR from adding one additional exposure is
higher or equal to the average CTR.
In other words, as long as the expected benefit from adding another exposure is higher than the average CTR, it makes sense
to add that exposure. Additional exposures should not be added when the expected CTR from those additional exposures is
lower than the average CTR.

Chart 5: Airline Click Through Rate by Frequency – Standard Banners

Optimal Frequency

Source: Eyeblaster Research. Data: Q4 2008 to Q3 2009, Standard Banners, Worldwide.

For campaigns with Standard Banners, the average CTR Chart 6: Average Frequency in Airline Campaigns
for airlines is 0.15%. The expected CTR from frequency by Cookie Data – Standard Banners
1, 2 and 3 is higher than the average CTR. However, the
expected CTR from frequency 5 is 0.13%, which is lower
than the average. Therefore, four exposures is the optimal 3 4
frequency for campaigns with Standard Banners in the 2 5 or More
airline industry.
Although four is the average optimal frequency, 61% of
users (as represented by cookies shown in Chart 6) receive
1
only one exposure, and 82% receive three exposures or
less. This analysis shows that airlines could benefit from
increasing the size of their campaigns in order to elevate
exposures towards the optimal frequency, or further limit
their target demographics. Airline advertising campaigns are
still just scratching the surface of the possible messaging
potential to each user.
Source: Eyeblaster Research. Data: Q4 2008 to Q3 2009, Standard Banners,
Worldwide.



Rich Media Doubles Effectiveness
Both Click Through Rate and Conversion Rate are higher for Rich Media as compared to Standard Banners. In particular, Click
Through Rate is 2.7 times higher for Rich Media as compared to Standard Banners, and Conversion Rate for Rich Media is
double that of Standard Banners.

Chart 7a & 7b: Performance of Rich Media vs. Standard Banner - Airlines


This finding makes it easy for advertisers to improve campaign performance. Switching from Standard Banners to Rich Media
may double a campaign’s expected direct response performance. This elevated performance has a few explanations. Rich
Media outperforms Standard Banners by alluring users’ eyes from the publishers’ content to the ad. Furthermore, by enabling
users to interact with the marketing message, Rich Media also increases recall. Rich creative also has the ability to feed data
dynamically and increase relevancy. When all of these effects are combined, the result is an increase in clicks and conversions,
as compared to Standard Banners.



Geographic Differences
The Airline industry is an international business, and as such this research leveraged Eyeblaster’s international presence to
conduct this analysis with worldwide data. However, there are striking differences between the regional markets.

Chart 8: Click Through Rate by Market


North America has the lowest CTR, while Europe and Australia and New Zealand have the highest. Some of these differences
may be explained by the lower tendency to click in some markets as compared to others, and by increased use of Rich Media
ads with airlines, particularly in Europe.

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Branding and Campaign Performance
A smaller portion of airline campaigns is not designed to generate immediate sales traffic, but for branding. These campaigns
let passengers know about new routes, business classes, lounges, higher standards of service and in many cases are directed
towards the most profitable passengers – business and first class.
To measure the effectiveness of branding we use two metrics: Dwell Rate and Average Dwell Time. Dwell Rate measures the
proportion of impressions that were engaged with by touch, interaction or click. Average Dwell Time measures the duration of
a Dwell. In both cases, unintentional Dwell lasting less than one second is excluded.

Chart 9: Dwell by Placement – Airlines
Average Dwell Time (sec)


Data in chart 9 shows that online airline branding ads spend ample time on each webpage reading in-depth
work particularly well in the news, finance, and lifestyle content, and thus also spend time engaging with display ads.
placements. The performance of ads in the travel
Travel placements have relatively high breakthrough,
placements is high in terms of Dwell Rate, but is slightly
following their high Dwell Rate, but users spend a relatively
lower than average in terms of Dwell Time.
low amount of time with ads. Travel placements tend to have
This works well for airlines that look for a more affluent a lot of travel related content and ads. Therefore, while users
crowd, and may find them on the news, and particularly do engage with the ads, as evidenced by the higher Dwell
on the finance, placements. News and finance tend to Rate, they are drawn back to the content relatively quickly as
outperform generally in branding, as Eyeblaster Research evidenced by the lower than average Dwell Time.
have found in previous studies. In these placements, people



Future Trends: Prepare to be Mobile
As presented in the beginning of this research, the transformation in the marketing
practices of the airline industry in the last decade is staggering. Half of the travel
spending in the US is done online, and airfare is the most popular travel related
online research.
While traditional marketing avenues such as display and search advertising are
about to grow, another fast runner is mobile. In a survey of airline IT executives
worldwide, 8% indicated that they are already targeting passengers with promotions
on their mobile, 10% are planning to do so by 2010, and 19% by 20126.

Chart 10: Airline Promotion by Mobile

No plans

2009

2012 2010

SITA and Airline Business. The Airline IT Trends Survey 2009. Cited from eMarketer.

Mobile provides an additional opportunity for advertisers for yield management and
reaching passengers. 78% of executives in the same survey indicated that they
plan to optimize their website for mobile browsing by 2012. This opens the door for
passengers to buy airline tickets directly from their mobile phones.
As the competition for passengers spreads to the mobile world, airlines will need
to allocate more budgets to this channel as well. As mobile phones and particularly
the iPhone are equipped with an enhanced browsing capability, users spend more
of their time accessing the web by mobile. The enhanced browsing capabilities also
mean enhanced advertising capabilities. Banners that not long ago were limited to
static images are soon to transform to Rich Media.

6
SITA and Airline Business. The Airline IT Trends Survey 2009. Cited from eMarketer.



Summary
The economics and underlying industry factors of airlines make it
an excellent fit for online advertising. Airlines are responding quickly
and are expected to double their spending on online marketing from
$2.5 billion to over $5.0 billion in five years. The majority of airline
campaigns focus on direct response, while branding is less frequent.
Using Rich Media more than doubles the direct response effectiveness
of airline campaigns, both in terms of CTR and in Conversion Rate.
Homepage, travel, news and finance have the best performance
in terms of conversion rate. When designing a direct response
campaign, adjusting the frequency for four exposures per user is
expected to increase CTR.
For branding campaigns, news, travel, finance, and instant messaging
are the best performing environments in terms of Dwell Rate. This is
good news for airlines, as news, finance and particularly travel tend to
draw more affluent crowds.
Regardless of the aim of the campaigns or the formats and
placements, online display advertising offers an indispensable
strategic advantage for Airlines. Display advertising is a flexible tool to
generate instant demand for yield management. It is easy to align ads
and messaging with empty flights, even at the last minute. With the
economics of airlines, occupying an empty seat in a flight that is about
to take off contributes directly to the bottom line. With this in mind,
online display advertising can bring ROI to new heights.



Airline Advertising Best Practices
• Use Rich Media to drive traffic and conversions.
• Adjust reach and frequency to activate underexposed users.
Media • Use both post click and post impression conversions to measure success.
• Expand media placements to non-travel sites with proven performance for airlines.
• Use synched ads to increase attention.
• Travel sites have high breakthrough, in terms of Dwell Rate.
• Integrate with the airline’s yield management systems, matching location, price, and
Creative inventory.
• Use Smart Versioning to increase message relevancy and easily change rates and
destinations.

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© 2010 Eyeblaster Inc. All rights reserved l www.eyeblaster.com l Email: info@eyeblaster.com

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EyEBlASTER RESEARCH NOTE
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 

 
 

 
 

 
  
  
 
 

 
 


 


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 



 

 

  
  
 

 
  
  

16



  


      
           
            

            
            
            

            


            
            
            
            

 
 
 







  


      
           
            
            
            

            
            


            
            
            
            

 
 
 




17



  


      
           
            
            

            

            


            
            
            

 
 
 







  

      
           

            
            

            


            
            

 
 
 




18



  

     

           
            
            
            
            


            
            


            
            
            
            

 
 
 




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