Case Study 4
Air France Internet Marketing
Web technologies have dramatically influenced that way companies to generate revenue. The airline industry was one of the very first to implement web technology in hopes of reaching greater numbers of customers. Clearly, travelers have found this delivery method to their liking as airlines have seen a 263% utilization growth increase (Jeffrey, 2009). In using technology the real question is what more can be done to influence the customer base and increase the bottom line?
Air France currently uses a varied SEM approach depending upon the search engine as part of their marketing advertising strategy. The company executives desire to implement a more effective growth strategy for the purpose of attracting more customers to their website, thus increasing overall revenue. Success depends upon determining the metrics that will be used and how the strategy implemented will influence those metrics. Media Contracts, a media solutions provider was retained to analytically identify web technologies that are most likely to help achieve this objective (Jeffrey, 2009).
Air France, an airline company based in France got it ultimate beginning when five different airlines merged into one large company. Most recently since its merger with KLM, Air France has become the largest European airline touting the most connection options available (Jeffrey, 2009). The pace at which Air France has grown and expanded appears to align with economic growth trends over the past several years. Additionally, technology has been a huge influence that has made traveling much easier for customers. Specifically, search engine marketing technologies have allowed customers to research various airlines, destinations, and specific timing opportunities and then book it with just a few mouse clicks. Not only has this ease significantly increased the number of customers traveling it has also increased the level of competition in the airline industry thus giving customers a greater number of choices at significantly lower price points.
Search engines such as Google, MSN, Yahoo, and Kayak appear to be key sources for customers due to their unique advantages. Air France wanted to determine whether it needs a uniformed or tailored strategy focus in using these particular search engines. Some key essential focus areas included finding ways that could optimize the number of marketing dollars being spent on search engine advertising, evaluating current and projected KPI’s, bid strategies, and keywords, and ultimately determining what will increase ticket sales and improve overall ROA. Another potential strategy for media contracts to evaluate was considering how to increase market share and profitability internationally, specifically in the U.S.
Some main KPIs considered in this case are search engine Click through Rate (CTR), Transaction Conversion Rate (TCR) and Return on Ad dollar Spent (ROA). The search engine Click through Rate indicates the percentage of visitors who actually click the ad and it measures the effectiveness of the ad campaign (Chaffey, 2018). Transaction Conversion Rate tells how many clicks are converted into actual transactions. A higher Transaction Conversion Rate indicates higher revenue (Nielson, 2013). ROA indicates the revenue generated by the investment in the ad. A high ROA means the ad campaign is successful (Investopedia.com, 2018).
Based on summarizing the data, Air France needs to implement the following recommendations in the hopes of meeting their objectives. Those in quadrant two need to adjust bid strategy and reduce CPC campaigns for those publishers showing a negative ROA. Look for ways to increase funding and purchase keys words for those publishers in quadrant three. A further recommendation would mandate the use of Kayak, period. Customers are always looking for travel bargains. The key with Kayak is that it drives customers to the airline’s specific site for booking.
Air France should continue to various strategies that easily target their customers according to the demographics. Based on the numbers, Air France must continue to use search engine technologies, specifically Google and MSN via SEM campaigns through developing and implement a more customized approach for each tool. The different demographic population reach will be expanded by doing so. Air France needs to establish tighter partnerships with metasearch site companies like Kayak.com. These types of sites summarize various travel provider incentives and deal into one search view which, ultimately direct customers to the airline’s website (Jeffrey, 2009). This could mean huge revenues for Air France because it can offer customers deals or incentive programs while creating a direct relationship with the consumer.
Also to increase Air France’s position internationally, when compared to other key competitors, Air France must implement a lower price strategy to popular international locations, especially in the U.S. through using more aggressive SEO strategy.
Chaffey, Dave (2018), “Average display Advertising Clickthrough Rates”, Retrieved from https://www.smartinsights.com/internet-advertising/internet-advertising-analytics/display-advertising-clickthrough-rates/
Jeffrey, Mark (2010), Data-Driven Marketing, “The 15 Metrics Everyone in Marketing Should Know”, John Wiley & Sons, Inc., Hoboken, New Jersey, 2010.
Jeffrey, Mark (2007) “Air France Internet Marketing: Optimizing Google, Yahoo!, MSN, and Kayak Sponsored Search”, Kellogg School of Management Cases, Also retrieved from http://www.kellogg.northwestern.edu/kellogg-case-publishing/case-search/case-detail.aspx?caseid=%7B430A9665-0431-467C-BA9F-9FCEB6B55A57%7D
Neilson, Jakob (2013), “Conversion Rates”, Retrieved from https://www.nngroup.com/articles/conversion-rates/
Investopedia.com (2018), “Return on Assets”, Retrieved from https://www.investopedia.com/terms/r/returnonassets.asp