Airlines looking for new revenue streams have an opportunity to use data insights to monetise their traffic through media advertising, according to a new report from <intent>.
The travel data analytics firm has published a new report claiming media has untapped potential and could be “The Next Big Ancillary” for airlines.
Travel technology consultant and former Ryanair director Sinead Finn writes in the foreward to the report:
“Advertising media is a major part of other travel brands’ core incremental revenue. If you know most visitors to your website are not going to book, why not take advantage of this opportunity by serving relevant media?
“This strategy gas become especially prevalent among OTAs and meta sites. Airlines are primed to include media as part of their ancillary strategy, and would we wise to – so long as it is executed intelligently.”
Finn says taking a personalised approach to serving ads to airline website users can dispel concerns that indiscriminate advertising can hit conversions and lead to an inferior customer experience.
Leading OTAs Expedia and lastminute.com have both created media divisions to take advantage of their high levels of traffic, the latter launching Forward in April under its former chief commercial officer Alessandra Di Lorenzo.
In 2018 Expedia Group reported revenue from media and advertising of $1.09 million, accounting for 11% of the firm’s total revenue.
The <intent> report says: “The numbers are stark; the OTAs are already claiming their piece of the action – it’s up to airlines to catch up soon or be left behind altogether,”.
Airlines that focus on driving up revenue per passenger purely by increasing conversions are setting themselves up for a fall in a sector in which enjoys high levels of traffic but low conversions, claims <intent> in the report.
And it says while the aviation sector continues to see ancillary revenue as important it remains focussed on commission-based travel products, frequent flyer programmes and taking an a la carte approach to bundling products and services.
“To sustain growth, the industry needs to turn to a new, reliably profitable revenue stream,” the report says.
The <intent> report claims 20% of up to 100 pre-booking customer digital touchpoints are with airlines and as carriers become retailers in their own right they should start to focus more on revenue per visitor rather than revenue per passenger.
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