Brand Wars: The Airline Booking Battle Will Be Televised

Brand Wars: The Airline Booking Battle Will Be Televised

Online travel agencies have had a solid run over the past two years. They picked up some market share as would-be travelers were willing to poke around a little more to score cheap tickets. High rates of unemployment and under-employment and general economic uncertainty, of course, were enough to make consumers value every dollar a little more. This opened an opportunity for online travel agencies to advance in the marketplace, and chip away at the dominance of their suppliers (i.e., the airlines) on the web.

Yet, the market is turning. Next year is expected to be a strong one for the air travel industry relative to 2010, and 2010 was a vast improvement over 2009. For online travel agencies, this provides some benefit as a rising tide, but it’s likely to favor their suppliers, as customers are more likely to go with what they know over putting in some effort to find the largest discounts.

Online travel agencies will have to overcome this tendency by investing smartly and substantially in their own brands. This is what we’re seeing in the latest move by CheapOair, the one of the 10 largest online travel agencies in the sector, in its recent announcement of a marketing mix change, which teases a broader strategic shift given changing market conditions.


A Changing Travel Market
From 2008 to 2010, online travel agencies were able to chip away at the online market share of their suppliers, reducing the suppliers from owning 62 percent of the online business in 2008 to 59 percent in 2010, according to travel industry research firm PhoCusWright. Bargain hunters drove the market, which eroded the importance of brand loyalty.

From 2009 to 2010, PhoCusWright notes a “strong countercyclical performance for the OTA category.” In 2009, sales fell only 1 percent for the sector, compared to 5 percent for the total online leisure/unmanaged business travel market. And, online travel agencies have posted double-digit gains in 2010.

Stronger industry conditions, however, are better for the suppliers, and PhoCusWright observes, “With the rebound continuing, supplier websites will likely regain momentum as the OTA fight to hold on to their share gains.”

In regards to the actual travel experience, ostensibly, the airline’s brand matters most. When a passenger books through an online travel agency, the brand associated with the transaction lasts for a few minutes – or a few hours, depending on the diligence of the buyer’s search. Meanwhile, interaction with the airline’s brand starts during the search for a ticket, persists through the flight and ends sometime after the passenger hops into a town car to get to his ultimate destination. To register in the customer consciousness, online travel agencies need to develop the sort of presences that will keep them top of mind.

This runs counter to the traditional online customer acquisition models associated with the online travel agency business, which involve a combination of search engine optimization, online ads, affiliate programs and social media. These are transaction-oriented tactics, which speak directly to the brand-barrenness of big discounting.

More Than the Transaction
The largest online travel agencies have already moved past transaction myopia: everybody knows the Travelocity gnome, Priceline‘s William Shatner and the likes of “Cooper” from Expedia. For all but the top players, however, investments in mass media brand development (such as television) have generally been eschewed in favor of what’s been known to work. Speaking at Business Insider’s IGNITION conference last week, Buddy Media CEO Michael Lazerow noted that Travelocity grew to $4 billion in revenue through online means before it moved to television to get to the next level.

Yet, for the online travel agency sector to hold its ground – and even grow – in 2011, brand has to matter more, and this means casting a wider media net. This, plus the size of CheapOair relative to its competitors, is what caught my attention about its recent media diversification. The company is launching its first television ad campaign, “Get More for Less,” in an aggressive move to get out in front of the imminent online travel market shift.

The move to television is an aggressive one, and it comes a bit ahead of “schedule” for CheapOair, if you use the Travelocity number as a reference point. Expedia pulled in close to $3 billion in revenue last year, for example, and Priceline at $2.3 billion. Travelong/CheapOair generated $825 million in revenue in 2009 and has grown at a year-over-year rate of 45 percent this year, resulting in forecasted 2010 revenues of $1.2 billion.

The company’s CEO, Sam Jain, says, “TV is a new strategy for CheapOair and as we head into our 6th year we believe this is the right time to expand our marketing efforts. TV is a natural evolution from our current digital marketing and will help build awareness among a larger audience and introduce more people to the brand.” The countercyclical tendencies of the online travel agency market relative to travel as a whole reinforce this point.

Pointing to the potential for a virtuous cycle, CheapOair’s Sr. Vice President of Strategic Partnerships, Bill Miller, adds, “This new TV campaign should draw in more customers for us which in turn will bring more value to our supplier partners. Our suppliers — airlines, hotels, car rentals —- want valuable and efficient distribution partners. I believe we are all that and more and this TV campaign is just another example of how we can extend our marketing reach on the behalf of our supplier partners.”

Fashion versus Reality
It’s been fashionable among the digerati to claim the death of other forms of media, and I’m as guilty as the rest. But, the reality is that SEO and online ads (a la Google’s pay-per-click model) are becoming increasingly crowded and competitive. Since they are focused on the transaction rather than the brand, they don’t provide for a relationship with the customer that results in a gradual reduction in cost per revenue over time. It’s strictly “pay by the drink,” and that can get pricey.

With the travel market starting to tip in favor of the travel suppliers over the online travel agencies, the costs associated with traditional online marketing will become even higher, as brand brings customers back to the suppliers and online travel agencies chase a shrinking share of bargain hunters. For online travel agencies to compete effectively, they have to make their own investments in branding – a commitment that lacks the predictability of other forms of marketing.

Strangely, television may become the key to winning on the web in the travel industry in 2011. A better market translates to the amplification of the importance of brand, and commercials are still a critical aspect of this in the consumer world.

A battle of the brands is about to break out. The good news is that it’s for your benefit … and you’ll get to watch it on TV!

[photo by Do u remember via Flickr]

Santa Claus to seals: 5 California sights worth visiting

You already know the Southern California’s top tourist attractions by heart. Disneyland. Hollywood. Hearst Castle. Ever wonder what else is out there? Here are five great lesser-known attractions to check out on your next visit to the Golden State.

Piedras Blancas Elephant Seal Rookery

Wildlife is often entertaining, and you will get more than your money’s worth (it’s free) by making a stop at the Piedras Blancas Elephant Seal Rookery. Located about seven miles north of San Simeon (site of Hearst Castle) along Highway 1 on the scenic central California coast, the rookery is home to an estimated 15,000 animals, according to Friends of the Elephant Seal.

The seals travel in the open ocean for 8 to 10 months a year, but they head to land at the Rookery to give birth, breed and rest. The site is typically a hive of activity as the animals bark, scratch, crawl, fight, sleep and care for their young. They are funny, sweet and fascinating creatures to watch any time of the year. Parking and entrance to the Rookery are free, and there are plenty of viewpoints from which to enjoy the antics of these strange but wonderful creatures.

Santa Claus Statue
Did you know it’s Christmas all year long in Nyeland Acres, California? You might just miss the area’s very own jolly old St. Nick, unless you know where to look. While cruising down Highway 101 through this area of Ventura County north of Los Angeles you’ll encounter a giant 22-foot-tall statue of Santa Claus resting behind wrought-iron gates off the Rice Avenue exit on South Ventura Boulevard.

For more than 50 years, this SoCal Santa stood atop a candy store in what was then Santa Claus Lane off Highway 101, nearly 30 miles away. After the Christmas-themed attraction closed down, Santa’s future was in jeopardy. In 2003, Mike Barber, president of Garden Acres Mutual Water Co. in Nyeland Acres, took possession of him, and the 5-ton Saint Nick moved to his new digs. The custom wrought-iron gate has Santa’s initials (an “S” and a “C”) in it, and he now has company: a snowman and two soldiers. Although the site is opened by appointment only and on special occasions, you can still come to peer at him behind the gates any day of the year for free.

Santa Paula Murals
The quaint Ventura County town of Santa Paula holds a treasure trove of artwork — all on walls of buildings in the city’s downtown. As the city says, you can “enjoy a Walk Through History” by viewing the nine colorful murals as you stroll through town. Santa Paula’s rich history in aviation, “black gold,” citrus, Chumash Indians, Latino culture and more is represented on the various murals. Best of all: It’s free. Visit SantaPaulaMurals.org for more information, including a map with the murals’ locations.

Nitt Witt House

Chances are you know about Hearst Castle, the opulent mansion built by publishing magnate William Randolph Hearst in the central California coast town of San Simeon. But have you ever heard of the “Poor Man’s Hearst Castle?” That’s the nickname given to the Nitt Witt Ridge home at 881 Hillcrest Drive in Cambria, about 15 minutes away from Hearst’s fancy digs.

The Nitt Witt home, built lovingly out of junk, is the product of Arthur Harold Beal, aka “Captain Nitt Witt” or “Der Tinkerpaw.” Beginning in 1928, Beal spent 50 years building his “castle,” out of such items as toilet bowls, tires, tile, rocks and beer cans. In 1986, the home was named California Historical Landmark No. 939. Today’s owners, Michael and Stacey O’Malley, offer tours of the folk art home. Call 805-927-2690.

Fillmore & Western Railway
Residing in the rural town of Fillmore, north of Los Angeles, is a star of huge proportions. He’s been in more than 400 TV shows, movies and commercials. “He” is the Fillmore & Western Railway, also known as “The Movie Trains.” Just a few of his credits: “Monk,” “Seabiscuit,” “Criminal Minds,” “Buffy the Vampire Slayer,” “Walk in the Clouds,” “City Slickers II,” “Bugsy” and “Fatal Instinct.” You can ride the rails on this famous train year-round for a myriad of special excursions, such as murder mystery dinner train rides, the Pumpkinliner Halloween journey and the North Pole Express trip. Visit Fillmore & Western’s Web site or call 1-800-773-8724 for ticket reservations. All aboard!

Flight attendant going bonkers? Here’s one hilarious explanation

For Gadling’s day of posts centered on Vintage America, Scott treated us to 10 vintage airline commercials. Those commercials put airlines and their personnel in a positive light. Here’s a video with another version of air travel thanks to one very cranky flight attendant.

Thankfully, this is a commercial for a product other than an airline, but it perfectly captures the worst aspects of travel –plus, it’s hilarious. Haven’t you had times on an airplane when you wish you could behave this way? The passenger version of these scenarios would be funny as well.

For a bonus there is a video of three other commercials after the jump. You’ll recognize other flight attendant pet peeves.

Ten of the sexiest commercials in airline history

Last year, we compiled a list of vintage airline commercials, and since the Internet is full of some of the greatest commercials commissioned by airlines, we picked “sexiest airline commercials” as the topic of this top ten lineup.

The list has some vintage clips (Southwest Airlines hotpants) and some pretty recent stuff. So, sit back and enjoy these ten sexiest airline commercials.

Virgin Atlantic 25th anniversary video


This commercial is brilliant – it takes all the best (and the worst) of 1984 to celebrate 25 years of Virgin Atlantic


Air New Zealand “Nothing To Hide”

Bodypainted cabin crew members, and a cameo appearance by the CEO of the airline.


Southwest Airlines

Remember before Southwest Airlines? We didn’t have hostesses in hotpants. And now we still don’t, but at least they don’t charge for checking a bag. Though if I’m honest, I’d probably prefer the hotpants.


Airport metal detector prank

Alright, so it isn’t for an airline, and it isn’t even for a product remotely related to flying, but it has long been one of the most popular commercials involving an airport.


Silverjet

Seriously? Using a lesbian mile high romp to advertise your airline? Sadly, the airline only lasted two years before they realized that their all business class service couldn’t survive in the new economy.


Fake airline, funny commercial

This commercial for “Lynx Airlines” was made in 2008.Obviously it isn’t for a real airline, but it does mimic the services Ryanair said they’d offer in Business Class should they ever start flying transatlantic.


National Airlines “Go Go vacations”

They really don’t make them like this any more – because if they did, someone would probably sue.


If you wanted to sleep with him, you would have married him

Not every sexy airline commercial involves a stewardess in hotpants.


“I just love a man in a JetBlue uniform”

These girls love pilots – but only JetBlue pilots. Talk about being picky.


Nothing says awkward like exposing yourself to your inlaws.

(Warning, may not be suitable for work). This is one of those commercials that was clearly devised before the ad agency had a taker, because nothing in the clip is even remotely aviation related. That doesn’t prevent it from being hilarious.


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Perfume ad or airline ad?

Feast your eyes on this airline commercial for Korean Air. For the first 20 seconds of the clip, you’d be convinced you were watching an ad for a new kind of perfume, or an upscale escort agency.

I’m guessing that this is what happens when you tell your ad agency to make something “different”. Thankfully this ad is not as insane as the United Airlines commercial I posted last month, but I still can’t help feeling that the ad completely fails to get me interested in flying with Korean Air. Then again, I am writing about it, and PR people keep telling me that any press is good press…