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Generating Ancillary Revenue THROUGHOUT THE ENTIRE JOURNEY EXPERIENCE

Raymond GirardPresident, Spafax Interactive

May 12, 2010

Generating Ancillary Revenue THROUGHOUT THE ENTIRE JOURNEY EXPERIENCEAgenda

• Brand connections • Advertiser expectations • How airlines can deliver on those expectations• A few examples of best practices

Ancillary revenueBRAND CONNECTIONS

This isn’t a presentation about generating revenue by charging for access to the WC.

Ancillary revenueBRAND CONNECTIONS

It’s about connecting brands with your customers – and having those brands pay for the privilege.

Brand connections …BUT WHY WOULD YOU LISTEN TO ME?

We’ve been making connections between brands and airlines for 25 years – and have generated over $300m USD in the process

BRANDS / ADVERTISERS

Brands / advertisersTHE MEDIA WORLD IS CHANGING…

• proliferation of new media platforms

Addressable

Portable Searchable

Social Interactive Transactional Everywhere

Brands / advertisers…AND ADVERTISERS HAVE HIGH EXPECTATIONS

1. audience2. speed3. rich media4. ROI – return on investment5. ROE – return on engagement

Brands / advertisersTHE AUDIENCE THEY EXPECT

• targeted• connected• PMEB’s ++• segmented

Brands / advertisersTHEY WANT SPEED

• time to market• flexibility• streamlined process

Brands / advertisersTHEY WANT PROOF OF RETURN ON INVESTMENT

• research • partnership • proof of performance

Brands / advertisersTHEY WANT ENGAGEMENT

• content• narrative• a “story”

CONTENT

ONLINE

AMBIENT

TV/AVODPRINT

PROMOTION

Brands / advertisersARE GETTING WHAT THEY WANT?

Media are happy to indulge them.

THE BILLION YUAN QUESTION

Brands / advertisersWHAT DO THEY GET FROM AIRLINES?

• audience• rich media environment• engagement• …the transumer

(consumer in transit)

Brands / advertisersWHAT DON’T THEY GET FROM AIRLINES:

What is the airline advantage with advertisers? THE AIRLINE JOURNEY CYCLETM

What is the airline advantage with advertisers? THE AIRLINE JOURNEY CYCLE

pre-flight

in-flight

post-flight & research

trip prep

decision

Safety and boarding videos

Electronic publishing, website management IFE portals and social

media

Commercialisation of lounges

GUI design and interactive

development

Inflight magazines

Frequent flyer e-zines

Inflight distribution, sampling and merchandising

IFE guides

Do airlines facilitate brand connections? DEAL BREAKERS:

• limited inventory• process / red tape / bureaucracy• high CPM• no proof of ROI

MAKING CONNECTIONS

Facilitating brand connectionsADOPTING “TERRESTRIAL MEDIA” BEST PRACTICES• compete with terrestrial

media (less process)• a single point of contact

at the airline • senior management

support• adopt a “hub and

spoke” approach to media sales

AGENCIES

AIRLINE

TRANSUMER

BRANDS

MEDIA OWNERS

Facilitating brand connectionsADOPTING “TERRESTRIAL MEDIA” BEST PRACTICES• adopt a “hub and spoke” approach to media sales

SUCCESS

175+ touchpoints throuhgout the airline journeyAIR CANADA MEDIA

pre-flight

in-flight

post-flight & research

trip prep

decision

Safety and boarding videos

Electronic publishing, website management IFE portals and social

media

Commercialisation of lounges

GUI design and interactive

development

Inflight magazines

Frequent flyer e-zines

Inflight distribution, sampling and merchandising

IFE guides

175+ touchpoints throuhgout the airline journeyAIR CANADA MEDIA

175+ touchpoints throuhgout the airline journeyAIR CANADA MEDIA

175+ touchpoints throuhgout the airline journeyAIR CANADA MEDIA

175+ touchpoints throughout the airline journeyAIR CANADA MEDIA

Innovation = customer added value VIRGIN ATLANTIC MEDIA

• Drinks – Bacardi, Grey Goose, Bombay Sapphire, Mumm, Heineken, Stella Artois, Dewars, Stolichnaya…

• Cars – Jaguar, Maserati, Honda, Lexus…

• Technology – Apple, Sony, Nokia, Motorola, B&W, BlackBerry…

• Personal care – GHD, Dermalogica, Jo Malone, Cowshed…

• Food – Gü, Green and Blacks, Costa, Ben and Jerry’s…

• Entertainment – Lord of the Rings show, We Will Rock You…

• Wellbeing – Mind Gym, Personal stylists, Lifecoaches

• Media – Sky, Virgin Media, New Line, Sony

Innovation = customer added value VIRGIN ATLANTIC MEDIA

Innovation = customer added value VIRGIN ATLANTIC MEDIA

Integration with airline operations LAN AIRLINES

WHAT IS SPAFAX?

Full Service Offices

Sales Affiliates

Editorial Satellite Offices

Worldwide coverageA full service sales and editorial network

• 8 offices worldwide• 160+ full-time staff• 22 sales agents

CONTENT

CONTENT

CONTENT

Our approachA HUB AND SPOKE OPERATION

Like airlines, we’re a hub & spoke operation. We use content as the vehicle for making engaging connections between advertisers and your customers

Our partnersAIRLINES AND TRAVEL BRANDS

Thank you!STOP BY OUR BOOTH FOR A CHAT