SMART TALK ADAM WILLIAMS
Adam Williams, brand marketeer and journalist, continues his series of topical articles on OnBoard Entertainment. Adam has worked in the IFE industry for six years
The value of immersive media
Groups such as Amadeus and IdeaWorks produce annual reports outlining how ancillary revenue has grown to be a multi-billion dollar industry for airlines. However, only a fraction is coming through IFE systems
INSTEAD much of that AR is currently coming from baggage, priority seating and other unbundled fees. Airlines are, however, making headway and opportunities still abound for revenue through IFE :
Modern advertising
Advertising is a long stalwart of ancillary revenue but the dynamics have changed over the last five years. The introduction of advanced systems allows for targeting and more interactive ads.
The IAB Mobile Marketing Center of Excellence estimated that the global mobile advertising market in 2011 generated an estimated US$5.3 billion (€3.97 billion). In other words, advertisers have learned a lot about advertising on small screens and are hungry to target consumers. Companies such as RMG Networks work with airlines to create ‘immersive media’ that includes any advertising opportunity that goes beyond the traditional 30-second TV or display ad, such as branded apps, white- labelled websites and highly focused brand experiences through product customisation (e.g. “build your dream car”). The question is, though, does this translate into dollars? Chuck Strottman, vp corporate marketing at RMG, shared, “Everything we do is developed to enhance customer experience, not just drive dollars to airlines. We adopt technology to distribute content as advertisers and airlines want it to be seen. Let me give you an example. On Delta, the seat back entertainment systems allow passengers to customise their entertainment experience by providing access to on-demand content. To reach people at their seats, we worked with our airline partners to create special sections and ad units for advertisers that make people want to engage with it as part of the entertainment experience.”
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Multiple airlines with similar passenger demographics and psychographics need to sell ad space as a single media buy
The fragmentation dilemma Despite the rosy outlook for some airlines, one of the largest challenges faced by many airlines and advertisers is fragmentation. For example, consider a low cost carrier with seatback or handheld systems in use on only a subset of flights. When you consider the total number of possible impressions or eyeballs that could see an advertisement, the number is often too low for a national advertiser whose media buys are traditionally much larger. On the flipside, regional advertisers are not incentivised to place advertisements because of the disparate routes. A car dealer is not interested in advertising on routes that do
not depart from or arrive at the dealership’s home city. Yet, IFE systems often are not capable of changing the ads served by route. And frankly, the financial incentive for IFE manufacturers and airlines to build out such finite segmentation is low.
The answer honestly lies in aggregation. Multiple airlines with similar passenger demographics and psychographics need to sell ad space as a single media buy. This approach would attract regional to national advertisers with an interest in reaching the larger audience. In order to achieve the needed scale, the aggregator would have to provide transparency to advertisers and have a delivery mechanism that supports multiple IFE system types. Another option is to bundle advert impressions on IFE systems with other media buys. There are traditional opportunities such as bundling the inflight magazine and IFE ad sales, but what about outside of the airplane? Or outside of the airport for that matter? A
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