Geoff Kowalski, James Corne, Bob Edmiston & Jon Schultz
Air France
1) Should Media Contacts recommend a uniform strategy?
In the PivotTable we can isolate and separate variables that lead to deeper insight into
the impact and revenue effect different publishers have on facilitating Air France ticket sales.
Placing Publisher name in ‘Column Labels’, with ‘Campaign’ and ‘Keyword’ as row labels and
‘Average of Return on Dollar Spent’ we see that each publisher has their own distinct
advantages. For example, customers looking to find western European destination results,
“flights to Florence” had a 1572% return when search via Google, with no such result on Yahoo.
Conversely, any dollar spent to link ‘European airlines’ with sales on Google was a dollar-fordollar waste, whereas Yahoo had a ROA of 1424%.
2) How should keywords be changed to increase overall value gained from investment with a
search engine publisher?
It is essential, especially in an increasingly saturated airline industry and the emergence
of travel aggregators, that Air France target and pay for the keywords that are most effective on
each site. We can decipher from the data that geographically based campaigns are sensitive to
certain cities, thus destinations in France. This data not only gives us insight into which regions
frequent which French metropolises, but such data should be further used to implement
dynamic pricing. Pricing based on the city from which the search took place, should correspond
quite efficiently with the airport from which someone departs on Air France. This should certainly
be implemented one step deeper, on a publisher-basis. Seeing as how different sites have their
inherent advantages, based on the order of the search result, or on the bid strategy, keywords
(including city names and words like “cheap” or “international”) should be exercised on a caseby-case basis. Obviously this is an idealistic approach; however, to truly isolate those
marketing efforts that contribute to Air France’s web traffic and the facilitation of ticket sales, the
extra effort would certainly be worth the initial cost. By our estimates, only 322 out of 4,510
keyword searches, across the various platforms had positive return on the investment. With
overall returns being so high, across all websites, we can see that this cost-model for
advertising will sustainably remain effective. However, when bidding on useless terms can be
eliminated, we can further increase margins by not only saving on our expenses when bidding
for terms, but by increasing the costs for our competitors to advertise.
3) What are the most important KPIs?
The most important KPIs are the ‘average return on ad dollars spent’, the ‘total cost’ and
the ‘probability of booking’. Between these three key variables we can execute a balancing act
between margin benefits and overall expenses. We would want to remain flexible, given the
evolving technology platform, to the overall expenses accrued and the percentage return we like
to receive. The reason we are not deciding to prioritize average cost, is because large
expenses can be incurred if the high percentage rate accompanies such an investment.
Likewise, if something has slim margins but is relatively cheap, we see no reason why not to
maintain our presence on web, as people search, purchase, and later recommend to others.
‘Probability of Booking’ is a reinforcement variable. We can do a sensitivity analysis between
overall investment in advertising and the rate of return on that investment, but to ensure that
Geoff Kowalski, James Corne, Bob Edmiston & Jon Schultz
little inefficiency are explored, we need to ensure that the investment has at least a minimal
benefit. It can be debated whether exposing Air France to the internet user, whether their
cognizant or subconscious noticing Air France as an option, is worth the overall investment of
advertising via a specific channel and whether it has the potential to place Air France into minds
of travelers as a prominent airline provider.
4) How should SEM campaigns be structured? Is there a new opportunity with metasearch
companies?
Metasearch companies like Kayak are certainly the movement of the future. While
search engines are going nowhere and clearly cemented into the habits and lives of internet
users, the evolution of these sites as a platform for travel booking make them the most attractive
source of advertising. We can see what Kayak was able to do in one week for Air France,
generating nearly a quarter-million dollars of revenue, with roughly cost being 1% of revenues
generated. The legitimacy of search engines cannot be questioned; however, these sites
should now be used to maintain a presence in the mind of the consumer. Early in the case we
were told how consumer behaviors have shifted to economy classes, while people’s familiarity
with traveling has increased. A conclusion could be made that with travelers looking to remain
thrifty, the prominence of such site like Kayak will increase, as people turn to websites that are
known for providing low cost options. Thus, we may see people turning away from simple
website searched for airfare as legitimate websites that facilitate the sale of cheap tickets
continue to merge. An example of this would be Youtube, whose presence as a established
source for videos makes general web-searches for video less common. We believe that Kayak
and its competitors will likely have a similar impact for airfare tickets. As a result, the variables
we isolated earlier should be reinforced as the sensitivity metrics for deciding where the
probability of facilitating a purchase and the average return on advertising was ever worth the
initial investment in that channel. When concerning search engines, we continue to endorse
region campaigns that specialize in destination-based (city specific) searches. In essence, this
general platform will be used to facilitate general interest in traveling to the area, likely
increasing the purchase of an Air France ticket.