Air France‘s Case You have just been hired by Rob Griffin to help him better understand the effectiveness of Air France’s online sponsored search efforts. He has requested answers to the following questions:
Please calculate the effectiveness of each of Air France’s marketing campaigns across the 7 different publishers categories (3 points).
|Publishers||Avg. Cost per clicks||Tot. Clicks||Media Costs||Tot. Bookings||Tot. Revenue||Net Revenue||Net Rev per Cost||Avg. of Sales per Click %||Avg. of Trans. Conv. %||Yahoo-US|
|MSN-Global||2. 15||11,217||$12,160||129||$145,524||$133,364||11||1. 15%||113%|
|MSN-US||2. 87||10,808||$16,098||140||$181,550||$165,451||10||1. 30%||73%|
|Google-Global||2. 22||72,895||$120,947||797||$929,550||$808,603||7||1. 09%||43%|
|Google-US||2. 38||192,109||$353,641||1,550||$1,745,482||$1,391,841||4||0. 81%||41%|
|Overture-Global||0. 8||60,899||$64,296||372||$430,085||$365,789||6||0. 61%||24%|
|Overture-US||0. 76||119,323||$141,976||289||$347,433||$205,457||1||0. 24%||9%|
|Grand Total||1. 9||512,849||$755,316||3,939||$4,661,913||$3,906,597||5||0. 77%||57%|
Based on the data above, we can see that: a. Yahoo-US leads for the most effective marketing campaign among 7 publishers based on the total net revenue per cost, Yahoo-US got the biggest value, 18, it means that every $1 that Air France spent they will receive $18 from their investment. The average of transaction conversion and average of sales per click of Yahoo-US also leads amongst the other publishers. b. Google-US got the biggest of total net revenue from the marketing campaign, almost US$1. million, and also had the biggest total booking number.
But our opinion is, Google US did not do the marketing very effective, the money for the media costs that they spent are the biggest amongst the other publishers, and the total net revenue per cost ratio is only 4. c. Overture-US is the most ineffective in doing Air France marketing campaign, even though the average costs per click of Overture-US is the lowest, but the total clicks is the highest, it ranked the second highest amongst the other publishers, so it makes media cost of Overture-US igh and the total booking from the clicks is not in a good value, so we think that Overture-US have to improve their its campaign of Air France. 2. Should Media Contacts recommend the same exact strategy for Air France across all search engine publishers? Or would it be more effective to tailor each publisher strategy to maximize ROI (Please provide support for your answer) (3 points) . From our analysis with the data provided by DoubleClick. Inc. , publishers have their own strong point to focus on in order to maximize their net revenue and tailor strategy for each publisher will be the best option.
Below, we will explain publisher’s performance in term of the following points:
Campaign All of the publishers earn lot of revenues from their “Air France Branded” campaign with modest click charges on average of $1. 82 and maximum clicks of 106,153 from Google-US, while “Business Class” campaign is not really productive to gain revenue as publishers lose money on this campaign. Click charges for “Business Class” campaign is ranged between $3. 76 (Yahoo-US) and $5. 39 (MSN-US) per click. Geo Targeted local search campaign has potential in using Google-US service.
For example, In New York City, Google-US can get total of 3,167 clicks with 1. 39% transaction conversion rate. Compare with “Paris & France Term” campaign, it only gets 0. 35% transaction conversion rate with 29,039 clicks. In Contrast, Yahoo revenue for its Geo Target campaign is very low and loses money in 10 out of 13 cities in US.
Keyword Keywords that consist of “Air France” word are convincingly gaining more revenues than other keywords across all publishers. Google-US earns from the “Air France brand”, but losing money on bidding European cities keyword like “Lyon”, “Bordeaux”, and“Rome”.
The use of phrase keywords also contributes to number of bookings like the phrase “DC to France Sale” which have the highest conversion rate compare to others. Different with Google, Yahoo has moderately earned more income from the words of city such as Florence, Paris and Rome. This may be resulted from the difference search methods that Yahoo mainly focuses on web contents keywords. Overture more likely to gain revenue in words that relate with cities in eastern part of Europe like Athens, Tunis, Amman. Overture loses money on broad unspecific words.
Thus, Overture should focus on the exact keywords which have connection with flight and travel to eastern part of Europe. MSN-US and MSN-Global costs mainly derived from phrase keywords except “Air France Brand” keywords. For example, phrase keyword of “travel to France” generates moderate number of 346 clicks, but none of the clicks succeed in sales conversion. Another example is “flights to Paris”, other publishers succeed in booking of positive net revenue with the keywords, while MSN-US and MSN-Global lose money. * Broad and focus keyword Broad keyword usually gains many clicks from the campaigns.
By analyzing publishers’ performance data, we concluded that Yahoo-US, Overture-Global, MSN-US and MSN-Global are publishers that have strength in broad campaign keywords. Number of clicks for broad keywords represents minimum 90% of total clicks and generates higher transaction conversion rate than focus keywords. Google-US and Google-Global also have a huge clicks gained from broad keyword campaigns on the average of 74% and gain more revenues than focus keywords, but the transaction conversion rate is lower than that of their campaign have.
Although broad keywords gain many clicks for its ads, it doesn’t guarantee the increase of sales. 3. Based on your analyses, who do you feel are the most appropriate target customers upon whom Air France should focus their acquisition efforts (again, please provide clear justification for your answer) (2 points) Due to several reason related to market modification and AirFrance partnership, we can support that Business customer segment would be the most important target market.
Indeed, because of the development of new low fare companies, the value proposition among the competition changed and gave another offer to the consumers. Ryanair by providing cheap price ticket attracted an important part of the price sensitive customers who use to travel with previous oligopolistic offer with higher price. The business customers are less sensitive to the price, because of less changing (except in case of travelling budget restriction), contracts and promotion with big companies. Ryanair, Irish company, was focused on intern European flight, taking care of 26 different destinations.
According to Exhibit1, AirFrance first market was Europe thenit was followed by the North American Market. The mix of price sensitive loss market and intern European market loss pushed AirFrance to work more on its flight between Europe and other continent (Transcontinental flights). International and Transcontinental travelers are highly interesting target market. Therefore it is also important to specify this segment. Indeed, it should be the higher class, service and security sensitive customers.
AirFrance provides a premium service compared to the competition. Based on our analysis, there is no or few people outside of USA (Google Global: Europe, Asia, Africa) making AirFrance generating net income for European keywords (Greece, Florence, Paris). The American providers, Yahoo-US and Google-US, are the biggest revenue generator compared to Global (Yahoo-Global and Google-Global), by the same time Appendix 1 shows that American customers are not price sensitive and will generate less profits for “cheap“ keywords.
The partnership with L’Avion for business travelers between Paris and Newark (NewYork) was a logical result of the AirFrance marketing situation. Through customer base, AirFrance kept a stable business customer amount and lost a significant part of its price sensitive customers who finally shifted to other low-fareairlines.
|Publisher Name||Avg. Cost per clicks2||Tot. Clicks||Media Costs||Tot. Bookings||Tot. Revenue||Tot. Net Revenue||Tot. Net Rev per Cost|
|Google - US||$2. 45||10479||$24,104. 59||33||$25,287||$1,182. 06||0|
|Google - Global||$2. 43||3465||$7,052. 0||20||$19,180||$12,127. 35||2|
|Overture - Global||$0. 72||1892||$1,538. 15||10||$15,207||$13,669. 20||9|
|Yahoo - US||$2. 33||1474||$3,786. 91||7||$7,057||$3,269. 79||1|
|Overture - US||$0. 78||6883||$6,774. 70||9||$10,230||$3,455. 05||1|
|MSN - Global||$3. 46||50||$174. 87||0||$0||-$174. 87||(1)|
|MSN - US||$4. 25||77||$252. 69||0||$0||-$252. 69||(1)|
|Grand Total||$2. 09||24320||$43,684. 81||79||$76,961||$33,275. 89||1|
Based on your answer to Question 3, what B2B acquisition partners would your team recommend that Air France consider? 2 points) Based on our group analysis there are 3 types of B2B acquisition partners that Air France should consider doing partnership with which are Yahoo-US, L’Avion. First partner, Yahoo-US, based on our group analysis from question 1 out result shows that Yahoo-US has the highest return on investment (ROI), the lowest cost per click and the lowest cost per booking. This is a good choice for Air France to engage in partnership in order to get the best ROI while at the same time minimize their costs in ads.
Not only that Air France can get a lot of ROI back but they also have a high possibility in getting more sales from the click of users. Therefore our group recommended Yahoo-US for Air France to consider. Second partner, L’Avion, as of our target customer from question number three our group focus on business travelers. L’Avion only provides business-class service between Paris International Airport and Newark International Airport. This can be link to with Ryanair partnership because as our group mentions before that Ryanair has not yet a flight to USA where Air France is offering this route.
By partnering with each other, both Air France and Ryanair can enjoy their profit from these group of business travelers which Ryanair already have a lot of loyalty customer with them. For example, if the customer from Ryanair wants to fly to United State they can use Air France service where profits can be shared between these two Airlines. Therefore, as our group has mention above, we believed that by partnership with these B2B business would eventually increase benefit and contributes to gain good market growth with good profit toward Air France and its partnership companies.
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