New Zealand Marketing magazine

Miles ahead

Originally published in NZ Marketing November-December 2009, page 24

Air New Zealand flies into fresh territory

Air New Zealand entered three categories this year—retail, new media and consumer services. However, the judges felt it was the combination of marketing initiatives that merited the Morton Estate Wines Retail Award.

The Air New Zealand retail marketing team’s innovative approach to unprecedented challenges has seen Air New Zealand become a front-runner in new media marketing, with an increased revenue of $21 million, eight million additional visitors to its website, and an increase of 63,000 in online bookings. An impressive year’s work for an airline almost written off just eight years ago.

Background

In 2008, Air New Zealand faced an extraordinary set of challenges. Powered by fuel-price madness, external business costs had sky-rocketed. In November 2007, Pacific Blue’s arrival launched a cut-throat price war that continues today. In January 2008, the New Zealand recession became official, driving down domestic air travel and tourism. And then, in September, the global financial crisis hit, dramatically curtailing international tourism.

What’s new

Dramatic times called for a bold strategy. Air New Zealand had already witnessed surprising success with its online booking engine and the 2007 Grabaseat campaigns. The marketing team built on this, doubling its online spend and placing digital marketing at the heart of demand generation. Novel media vehicles, such as the Cranial Billboards campaign announcing the end of domestic check-in queues, were used to promote new, high-investment products.

The airline also experimented with electronic direct marketing of its Special Offers database, avoiding the traditional above-the-line activity. One such successful campaign included the Gotta Go 24-hour Domestic Deals.

And in March 2008, Air New Zealand became the first New Zealand airline to launch a mobile site.

Results

Air New Zealand has increased its Search budget by 500 percent year-on-year. Search continues to deliver impressive results and was generating a 90-to-one return on investment by the end of March 2009.

The Cranial Billboards campaign showed how an innovative creative idea can generate huge additional value in unpaid media coverage, with 55 percent of people hearing about the ‘casting events’ through the media, compared with just 24 percent through advertising. The campaign featured in both the ‘most read’ and ‘most emailed’ story lists on many websites in New Zealand and internationally. It featured on the BBC World website, and even the Jay Leno Show. As a result of this initiative, almost half of all travellers said they felt much more positive about Air New Zealand and over a third said they would be more likely to fly with Air New Zealand.

The Air New Zealand 2008 eDM programme delivered a significant improvement in results compared with 2007, with total campaign returns up 28 percent, total revenue clicks up nine percent, total click-throughs up 34 percent and total overall revenue up 28 percent. The eDMs resulted in bookings and a return consistent with campaigns supported with above-the-line activity and investment.

The 2008 mobile advertising investment delivered 1.8 million impressions, resulting in over 43,000 clicks.

In addition, the two-month trial removing all press advertising from the Auckland market satisfied the Air New Zealand marketers that they could deliver effective demand generation campaigns to market without using press. Two of the three campaigns achieved the same level of consumer awareness in Auckland as in Wellington (where press had been used in tandem).

The shift from ‘Hot Deals’ to Blackboard Deals, the new creative property developed as part of this project, resulted in a 90 percent increase in visits to this section of the site—still a core retail section today.

All in all, Air New Zealand’s retail marketing has been outstandingly successful, combining innovation, intelligence and flexibility rarely seen in New Zealand.

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