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Blog: Increasing airport advertising revenues in the digital age

As a place where technology, commerce, engineering, global connectivity, human achievement and ambition all combine in a manner seldom found elsewhere, there can be few better examples than the modern international airport, writes Charles Hugill.

With this position comes a set of challenges.  

If one asks: “Are there opportunities to be explored resulting from this combination, which will both benefit the passenger and generate valuable income for airports?” The answer would be a resounding ‘Yes’. 

Are airports demonstrating that they are capable of grasping this particular nettle? The answer is not so clear. Should/could they be doing more? Almost certainly.

The symbiotic relationship between airports and their airline customers is plain for all to see, nowhere more so than from a purely functional perspective.

The international airport’s primary function is to enable the safe movement of passengers on and off aircraft, into or out of a country in order to start or finish a journey.  

Dixons

The commercial imperative all airports face (i.e. to supplement their aviation income stream with revenues from other sources) is widely understood. In order to succeed at this, each airport needs a strong ‘brand’, clearly evident at all potential touch points of the passenger experience. 

Any airport looking to generate non-aviation income without a brand identity will find it more difficult to do so.

Defining the challenge

By the time the passenger reaches the airport there will have been several interactions with the selected airline. Each one, be it online check-in, meal choice, seat selection etc, is an opportunity for the airline to reinforce its relationship with the passenger. 

This continues until arrival at the final destination. Far fewer such instances will have arisen for the airport to do the same.

It is here that the divide between airlines and airports becomes self-evident. 

Typically, airline brands are well known, visible, recognisable, and, even for new carriers, established quickly in the public’s consciousness. 

The same cannot be said for airports.   

Schppy2

Furthermore, perks such as airline Business Class lounges do not, as Jan C Laufs’ Moodie Report article states: “represent a profitable business to the airport”. Instead, they stifle the wider choices of products and services available elsewhere.

In recognition of this, some airports have started to eliminate dedicated airline lounges, replacing them with common use or third party-operated lounges. 

Airport brands tend to be harder to identify and less well executed. There are some exceptions. Amsterdam Schiphol (with its ‘See, Buy, Fly’ outlets), Singapore Changi and Dubai have worked hard to create strong brand identities, derived partly from a real sense of place.  

A recent straw poll conducted informally amongst a randomly selected group of regular flyers confirmed that most see themselves as customers of the airline rather than the airport.  

Granted, when things go wrong at the airport, today’s frequent flyer is likely to behave as the customer of both airline and airport, whichever suits his/her needs most!

But, by and large, passengers consider themselves as airline customers first and behave accordingly. 

And therein lies the challenge. How best (a) to develop the airport brand in order (b) to be in a position to monetise the relationship with the passenger thereby (c) attracting advertisers.

Defining the opportunity 

Today’s international airport has to be as good a place as any to rise to this challenge.  Assuming – for the moment – that an airport has gone some way to establishing its brand identity earlier in the transactional processes with the passenger, so that he/she is at least aware of its existence in its own right, the focus here is on the fundamentals.

The five key pieces of this particular jigsaw puzzle are:

  • Time spent at the airport – anything from one to three hours, including dwell time.
  • Multiple touchpoints – for departing passengers any time prior to boarding, and on arrival, any time after disembarkation.
  • Choice of activities – shopping, eating, gifting, even gambling, all under one roof.
  • Propensity to spend –passenger willingness to buy.

    LHR

Few airports – Schiphol, Changi and Dubai notwithstanding – have shown themselves able to fit these five elements together.

However, the communication possibilities provided by the airport digital infrastructure and passenger’s own devices are almost limitless.

Defining the solution

Finnish airport operator, Finavia, recently announced a development at Helsinki which goes beyond the basic apps many airports have already created.  

Using sensors throughout the terminal, the 60%-70% of passengers with Wi-Fi enabled mobile phone transmitters, can be tracked as they progress from car parks right through to departure gates. 

Bottlenecks in passenger flows can thus be identified and airport retailers can push location-based content to passenger smartphones, thereby increasing the accuracy of their marketing.

 It is unclear as to whether the airport is charging its retailers for facilitating this improved passenger experience which should set tills humming. If not, then it is a lost opportunity.

A slightly more traditional – although no less enterprising – venture has been launched by Qantas and advertising concessionaire oOh! Media in Australia. 

The scheme is called QView and offers Qantas Club Lounge users an interactive digital content solution, across a screen network provided by oOh! Media. The content shown is shaped by passenger viewing selections on their own personal devices. 

Full marks to both companies for bringing this to market. 

But, in this case, I cannot help wondering if it is something perhaps Sydney Airport and other airports on the Qantas route map should have pioneered themselves, across the rest of their real estate, and generated some much-needed income in the process.

Again, there should be some commercial benefit for the host airports on whose premises these developments are taking place. 

Other airline-led examples exist, Iberia’s Project Agora at Madrid Barajas’ Terminal 4 springs to mind.

The common denominator in all three examples is that they rely on the digital hook provided by passengers’ own communication devices.

It would seem that harnessing this technology, which is almost universally used amongst air passengers, is the obvious way to complete the puzzle, joining up  audience, dwell time, touchpoints, choice and inclination.

Screen
The revenue opportunity is clear and if these developments have missed it, they represent only a partial solution.  

The complete solution lies in creating a framework out of a combination of airport infrastructure (digital signage, Wi-Fi connectivity, tracking systems), monetising its value, and making it attractive and ‘buyable’ to advertisers, retailers and other commercial entities looking to target the passenger. 

The content must be managed in an organised fashion. The framework needs to function across the whole airport estate – international, domestic, arrivals, departures, airside and landside.  

It should form a standard part of what the airport provides its partners, tenants and concessionaires within its commercial agreements. 

Take all these elements, combined with an airport brand, and you have the beginnings of something viable and of potential interest to advertisers and sponsors wishing to engage with the passenger audience in an intelligent way.  

New developments of this type do take effort to implement, but there is a first mover advantage, one which, with careful handling, will generate income.

 

• Charles Hugill has worked continuously in the Out of Home and airport advertising sectors for over 30 years, as both a media owner, and as a planner/buyer of international campaigns. He now runs his own independent consultancy, CHMedia Associates, as well as Airport Partners International (API), a leading international representative network for airport advertising companies based overseas.

 

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