Industry Trends : Business Intel & Social Media - Integrated Marketing in Travel

Ai Guest Editorial by: Rodolfo Elizondo, Partner & EVP of Strategy and Consulting, CrossMedia Digital Marketing
and former VP, Ecommerce and Distribution, Mexicana Airlines

Nowadays, managers, consultants and social media experts tend to want to give credibility to social media strategies and investments. As we all know, marketing and PR resources are scarce and most times, except maybe for “branding” strategies in which brand equity would be the long term result, investments need to have bottom line impact.

I the most recent article from Ai regarding jet Blue and Tam’s success in social media, the fear of trying to link social media success and airline metrics comes true. The premise of the article is that twitter followers and airline traffic and departures metrics measure success of social media strategies for airlines.

If the premise of the article is to "measure penetration" of social media as defined by the author, I guess it does its job. It "creates" sets of data and just assumes that twitter dictates social media success and that “number of followers” paired with some airline data is a good base for defining success. Nothing wrong so far, right? Actually not. This rationale is conceptually flawed given that the variables that are being considered have no true relevance to an airline’s success in social media.

For some time now, it is common knowledge that Social media success is not measured by the number of followers a brand has. That would be like comparing a Display Advertising Campaign in which millions of impressions are served but the click-through rate is extremely low. In simpler terms, you measure the success of the campaigns by click through rates or conversion or sales. But you would never try to establish a theory on which success is measured by the numbers of impressions or the number of sites that are showing these impressions. Well, in terms of Social Media, this is what the author is trying to establish and where I find the basic flaw of his argument.

How do we really know if a social media effort is being successful? We basically have to know if there a tangible or intangible result from the interaction or participation of the brand within the social media space.

Let me present a few guidelines that will shed some light on the subject.

You first have to establish that social media is not solely twitter and that twitter is just one element of social media. In the article, there is no other element of social media being considered that gives enough credibility in that these two airlines are doing a good job in that space. I'm not saying that jetBlue and TAM, which fare well in the study, are not doing a good job with social media. I just don't believe that this conclusion may be drawn from the study done.  

Second, you must measure social media success based on the actual interaction between a brand and its consumers which in this case are the consumers that are interacting with the brand through social media (blogs, twitter, facebook, specialized forums, collaboration practices, etc...)

Last, If you want to proxy social media success through twitter, you have to go deeper with "listening" and "engagement" tools and software that gives you some insight on the level of chatter around your airline and what the airline is doing about it. Is the airline interacting with the passengers and responding to that chatter? Is the airline pushing twitter specific promotions to gain more followers? Is the brand creating twitter specific promotions that actually drive sales and conversion rates? How many of these promotions does the airline create in a given month or timeframe? If these promotions have a call to action, how many users are actually participating in these actions? Is the airline engaging with the customers when problems arise? Is the airline solving problems and answering questions through social media?

These are just some of the relevant questions that might drive an inference to social media success.

The airline industry is no different from other industries.  Airlines are constantly trying to identify ways to measure the “success” of digital media.  Social media consultants frequently use soft examples constructed around customer engagement metrics to demonstrate that success is not necessarily a data driven activity.

But for airlines that operate in a world of narrow margins and depend on real numbers like CASM and RASM to operate, a deeper insight into social media is required.  Ancillary revenues, the newest revenue stream for many airlines, will remain as a vital part of the product mix because there are hard numbers to show for it, including the recent quarterly profits earned by all major U.S. airlines except one.  Social media experts shake their heads as they point to negative comments in the social media milieu, indicating that very few outside the airline industry likes these fees.  Airline managers are right to ignore these comments, since they have a business to run.  If everyone else has to deal with change (embrace it even!), why not airline passengers?

At IAG, we have assembled some data that may offer airlines one metric by which to measure social media success.  Due to limits on data sources, we are sticking with Twitter and US DoT. Here’s the first table. 

The green cells show airlines that are exploiting Twitter very well in relation to traffic and departures.  For example, jetBlue has nearly 8 passengers per departure and about one in thirteen of its passengers uses Twitter.  Clearly this is a two edge sword – the airline can instantly communicate with a massive amount of its customer base when needed.  But this same customer base can communicate with the airline just as quickly.  Fortunately jetBlue has managed to develop a working relationship with its customers and the continued growth of Twitter use among its customer base is testimony to this.  We would call this a success.  Looking at Southwest and Virgin America, note that these airlines are in really close communication with their customers.

The light yellow cells are the average players and the dark cells are airlines that are failing in their social media interactions. After all, Twitter is a free tool. Overall, the U.S. industry average is that one in ~150 passengers is using Twitter.  That would typically be one person on any narrow body flight.

Looking at the international airline market, we run into some difficulties with the data.  So using slightly different measures with which to compare Twitter followers, we created the following table.

We used the US based Twitter accounts and used DoT traffic data for the data.  We tried to use fleet size as a guide, but this was not overly helpful.  Here we see that TAM of Brazil is doing a remarkable job of being in touch with nearly 10% of its customers.  TAM is in a class with jetBlue and these two are in a class by themselves as compared with other airlines.  Just like in the first table, the results are extremely varied among different airlines.

We have moved into a time where service among airlines is less about what happens in-flight and more about how the airline communicates with its customers.  Consequently we would say the ratio of passengers to Twitter should be seriously considered as a benchmark to measure the ability to serve customers.  It should come as no surprise that among the US airlines, jetBlue, Southwest and Virgin America are brand favorites.  These companies have developed the means to communicate with customers and therefore can adjust expectations to ensure customers are at least informed when there are deals or weather-related delays.

Clearly, even though social media is tough to measure, there are data points that one can define exactly.  Twitter is rapidly growing around the world and consequently is increasingly used by airlines as a communications channel.  We think this channel should be exploited by not only every airline – it should be used by every company concerned with listening and communicating with its customers.