Airport Focus talks to Managing Director of Wildstone Airports, Paula Oliver, about the media and advertising strategy airports need to adopt to help with their overall retail offering. Having worked for JCDecaux Airport and other media agents for over 20 years, Paula is an expert in airport and digital advertising and responsible for the digital development at many international airports.
What are the unique selling features and advantages that can attract media owners and advertisers to an airport?
Airports provide an incredibly targeted media audience with locational planning and personalisation enhancing and refining the opportunity to reach individuals who consume very little media and advertising elsewhere. An airport is a total ecosystem in itself and with the introduction of beacons, wifi sensors, apps and digital technology, there is the opportunity to very specifically target an advertiser’s key audience profile. You know exactly where the customer is going next and this is a very powerful tool for any advertiser. For the media owner, advertising in airports commands a premium value rate card and attracts some of the world’s top brands. What’s not to like?
Additionally, unlike Out of Home advertising (OOH) generally, the top global airports provide a narrowcast environment, attracting a high demographic, extensive early adopters and affluent business people and travellers. This is an attractive, exclusive audience, so for the right advertiser, the airport audience is an essential part to their advertising mix. Think Accenture who sponsor Fast Track in Heathrow Terminal 5, or HSBC who sponsor jet bridges globally.
Does the airport sector have any particular disadvantages in this respect?
Unlike rail and other retail environments, airports do not benefit from a regularly repeating audience. On average, most airport passengers do not travel more than 4-5 times a year and this detracts from short term commitments which reach less of the audience and encourages longer term advertising, particularly when looking to reach a particular smaller segment of the audience, for example C-Suite or top earners.
Also, unless a brand has specifically planned for airports, much of their OOH budget will be based on individual broadcast campaigns on a short term basis. Domestic campaign spend is difficult to attract to airports; as a large percentage of traffic in any airport is leaving the country.
These nuances can mean that brands and planning agencies will not commit, or find airport advertising too complicated and wasteful to buy. This has been a key challenge for airports over the last 30 years and as a result, 80% of advertising income often comes from only 20% of clients, with long term commitments being the main drivers for income.
Growing advertising revenues from a small pool of committed brands has been traditionally very challenging. An ACI report in 2014 asked ACI members airports to confirm airport advertising growth since 2007 against other areas of non-aero income and this demonstrated that airport advertising had remained predominately flat in most markets, (allowing for RPI) when compared to Duty Free revenues which had increased by 40%.
This dynamic is changing as flexible digital advertising screens are introduced enabling targeting to individual locations at specific times. Sophisticated programmatic advertising platforms are being developed which segment the audience efficiently through external feeds such as flight information, ensuring only the brand’s key audience is reached, maximising the effectiveness of a brand’s budget. So imagine you are a London theatre show wanting to increase your ticket sales, you will in the future be able to promote specifically to every passenger globally flying to the UK, by reaching all London bound passengers at the specific gate for little more than one hour. This really opens up the opportunities for brands to efficiently target the airport audience.
An airport owner recently told me that he viewed his facility as just a shopping centre with a runway attached.
Is it a mistake for airports to try and match the high street retail approach and offerings? Yes, I believe it is. Shopping centres provide a broadcast audience, a leisure and retail destination in itself. Airports increasingly around the globe are offering retail experiences which surpass many shopping centres, appealing to the enhanced demographic.
There are a number of reasons why airport advertising should be viewed completely differently. The International dynamic cannot be ignored. Major international airports rarely have more than 50-60% passengers originating from the locality and therefore the advertising and retail offer should be tailored accordingly. The overall demographic is generally higher than that of the shopping centre close to the airport and this again determines the offer.
Also, airport passengers generally have a higher propensity to spend than the high street audience. There is the Duty Free and Tax Free dynamic, continuous pricing differentiation with the high street, which ensures that the airport visitor spends, especially when going away on leisure. The trick is to also get the affluent business passengers to spend as they arrive just on time and rush through the airport. This is one of the reasons why on-line and CIP lounge retail options are becoming more important and this in turn will drive new advertising opportunities. In summary, the reason for the customer being in the space is different, the mentality is different and a different approach is required to maximise customer spend and grab attention.
What do they need to do differently in order to compete better in your view?
Advertising needs to be dynamically integrated into the fabric of airport infrastructure and this rarely happens effectively. Airport authorities and investors appoint architects to develop a masterplan for retail, wayfinding and passenger flows with limited thought given to how advertising holistically fits into the overall experience. It is often an afterthought with little attention or funding given to the outcome. As a key communication channel, it is crucial that design-led, iconic advertising interrelates with airport design ethics and the strategic vision, connecting vividly with overall ambitions to communicate smartly and effectively.
Airports are working far harder to understand their customer better and this enhanced approach to retail and the benefits this will bring to advertising will create a paradigm shift within a few short years. Through anonymous tracking of customer devices in the airport, connectivity between those on the Airport App, retail spend patterns and on-line activity, a collated picture is developed of each customer’s movements and their preferences which can feed into an algorithm based advertising platform. Whilst airport advertising is unlikely to be “one to one” in the future, airport advertising screens will increasingly become a call to action, an initial conversation between the brand and the targeted individual with the opportunity to continue the relationship on-line or via mobile. A truly successful campaign will be measured through real ROI as the advertising consumer is converted into a spending client and can be tracked as such.
Far more direct engagement with a brand’s product is essential. The product which is picked up, touched, tried is the product that is bought, and retail and advertising is likely to be far more about showcasing and online fulfillment in the future than about floor space and masses of stock.
Would you say a lot of airports are quite advanced in their use of technology in the marketing and advertising space or do they have a lot of catching up to do?
There is a rush to invest and develop ground breaking advertising in airports globally. Over 40% of all advertising will be digital by 2020, however futureproofing and serious consideration as to the use of different technologies is sometimes a knowledge set which is lacking. This then can lead to a disjointed media offer and revenues which do not met expectations. Integration with the airport ecosystem is essential for advertising to become truly part of the customer experience. Digital screens are generally being used in a very linear way and consequently can end up becoming very impressive wallpaper, without imparting any relevance to the customer.
Airports generate an awful lot of passenger data through their business process systems and retail concessions. Are they making the most of this information for advertising and what could they do differently?
It is essential for airports to put the advertising pillars in place at the earliest junctures to achieve great things in years to come. Advertisers and marketers need to tap into the extensive data which airports collect through EPOS, Sensors and Apps to develop a holistic strategy to advertising, both as an income generator and also a crucial part of integrated communication. Too often data still remains in silos which has limited customer focused or commercial benefit. There are challenges in terms of data sharing and privacy, however ultimately, if the airport is able to achieve enhancements for the customer which provide crucial information, personalised offers and a very special and connected journey through the airport, everyone will be happy.