July 15th, 2008

Airlines Stamping Ads Onto Boarding Passes

By Michael Bush
Advertising Age

Messages Will Include Coupons, Local Restaurant Picks

In an effort to generate additional revenue, six major U.S. air carriers have decided to cover their boarding passes with ads—at least giving disgruntled travelers something to look at as they wait out delays and rifle through their wallets for cash to pay baggage fees.

American, Continental, Delta, Northwest, United and US Airways today announced, in partnership with Omaha, Neb.-based start-up Sojern, the company behind the program, that they would begin filling the white space on boarding passes travelers print out at home with targeted coupons, ads, dining recommendations and weather information.

Delta is first in line
Delta Air Lines launches its effort today in Las Vegas and will expand the program Thursday to more than 300 cities nationwide. The other airlines will launch their efforts in the coming months.

Consumers will have the option of printing their boarding passes without the ads. In time, participating travelers will be able to save their preferences for future trips, allowing Sojern and the airlines to customize their boarding passes, but there was no specific time frame given for that.

With ads on tray tables, overhead bins, ticket jackets and baggage carousels, travelers are assailed with ads from the beginning of their trips right up to the very end. By putting ads in one of the few remaining white spaces, airlines risk angering an already annoyed and ad-overdosed group of people.

‘Careful balance’
Josh Weiss, managing director of Delta.com, told reporters on a conference call that the airline was not worried about upsetting passengers by putting ads in a place they essentially can’t avoid. “It’s a very careful balance between generating revenue and giving customers a good experience,” he said. “Travelers are able to control the experience, and that’s the best path for both customers and our revenue.”

Sojern plans to keep signing up partners and to take the program international. Duane Worth, senior VP-airline relations, said, “We’re going to get everybody into this operation and anticipate being in Europe by late summer talking to those airlines about this.”

Marketers taking part include Bahama Breeze, NBC Universal, Crocs, Cirque du Soleil, Omaha Steaks and Borders.

Carey Rademacher, co-founder and director of airline accounts, Sojern, said a total of five ads can be placed on the boarding passes. The airlines will be given space to promote frequent-flyer programs or credit cards, she said, noting that she sees this as a benefit to travelers as well as to the airlines and marketers.

Offering useful info
“I don’t think it’s annoying advertising; I think it’s just the opposite and something that will interest and entice them and be a value-add to them,” she said. “For business travelers, it saves them work and time in trying to find a place to eat. And for leisure travelers, it saves them time from having to go to all those different websites when trying to plan activities around a trip.”

For cash-strapped airlines, the venture represents a new potential revenue stream. “Forty percent of check-ins are done on our website,” said Al Lenza, VP-distribution and e-commerce, Northwest. “And with right segmentation and targeting without being intrusive, this will be responsible for many millions of dollars for each airline.”

The participating airlines bought minority stakes in Sojern and will be splitting the ad revenue with the start-up. Sojern executives would not discuss how the revenue would be divided.

“It is a healthy partnership between airlines and Sojern,” said Gordon Whitten, CEO, Sojern. “The airlines share in the revenue from the service across the board.”

Ready for takeoff
Mr. Whitten said he intends for the company to grow in the near future. “We have had numerous discussions with other airlines,” he said. “And we fully anticipate that there will be a myriad of additional airlines joining us in the coming months.”

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