Air France

In an airline industry, companies had been suffered with low returns, bankruptcies and ever-fluctuating demand. Air France has been preventing the situation by developed strategies such as a progressive operating lease, short- or medium term lease of substantial part of fleets to reduce capacity and cost. Since 2006, the traffic of air travel has been growing rapidly, which created a competitive landscape in the airline industry and also the emergence of e-commerce as a direct to consumer sales.

Air France took those opportunities by providing online services on direct website, but after a while aggregators and metasearchers who offer beyond services appeared, which make the direct website had difficulty to compete. Media Contact, hired by Air France, has been developing strategy to optimize performance on Search Engine Marketing campaign to increase net revenue gained through online channel and return on investment spending, as well as efficiency of driving visitors to site and convert them to consumers through the conversion funnel at the minimum cost.

The Media Contact uses sponsored search of six search engines, global- and US-based, and advertises on metasearchers and aggregators as well. As shown in the publisher performance table below, from exhibit 6, Google US earns highest impressions, mostly from branded keywords, and volume of bookings, also at highest cost but the conversion rate is relatively low. On the other hand, MSN has lowest investment but it turned out that MSN give the outstanding conversion rate than any others.

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Click-Through-Rate is relatively low, The Media Contact should arrange strategy that can lower cost such as modifying bid strategy, keyword selection, and match type. The funding for these publishers should also be lowered. In the upper-left quadrant shows publishers who have lowest conversion rate at highest cost, no publisher is in this category and should not be. Overture Global and US are in the third quadrant that demonstrates publishers with low probability of booking.

Publishers in this quadrant must be converted to the forth quadrant by considering keyword selection, ease of completing transaction, and complication of website and applications, for example. The highest probability of producing a booking come from the forth quadrant where Yahoo US, MSN Global, and MSN US rely on. This quadrant not only gives Air France high probability of bookings but also at the lowest cost. The Media Contact should focus on this quadrant by increasing funding for these three publishers from budget deducted from the first quadrant.

In order to gain visitors from aggregators, Air France should consider about creating two- or three-in-one service by offering hotels, car rental or promotional packages. This strategy could increase sales occurred in direct website and reduce cost of advertising on aggregators website. Air France could also earn revenue from advertising of hotels and car rental services. By optimizing sponsored search and implementing strategies, Cost-Per-Click will be reduced and number of bookings will be higher. The Media Contact can deliver higher net revenue and Return on Investment to Air France.

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