The Next Big Ancillary: The untapped potential of media revenue for airlines

Travel brands are full-fledged retailers, including airlines. Forrester has said it, and now the IATA has declared it, too. Ancillary revenue is expected to reach close to $100 billion in 2019, with even more growth in 2020.

There’s a massive opportunity for airlines to think more like retailers. To better serve, upsell and monetize their users like retailers. It doesn’t have to be just more of the same. In fact, it can be easier, and more lucrative.

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The untapped potential of media revenue for airlines

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Foreward from founder of affinnity, former Director of Commercial Revenue of Ryanair, and airline expert, Sinead Finn:

Airlines were the pioneers of the ancillary concept. Revenue beyond ticket sales has become vital to any airline’s bottom line, with the value of ancillaries estimated at more than 10% of total airline revenue worldwide. Technology is moving at lightning pace and has opened many new sources of revenue for airlines, who recognize that these sources are essential to compete and stay relevant. But one such area still largely untapped is media.

Advertising media is a major part of other travel brands’ core incremental revenue. If you know most visitors to your website are not going to book, why not take advantage of this opportunity by serving relevant media? This strategy has become prevalent among OTAs and meta sites. Airlines are primed to include media as part of their ancillary strategy, and would be wise to – so long as it is executed intelligently.

Airlines have typically shied away from deploying media as an ancillary. Chief among the reasons for this are concerns about compromising conversions and user experience. But with the right technology and the right use of data, those concerns can be dispelled. Airlines have a huge amount of user data. When it’s used the right way, a personalized experience can be applied to each individual site visitor. This is a million miles from indiscriminately serving ads to every user.

One data science company that is already helping airlines harness their data to serve media intelligently is <intent>. Its real-time predictions platform calculates the likelihood of each user to convert. This knowledge allows airlines to power better decisions that deliver the right user experience, and maximum revenue and loyalty. Partners in the <intent> network have seen an increase in media revenue of up to 10 times compared with traditional media – and without any negative impact to their core conversions.

For years, airlines have realized that their websites are more than just a place to buy a flight. The flight-booking ecosystem is much more complex than this. Many site visitors are dreaming, browsing, and shopping with no intention to book. But that doesn’t mean they can’t be monetized. Airlines that can realize this opportunity by serving media at the right time and in the right place will be the ones who gain most from the next big ancillary.