Challenge:
We were engaged to help with a newly launched airline called Swoop. The airline industry is incredibly competitive with many carriers continuously adjusting prices and promotions, frequent changes of creative in response to competitive activity, a complex regulatory environment, and competition from not just other airlines but also travel aggregators with large budgets such as Expedia, Flighthub, and Travelocity. Not only was the competitive landscape challenging, but as a new entrant to the market, Swoop had very low brand awareness and as an Ultra Low-Cost Carrier, they were working with extremely thin margins. This meant that the customer acquisition strategy had to be focused on the most efficient means to maximize revenue.
Strategy:
We started by implementing ecommerce tracking, ensuring that we could track performance of all campaigns right through to revenue. With accurate tracking in place, we were then able to optimize campaigns toward ROAS (return on ad spend) rather than a Cost Per Acquisition (CPA), which better captured the differences in ticket values and average order values, which we found varied greatly.
Then, we broke out campaigns into a more optimizable structure and optimized towards ROAS, driving media efficiency. We implemented new channels to increase online presence and developed a custom system for dynamically swapping out route pricing in ads, in order to leverage their main competitive advantage (lower prices) while working within the tight regulatory markets in the US and Canada.
Operating only in select markets in both Canada and the US, we had to be careful when defining our geographic targets. To do so, we looked at sales data to understand the maximum distance from airports that travelers would be willing to drive for a great deal on a flight and established separate geographic target areas for each market.
Result:
Through the implementation of full e-commerce tracking, leveraging a number of technologies, and developing a strong understanding of their target markets, we were able to drive significant media efficiency. In fact, Swoop was able to measure a 19% increase in online sales driven by a 71% ROAS increase in media efficiency in just the first six months.
