Strategic Synergy: Unlocking SEM's Full Potential with Data-Driven Marketing and Revenue Tactics
It’s no secret that Search Engine Marketing (SEM) is a highly crowded and competitive space. While it takes constant strategy and optimization, when implemented with the right collaboration between Digital Marketing technology and Revenue Management strategies, SEM becomes the most cost-efficient channel to drive direct sales and incremental bookings. Discover how real-time data insights and external data sources guide airlines to spend in SEM at precisely the right time and at the most advantageous price.
Full Transcript
Bertha Rubio: Can you hear me? Yes, right?
Surya Kuchibotla: Yes.
Bertha Rubio: Okay. Well, thank you everyone. First of all, thank you for joining us for the Unlocking SEMs Full Potential with Data-Driven Marketing and Revenue Tactics. This SEM session in short is, I think I mentioned it, for those of you that were here last year, this is very close to our heart because offer marketing started as purely SEM and we evolved into technology, so we're very happy here to be discussing this with our amazing panelists. We have Surya Kuchibotla, Head of e-Commerce and Distribution at Flyadeal. We have Jonathan Wan, Director of Marketing Strategy and Growth for Flair Airlines. Gerard Thomas, Loyalty Manager at Caribbean Airlines, and Caro Ruiz, Senior Manager Performance Marketing at PROS. Okay. So, as I was mentioning in the beginning, like SEM performance, making sure users get to an airline's website and book flights is essential to this type of the business.
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Bertha Rubio: Increasing profitability of those campaigns that we put in Google is essential to what we do. And I think you will see today that these three partners here, Flyadeal, Flair and Caribbean Airlines, are very different airlines in terms of not only their regions, but their goals, how they do things, seasonality. So it's very, very interesting, I hope it's interesting for you guys to see their take on this and our partnership. To kick it off, we want to start with something basic, but going back to the fact that all these airlines are very different, we want to ask them all three of you, what are some unique challenges that airlines face in SEM altogether? When we were preparing for this session, we also discussed that, some of them have different experiences, of course. Jon, for example he has had experiences in agencies in different industries. Then Surya's profile is mainly about airlines, and Gerard is also a little bit about performance. So yeah, with no further ado, maybe Surya, you want to take that one?
Surya Kuchibotla: Hi. Hi everyone. I'm Surya, I'm from Flyadeal. I don't how many people know about Flyadeal. Flyadeal is the only low-cost airline out of Saudi Arabia. So Saudi Arabia has been a bit of hotbed in terms of aviation nowadays. So, it's a bit unique for us as, over 90% of our sales are direct sales. We are the only digital direct airline in the region, and lately for the last two years, we have been diversifying a bit of indirect, so we are still 75% direct. So that puts us in a situation where SEM is one of the key channels for us. So, SEM has been evolved over a period of time, what we have been facing challenges, bringing data centralization so earlier, yeah, the thought process is SEM runs by the agency and the data sits with someone else. So the customer data, or whatever you track on the website is, with e-commerce team. So, e-commerce team doesn't share anything with the marketing team to run it efficiently. So how do you centralize the data to make sure that it fuels your SEM for superior conversion and lowering your CPA and improve the ROIs, right? So this was one of the challenge we put forth in front of the PROS table as well.
Bertha Rubio: Jon.
Jonathan Wan: Yeah. Hi everyone. So my name is, Jonathan. I'm from Flair Airlines. So in case, if you guys don't know, Flair Airlines is an ultra-low cost airline base in Canada. So for any one of you who's been to Canada, you know it's basically a duopoly. It's basically Air Canada and it's WestJet. And because of that, prices are relatively high. So our mission really here is to bring affordable travel to everyone in Canada, and we do fly to the US and the Caribbean as well. So, why SEM is so important for us is really because, it's we are also a primarily a direct channel. We want to keep costs low. So every cost that we can save, we pass that cost savings to the customer. And because of that, one of the pain points that we have in SEM is really trying to identify true incrementality, right? Because we know that there's so many variable factors in SEM, especially for an airline, competition, how well known you are, who's bidding there. And as we all learned from this morning from Dr. Michael Wu, you know, pricing is really one of the main influencing factors for revenue, right? So who's to say that maybe by dropping my airfare by a dollar, maybe I can generate more revenue versus spending on SEM, right? So we are really trying to find what the real incrementality is, and we'll share a little bit more in terms of how we are working with PROS to really identify that. Thank you.
Bertha Rubio: Gerard.
Gerard Thomas: Thanks Jon. Greetings everyone. My name is Gerard, I'm from Caribbean Airlines Loyalty Manager, which is a little bit misleading being on this panel, but for the last few years as well we have also heavily supported the digital portfolio at the airline. We are a legacy carrier. We primarily serve the Caribbean region, but we also have some North American roots. So we do barely brunt of that heavy competition from a number of the bigger carriers. So in recent years, SEM has become an important tool for us as well. When you think about marketing though, one of the things customers always ask is, for any product across industries, what's the price? And for airlines that's difficult to communicate, right? You can have flights on a route multiple times a day, multiple times a week, multiple price points. And that can change at any moment. Internal decisions, external pressure from competition, that price is always changing. So by the time you put on an ad to say, well, this is the price, it's here today, it's gone tomorrow. And for us, that's been one of the bigger challenges. And well, I think the PROS products, formerly EveryMundo, has helped us address that. And I guess we can go into that in a bit more detail.
Bertha Rubio: Yeah, yeah. No, actually, you were mentioning how SEM has become vital for your business and also how the technology, when we were preparing for this, I think you guys will agree that the tech piece and what you mentioned about prices getting updated and managing that very seamlessly has been very, very important for you guys. And with those notes and those considerations, how do you feel in general that your SEM strategy has evolved in the last two years by working with PROS?
Gerard Thomas: Yeah. I would say this strategy has evolved significantly, and that's due to different technologies that have been on offer. The one that solves the pain point of having prices available would be the FareNet/airWire product, where we are now able to dynamically display the lowest fares in our SEM ads. So that's been a big help. We saw in the keynote just now in general, that click-through rates increase by as much as 40%, and we've seen maybe not as much as 40%, but we've seen a dramatic increase in click-through rates because of those prices being added into the SEM ads. We've also seen a much higher conversion rate on our Google Ads as well. Probably 2-3% points increase over the last two years. Generally, we've been able to expand the strategy because of the airTRFX product as well. With the landing pages being easily available, we can now focus and call out different routes.
Gerard Thomas: So we now have a bigger focus on our non-brand campaigns, whereas less than 5% of that budget went to non-brand campaigns before. We're now looking at something like 40% of the budget going towards non-brand campaigns to really focus on the routes that need focusing on. We've also taken advantage of the SEM services. Those are managed services from PROS, so they've handled everything, they've optimized keywords, all of that, and in a combination of those different technologies and the services provided. You can see on this slide there, we've seen a significant increase in bookings and revenue, and what we've actually been able to do is convince stakeholders internally, specifically finance, you can give us some more money. Because the ROIs there, it's working. It's been a much easier conversation since we've had these tools at our disposal.
Bertha Rubio: Yeah, that's right. No, and thank you. That's also something that we've been discussing, that conversation that you have with internal stakeholders. I think, well, for all of us who have managed SEM or SEM conversations, we know that sometimes some departments, particularly finance, they question, do I really need to invest in SEM? And when you have a very streamlined way of managing your campaigns, your budget and achieving profitability, it's very important to have that conversation. That leads me to a very interesting story with Jon. We're going to go back in time a little bit here. We started a relationship with Flair in 2021, and then there was a hiatus for two years and now they're back. So there were a lot of internal conversations as well on Flair back then. But after us proving and showing the value of what we can bring with the technology and together as a partnership, because that's very important, being able to share goals not only for SEM, but macro goals for the company. We came back and Flair joined the good side again with PROS. So yeah, I guess the question is very straightforward. Why for you and Flair was PROS, the right partner to go back to SEM for?
Jonathan Wan: For the record, that wasn't my decision to put this relationship on a hiatus, but speaking of relationships, like most relationships, you don't really know what you got until you've lost it, right? So let me tell you what we got or what PROS has. Basically, it's really -we learn how to appreciate how the granularity that they provided to our campaigns, the really scalability that they have, and also most importantly, the expertise that they bring, particularly in travel. So let me explain a little bit, right? So, for instance, when you talk about granularity, a lot of times if you're working with a partner that might not understand travel as well, very oftentimes it's just talk about optimizing towards your goal as your ROI. But many times, when you bring these marketing metrics to your CFOs or your CCOs, they're going look back at you and say that, why were you selling a route that could sell itself anyway? Right? So really being able to be super granular and to be able to scale that granularity using things like airBLDR or airWire to show that dynamic pricing is so very important. And apart from that, also that expertise, knowing what to test, knowing how we can incorporate certain things like inventory, which is so crucial to us. I think that's super important that we really miss from the PROS team, and that's why we are back.
Bertha Rubio: No, thanks for that. I think you hit a really key point with routes inventory, understanding what's happening. As we were saying, beyond just the Google Ads platform, what's happening at the airline, we have ways to integrate, and Carolina will explain this later, we have ways to integrate revenue management data. Again, for those of you who were here last year, you were able to see how we started doing that to understand where to bid. This year, we're doing something with SEO because we've seen that this is also a very important component when it comes to where to bid. And I guess that's my next question for you, Jon, because we're having a conversation about that as we speak. What's the... Who is a search user, someone who searches for a given route in Google, they can interact with an organic result as we see in the bottom, or they can interact with a paid result. What do you think are the key advantages of integrating this for the overall profitability strategy?
Jonathan Wan: Yeah. Because clearly, most of us are marketers here. We know that synergistic relationship between SEO and SEM, but I guess a lot of our questions really is how much can SEO really kind of help to cover and where can we better maximize the value and cost optimization in terms of SEM? Because if you can get free traffic and if you can get free conversions, why not? Why are we spending like on that? So what we've done here is to really run a test with the PROS team right now, and we are also putting a little bit more rigor to the test. It's not just mere observation, but the very talented team here is using causal impact analysis to really kind of try to map out the different relationships, based on different control periods to try and forecast, what the differences are. Right.
Jonathan Wan: So basically, what we've done there is to really take a lot of factors into consideration, like your seasonality, the different routes that we are running, the different campaign types that we have, because each one of these have different variables that impacts your SEO score. And one of the main benefits of us really running airTRFX is that we saw that, for certain routes where maybe we were one of the only airlines or one of the few airlines that flies that route, our airTRFX pages do rank pretty high from an SEO perspective, and therefore we learned that, okay, there are certain routes or certain parameters, if a certain type of route has all these different variables, we can turn that off potentially, because SEO can get that, but there are certain opportunities, expanded markets for example, that SEO cannot cover because we don't have that rank, we don't have that authority, and that's where SEM is going to come in. So that's an ongoing test that we're still working with the PROS team on.
Bertha Rubio: Yes, and I mean, I'll pause there and turn to Caro, but this is a summary of what we're doing this year. One for big priorities, for those of you that attended this same session last year, it was about RM. It was about looking at what are the routes that really need help, let's say, because there might be a goal that for a route that we just need to push it regardless. So we need to be there both organically and in paid search, but now let's look at those SEO results and understand the mix of all the elements and determine if we really need to push a certain route or not. We also have FareNet in the mix, meaning do we get searches in our own websites for that route? Maybe no one is searching for that route. Then this is another, I was going say issue, not issue, but then this is another type of strategy that we need. Maybe we need awareness for that route. So yeah, I guess, Caro, you can give us an overview of what's happening?
Carolina Ruiz: Yeah. So basically, what we want to achieve is how we are more efficient with the budget that everyone is giving us for us to make decisions based on different data sources. So, as we know, I guess everyone that starts doing SEM, they only start with the Google Ads piece, and that's what everyone has. And what we wanted to keep adding is other data sources or other data points in order to make better decisions. So the first one that we integrated, it was FareNet because anyways, FareNet is our script that we use for all our products. So we were already taking a step forward with having not only Google Ads, but also FareNet. That gives us demand, right? How much we are having a volume for a certain route in our website.
Carol Ruiz: Then we went with RM, like Bertha was saying. So now we can add this value of how much we need to sell in order to fill those planes in both parts. Like if we have load factor high, we maybe can reduce the investment that we have on those campaigns because to Jon's point, maybe they're selling by themselves. But on the other hand, if we have a low load factor, what we can do is push the routes and help revenue management to start selling more.
Carol Ruiz: And now that we have been asking from a lot of customers is this kind of test. Actually, do I have to be bidding for certain routes or they don't have competition that I'm the owner? So now what we want to do is add another layer to that, it's the SEO ranking. So because the customers that have airTRFX, we can capture that information and see their rankings that they are having on SEO. And we can make the decision. If you are ranking on position one or two, you can save those dollars for the actual routes that you are struggling. So yeah, I'm going back to Surya. So Surya, I just want to ask you like, how your team has been working with us with PROS in order to personalize SEM's strategy with certain audiences or customers?
Surya Kuchibotla: So as I said, right, so the entire e-commerce ecosystem is a combination of multiple systems, right? So there are multiple partners. So example, Insider is our customer engagement platform. And PROS is our process managing the SEM. So in a simple way, what does the customer engagement platform does? Is it collects a lot of data. The guy who is sitting there is a geek who segments the audiences, who predicts it and tries to create cohorts and other things. But where do you use it? Is just on your communication channels, maybe for an email or an app push or a web push. So we figured out how do we bring the ecosystem together and leverage these geeky stuff onto SEM, right? So we took these audiences and gave it to ad channels and see what happens, right? So immediately we saw the results and to give a wild guess, 2023, almost 20% of our revenue comes from these audiences and these kinds of things we do. So that means efficiently utilizing the ecosystem of the entire digital commerce, right? It is no more a standalone digital marketing and e-commerce.
Surya Kuchibotla: It is a centralized digital commerce stack where there should be a huge interoperability of what data has been collected and how you are actually monetizing that for improving the value realization on individual channels, right? So it can be SEM on Google, it can be on Microsoft, it can be on anywhere. So if you have a high degree of interoperability, it inherently brings value to the organization. This is a classic example what we have done and moving ahead, right? So we are a strong believer that airline can't do everything, right? It's a foolishness that, yeah, we can do everything. It's not. This is where we bring in partners, where they bring in additional ingredients for superior value realization. And PROS is in a very innovative and open mindset. So it's not an agency, right? Agency is always apprehensive to try something new. They are always in a cocoon fashion, right? So they just know the traditional media planning. They'll just give you an Excel sheet and numbers and they will monitor, no. So PROS comes with a different approach where they unify the entire ecosystem around the client and monetize it well. So this is a classic example how we brought in our customer engagement platform partner and PROS together and realize value for Flyadeal.
Carol Ruiz: Yeah. And I think what we have been doing a lot with the three of you, but a lot more with Flyadeal is testing. So we always like to try in a sample and see, of course, if it works and then we can scale that part. And that's what we did with Insider that actually we were trying to see if we are bringing that value to the customer and if it's working, we keep that strategy as an always-on strategy. So I think in terms of experimentation, we are always be on top of what are the betas, what are the new features that are in Microsoft of Google Ads, because as we know, this business is changing every time. Actually, today was the Google Live also event when they announced all the new features for this year. So I'm pretty sure there's going be a lot of AI as well there, and we have to be on top of that and try to adapt what the airlines need with all these new features that we need to put on Google Ads and Microsoft. So Surya, can you give us an example of one of the experiments that we have been doing with you?
Surya Kuchibotla: Yeah. So fundamentally, we are a big fan of experiments, right? So that's why in my record, somebody was asking me, why don't you write Flyadeal Airlines instead you put flyadeal.com? Because flyadeal.com is so closer to our heart. In 2023, we have run almost like 520 experiments for B2C, so that's the way how we experiment crazily. So we brought that craziness onto SEM and said that, okay, can we run a PMax experiment with bringing in partners, again SEM, right? So there's PROS, there's Flyadeal and Google. So we brought in together, there's a biweekly catch-up, and we run the PMax experiment with PROS.
Surya Kuchibotla: And it delivered incremental results for us. And beyond that, we're also saying that, okay, we don't, as I said, everything is not right when you just look at it. So we went to Google and said that, okay, what we have done together, is it right? So Google came back to us and said that, yeah, you're doing right. And to comment PROS, Flyadeal has the lowest unit cost on SEM in the entire GCC and Middle East. So that shows how efficient the partnership is and the technology robustness in terms of delivering value for the airline.
Carol Ruiz: Yeah. And I guess we already talk about the challenges, like all these experience that we have been working with the three airlines. So I just want to wrap this up with, how do you envision SEM evolving as part of the broader omni-channel marketing strategy for airlines? And what steps for the airlines you want to follow in order to stay agile and responsive? Maybe we can keep with you, Surya.
Surya Kuchibotla: Okay.
[laughter]
Surya Kuchibotla: So as I said, moving forward, where SEM or the entire omni-channel marketing should head towards is, is heading towards is, it's not siloed. So it's not digital marketing, it is digital commerce, right? So that means you might have a kick-ass marketing message, great creative, but you don't have any intelligence to market it. Right? There is no data, there is no audience, maybe down the lane one year, down the lane two years, down the lane, you don't have any cookies, right? So there is 100% reliance on your primary data, but you don't know where your data sits. This is a huge challenge, right? So decentralized ecosystem has been the norm for years, but moving forward, centralized digital commerce ecosystem is a need for an airline's existence or any digital commerce organization's existence.
Surya Kuchibotla: For that, it's a bit difficult for organizations to adapt because the organizational thinking is not there, because they think that, okay, digital marketing is marketing, e-commerce is you do the geeky stuff, which is all your customer data and other things. So if they don't talk to each other, then there is no use, right? And then you centralize your technical stack, that means all your advertising products, all your customer engagement products, your customer data platforms, has to be centralized enough to talk to each other and bring value, right? So that centralization of the system has to be there and bringing the right resource to manage it will be the bottom tier. So this is a big challenge in terms of how to address it. At Flyadeal, we were lucky enough because we started with that structure. So for us, marketing does brand, we do performance. So performance, the CDP, CRO function, and product management sits within the same department. So we don't have that challenge, but eventually other airlines will face this challenge where they need to resolve this.
Carol Ruiz: Jon?
Jonathan Wan: That was such a comprehensive answer. I’ve got to figure out a way to say the same thing in different words. So here goes. No. I think everything that Surya said was super relevant, even down to the organizational structure. That's something that we're trying to do as well to really share that data and to understand that these don't exist in a silo. I would say that maybe we'll look at it in different contexts, right? That really, SEM or even SEO, these are just one touchpoint, right? We need to look at the greater context and to understand that this is one context from a marketing channel. We need to understand when do they interact with us on this channel and how do they continue that journey? Which other touchpoints will follow after that? That's why it's so important to really look beyond just SEM. And this is where I'll also give a little bit of a plug to the next session after the break where it talks and goes deeper into SEO because we really do see that super deep connection there.
Jonathan Wan: And apart from that also is definitely try to kind of see it from the customer's perspective as well, right? SEM, a lot of times we see this as a performance-driven channel and therefore oftentimes we see this as like a more boring channel. It's not much for brand awareness, but really so many customers' first exposure maybe to your brand could be your search ad, right? And that's a great opportunity for branding as well. So therefore that connection between brand and e-commerce is so important. So I agree with that 100%
Carol Ruiz: Gerard?
Gerard Thomas: You all have left me with the toughest job to close after two very comprehensive responses there. You know, when I heard Surya and Jon talking about what they were doing yesterday, I wanted to switch my answer to say just do what they're doing. I think, you know, the level of experimentation is good. I think it's very important. And just to echo what Surya said in terms of the open-mindedness of the PROS team, our team is always coming in and saying, we want to try this experiment. They're very proactive that way. And I keep saying, if one says budget, just go ahead and do it because I'm very much open to it. The data integration that they've mentioned is super relevant. I just want to think about this question a little bit more tactically though looking at SEM as part of the social media funnel.
Gerard Thomas: You know, we're familiar with one funnel might be you send an email, you get summary marketing on Matter, and then someone goes to Google, and SEM closes the deal. What I would say is that the challenge I mentioned earlier about fares not being available, that exists across all marketing mediums. And what we're looking to do with the team now is to implement FareWire, airWire, in those different touch points in Matter and email. So there's a more seamless customer experience where people are seeing the price across different channels that they're browsing. I think that's going to be important to bring it all together and help drive that click-through in terms of that familiarity and awareness throughout the entire funnel.
Carol Ruiz: Great. No, I think, thank you very much for coming today, for the audience. And I think we touched a lot of good points about how the ecosystem of offering marketing works together. And also in terms of how it's coming, I guess, yeah, a lot of keeping the data in one place, as Surya was saying, like we can have that visibility and we can use it across all the different channels, be consistent, as Gerard mentioned. And I guess, Jon, on your point, keep that search user as a unique user and see how they behave around the SEO and SEM.