Social media is increasingly important for airlines to connect with travelers. A survey of 29 airlines found that most dedicate 1-10% of their marketing budget to social media and have customer service departments managing their social media presence. The top goals for airlines using social media are brand engagement, customer service, and generating revenue. Budgets and staffing for social media are expected to increase in the coming year as airlines recognize its growing impact.
1. Survey: social media
Social security
Consultancy firm SimpliFlying has studied the social media habits of 29 airlines
worldwide to see how they use these platforms. Here, its findings are revealed
A
irlines today are finding an increasing need to speak to travellers in the same language and using the same mediums that they
use in their daily lives. Social platforms have proven to be an effective tool for the modern traveller when gathering information,
sharing reviews, planning trips, gaining advice and, most importantly, making the decision to travel to a particular destination
with a particular airline. The age of the connected traveller has arrived.
Which department? Budget
About 75% of the 29 airlines surveyed adopt a cross-functional model, with customer service Over 85% of the airlines surveyed
departments emerging as the most common users of social media, compared to a year ago have specifically allocated part of their
when corporate communications roles were ranked first. It appears that while social media is marketing budgets to social media. The
used as an outlet for corporate and marketing messages, airlines are also increasingly using majority of them (over 70%) said that up
it to perform customer-related services. AirAsia, most tellingly, has decided to move all its to 10% of their marketing budget goes
customer service efforts online and has shut down its call centre operations in Singapore, towards social media. Taking into account
creating a key virtual hub for the low-cost carrier. the different sizes of marketing budgets,
this means that airlines’ social media
What social media metrics are used for budgets are spanning from a few thousand
100 dollars to over a million dollars.
86.2% 86.2% As most social media activities take place
80 72.4%
100 65.5% on the airlines’ own online assets, lower
86.2% 86.2% costs are incurred as compared with paying
60 48.3%
80 72.4%
65.5% for advertising space on external mediums.
40
60 48.3%
This helps to explain why the allocation of
20 the marketing budget dedicated to social
40
media is relatively small – the campaigns
0
20 Customer insights, Customer Performance Budgeting or New product simply cost less to run than other, more
segmentation, service or management planning strategies traditional marketing methods.
0 or targeting support (internally)
Customer insights, Customer Performance Budgeting or New product However, resources for social media do
segmentation, service or management planning strategies not only come from marketing. According
60 or targeting support 55.2%(internally)
Cross-functional roles performed by social media staff to 62% of the airlines surveyed, other
50 44.8%
departments contribute to the social media
60 55.2% 37.9%
40 budget as well.
50 44.8%
30 24.1% Corporate communications and customer
40 37.9%
20 13.8% 13.8%
service departments are the most common
30
10 24.1% contributors to social media budget, aside
20 13.8% 13.8%
from the marketing department. In fact,
0
10 Social media Marketing Customer Corporate e-commerce Other 83.3% of the airlines within the group
only service communications surveyed receive budget from the corporate
0 support
Social media Marketing Customer Corporate e-commerce Other communications department, while 61%
100 only service communications see budget contribution from the customer
83.3% support
service department.
80
100 61.1%
83.3%
60
80 44.4%
64 Low Cost & Regional Airline Business www.lowcostandregional.com − December 2012
40 61.1%
60
44.4% 16.7%
20 11.1%
2. dollars
$
26-50%
$ Survey: social media
3.4% Resources
Fewer than 10 Over 75% of airlines invest more than
man hours are
90 man hours per month on social media,
spent per month
75.8% with the majority having up to six staff
6.9%
10 to 50 man hours OVER 90 working on it. As mentioned, the budgets
for social media span a very wide range,
spent per month man hours from a few thousand dollars to over a
spent per month
13.7%
million dollars. While some airlines are
50 to 90 man hours
spent per month only starting to take off in social media, it
is apparent that others have recognised
the impact that social media has on their
businesses, pouring large investments into
their activities.
Staff numbers
Top % goals driven by social media
3 of marketing budget that
1-3 goes into social media 37.9%
ollars 4-6 17.2%
10-25%
7-9 100% 86.2% 20.6%
72.4% None
10+ 24.1%
Less than 10%
26-50%
$ Brand
engagement
Customer
service Revenue
Clearly, social media is a tool that is
relevant not only for airline marketing.
100 % of marketing budget that
86.2% 86.2%
As budget seeps in from other departments
10.3% 3.4% 6.9% goes into social media
80 72.4%
such as e-commerce, loyalty and sales,
31.3% 48.2%
65.5% 10-25%
60
airline organisations are recognising the fact 48.3%
None
that social media has now inched closer to not
Less More Have
5.8% 40 Less than than than broken
having a direct impact on the bottom line.
1 year 2 years 2 years even Unsure
Less than 10%
26-50%
R 90 20
ours 0
Customer insights, Customer Performance Budgeting or New product
er month
segmentation, service or management planning strategies
or targeting support (internally)
Social marketing budgets ranges
60 55.2%
1-3
Over five
50 44.8% million dollars 4-6 17.2%
40 37.9% 7-9 20.6%
A few thousand
10+ 24.1%
30dollars 24.1%
20 13.8% 13.8%
10$ $
0
Social media Marketing Customer Corporate e-commerce Other
only service communications
Contribution to social media budget from other departments ranges
3.4% support Social marketing budgets
Fewer than 10
1-3
100 hours are
man Over five
83.3%
spent per month
75.8% million dollars 4-6 17.2%
80
6.9% 7-9
10 to 50 man hours 61.1% OVERthousand
A few 90
dollars 10+
60
spent per month man hours 44.4%
spent per month
13.7%
40
50 to 90 man hours
$ $
spent per month 16.7%
20 11.1%
0
Corporate Customer Sales e-commerce Other
3.4%
communications service
Fewer than 10
man hours are
Top 3 goals driven by social media spent per month
75.8%
Other 6.9% 13.8%
December 2012 − www.lowcostandregional.com
100% 86.2% Lack 72.4%
of budget 10 to 50 man hours 37.9%
OVER 90 Cost & Regional Airline Business
Low 65
spent per month man hours
Insufficient allocation of resources 51.7% spent per month
13.7%
3. 50 to 90 man hours
80 72.4%
65.5% 75.8%
spent per month 6.9%
60 48.3%
10 to 50 man hours OVER 90
Survey: social media
40 spent per month man hours
spent per month
20 13.7%
50 to 90 man hours
0 spent per month
Customer insights, Customer Performance Budgeting or New product
Top 3 goals driven by social media
segmentation, service or management planning strategies
100 or targeting support (internally)
Return on investment
86.2% 86.2%
86.2%80 72.4%
While almost half of the airlines are unsure about the return on their 65.5%
60 55.2%
100% 72.4% 86.2% have mapped the 65.5% of social
social media investment, many
60
72.4% value
50 44.8% 48.3%
media performance to business goals. The top three business goals
48.3%
40 40 37.9% Top 3 goals driven by social media
that airlines are driving through social media are brand engagement,
20 30 24.1%
customer service and revenue.
Brand Customer
20 13.8% Revenue 13.8%
0 engagement service
100% 86.2% 72.4%
Customer insights, 10 Customer Performance Budgeting or New product
hts, Time
Customer to break even service or or management
segmentation,
Performance Budgeting New product planning strategies
service or or management
targeting 0 support
planning (internally)
strategies
support 10.3%
(internally) 3.4% Social media
6.9% Marketing Customer Corporate e-commerce Other
only service communications
6031.3% 55.2% 48.2% support Brand Customer
55.2% engagement service Revenue
50 100 44.8%
44.8% Less More Have not
83.3%
40 37.9%
Less than than than broken
80
37.9%
30 year
1 2 years 2 years even Unsure
61.1% 24.1% 10.3% 3.4% 6.9%
60 24.1%
20 13.8% 13.8%44.4%
31.3% 48.2%
10 40 13.8%
Less 16.7%
More Have not
0 20 11.1%
Social media Marketing Customer Corporate e-commerce Less than
Other than than broken
MarketingChallenges
Customeronly 0
Corporate service
e-commerce communications
Other
1 year 2 years 2 years even Unsure
The biggest challenge faced by airlines support
service communications Corporate
is expand their social media teams. e-commerce
Customer Sales Other
support communications service
the insufficient allocation of resources to
100 Regarding the expected impact of
83.3%
social media. social media on the airline’s operating
80
Over 70% of airlines surveyed plan
61.1% income in the next three years, half of
Other 13.8%
60
to increase their social media budget all theof budgetrespondents are unsure.
61.1% Lack airline 44.4% 37.9%
in the next year. This is almost a two-fold allocationspite of this, more airlines than
40 44.4%
Insufficient In of resources 51.7%
increase compared with a year ago,Low tolerance for risk orplanning to increase13.8% 16.7%
20
when not are failure
11.1%
resource Conclusion
16.7%
only 40% of airlines surveyedsenior management interest or supportsocial media. 13.8%
11.1% Lack of planned to allocation for It is apparent that social media is only
0
Difficulty in finding functional talent 17.2% going to become a bigger part of the
Corporate Customer Sales e-commerce Other
Customer communications
Sales service
e-commerce technologyOther
Lack of infrastructure 31.0% business agenda for airlines. They
ns Challenges faced by airlines using social media
service
Organisational structure
are recognising the ability of social
48.3%
media to impact business goals and the
Other 13.8% 0 10 20 30 40 50 60
bottom line, and that social media is
Other 13.8%
Lack of budget 37.9%
becoming more integral across more
Lack of budget 37.9%
Insufficient allocation of resources 51.7%
business functions.
allocation of resources 51.7%
13.8%
Low tolerance for risk or failure 13.8% As the social media space becomes
rance for risk or failure 13.8%
Lack of senior management interest or support 13.8% more crowded and competitive, airlines
ment interest or support 13.8%
Difficulty in finding functional talent 17.2% need to bear in mind their long-term
6.9%
finding functional talent 17.2%
Lack of technology infrastructure 31.0% business goals.
chnology infrastructure 31.0%
Organisational structure 48.3% The need for, and the effectiveness
Organisational structure 48.3% 6.9%
0 10 20 30 40 50 60 of, successful social media interaction
62.1%
0 10 20 30 40 50 60
6.9% initiatives are hinged on two crucial
factors: the rise of today’s modern
Plans to increase budget for social media next year traveller who constantly stays engaged
13.8%
3.4%
13.8% in his social networks; and the ability to
correctly identify the best platforms to
6.9%
Likely to increase but reach this audience and cultivate social
6.9% amount unknown advocates. To achieve this, airlines
Likely to increase budget need to have a firm back-end support
6.9% by less than 25%
6.9% 62.1% structure in place.
Likely to increase budget
6.9% 62.1% by 25-50%
6.9%
No increase
Likely to decrease
3.4% Source:
Unsure
3.4% All charts: Airline Social Media Outlook 2012 by
SimpliFlying
Likely to increase but
Likely to increase but amount unknown
amount unknown Likely to increase budget
66 Low Cost & Regional Airline Business www.lowcostandregional.com − December 2012
Likely to increase budget by less than 25%
by less than 25% Likely to increase budget
Likely to increase budget by 25-50%