Airline and airport consultant SimpliFlying has compiled responses from 29 low-cost and legacy airlines into its Airline Social Media Outlook 2012.
Despite the relatively small sample size, the report reveals the continued split between those airlines that get social media, using it as a cross-platform tool that generates a measurable ROI, and those who are still working to understand just how it fits into their overall business strategy – and how to measure the return on the social media investment.
Key findings include:
- Over 75% of airlines invest more than 90 person-hours per month- and only 3.4% dedicate less than 10 hours.
- Cross-functional roles are commonplace for social media teams, with 85% employing cross-functional teams.
- Customer service emerging as the most common cross-functional role.
- Business goals of social media investment are: 1) brand engagement 2) customer service 3) revenue.
- The biggest challenge faced by airlines is the insufficient allocation of resources to social media.
- Over 70% of respondents plan to increase their social media budget in the next year, showing an increase over Simpliflying’s 2011 report.
Beyond these percentages, the story is in the details. The research shows an industry still trying to grapple with the benefits of social media, and creating an institutional structure to scale success across the organization.
A full 48% of respondents are still unsure about the ROI of their investment – and with 73% planning on allocating more resources to social in 2013, Â there’s definitely some overlap between those who have no idea what their ROI is and those planning to increase social media budgets in 2013.
So, if these marketing folks have no idea if/how they are making money on social, why are they funneling more money into that channel?
The answer lies in the metrics that the airlines report using to measure ROI: Customer insights/segmentation/targeting, Customer service, Internal performance management, and new product strategies are the most used among the majority of airlines surveyed.
This conversation regarding increased investment in the socia media channel must be tied to ROI goals, so that there is a clear indication of success or failure. In addition, airlines must pay attention to their competition’s performance on social media to ensure appropriate external benchmarking in addition to the internal performance evaluations.
SimpliFlying suggests using a three-pronged approach to measuring ROI: Revenue, Reach and Engagement.
The ability for airlines to have complete and direct access to their customers is one of the core advantages of social media, and is something that appeals greatly to the airlines.
However, this direct access goes both ways. If airlines are not as accessible to their customers on social media as their customers are to them, they stand to lose a great deal of good will.
And, in spite of the trend towards an increased investment in social media next year, the majority of respondents (51.7%) report that “insufficient allocation of resources to social media” as the primary challenge facing them in their social media efforts. Also, almost 65% of airlines facing this challenge are already devoting over 90 person-hours each month to social media.
So, let’s recap: most companies say they do not have enough resources allocated to social media, and therefore are planning to increase investment – even though the channel has yet to prove an ROI for most of these airlines, because most of them aren’t even measuring ROI in a way that confidently allows them to state what said ROI is.
The contradictions of this report confirm that the social media landscape for airlines remains complicated, to say the least. Many airlines are still trying to determine best practices for integrating the channel in a streamlined, consistent and value-generating way internally, while delivering a consistent experience for customers externally.
Forward-thinking airlines have the opportunity to try things in this volatile landscape, and perhaps that is why the majority of airlines are planning to increase investment.
Let’s hope that they see increasing resources as a license to experiment and to truly move towards a “social as unique channel” strategy specifically tailored for its specific advantages – and peculiar pitfalls.
Related posts:
About Nick Vivion
Some interesting points but I think this is in line with what we’ve been reading about social from airlines for a while. I’d be more interested in the difference between what a social media team and upper level marketing executive view the social media outlook as. I was happy to see that the organizational structure is a challenge most people are seeing since that is the most likely obstacle after making the leap into social.
What worries me is that we don’t see the words “content” or “inbound” or “search” anywhere on the infographic. Instead we see terms like budget and ROI over and over again. Let me say this: the social media outlook that focuses on ROI is grim. The problem with this focus is that you are setting yourself up to be disappointed. Much like those who still search for instant SEO satisfaction, it leads to instant frustration when you don’t see the bookings roll in.
Instead, buy in to the long-term effects and actually build an inbound marketing strategy where you create value AND bookings. Don’t wait for another airline to do it first so you can copy them.
As a content creator myself, I couldn’t agree more with that – excellent observation.
Interesting:
“even though the channel has yet to prove an ROI for most of these airlines, because most of them aren’t even measuring ROI in a way that confidently allows them to state what said ROI is.”
This was also found in the recent study on hotels by Ecole Hoteliere de Lausanne, The Distribution Challenge 2012. In essence, hotels shunning social media because of unknown ROI: http://www.tnooz.com/2012/08/10/social-media-2/beyond-social-research-shows-hotels-looking-offline-to-drive-direct-bookings/
So the same criticism lies in both reports – but identify a similar result…Do we dare ask the value of Social media or continue to raise our finger to find the wind?
This is the way I see it:
The reason why ROI is not defined is because no one has taken the time to figure out a true formula for measuring ROI – and, like any channel, this has to be done internally within each organization, as each company is different.
ROI also doesn’t just mean short-term – there is such a thing as long-term ROI, and social media would fit in this category. Organizations must commit resources over a long-term period – say 5 years – and set metrics for success from the start. Obviously these metrics can be tweaked over time; there just needs to be a full, thoughtful effort towards creating the framework for tracking ROI.
Metrics could include: customer service engagements, sentiment, loyalty program conversions, miles flown, insights gained, tracking trends through what the brand’s fans like/follow/tweet, monitoring situations before they become issues, response time for customer service/customer service waits. I’m just throwing some out there…the issue isn’t that social has no ROI – it’s working for many brands out there – it’s that some organizations don’t have it in their DNA to determine how it can work best for them.
N
Absolutely – so it becomes little different to PR – and the problem with PR is there is no direct ROI calculation, the PR industry itself cannot equate its value to sales.
But I agree with your point
Exactly – what is the ROI of a print ad, for example? At least there’s the ability to track pretty much everything online – overwhelming, sure, but so many metrics available.
N
I think in both cases, print and PR, they’ve become the victims of our obsession with attribution and analytics. The parallel story here is that we’ve realized that mass media just isn’t that effective and is still very expensive.
It’s kind of a strange response to the evolution marketing is going through right now. You have those that are starting to realize the shift away from the mass and toward individual connection and then you have those same people throw their arms up because they can’t figure out the value of a Like on their Facebook page.
It’s like Marketing Purgatory.