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Wed 13 Jan 2010 04:00 AM

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Still red hot

Creating ads with wow factor proved a recession-busting move for Virgin Atlantic explains the upbeat airline's sales and marketing director, Paul Dickinson.

Still red hot
Still red hot
Virgin’s Sir Richard Branson proves he’s still red hot too.


Creating ads with wow factor proved a recession-busting move for Virgin Atlantic explains the upbeat airline's sales and marketing director, Paul Dickinson.

Where are few, if any airlines that can say they have immune to the global economic crisis and Virgin Atlantic is no exception. The UK long-haul carrier took quick steps to address the issue early last year - reducing capacity by 13% by dropping unprofitable routes and cutting staffing levels by 13% to mirror that strategic move.

But unlike many travel firms, whether airlines, hotels or tour operators, Virgin, which is renowned for its ‘out-there' cheeky and influential ad campaigns, did not cut back on sales and marketing spend.

In fact, it embarked on a 25th anniversary advertising extravaganza that involved creating a TV advert that set the airline back £800,000 to produce.

This '25 years and still red hot' initiative was a roaring success, picked up by websites, bloggers and cyber geeks worldwide, while it was parodied and posted online by avid fans, from groups of bus drivers to Essex girls.

The result of this investment was a brand presence stronger than ever, the airline's Paul Dickinson tells Gemma Greenwood.

What was your strategy towards sales and marketing during the recession?

We didn't cut resources and we didn't cut spend and it has really paid back for us when others were cutting back. The UK is our number one market and so we always invest the most in that market. But with no new routes or aircraft, the question was what to market, so the story was to make more of our 25th birthday and decided to run the campaign all year.

We challenged the agency to come up with a good concept and it came back with the ‘25 years and still red hot' campaign. We produced a TV advert at the cost of £800,000 involving 200 extras, a massive crew and turned Ascot into an airport terminal. The ad was based in 1984 and the day or our first flight. It ran three times throughout 2009. We took a big risk in spending that money.

So how did you measure its success?

We did ad tracking and used econometrics - a special agency tracks data and calculates the effect of adverts on your revenue and tell you your return on investment. We discovered that our ROI was £15 for every £1 spent on this campaign. By using this system we also found that our very glamourous adverts for Premium Economy didn't work as well - the ROI was just £5 for every for every £1 spent - and that's mainly because of the limited size of the Premium Economy cabin.

With the ‘still red hot' campaign we recorded more than 700,000 searches on Google and more than 100,000 hits on our website. When the TV campaign was aired the number of people searching for the Virgin name increased by 500% and as a result, our rating as an airline for business and leisure is the highest it's ever been.

How does this now position you against your competitors coming into 2010?

Coming out of 2009 into 2010, both in the UK and US, our brand has never been stronger. Virgin Atlantic is perceived in the best light ever, particularly as some of our competitors haven't maybe had the most effective advertising and marketing this year and others haven't had the best press relations.

At the same time, the on-board experiences of some have been disappointing. During the past 12 months our crew have carried on professionally and have not lowered their standards or become grumpy.

What's your sales and marketing strategy for next year?

The challenge for 2010 is to maintain and grow. The big news is we are changing the way we do our marketing - we are globalising the creative work whereas in the past, each territory had its own budget and agency. From now on, all creative work will be done out of the UK with our ad agency (Y&R) and each marketing team will have access to an online system where they can adapt the creative to the local market. From March 1 we will have consistent ads around the world.

What's your advertising theme for 2010?

The theme is a secret, but it's going to be very confident - we are never pessimistic and never shy and try to be amusing. We think it will work in all of our markets.

Your marketing in Dubai has been low- key in 2009 so what's the plan for 2010?

We always invest proportionately to the scale of opportunity so smaller markets like Dubai get a relative percentage of spend. For 2010 it will depend on how big we see the potential - if we think the biggest opportunity will be inbound to Dubai then we will spend less in Dubai and more in the UK and vice versa.

Dubai does have potential however, if we did go to double daily flights (currently daily) - and this probably won't happen for the next two years - it would probably be on the back of inbound to Dubai. We are seeing an increase in the number of hotel rooms and average rates are coming down so suddenly we can offer fantastic packages for affordable prices. This opens up massive new markets.

What is your distribution strategy?

About 30% of business is direct, which has increased from around 18% five years ago. Bookings on the phone remain unchanged and that's about 10-12% of our business.

What's changed is the number of people booking on the website, however, our strategy is to work with all channels to market.

We are not so big that we can dictate how people book. We work closely with the big agents and TMCs plus there are some big leisure players out there - Expedia, Trailfinders, Thomas Cook, TUI etc.

Web penetration is low in Dubai and our strategy is to work with all agents to support their growth and objectives, but at the same time, ensure our website is up to date.

We don't pay commission in many markets anymore, but of course, we have overrides and marketing agreements.

To view virgin's '25 years still red hot' campaign visit
www.Virginatlanticstillredhot.com

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