Published on March 12, 2014
+ AIR FRANCE SEARCH ADVERTISING CASE ANALYSIS Hauwaert Laurent, Henderson Aaron, Schnoll Marc, Travaglia Melissa, Zhao Chao
+ Publisher Strategy Objectives: Evaluate the past and plan for the future (strategic recommendation) Existing Metrics CPC, CTR, CV, Net revenue, ROI, Probability of Booking (CTR*CV), Average Revenue Per Booking New Metrics Net Revenue Per Booking: to measure how much NET profits generated with every one ticket sold out. This might be more efficient than Revenue Per Booking to reflect the differences. Key observations 1. Kayak has the highest ROI, high Net Revenue Per Booking and CTR. 2. Yahoo has the highest Net Revenue Per Booking, high ROI, and high Probability of booking. 3. MSN has high Net Revenue Per Booking and high Probability of booking. 4. Although Google US has the highest Net Revenue, the net profits generated by each booking is not that high (low Net Revenue Per Booking). Also, the Probability of booking is low, which may results from a low CV.
+ Publisher Strategy Publisher Name CPC CTR CV Net Revenue ROI Net Revenue Per Booking Revenue/bookin g Cost Per Booking Probability of booking Average Revenue Per Booking Sum of Total Cost Google - Global 1.66 4.03% 1.09% 808,603 669% 1015 1166 152 0.04407% 1166.31 120947 Google - US 1.84 4.98% 0.81% 1,391,841 394% 898 1126 228 0.04020% 1126.12 353641 MSN - Global 1.08 8.01% 1.15% 133,364 1097% 1034 1128 94 0.09216% 1128.09 12160 MSN - US 1.49 6.35% 1.30% 165,451 1028% 1182 1297 115 0.08229% 1296.78 16098 Overture - Global 1.06 0.34% 0.61% 365,789 569% 983 1156 173 0.00208% 1156.14 64296 Overture - US 1.19 0.70% 0.24% 205,457 145% 711 1202 491 0.00169% 1202.19 141976 Yahoo - US 1.01 4.89% 1.45% 836,091 1810% 1263 1333 70 0.07093% 1332.76 46198 Grand Total 1.47 1.22% 0.77% 3,906,597 517% 992 1184 192 0.00941% 1183.53 755316 Kayak (one week) 1.26 8.00% (article) N.A. 230,127 6451% 1106 1124 17 N.A. 1123.53 3,567
+ Publisher Strategy Google-Global Google-US MSN-Global MSN-US Overture-Global Overture-US Yahoo-US Kayak -0.02000% 0.00000% 0.02000% 0.04000% 0.06000% 0.08000% 0.10000% 0.12000% 0 200 400 600 800 1000 1200 1400 1600 Probabilityofbooking Net Revenue Per Booking Quadrant4 Quadrant2 Quadrant3 Quadrant1 Formulate Publisher Strategy Note: Bubble size= current funding
+ Publisher Strategy Publisher strategy by publisher type Quadrant Probability of booking Net Revenue Per Booking Publisher Type Publisher Strategy 1 High Low Excellent at transforming visitors into buyers yet low net profits generated with each ticket sold No publishers in this quadrant 2 High High Excellent at generating sales and high net profits with each ticket sold Fund more 3 Low High Poor at attracting visitors to make a purchase, high net profits per ticket Improve the relevancy of ads (keywords, copy, landing page, etc.) so as to increase CTR and CV 4 Low Low Poor at generating sales, low net profits per ticket Fund less (Overture) or adjust the campaign tactics (Google)
+ From Publisher to Keyword Strategy Comparison between Google US & MSN US Net Revenue Per Booking: Google < MSN (32%) Need to analyze: Rev/booking & Cost/booking Rev/booking: Google < MSN (15%) Cost/booking: Google > MSN (50%) How? Decrease CPC: By improving QS Decrease Clicks generated by KW with low ROI (e.g. “flights to France” ROI of 92%) and increase Clicks of KW with high ROI Probability of Booking: Google < MSN (105%) CTR: Google < MSN (28%) CV: Google < MSN (61%) Since: ↑ CTR ↑ QS ↓ CPC Need to focus on lowering Cost/booking of Google Focus on improving QS of Google. The issue is that Google is using a lot of Generic KW (see later) and generates a lot of clicks. Thus If Air France primary goal is to increase ROA, then Air France should limit generic KW to improve CTR and thus QS. If Air France focuses more on brand awareness, then nothing should be changed in the KW strategy.
+ Keyword Strategy - analysis Total Cost of Negative ROA KW: $337,258.97 As an illustration the table (lower-left corner) shows how ROA would rocket if all negative KW were deinvested. Although, one should be careful since some KW might bring brand awareness necessary to generate sales. Again as an illustration, let’s suppose that we reinvest only 1/3 of all negative ROA KW (because some are interesting to keep because they generate a lot of impressions and/or clicks). By reinvesting those at ROA’s according to the following scheme of possible scenarios Recommendation: Decide for benchmark of a minimum amount of impressions and clicks to compensate for a Negative ROA. Since, substantial profits could be derived from that. Problem Solution Gain made by reinvesting in KW with positive ROI Total money reinvested Pessimistic Realistic Optimistic Google - Global 12.877 19.315 38.631 77.261 Google - US 65.712 98.568 197.136 394.272 MSN - Global 1.564 2.346 4.693 9.385 MSN - US 4.590 6.884 13.769 27.537 Overture - Global 7.881 11.822 23.644 47.287 Overture - US 19.094 28.640 57.281 114.561 Yahoo - US 3.762 5.643 11.286 22.571 Grand Total 115.479 173.219 346.438 692.876 Pessimistic 150% Realistic 300% Optimistic 600% Publisher Current ROA ROA w/o negative ROA KW Google - Global 669% 1016% Google - US 394% 986% MSN - Global 1097% 1849% MSN - US 1028% 1477% Overture - Global 569% 937% Overture - US 145% 284% Yahoo - US 1810% 2427% Kayak 6451% 994%
+ Keyword Strategy - analysis Keyword ad group analysis Air France Brand Group and Air France Website group have the highest net revenue; Keyword campaigns analysis: Characteristics of different campaigns: “Air France Brands and French Destinations”: Lot of generic KW (tickets, budget, tourism, flight) either combined with each other or with French cities, Broad matching. Google Global, MSN Globlal and MSN US “Air France” Global campaign”: A lot of French cities, Big European cities (e.g. Capitals), Generic KW, broad matching. Google Global “Air France Branded”: Containing “Air France” using both Broad and Advanced matching. Yahoo US and Google US “Business Class”: Specific KW (e.g. business class, luxury) combined with more generic KW (e.g. flight, seat, ticket), both broad and advanced matching. Google US, Yahoo US, MSN US “French destinations”: French cities with Generic KW, broad matching, Google US, Yahoo US “Geotargeted Cities”: French & other European cities, often with generic KW, Either use of Broad or Advanced matching. Google US and Yahoo US Google Yearlong 2006: European cities & countries with generic KW, Broad matching, Google US Outstide Western Europe: Flights to India with generic KW, broad matching, Google US Paris & France terms: Mainly “Paris” as KW but also “France” mixed with generic KW, Broad matching, Google US and Yahoo US “Unassigned”: Lot of French and other European cities with generic KW, Standard and Advanced matching, Overture US and Overture Global Western Europe Destinations: Lot of different European cities, mixed with generic KW, Broad matching, Google US and Yahoo US. Air France Website $1,290,204 Air France Brand $1,797,429
+ Logic: We made use of Pivot Tables to sort the data according to Keyword campaigns to have a clearer picture. Which we then couple with our the analysis we made of the characteristics of each campaign. Impressions: Overture “unassigned kw” generate 84% of all impressions with for $206272 very good for brand awareness; “Google Yearlong”, “Air France global” and “Air France branded” (broad & advanced matching) respectively account for 4%,4% and 3% of impressions. Thus, Branded keywords and more generic-broad matched kw induce more impressions. “Air France Branded” KW generate respectively 23% and 39% of all Impressions of Google-US and Yahoo US; Air France brand & French destinations KW are key for generating MSN-US impressions (97%). Air France Global campaign generates 85% of all impressions of Google-US Clicks: Unassigned KW of overture generate 35% of all clicks; Air France branded KW generate 28% of all clicks; Air France brand & French destinations KW generate 11% of all clicks Good for brand awareness Google-US generates 74% of all its clicks with Air France branded keywords. In the meantime, Geo Targeted KW only account for 3% of all Clicks on Google- US. ROI: The average ROI for Geo Targeted keyword campaigns was of 186% for Google US and of -14% for Yahoo US. In comparison Air France Branded KW, French destinations and Air France Global campaign yields ROI’s of between 650% and 2797%. Recommendation: 1) Keep Overture funding if interested in keeping a lot of impressions to foster Brand Awareness. If Focus is only on ROA, consider decreasing Overture’s budget 2) Increase KW using Air France, generic keywords and broad matching to get more clicks (as Overture and Google-US did, which did generate a lot of clicks) 3) Stop investing in Geo Targeted Keywords and rather increase the budget of Air France branded keywords of Kayak (see publisher strategy). 4) But keep the following Geo Targeting for Google US New-YORK, Houston, DC, Chicago because their ROA's above 250%. And keep the following Geo Targeting for Yahoo US in: Chicago and DC. Keyword Strategy - analysis
+ Bidding Strategy Observations: The 5-10 Bid Strategy is the costliest and least profitable bidding strategy. Air France should discontinue this strategy The Position 1-2 Target has the highest probability of booking and highest ROA and lowest click charges and low cost per booking; best use of Air Frances search engine dollars. Air France should pursue those two The Position 1-3 strategy brought in the most revenue and most bookings and has the second highest probability of booking and a high ROA. Continue to use this strategy Position Sum of Net Revenue Sales Sum of Clicks Sum of Total Cost Sum of Impressions Sum of Click Charges None 2648983 2401 206956 241490 18808845 241490 Pos 3-6 545 48 12020 45966 252206 45966 Position 1 -2 Target 50108 53 4920 5296 35472 5296 Position 1- 3 406890 365 36114 58697 1496864 58697 Position 1-2 Target 313853 291 32076 23761 1998123 23761 Position 1-4 Bid Strategy 281389 337 105582 128886 14956069 128886 Position 2-5 Bid Strategy 9839 29 6006 11568 321475 11569 Position 5-10 Bid Strategy -46776 125 76388 172973 3414841 172973 Postiion 1-4 Bid Strategy 241765 290 32787 66677 584779 66677 Grand Total 3906597 3939 512849 755316 41868674 755316
+ Bidding Strategy Logic of the Ranking: We gave a ranking (low-medium-high) to Probability of booking, ROA and CPC for each possible bidding strategy. This ranking was based on quartiles: low being under the 1st quartile, medium being inside the 2nd and 3rd quartile and High being above the 4th quartile (the opposite holding for CPC, since we would prefer low CPC’s). Recommendations: Low Probability and Low CPC Improve search or site side copy Low Probabilty and High CPC Discontinue funding or remove High Probability and High CPC Adjust strategy High Probability and Low CPC Continue funding Bidding Strategy Probability of Booking ROA CPC Strategy None Low High Low Improve search or site side copy Pos 3-6 Medium Low High Adjust strategy Position 1 -2 Target High High Low Continue funding Position 1- 3 Medium Medium Medium Adjust strategy Position 1-2 Target Medium High Low Continue funding Position 1-4 Bid Strategy Low Low Low Improve search or site side copy Position 2-5 Bid Strategy Low Low Medium Discontinue Funding Position 5-10 Bid Strategy Low Low Medium Discontinue Funding Postiion 1-4 Bid Strategy Medium Medium Medium Adjust strategy
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