Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.
Qantas’ Red Planet customer and marketing analytics business is expected to turn a profit in its first year and has already helped Australian book retailer, Dymocks, improve its marketing campaign efforts, the airline has revealed.
Detailed during Qantas’ Investor Day in Sydney today, the airline said its Red Planet integrated media, analytics and research services offering was using proprietary data from the 27-year history of the Frequent Flyer Loyalty program to provide both Qantas and external customers with better targeting capabilities.
As an example of its effectiveness, the airline outlined recent work undertaken by Red Planet with Dymocks on a high-value, targeted digital marketing activity, which saw email open rates as high as 50 per cent on individual targeted campaign. This contributed to a 30 per cent lift in sales in one campaign result and overall year-on-year sales growth. The retailer also saw a 418 per cent improvement in clickthrough rates for individualised EDMs over non-targeted ones.
Work undertaken on a Qantas early bird marketing campaign to increase flight bookings using Red Planet’s customer targeting capabilities, meanwhile, saw a 28 per cent total baseline sales uplift, a 70 per cent increase in average spend per booking, generated per click, and a 51 per cent improvement on cost per acquisition per booking. The social media advertising that Red Planet deployed was also four times more effective than that of typically used social media targeting methods.
In all, individual campaign results showed 19.3 times the improvement in terms of ROI, Qantas stated.
Red Planet is a B2B marketing services business launched by Qantas last year off the back of its customer loyalty program. It is focused on three areas: Media planning, data and analytics, and research.
The company is marrying offline and online behavioural and consumer attributes data across media buying in a bid to better target advertising and marketing campaigns. During her investor day presentation, Qantas Loyalty CEO, Lesley Grant, said the business will also launch a new research panel next month featuring 100,000 members to support its customer insights efforts.
According to its half-year financial results to December 31, 2014, the Red Planet business had secured 15 bluechip clients during initial business development, across several different industries.
As an example to investors of how it is delivering more targeted advertising, Qantas pointed to two types of consumers. Consumer A was simply targeted based on upcoming travel in Australia, and served up a general hotel bookings ad for all locations. In contrast, Consumer B was recognised as being from the East Coast, and had either searched for flights to Western Australia, or was recognised in the top three deciles of the airline’s WA travel prediction model. In this instance, an ad about WA was served.
As a further boost to its data analytics expertise, Qantas acquired a 51 per cent controlling stake in analytics and actuarial consultancy, Taylor Fry, in February. At the time, Grant, said the acquisition was about growing its broader loyalty and marketing services offering through big data and data-driven customer insights capabilities. Taylor Fry will continue to run as a separate business and retain its name, branding and premises.
The Qantas Loyalty business report a 10 per cent increase in EBIT to $160 million the half-year to 31 December, 2014 as well as an increase of 400,000 members over the half, bringing its total member base to 10.5 million.
New businesses, including Red Planet, Qantas Cash, Qantas Gold, Qantas epiQure and Accumulate, contributed 6 per cent of total revenue to the loyalty business and a gross profit of $17m over the same period.
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