Airline Advertising Bureau Inflight Television Advertising and The New IFE Technology Presented by John Caldwell Managing Director

Airline Advertising Bureau Questions to Answer… 1.Where is the value in inflight TV? 2.What do advertisers want from inflight television? 3.What revenue can an airline reasonably expect from inflight TV? 4.How might new IFE technology impact the flow of advertising revenue.

Airline Advertising Bureau The Value of Inflight TV… 1.Upscale –High income, influence, education, etc. 2.High usage of key products and services –Business decision makers, mobile executives –Frequent travelers, high tech users 3.Unique –Looking for a new way to stand out

Airline Advertising Bureau Viewers with Highest Income

Airline Advertising Bureau A Concentration of Consumers

Airline Advertising Bureau Concentration of Top Management

Airline Advertising Bureau What Advertisers Want… 1.Passengers to see and hear their commercials. 2.Credible numbers and research. 3.Airlines that understand the needs of advertisers. 4.A critical mass of viewers. 5.Competitive prices.

Airline Advertising Bureau Ad Revenue Earned Monthly 1.Given –Single-channel overhead system –Airline has 1 million passengers on TV flights –Advertising sold at $10 cpm passengers on board –Five commercials sold 2.Results –$10,000 per advertiser –$50,000 in total sales per month 3.Less agency & sales costs –Airline receives $36,000

Airline Advertising Bureau Impact of Multiple Channel IFE 1.Same number of passengers, but now fragmented –Rather than one channel, there are now 6, 10, 24, etc. $36,000  10 channels = $3,600 per channel Additional competition diminishes the advertisers’ chance to be seen. 2.To re-create the advertising impact we must “road block” –Must place ad on each channel, if possible

Airline Advertising Bureau Licensing Fees In Flight Terrestrial TV vs. Inflight TV –Inflight rights usually not bundled with broadcast and cable rights – SAG, AFTRA, Amer. Fed of Musicians consider inflight TV a “theatrical / industrial” venue –Additional fees required

Airline Advertising Bureau Global vs. Regional Advertising 1.Most airlines are global service providers. 2.Advertising is seldom global in scope –Budgets restrict –Customs and language restrict –Distribution restricts

Airline Advertising Bureau Summary 1.The inflight TV audience is valuable. 2.Advertisers want a reliable audience and advertising professionals. 3.Don’t assume advertising will pay for it. 4.Understand why advertising works for one airline and not another. 5.Understand the fickle nature of advertising.