The Inadvia Insights Series: Innovation in a crisis – it’s time for inflight advertising to truly take off

“In past crises, companies that invested in innovation delivered superior growth and performance postcrisis. Organizations that maintained their innovation focus through the 2009 financial crisis, for example, emerged stronger, outperforming the market average by more than 30 percent and continuing to deliver accelerated growth over the subsequent three to five years.” (Source: McKinsey & company: Innovation in Crisis: Why it is more critical than ever, June 2020)

Who am I to argue with McKinsey?

It is no secret that the aviation industry has been hit hard by the global pandemic that has been taking hold across the globe. The industry saw a downturn in traffic to the tune of 91% in May (source: IATA) and still faces uncertainty as to the speed and level of its recovery. It is also true that it can be difficult to focus on innovation while there are seemingly more immediate issues to face.

Speaking as an advertising technology company built for the inflight environment, having dramatically fewer flights per day is far from positive in the short term. For all the negative economic impacts COVID-19 has had upon the industry however, we are also beginning to witness one of the potentially positive business outcomes: a greater embrace of digital transformation to guide the industry through these unprecedented times. Now, more than ever, the industry is looking to technology to ensure a hygienic inflight environment and drive much-needed efficiencies and ancillary revenues.

A new, smarter inflight advertising offering is one such key ancillary revenue stream.

Inflight advertising today

Inflight advertising has failed to keep up with the times, with challenges centering around upload times, lack of targeting and reporting, and its purely manual booking and fulfilment processes. All of these have become a barrier to entry for advertisers in the space, and that was pre-COVID. Yes, it is a great environment reaching a wonderful audience, but to all intents and purposes it has been an analogue medium operating in a wider world that has undergone sustained digital transformation.

Change is on the horizon

Which brings me to McKinsey again: “Crises are like adrenaline for innovation, causing barriers that once took years to overcome to evaporate in a matter of days. Entrenched orthodoxies on “the way things are done” are replaced with “the new way we do things” almost overnight.”

Airlines face incredible difficulties over the coming months and years, and that is adding increased pressure to their suppliers. But those offering new business models and best-in-class solutions will help carriers rebound quicker and come back stronger.

Luckily, that is exactly what we are seeing within the industry. We have seen multiple vendors reach out to us to understand what they need to do to make their systems fit-for-purpose as an aviation advertising proposition in 2020 and beyond. In the current situation where inflight magazines are being taken off aircraft, and the duty-free trolley is unable to operate, many predict that digital services delivered to the passenger’s own device will fill the void. But we must move away from the silos that exist today and ensure the solutions we create are fully integrated to make the most of both the passenger experience and the commercial opportunity.

What advertisers need

This proactive approach is heartening. In our recent Attitudes to Inflight Media Survey 2020, which was undertaken when COVID-19 was still largely confined to China, we found that 76% of media decision-makers we spoke to say inflight travellers are a desirable audience. Surprising then, that only 25% of those decision makers have ever, even once in their career, invested in inflight advertising.

Now, as a result of the global pandemic that has ensued, ad spend has dropped 9% on average across Europe (Source: World Economic Forum, June 2020). With less to spend in the short term, it is clear to see that advertisers require greater understanding of their ROI than ever before.

Traditional media such as TV and Out of Home have been hit hardest. Meanwhile, digital video continues to grow (eMarketer predicts 15% growth in the UK in 2020 despite the pandemic), and programmatic specialists are proving more robust than direct publishers in the crisis (source: IAB, Mar-Jun 2020).

Combining improved targeting, measurement and programmatic fulfilment will ensure many more advertisers will invest in inflight – most of whom will have never considered it before on their media plans. That increased demand will drive yield and fill rates far beyond the current situation.

The opportunity for first-party data 

The opportunity is not just the modernisation of inflight advertising, it is also about the growing importance of data. With Google joining the other major browsers in announcing the death of the third-party cookie earlier this year, there is a huge opportunity in inflight to create a closed-loop ad vertical relying on its own first-party data. Partners who have rich and reliable first-party data will become much sought after for ad-targeting by the advertising industry in the new cookie-less world. This offers up an incredible opportunity for the industry, but one which needs to be grasped with urgency. It will not be long before an external entrant challenges inflight media, in the way the duopoly have done to publishers on the ground.

Scale is key

If, as an industry, we can combine this improved media proposition and data play with significant scale, then more and more advertising budgets will be unlocked. The opportunity is huge.

At Inadvia, we are on our way to doing this with forward-thinking partners. We truly believe that inflight can be a powerful standalone force within the media world, and realise the multi-billion dollar potential that the likes of the London School of Economics have predicted it to achieve over the upcoming decade.

Now that would be innovation in a time of crisis.

This article was originally published on LinkedIn here.