Embattled Cruise Line Carnival Launches Media Agency Review
Carnival has begun a media agency review as it attempts to reinvigorate its business after more than a year of mishaps.
The review comes about year-and-a-half after a Carnival-owned Costa Cruise ship crashed on the coast of Italy and killed 32 people. Following that incident was the company's notorious "poop cruise," in which an engine fire stranded the flagship Carnival line's Triumph ship off the coast of Alabama and left passengers with a limited supply of food, water and plumbing for days.
Adding to the troubles, cruising as an entire category has been pummeled with a string of unfortunate incidents, such as a recent fire aboard a ship owned by competitor Royal Caribbean, among other examples.
According to people familiar with the matter, Carnival this week sent a document inviting pitches to a number of large media shops, as part of which it referenced the negative publicity it has experienced as a result of its crises.
Incumbent Havas Media, which didn't immediately respond to a request for comment, was not invited to defend the business. Havas Media -- formerly known as MPG -- and sister agency Arnold won the media and creative business in 2008.
"Carnival Cruise Lines is currently conducting a review of its media buying and planning agency resources," said the company in a statement, noting that it "has not conducted a review in several years and is currently seeking a media buying and planning agency capable of effectively building and managing integrated plans across both traditional and digital media." The pitch is being handled by Select Resources International, and the company's lead creative agency, Arnold Worldwide in Boston, is not under review.
A big challenge for a new media shop will be to help positive brand stories about Carnival surface in more media channels, both online and offline.
Usually at times of crisis brands pump more dollars into advertising to help counteract negative press. But rather than support its flagship cruise brand amid its problems, Carnival has cut back on measured media. In 2012, the company spent $66 million on measured media in the U.S. across all of its brands. It devoted about $22 million to marketing its Carnival Cruise Lines brand. In 2011, it spent roughly the same total amount devoted significantly more, $39 million, on its flagship line. Neither year compares to 2010, when it spent $106 million in domestic measured media, with $66 million devoted to marketing the flagship.
Carnival has, however, been very active on social media as part of its crisis communications strategy in order to address criticisms about the safety of its ships.
The company owns a portfolio of cruise brands including its Carnival line, Holland America, Princess Cruises, Seabourn, P&O Cruises, Cunard, Costa Cruises, Aida and Iberocruceros.
In its most recent earnings documents, Carnival Corp. reported that revenue was flat, but it saw a $24 million decrease in cruise passenger ticket revenues compared to the same period the year before. The company also derives revenue from onboard spending of passengers, from gambling and liquor, for example. But it claimed the dip it saw wasn't from less passengers booking, but a drop in prices. "This decrease was caused by a decrease in cruise ticket pricing" the report stated.