SAN FRANCISCO (AdAge.com) -- How do you compete as an upstart in the cutthroat domestic airline industry when your marketing budget is a fraction of your rivals'? For Porter Gale, VP-marketing at domestic value carrier Virgin America, you make every dollar stretch and use social media and buzz to amplify every marketing event, all the while trying to show that Virgin is the antidote to marginal domestic air travel.
How Virgin Airlines Is Reinventing a Category With Sky-High Brand Buzz
In some respects Ms. Gale is a fitting candidate to run a lean, startup airline. With a master's degree in documentary film from Stanford University, she's a filmmaker who has had to figure out how to produce high-quality content on shoestring budgets. As she financed her own projects with her credit card, she discovered that one way to make the dollars go far is to recruit people who share her passion for a project.
To make big splashes for new-product and market launches, Ms. Gale leans on social media, big-name celebrities and iconic pop-culture phenomena.
The tech-savvy brainchild of British entrepreneur Sir Richard Branson, whose Virgin Group owns just under 25% of the airline with the remaining owned by U.S. private-equity firms Black Canyon and Cyrus Capital, Virgin America marked its two-year anniversary in August. Since its launch, the Burlingame, Calif.-based carrier has grappled in a competitive business hit by a recession and stratospheric fuel prices. Still, it says it's on track to reach profitability by 2010.
Created by agency of record Eleven, San Francisco, Virgin America last spring launched "Flydealism," a campaign urging travelers to join an actual movement by the carrier's loyal base to reinvent the domestic airline experience. In October, the campaign will continue with a reinvigorated online effort and will expand the brand's offline presence through magazines and additional out-of-home media.
Reporting to Virgin America CEO David Cush, Ms. Gale oversees online and offline marketing, loyalty and credit-card programs, as well as the in-flight entertainment content selection. She puts Virgin's total marketing budget between $10 million and $12 million, dwarfed by the media spend of larger rivals. Respective measured-media spend for Southwest Airlines and JetBlue totaled $169 million and $25 million last year, according to TNS.
In an interview with Advertising Age, Ms. Gale discussed how the airline is taking on established players with a smaller budget, upping the domestic air-travel game.
Ad Age: How is Virgin trying to reinvent domestic air travel?
Ms. Porter: In the past when people talked about airlines, it would be "They lost my bag" or "They only served me peanuts," but now, the conversation is about mood lighting, it's about in-flight entertainment. We're really trying to change the game. Our most recent innovation -- the in-flight WiFi -- got people not only talking about their flight afterward but they're tweeting [about it] from the sky.
Ad Age: How do you do reinvent the category without the benefit of a budget for a medium like broadcast?
Ms. Porter: PR and marketing collaborate a great deal, and we've had great success in generating buzz via events and also through partnership marketing. We recently partnered with Google apps [which uses cloud-computing technology], and hosted an event called "A Day in the Cloud." It was the first online scavenger hunt that was hosted both in the air and on the ground. With this, we generated about a million dollars in press impressions and lots of hits to the microsite -- 40,000 unique visitors in a day and buzz in Twitter, Facebook.
We're also successful in having big, buzz-oriented launches every time we launch in a new market. Also, we have loyal and passionate fans sharing their stories.
We're only in nine markets at the moment, so if you look at the cost to run local TV, we don't have the reach where we can efficiently buy national TV. Our traveler is online-oriented and very tech savvy. You probably won't see TV from us for a long time.
Ad Age: As a new player, does Virgin America direct its marketing dollars to brand awareness or demand generation?
Ms. Porter: We use different media for different objectives, billboards for awareness, and a lot of our online efforts are very direct response and fare-oriented. In terms of creative strategy, initially, we created a campaign that was a visual demonstration of our cabin where it really showed some of the product differences and the amenities we had. [From there we evolved it, as] we realized that we had a movement starting. People wanted us to succeed.
Ad Age: What's your strategy and tactic for helping Virgin America thrive in the recession?
Ms. Porter: We dramatically lowered our online click-per-action by reducing our ad costs and improving our buying efficiency. Our online agency negotiates great rates, and we've had success buying ad networks and using last-minute inventory deals. We produce the bulk of our collateral in-house and we work directly with production companies or producers for all video content. We've also reviewed all partner contracts to make sure we have the best partners, rates and ROI.
Ad Age: Part of Virgin America's strategy has been to position itself as a media company. How does that work and how has the strategy served the airline?
Ms. Porter: We have a very influential guest flying us, and they're a captive audience for sometimes up to a five-and-a-half hour flight, so we do have an ability to be a media company. We have a very innovative, in-flight entertainment platform: It's seat-back, at-your-seat, on-demand TV. We have live TV content; we also have seat-to-seat chats, electrical outlet plugs at the seat, so we are perfectly positioned to be a great media company.
The brands we have partnered with have found it a very favorable partnership where the hip halo of our brand and media platform help increase the awareness of whatever they're offering.
We've used it to extend our reach so it's helped to make our budget look larger. We'd rather have fewer and deeper partnerships.
Ad Age: Airlines are often the scapegoat for poor travel experiences, justified or not. How do you close the loop on sub-par customer experience?
Ms. Porter: We have higher standards in terms of the in-cabin experience. We have brand-new planes that have leather seats, great entertainment, and the most recent survey from our tracking study showed about 70% of the people were extremely pleased or pleased with our food. How are we then closing the loop? We have high standards from the type of people we recruit. We do a lot of training and refresh training with our team. We engage in social media to really talk and collaborate with our guests.
Ad Age: Talk about how you've applied social media to the mix and what the returns have been.
Ms. Porter: We are active on Twitter and Facebook. We also have a YouTube channel. As far as returns -- it has been a great way to engage with our fans and we have seen that there are some high-profile Twitter users, and if they're up tweeting at 35,000 feet, they could tweet a message about Virgin America that could then reach hundreds of thousands of potential flyers. We've also used it for guest response and guest care, and special promotions, where people could win tickets to come to a launch event. We've done live dialogues in planes and to the ground.