January 9th, 2017
How not to lose customers and alienate regulators: Four tips for avoiding fines and unwanted attention from DOT and ASA
For airline marketers, 2017 has started with the concerning news that Ryanair has been castigated by the Advertising Standards Authority for using misleading pricing in its ads. This follows on the heels of other airlines, in the US and UK violating regulations seeking to protect consumers from misleading advertising. Airlines and other marketers, caught between a rock (low prices in ads are known to drive demand) and a hard place (low prices can be deemed misleading to consumers,) have a difficult question to answer; Pricing, to use or not to use?
This issue is once again garnering attention because of two primary forces: First, low airfares (driven by low oil costs) and a booming leisure demand in 2016, has encouraged airlines use their most powerful sales tool: price, in as much of their advertising as possible. Second, the versatility of digital media enables the use of dynamic variables such as weather, scheduling and pricing has also encouraged airlines and their agencies to include fares in as many digital media campaigns as possible.
The challenge of doing this effectively, without incurring the wrath of regulatory bodies or damaging your brand and missing future revenue is no small feat. To help you navigate this thorny challenge we have outlined four key tactics to avoid unwanted attention from regulators:
1: Read, reread and read the regulations again:
I am sure as a marketer you have plenty of spare time on your hands, therefore, you can feel free to review the current regulations for the US here and the UK here. While the guidelines are different in both countries, the message is the same: if you advertise a price, it should be the full price; fees included, also ensuring that the price you promote will be available whenever your newly motivated consumer goes to book their flight. Typically, this means 10% of your seats are available for booking at the promoted price, throughout the promotion. There are nuances to this, especially as it pertains to availability over time but generally, a minimum 10% threshold is acceptable. Fair warning: you will need to read these guidelines (especially the US guidelines) more than once in order to properly comprehend the regulations and avoid unnecessary pain and suffering. It’s not like you have better things to do on your commute, right?
2: Find new resources to perform daily availability checks on the prices you are promoting:
In addition to all that spare time: I am sure you have ample resources with an abundance of time on their hands, should you wish to use pricing in your ads. One way to avoid fines is having someone on your marketing team checking availability: route by route, at least every morning and then push only those fares, that meet regulations, for inclusion into your digital ad-units. If you are lucky enough to have a plethora of spare resources, they can spend their days updating and re-trafficking ads as price and availability levels change. While this manual process is fraught with potential for mistakes, it can certainly ensure a small level of comfort for your legal team. Do not forget to ensure that this resource also finds a way to capture your hour-by-hour availability levels for future use, if the Department of Transportation (DoT) decides to audit your marketing campaigns.
3: Use your expert negotiation skills to acquire an agreement with revenue-management:
Negotiating for a set of promotion worthy prices with a desirable selection of routes and travel periods, worth including in a marketing campaign, is one of the more enjoyable tasks of an airline marketer. Once you have finally completed the unending chore of securing significant availability for the duration of your campaign, across a range of routes consumers actually want to fly, you can rest easy. Unless, the negotiations took too long and the budgeted funds are no longer available.
4: Or to avoid all that, adopt xCheck’s purpose built solution for compliant, price based airline advertising.
Imagine your campaigns could stay compliant, relevant and up to date without all the effort and risks. That is exactly why we built xCheck: to empower airlines to use pricing in their advertising, enabling compliant, transparent and effective campaigns, driving up revenue and building consumer trust and loyalty.
Our technology calculates and serves your lowest compliant price into any of your digital advertisements. This fully automated process provides a historical audit trail, should any regulatory authorities come knocking. We understand how challenging it can be to install new partners so we designed our product to for easy integration with your existing systems and partners: from creative agencies, to ad-serving vendors.
Low prices are a customer’s friend and an airline’s most powerful driver of incremental demand. Let us show you the best way to safely and effortlessly, integrate current pricing trends into your advertising campaigns. Get in touch and we can tell you more about how to please regulators, customers and your legal team.