Category Archives: Marketing

Impact of an AdWords campaign

Some months ago, my friend Nacho gave me as a gift 75€ to be used in AdWords campaigns. I set up 3 of them: 2 of them promoting 2 Toastmasters clubs, the third one promoting this blog.

According to the campaign report the blog received 1,410 visits from the advertisements. The campaign ended in July and cost 51.96€; thus the average cost per click (CPC) was 0.037€.

I plotted in the following graphic what the total visits per month have been (blue line) and the total visits less the ones that originated from AdWords ads (green line).

Evolution of the blog.

You can see the big impact of the campaign: so far 26% of the visits came from it (since February, when I started the blog, to the end of November the blog received 5,434 visits), while the campaign was active up to 48% of the visits came from it.

Discounting the campaign (green line) we can still see that the pattern of the growth is not as smooth as we would expect. That is why I linearly interpolated visits from March to June (and in August, where you see that due to the low activity of the blog – holidays – there were less visits than the trend) and plotted the red line (adjusted).

Finally, I tried to see what trend line adjusted better to the growth of the blog, using the adjusted red line, and even though now it seems that follows closely a second grade polynomial I guess the evolution of the blog should follow an exponential (if any).

From this analysis I conclude that:

  • The real impact of the AdWords campaign is the difference between blue and red lines, instead of blue vs. green ones. This would mean 243 extra click for free; this would have had a cost of ~9€, not much but a whole 17% extra than what I paid. Where did those extra clicks come from? E.g. people who saw the ad but didn’t click on it and did enter the blog, people who enter in the blog more times than the initial click…
  • It could be predicted that the blog should have ~850 visits in December, and in January ~1,000, a year after it started (if indeed it follows the exponential pattern of evolution)… we’ll see.

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Starting up an airline?

Some days ago I came across a post in the blog of Randy Tinseth, VP Marketing  for Boeing Commercial Airplanes, where he explains the concept of StartupBoeing and invites entrepreneurs to take up the opportunity. StartupBoeing is a website which offers information to entrepreneurs in order to help them build their business plan or run their operations. As it is stated in the web itself:

“The StartupBoeing team assists entrepreneurs in launching new airlines. From concept through launch, StartupBoeing offers guidance, review, analysis, data, resources, contacts, and referrals to qualified startup airlines.”

The first thing I thought was “yes, there is the opportunity to lose your investment”. To be fair, Tinseth points at different moments the difficulty of the business and that it is tough to start-up an airline. Airbus does also have the same concept available to entrepreneurs, in this case is called: Start Me Up.

I looked for the last industry outlook from the International Air Transport Association (IATA), the industry association. The figures are appalling (see the table below):

IATA Financial results of the last decade.

Airlines around the world have lost during the last decade 50 billion dollars, with only 2 out of ten years with profits. On average the net profit, loss in this case, was -1.4% of the revenues (over 4 trillion dollars in the decade). Of course, there are airlines making profits, but the industry is not doing well (just remember the last achievements of G. Díaz Ferrán).

I then remembered this other comment from Warren Buffet about the airline industry since its inception:

“I made the comment that if a capitalist had been present at Kittyhawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money.

But seriously, the airline business has been extraordinary. It has eaten up capital over the past century like almost no other business because people seem to keep coming back to it and putting fresh money in.

You’ve got huge fixed costs, you’ve got strong labour unions and you’ve got commodity pricing. That is not a great recipe for success.

I have an 800 (free call) number now that I call if I get the urge to buy an airline stock. I call at two in the morning and I say: “My name is Warren and I’m an aeroholic.” And then they talk me down.”

So, yes, if you are considering whether to start-up an airline, do yourself a favour: call that 800 number, and put your cash somewhere else where it returns more than -1.4%…

The one thing we should definitely praise from these initiatives is the information resources available to the general public, something commented by readers of Randy’s blog and a purpose expressed in the Startup website as well:

“StartupBoeing.com also has a wider purpose as a resource to pass on information to our customers – and also as a resource for existing airlines, financial institutions, consultants and the leasing community. It’s a place for neutral industry data. We want to help make the industry healthy and make airlines safe, reliable and profitable.”

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Meet my avatar

Time ago I already introduced you to my Lego. Some weeks ago during a Gol flight in Brazil I was reading through the in-flight magazine when I found an article that talked about Meez among other things.

I was just playing with it little bit. Please, meet my avatar, “Javier in casual Friday” (just if I wore casual on Fridays…).

Meez 3D avatar avatars games

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Filed under Marketing, Travelling

A ‘Gol’ to Ryanair

Luca and I are planning a trip to Brazil at the end of March. Two days ago I received an email from Gol, the airline which will take us to 4 different places in six different flights. They informed us that one of our flights had been re-scheduled. We just needed to accept the change by clicking to a link in that email. So far it was like the process with other airlines.

The problem was that with the new flight we would be arriving to Sao Paulo Congonhas airport 5 hours later than the departure of another flight we had booked also with Gol. I had previously introduced some changes of flight dates once booked in the Gol website, so I just went on.

This time I encountered a problem. At some moment in the process the website switched from English to Portuguese, which was not a problem until the payment page, where I was asked to introduce my CPF, a fiscal code that I don’t have since I’m not a resident in Brazil. Then I tried to proceed with the payment through other method… but that also didn’t work. When I tried to perform again the whole process, I found that the current status of my flight was the new one but appeared a ‘Payment: pending’ status. Nothing else that I could do. No way to proceed, to cancel or to change again the flight data. A kind of dead-end situation.

I wrote an email to Gol customer services about this situation. Late in the afternoon I phoned their Call Center in Brazil. I was explaining the whole situation to a lady… ‘and now I would like to know how can I proceed to pay this remaining amount (20R$, about 8€)’. She paused for less than one second… ‘ok, I’ll proceed to cancel this extra payment of 20R$, so you don’t have to pay more, confirm the new flight, and send you emails of confirmation of the two last changes of flights, the one that originated the issue and this new one’. I could only muster an ‘oh, that would be ok’. One minute later everything was arranged and I had already received those emails. One hour later I got a reply from customer services to my email of the morning: they had gone through my records and seen that everything was correct now and would archive they case.

Let me show you the ‘Terms and Conditions’ of Ryanair related to Flight and name changes:

Flight dates, times and routes are changeable (subject to seat availability). If booked online the change rate of £25/€25 per one way flight/per person applies or if booked at an airport or reservation centre the rate of £55/€55 per one way flight /per person applies. In addition, to these flight change fees, any price difference between the original total price paid and the lowest total price available at the time of the flight change is charged. Please note that if the total price on the new flight is lower, no refund will be made.

One may argue: Ryanair model is based on charging little money on the original flight and adding up revenues with other services, changes, penalties, etc… The Gol flight I was changing cost: 119R$ per person, about 45€, as little as a flight with Ryanair may cost. Gol doesn’t charge anything for changes made with at least 7 days in advanced of the flight (see above what Ryanair does). The 20R$ related simply to the different fare of the new flight…

It is not about money or the abusive clauses of Ryanair that I wanted to write about but I wanted to point the difference that makes having people trained, empowered and customer-oriented in Call Centers.

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Nothing like a good red wine…

The recent Tweet from Freakonomics http://bit.ly/9jsc3r, in which they tell how American supposedly fine wine aficionados could not tell the difference between the wine they were given and the one they were looking (and paying) for, reminds me of 3 different cases to point how we can be influenced in our perceptions:

  • The first is a personal anecdote. I have always preferred Coca-Cola over Pepsi, one of these people who had never bought a Pepsi in a supermarket. In 2007-2008 I did a test at home to see whether I was able to distinguish one from the other. I did the test with my partner. I was blind-folded while she poured same amount of Cola and Pepsi in two identical glasses. She left them for some couple minutes in the fridge so they would get same temperature, etc, etc. Then I tasted them. After trying the first glass I said “Pepsi, I don’t even need to try the other”. Then I thought it twice. I tried the second glass. Thought for some seconds. Then again the first. Then… then… I mixed everything in my mind and couldn’t distinguish one from the other, to the point of changing my initial choice and being wrong.

Whenever I tell this story to my friends, they tell me “I can distinguish them”: I challenge you to do so. Find a helper and take the test. Please let me know the result.

If you thought my test is not representative, here is another story:

  • This is a TED talk by Benjamin Wallace on the price of happiness. Benjamin goes exploring different luxury articles and finding that they don’t bring him or those close to him any special feeling. He indeed does a similar test to the one I did, this time with luxury oil, with more varieties to distinguish and more people to try them, the result… guess it.

 

After having read the case of the fake Pinot Noir, having suffered the non-distinguish ability of  Pepsi and hearing to the TED talk cases… we might wonder: why are we mislead so much by perceptions? Why do we pay more for something that doesn’t bring us any enhanced customer experience except for being able to tell that we paid that amount for this?

Last case I wanted to point…

  • The Dutch are well known for being a very pragmatic nation. Here you have a case, again, for wines (just to close the loop). What do you care about the brand of a wine? Let’s remove it. What do you appreciate in it? Is it the grape type? Is it the fruit flavour, the tannins? So that’s what you need to know!! The rest… better to call it “4. Red Wine” and remembering that it comes in a blue bottle… check it: http://94wines.com.

Prost!

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