Norwegian Airlines Is Using Machine Learning and Automation to Boost Bookings
Norwegian Airlines is a low-cost airline and the largest of its kind in Norway. It's also the third largest Europe and the ninth largest in the world. Now, this massive company is taking bookings to a new level by using machine learning and automation to boost its sales.
To this end, Norwegian Airlines is utilizing AdTheorent, a digital advertising platform based on advanced machine learning technology. It provides advertisers and marketers with everyday value by cutting down on the manpower required for data analysis. The primary goal of the partnership is to drive ticket bookings through the airline's website and digital channels, with a secondary goal to raise awareness of the "World's Best Long-Haul, Low-Cost Airline" (i.e. Norwegian Airlines) in key markets.
Machine Learning
Through AdTheorent's advanced machine learning technology, Norwegian Airlines can find consumers with the highest chance of converting. This is achieved by identifying the designated market areas (DMAs) of potential customers and targeting them with appropriate advertisements.
"Airlines must use smart advertising tactics to engage customers who are the most likely to book flights," said Head of Marketing for North America at Norwegian Airlines, Marina Suberlyak. "Machine learning and predictive targeting capabilities enabled us to spend our limited advertising dollars more efficiently by rapidly identifying opportunities to optimize where and how our brand was positioned to the most qualified buyers."
Norwegian Airlines is embracing the technology specifically to target young consumers, offering them unique opportunities to book more trips. This is something which is particularly appealing to younger generations who are choosing to spend their hard-earned money on gaining experiences through travel, rather than on materialistic possessions.
With machine learning solutions, Norwegian Airlines can target sales-qualified consumers with travel-related content on their favorite online channels much more effectively. The targeted content can provide people with information about travel locations, along with tips, images, videos, and flight reservation facilities, encouraging more bookings to take place.
Automation
Due to the variation of seasonalities, destinations, and different levels of brand awareness in different national markets, Norwegian Airlines required a paid search approach that was cost-efficient yet broad enough to reach a massive set of potential customers.
"We have a limited budget and large search volume, so it makes sense to be more visible for searchers who are more likely to buy our most profitable products, while reducing visibility for loyal customers or where an organic sales baseline is already established," said Digital Advisor at Norwegian Airlines, Mario Garcia. "But to pursue this kind of strategy at scale, we needed the machine-fueled intelligence of an automated optimization system."
Norwegian Airlines has begun using an inventory management system which generates individual campaigns for each of its departure airports, ensuring that seasonality, price, and availability factors are all considered. Using this management system, advertisers set up an inventory feed that has a list of products with associated information, including descriptions, pricing, and capacity levels. The system makes room for Norwegian Airlines to use its information feeds more effectively and to create segmented marketing campaigns and ad groups. The automation software is then able to efficiently add or remove keywords as the availability of package fluctuates.
Since adding automation to its marketing strategies, Norwegian Airlines has witnessed a 40% increase in revenue and an 11% reduction in its costs, year-on-year. The company reports that the inventory management system has saved a lot of time in campaign and ad group generation. The next step in this process is refining the optimization systems which are already in place by adding more business data and focusing on incremental sales with a data-driven approach and multi-moment bidding.
Final Thoughts
Through machine learning and automation technology, Norwegian Airlines has been able to carefully curate lists of potential customers who are more likely to convert and thereby target specific groups who the company knows are most likely to book flights. The systems in place save time and boost the income of the company, which ultimately makes the business more successful and cost-efficient.
"We are creating a new market with low-cost long-haul flights, alongside our domestic and short-haul range," says Garcia. "So, it's vital that our paid search strategy is aligned with our business priorities: increasing average order value, protecting our position in mature markets and exploring how to achieve incremental sales."
You can hear Norwegian Airlines' Head of Marketing for North America, Marina Suberlyak speak at Digital Travel Connect US 2019 taking place this October at the Rancho Bernardo Inn, San Diego, CA.
Download the agenda today for more information and insights.