Are Virgin America’s marketing efforts paying off?

Virgin America airline has quickly made its way into the public eye since the company’s launch in late 2007. Known for their snazzy inflight safety video Virgin America has obtained popularity with its consumers and recently they updated their video that has the web abuzz. But does having an entertaining video embedded with humor and wit generate a profitable airline? Are Virgin America’s marketing dollars really paying off? ratings show Virgin America as the top airline preferred by customers, with comfortable leather seats in coach and baggage handling as being the top points of satisfaction. Not to mention of course the inflight entertainment system being one of the swankiest in the industry. Other features that consumers rate on are cabin cleanliness, ease of check-in, and more leg room. But are those amenities really selling points to the average consumer?

According to The Wall Street Journal an article from early May of this year dubbed Virgin America has only collected a profit in one quarter since the company first opened its doors. Taking into account that the company is still new in the industry and with continued efforts to increase their areas of service and adding new routes the potential for the company isn’t small. And data is showing that Virgin America’s loses are decreasing overtime.

Although many newspaper journals are praising Virgin America as being a top-of-the-line airline and most preferred by consumers, does that preference entail that consumers will spend more for an airfare when they can find a seat somewhere else cheaper. One of the airlines known for their poor customer service, cramped seats, and fee entrenched experience has seen a profit in the last few years. Why? They pride themselves as offering the slowest fares. Spirit Chief Executive Ben Baldanza says on CBS’ This Morning about consumers, “They know they’re getting a lower total price than they’ll get anywhere else.” And Spirit has the financial data to back this up.

Cool features and amenities are nice to have but are not required when making a big-ticket purchase, such as airfare. The price of an airline ticket is still the biggest determining factor in choosing which airline to purchase with. Consumers will commend airlines for snakes that are more than just a pack of peanuts or satellite TV, but they are also speaking with their wallets.

Does this mean there is no room for Virgin America to play with the “big boys” in the airline industry? Definitely not. The airlines image aligns and has formulated a loyal customer base with a large portion of young entrepreneurs on the west coast and in the Bay Area. There may be an untapped niche market in that. I enjoy a great flight experience as much as the next person and although my principal deciding factor when choosing an airline ticket is price I appreciate Virgin America and their spiffy accent lights trailing down the cabin. Alright, if their flight is ten to twenty dollars more than the cheapest airline, I’ll choose Virgin America. How’s that?

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Tailored Advertising: The Butler Who Knows Your Needs Before You Do

In a world where information is readily available and easily accessible consumers are increasingly worried about the privacy of their information. With an ever increasing amount of social media sites and online stores consumers inevitably create personal profiles, which on the one hand makes shopping, listening to your favorite music on Pandora, or sharing pictures easier, but it also allows marketers to use this information to provide its users with more meaningful advertisements.

The problem of course is consumers are afraid of what companies will do with the information they gather. We as consumers want to use free services like Facebook, Instagram, and Pandora. We want to do our shopping online, keep our credit card on file, and save our shipping information for easy use. We sign up to use free applications and agree to the terms and conditions – while reading little to none of the actual print – all for the sake of adding entertainment or convenience to our daily life. But we also feel entitled to using these services without paying for them and without being bombarded with advertisements. Unfortunately we forget that these services exist and are available to us free of charge because they are sponsored by ads. We got the principle long ago with broadcasted programs on our television tubes that are interrupted in intervals by commercials. With time we quickly figured out that we can flip channels during those breaks and entertain ourselves by watching a couple minute glimpses of another program. Advertising companies responded by doing their research and figuring out a more effective way of bringing ads to the consumers. Social media sites and applications can only be offered free of charge as long as advertising dollars can be proved effective by bringing in a return on investments. This means marketers and advertising companies continually analyze data they collect and yes, find ways to obtain your consumer dollars. In a way you are paying for these free services, it just comes with a new L’Oreal lipstick or Axe aftershave cream.

If you are prone to be suspicious of all online activities and believe in conspiracy theories easily then you can delete your Facebook account, reprogram your computer just to be sure any cookies or other data collecting files are erased, and live under a rock. But for the rest of us for whom this is not an option, there are a few things we can do. Be more diligent and read those terms and conditions, because yes, they do list what your personal information can be used for and how. Be more wary of what you sign up for online; not all stores have the same privacy terms and they can change at any time. Be more selective of what posts you write and what pictures you share, even if your profile is set to uber-private.

Now that you’re going to be a more conscientious consumer, let’s rejoice in all the benefits of tailored advertising. And now that we have established the world cannot exist without advertisements – one might even say it’s what makes the world go round – we can now put away this outlandish notion and even expect ads in our everyday lives.

Tailored advertising still needs to be fine-tuned. Viewers who tune into Two and A Half Men aren’t all overweight couch potatoes who can’t decide which chip brand to go with the next time they’re at the supermarket. Or maybe a college student who wanted to repaint their dorm room so you did a quick Google search for the closest Sherwin-Williams store location from your study laptop and now you’re getting ads for other home decorating projects. Or maybe you browsed online from your work computer during lunch hour but bought the items from your smart phone; now you are getting ads for an already owned product whenever you open your search tool. With consumers using multiple devices and sharing them at times does pose to be problematic in receiving relevant ads and that problem may never completely cease. But with websites and applications encouraging and sometimes requiring users to create individual profiles, information gathered will be more appropriately quantified.

Now imagine a world where marketers have got it right. You wake up in the morning and you get an email with a coupon to your favorite coffee shop because you made a purchase there three times in the last two weeks. The weekend is coming up and you’re wondering how you want to spend it so you write an email to a friend listing a few ideas, after which you see an advertisement on your search bar for a spa treatment at a nearby resort. You just moved into a new home and love everything about it except the kitchen cabinets, and before you get a chance to do your own research, you get coupons from Home Depot and Lowe’s in the mail. You see a mobile app suggestion on Facebook that encompasses exactly who you are and since downloading the app your life has been made easier in some way. That’s tailored advertising. Anticipating your needs at the right time and getting you information that is relevant to what is happening in your life. Tailored advertising prevents you from receiving pet grooming ads on your browser when you don’t even own one or being swarmed with coupons for Wheat Thins from Safeway when you are gluten-free.

Tailored advertising is kind of like having a butler who anticipates your needs before you do. The more information advertising companies gather about you and the more they are able to analyze mass amounts of data, the more you will be provided with customized ads that will be based on your personality and character. Isn’t that great! No more receiving promotional mail simply because you’re on a mass send list with credit card companies wanting you to open a card with them. Seriously Capital One, stop it! And no more throwing away 97% of a coupon magazine because it’s a one size fits all.

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