Overview of the company

Virgin Airline is a United States-based airline that began service on August 8, 2007. The airline’s stated aim is to provide low-fare, high-quality service between major metropolitan cities. San Francisco International Airport is its main hub. The other main hubs are LAX and Dallas Love Field. Virgin America is launched by Sir Richard Branson. Virgin America operates in a range of markets across 200 countries. It’s main mission is to make flying good again. Its main theme and focus is to provide consumers with attractive fares, top-notch service, and innovative amenities that are reinventing domestic air travel. Special feature includes mood-lit cabins with fleetwide WiFi, custom-designed leather seats, power outlets, and a video touch-screen at every seatback offering guests on-demand menus and countless entertainment options.

Virgin America won many awards. Virgin America won best-in-class awards, including: “Best Domestic Airline” in both Condé Nast Traveler’s Reader’s Choice Awards Travel + Leisure’s World’s Best Awards for the past seven consecutive years.”

Facts

  • A service company
  • Started by Richard Bradson
  • Operates in a range of markets across 200 countries
  • California-based airline that is on a mission to make flying good again
  • Innovation in industries
  • innovative amenities that are reinventing domestic air travel.

Offerings

  • Low cost travel with high quality service
  • Featuring mood-lit cabins with fleetwide WiFi,
  • Custom-designed leather seats, power outlets
  • Video touch-screen at every seatback
  • Offering guests on-demand menus and countless entertainment options.

Target Market

  • “Young adults who aspire a stylish lifestyle”
  • Young, urban, tech savvy professionals
  • Ranges from 20-30 years old
  • Lives in urban area and socializes on the web
  • People who have previously been flying other airlines

Virgin America’s target market for the advertising campaign is young people in the age-range of 20-30 who live in urban areas. People in this age-group are exploring adulthood and at every step trying to reach a new level of class and style. The goal of the campaign is to hit the sweet-spot of this segment by showing them that their style can be transferred to the skies.

Competitive Advantage

  • Value (Customer focused, Deliver superior quality, Reasonable pricing)
  • Rare (Risk taking, Strong Leadership)
  • Imitability (Richard Bradson at the core, Company Values)

Virgin Airlines is a younger airline with a more modern look than the traditional and established airlines in the US. The stylish look and feel of flying with Virgin is one of the most valuable sustainable competitive advantages the company has. It is a point-of-difference that the older airlines have a hard time copying.

In addition, Virgin America receives a lot of free publicity and attention due to the popularity of its founder Sir Richard Branson. By also incorporating him in the image of the company, we can build on our competitive advantage and better reach our target market.

Where is our target market?

Virgin America wishes to appeal to the young adult audience and it is therefore essential that the advertising strategy takes into consideration the different  media channels and vehicles that are used by millennials in general and 20-30 year-olds in particular.

In general millennials or generation Y are more hesitant and resistant to advertising influences than any other generation (Valentine and Powers, 2013). This poses a challenge for us in creating a message that appeals to this demographic. The good news is, this generation likes the “different” and Virgin America is that different. Our strategy aims to appeal to the sensory of this generation by using simple, quick and fun advertising that is different from what they have been exposed to before.

One of the best ways to reach Millennials today is through social media. Research shows that no other age-group is as present online and with social media as this age group (Moore, 2012). The main vehicle we will plan for Virgin America is Facebook and Instagram in addition to internet radio channels such as Pandora and Spotify.

We will also recommend Virgin America to reach their target audience through magazines that also appeal to fashion and style, such as Vogue. Millennials are concerned about image and by showing them that Virgin America is the best way to fly in style, we are appealing to this demographic’s view of image (Williams, Page, Petrosky, & Hernandez, 2010). By doing this, we will also show that Virgin is different by choosing media vehicles not traditionally used by the airline industry.

Situational Analysis

Airline Industry

Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. The industry continues to grow rapidly, but consistent and robust profitability is elusive. Measured by revenue, the industry has doubled over the past decade, from US$369 billion in 2004 to a projected $746 billion in 2015, according to the International Air Transport Association (IATA).

Much of that growth has been driven by low-cost carriers (LCCs), which now control some 25 percent of the worldwide market and which have been expanding rapidly in emerging markets; growth also came from continued gains by carriers in developed markets, the IATA reported. Yet profit margins are razor thin, less than 3 percent overall.

Travel for both business and leisure purposes grew strongly worldwide. Scheduled airlines carried 1.5 billion passengers last year. In the leisure market, the availability of large aircraft such as the Boeing 747 made it convenient and affordable for people to travel further to new and exotic destinations. Governments in developing countries realized the benefits of tourism to their national economies and spurred the development of resorts and infrastructure to lure tourists from the prosperous countries in Western Europe and North America. As the economies of developing countries grow, their own citizens are already becoming the new international tourists of the future. Airlines’ profitability is closely tied to economic growth and trade. Despite this, the airline industry has proceeded along the path towards globalization and consolidation, characteristics associated with the normal development of many other industries. It has done this through the establishment of alliances and partnerships between airlines, linking their networks to expand access to their customers. Hundreds of airlines have entered into alliances, ranging from marketing agreements and code-shares to franchises and equity transfers.

Analysis of Virgin America

Virgin America is a subsidiary of the Virgin Group, which is a venture capital conglomerate, composed of 400 companies worldwide owned by Sir Richard Branson. The concept behind this business model is to infuse each subsidiary with the Virgin brand and core values in order to invest in different business areas. The Virgin brand is intrinsically linked to its owner, Sir Richard Branson. Branson infused the core values of being unconventional, hip, and innovative to each of the conglomerate’s subsidiaries with a keen emphasis on delivering high-quality products for a low price. These core values are present in Virgin America because it provides high-quality travel at a low cost. Virgin America’s primary operations are located in San Francisco International Airport and its headquarters are in Burlingame, CA.Virgin America started its flight operations on August 8, 2007 with an aim to provide low-cost travel with high-quality service between major cities across the east and west coasts.

Two years ago, Porter Gale, Virgin America’s vice president of marketing, relied heavily on the use of social media and “buzz” to amplify the brand. However, The airline is now active on all advertising medium to spread their word across and to create more awareness. From print ads, social mediums, television, web efforts and out-of-home iterations such as billboards and taxi wraps are in the media mix. Not only are customers tweeting about Virgin America on the ground, they are doing it for the sky, due to the recent addition of inflight WiFi.

In 2012, Virgin America has expanded its travel destinations to 13 cities in the U.S. now they gets you to all corners of the world. Currently, Virgin America’s target audience is the tech-savvy, business and leisure traveler. Dedicated to comfort, quality, and convenience; this technologically innovative airline caters to its target audience’s needs and wants. With a primary market of customers 35 and under, Virgin America’s innovative media platform ties in its marketing objectives perfectly to cater to the “Gen-Y” target.

With Virgin America’s vision in mind, the addition of more cities including international destinations will be apart of the long-term goal to reach into prospective markets. With the tech-savvy business and leisure traveler still in mind, Virgin America  plans to give their passengers more choices, destination wise. Not only would more destinations help the target market to grow but it would also allow the company to grow.

Virgin America Make the most of their route map from San Francisco International Airport with low fares and nonstop flights to hot spots like Los Angeles, Las Vegas, New York, and more. Virgin America reports first quarter 2015 earnings $10.5 Million Profit Excluding Special Items

Tenth Consecutive Quarter of Year-over-Year Improvement in Profitability

Distribution

There are two main distributions channels for Virgin America’s tickets. The main one, which accounts for 70% of the Airline’s ticket revenue is the company website, Virginamerica.com. The other 30% comes from online travel agencies, such as Travelocity or Expedia.

Competition

The airline industry is characterized by having high fixed costs and fierce price competition. As a result, airlines created several alliances as means to increase revenue and efficiency while reducing costs. There are three major airline alliances: One world with a market share of 22.7%, SkyTeam with 28.3%, and Star Alliance with the majority of the market share of 37.6%.7 This is key for Virgin America because it’s an independent airline, which means it has no alliances. This factor places Virgin America at a disadvantage when it comes to reducing cost via increased purchasing power or increasing revenue via costumer sharing, as the big three alliances do. Virgin America’s disadvantage is shown in it lower profits compared to airlines that are members of alliances.

Promotion

Because Virgin America’s target market is the “creative class”– young, urban, tech-savvy professionals using smartphones to frequent social media sites, such as Twitter and Facebook–the best place to reach them is online. For promotions and advertising, Virgin America is mainly active in two social networking sites: Twitter and Facebook. Twitter is the main promotional vehicle for Virgin America. It aims to attract new customers in the tech-savvy market with Promoted Tweets, which are advertisements that appear in the feed of people who aren’t following Virgin.This is a good strategy because even though Virgin America has over 300,000 followers, it can increase its revenues via more customers. Moreover, Virgin did a Twitter promotion through Promoted Tweets called “Fly Forward, Give Back”, which resulted in the fifth most successful day in ticket sales. Virgin America aims to create brand awareness, engage customers, and increase emotional bonds by being highly responsive with its followers.

SWOT

Richard Branson and Virgin Inc. have done well financially, but as many other, hit a bump during the recession around 2008 (Finkle, 2011). The thirst for innovation, however has served as one of the company’s biggest strengths and this is also passed on to Virgin America.

Being in an industry with high entry-barriers is serving the company well, and as one of the youngest airline companies, and the only one located in Silicon Valley, CA, there is a lot of room for Virgin to create points-of-difference that can attract a younger market. However, being different can also cause scepticism at Wall Street in which is considered one of the company’s weaknesses.

As Virgin America has expanded, some of their markets have reached maturity in which can also mean an opportunity to make more on those markets as the routes have been established in the minds of the consumers. Capital is something the company needs a lot of, especially due to the increase in labor and airport cost in recent years, in which serves as one of the threats for Virgin as well as other players in the American airline market (CAPA, 2014).

1.      Strengths

  1. Passenger favorite, generated countless accolades
  2. Relatively stable network
  3. Exceptional level of market disruption
  4. Young, single aircraft type fleet
  5. High utilisation and low CASM (Cost per available seat mile)
  6. RASM has improved (Revenue per available seat mile)
  7. Different programs to encourage innovation

2.      Weaknesses

  1. Their differentiated business model is difficult for Wall Street to understand.
  2. Elevated costs
  3. Spotty Profitability
  4. Low widespread investor confidence
  5. Lack of commanding position in its largest markets.

3.      Opportunities

  1. Growing market in the age range of 20-30 year olds (Generation Y)
  2. Expansion of more routes
  3. Certain markets reached maturity
  4. Increase accessibility
  5. Market reaching maturity
  6. Increased social media engagement
  7. New market awareness

4.      Threats

  1. Competing airlines
  2. Flight attendants union representation
  3. Rising labor costs
  4. Personalization of private jets
  5. High cost of terminal/gate fees
  6. Rising cost of fuel

Positioning and vision statement

Suggested Positioning Statement

The moment you step in any of our airplanes, you know it’s a different kind of airline, an airline that keeps your cool style. You’re welcomed by mood-lit cabins, custom-designed leather seats and the most advanced entertainment system in the skies. You feel you are where you should be. The Virgin America experience was designed to be like no other, marrying stylish design and innovative technology. The airline provides upscale flights and gives guests control over their in-flight experience in and elevated style.

Vision Statement:

Within the next 5 years Virgin America aims to be the leading low-cost, high-luxury airline in the United States by expanding flights, its air force and by creating new destinations.

Marketing and advertising objectives

The marketing campaign would be focused on expanding Virgin America current associate/member program called “elevate” and use the power of social medias to enhance the company’s brand and increase the number of young people choosing Virgin America as their preferable airline company. To accomplish this we would utilize several media channels like printed magazines, social media, radio, and smartphone apps like Pandora, Spotify and Apple Music and public relations.

The Main Campaign: Elevate Your Style

For Virgin America’s advertising campaign, we would like to take advantage of the fact that the company has one of the most modern and updated line of airplanes. By targeting the segment of people between the ages of 20-30 that are in the process of entering adulthood and constantly seeking a higher level of wealth and comfort, we will make sure to let them know that flying Virgin America is the only way to maintain the level of style in the air.

Public Relations:

In order for the advertising campaign to be successful, it is essential that the public relations department at Virgin America assist the rest of the marketing department with spreading the message and creating integrated communication. By writing press releases, actively speaking out about the campaign and making sure that inquires and questions from the media regarding the campaign is answered.

Print-Ad:

A print-ad will allow Virgin America to communicate it’s message by using intriguing images and fun, yet informative words. We can easily reach our target market, by putting the ads in magazines that are popular for our target market.

In addition, we will suggest that Virgin America put the ad in fashion magazines like Vogue in order to show how different Virgin is and how serious Virgin is about being the most stylish airline in the American market. An ad like this would also naturally stand out and could therefore lead to more people showing interest in it.

Example of print-ad:

At Virgin America we know you have certain standards down on earth. You shouldn’t have to settle with an airline that doesn’t reflect the cool person we all know you are.

Virgin is the only airline that lets you elevate your style to the skies. With modern airplanes, comfortable seats, sociable environment, fine food and drinks, free WiFi and amazing customer service – We make sure you get to your destination in style.

Don’t let the old airlines tell you how you should fly. Show them how it’s done by booking a flight with Virgin today and use hashtag #FlyingInStyle and @VirginAmerica next time you fly with us. Who knows, you might even win a free roundtrip flight of your choice.”

The text would be all lowercase except for the hashtags and the company name. Since the target audience is constantly online, a new trend seems that in the online environment people don’t care about the text being Capitalized on the beginning of the phrases. This would be an effort of “telling” the target audience that Virgin America is also understands their new “techy” lives.

The bottom part in purple with the text in white is a repetition of the text. This would be in purpose to have a chance to get people read the main objective of the campaign. We know people don’t like to read long blocks of text so that would be an effort to at least get more people aware of the campaign.

A mockup of how the print ad could look like:

Social Media Strategy

Same picture as used in print-ad to repeat the image of Virgin America and the campaign as a whole. We will post the picture using the text:

“At Virgin we elevate your style to the skies. Don’t let the old airlines tell you how you should fly. Show them how it’s done by booking a flight with Virgin today and use hashtag #FlyingInStyle and @VirginAmerica next time you fly with us. Who knows, you might even win a free roundtrip flight of your choice.”

By taking advantage of Facebook and other social media’s sophisticated algorithms, we can target people in the age-group 20-30 living in urban areas. In addition we can target people who have previously checked in at major airports or even other competitor airlines. As these people scroll down on their page, a sponsored content post will show up from Virgin America with the above message and picture.

Radio Ad

(Sound of glasses and chatter in the background to make it seem like a cocktail-party). Narrator (Richard Branson): “This might sound like one of your regular cocktail parties, but It’s just our 2pm flight from Los Angeles to New York. Don’t let the old airlines tell you how you should fly. Show them how it’s done by booking a flight with Virgin America today and use hashtag #FlyingInStyle next time you fly with us to to enter a chance to win a free round-trip ticket of your choice. Elevate your style, with Virgin.”

Pandora/Spotify

Smartphone apps like Pandora and Spotify now are on the industry competing with radio and other media. The advertising in those apps doesn’t change much for one app to another. It plays a few songs and then it plays some ads. The advantage is that they stop the songs you are listening and asks for an interaction on the device. The ad could be very similar to the Radio Ad but tweaked to make it fit with the new technology:

(Sound of glasses and chatter in the background to make it seem like a cocktail-party). Narrator (Richard Branson): “This might sound like one of your regular cocktail parties, but It’s just our 2pm flight from Los Angeles to New York. Don’t let the old airlines tell you how you should fly. Show them how it’s done by booking a flight with Virgin America today and use hashtag #FlyingInStyle next time you fly with us to to enter a chance to win a free round-trip ticket of your choice. Elevate your style, with Virgin. Tap the banner to become an Elevate member now”.

Additional Promotional Campaigns

  1. Excess capacity
    1. Promotional group discounts for specific months
    2. February, March, June, October, November/December

Measuring Success

Social Media

A majority of industrial companies are having trouble measuring social media Marketing ROI. They know the importance of social media marketing but they do not know how to measure the effectiveness. Too many companies measure social media marketing success by only counting “Likes” and “Followers.” However, it is only the part of measuring success in social media marketing. Getting many Followers on Twitter, Likes on the Facebook page, Views and Subscribers on the YouTube channel is important part of measuring the success because it is the beginning of the measurement. Yet, these numbers do not automatically connect to the performance. It is important to check the interaction with companies’ message. Clicks on links in the social media posts, shares on Facebook and LinkedIn, Comments on the Facebook and LinkedIn posts are good measuring stick for actual engagement. Finally, if people took action because of the message provided through the social media would be the final measurement of impact of social media marketing efforts. It will tell you how many people took the next step to enter the lead generation funnel and join the marketing database. The activities include: Registrations for content downloads and webinar registrations, and customer satisfaction survey.

Radio/Magazine Ads.

It is important to select the radio stations and magazines that are popular among age group of 20-30. It is important to compare the traffic of the selected age group before and after the ad campaign started. For magazine advertising campaign, it would be determined easily by including the coupon that customers can redeem for a discount or other benefits. However, it is generally not the case for the airline advertisements for magazine. Magazine advertisement usually used to increase of brand recognition. It is hard to find the short-term effect but if the company invests long enough time to monitor the brand recognition improvement, the company can assess the effectiveness of the advertising campaign. Posttesting is a common for advertisers to measure the effectiveness of ads. We can recommend using inquiry tests “to measure advertising effectiveness on the basis of inquiries generated from ads appearing in magazine.” We can also recommend using recognition tests (Gfk-Starch) to determine recognition of “print ads and comparing them to other ads of same variety or in the same magazine (Belch and Belch, p 609, 2012).” For radio ads, we can suggest doing concept testing to explore the targeted consumer’s response to a potential new ad on focus groups in the target market which is 20-30 years range lives in urban area.

Advertising is not an exact science. You cannot determine how many sales dollars are generated by each advertising dollar you spend. This method of measuring the effectiveness of advertising is just rough estimation of whether ads are hitting the mark.

Overall, it is more important to focus on the number of returning customers to fly Virgin America for young age group. Retention rate is more important than rate of sales improvement in certain promotion.

Media Objectives

Our target markets for the Elevate Campaign for Virgin America Airlines are young adults between the ages of 18-34. As these young men and women transition from student to professional why shouldn’t they transition the way they travel also? Becoming an Elevate member with Virgin America allows them to enjoy the conveniences of a Virgin America flight such as redesigned interior decorations, mood lighting to enhance the travel atmosphere experience, an inflight bar to make socializing on Virgin Airlines incredibly unique and a refreshing experience, with Wi-Fi onboard they could never lose a moment to keep in touch and easily share and network their moment-and yes make their friends jealous.

With our media objectives we want to generate traffic to the website where people can sign up for the Elevate program-a FREE PROGRAM by the way-and our call to action will be to fly to the cities that Virgin America operates in.

We want to make flying fun again for the growing demographic of young professionals entering and dominating the future workforce in the USA. By having a creative campaign that attracts our target market, our last objective will be to improve overall brand equity for Virgin America (Wu, Wen, Dou, and Chen, 2015).

Cities Virgin America operates in:  (Population stats as of 2012 via CLR Search.com)

  • Austin, TX – 33.95% of population is made up of ages 18-34 (300,593)
  • Boston, MA – 40.44% (261,228)
  • Chicago, IL – 30.2% (821,138)
  • Dallas, TX – 27.69% (348,340)
  • Lauderdale, FL – 22.27% (38,391)
  • Honolulu, HI – 21.06% (82,289)
  • Las Vegas, NV – 23.15% (139,707)
  • Los Angeles, CA – 28.14% (1,092,957)
  • Maui/Kahului, HI
  • New York City, NY – 24.88% (2,091,412)
  • New York, EWR, NJ – 24.88%
  • New York/JFK, NY 24.88%
  • New York/LGA, NY 24.88%
  • Orlando, FL – 30.58% (78,126)
  • Palm Springs, CA – 15.28% (7,071)
  • Portland, OR – 29.32% (178,692)
  • San Diego, CA – 30.98% (994,767)
  • San Francisco, CA – 30.84% (258,267)
  • Seattle, WA – 32.4% (211,379)
  • Washington, DC, WAS – 37.13% (244,646)
  • Washington DC/DCA, DC – 37.13%
  • Washington DC/IAD, DC – 37.13%

Determining the success of our campaign will be to see an increase of new Elevate Memberships with Virgin America. The service is free to join and lasts a lifetime. We want to get more people flying in style with Virgin Airlines. Cost, Tracking, and ROI will be the most effective way we will be able to determine success for online media campaigns.

The costs have been set to run ads on a few of the major social media platforms. By tracking the interaction from the social media site that gets directed to the Virgin Airlines sit will we be able to determine how effective any one particular ad is in its respective medium. Every month a team from the agency will evaluate which ads created the most traffic and how it can be improved and changed if needed at all, and adjust the ads that did not generate sufficient traffic.

To evaluate the success of print ads it will be keen to focus on the amount of sales boosted (or if they’ve plateaued-or worse dropped) for flights and promotions advertised with our print ads. And also the amount of traffic drawn from the magazine’s target audiences who access the site and Elevate memberships from either their personal computer, or mobile device.

The success effectiveness for a billboard depends on the measurements provided by the billboard rental company. They are able to provide information about a certain billboard’s location but however the ad is what must determine if it’s a success of not by whatever the call to action from the ad. Our billboard ads will focus on promoting the Elevate memberships and the idea behind how great life can be to fly Virgin Airlines.

Frequency

Online Per month:

  • Facebook ads will pulse every two weeks for the six months.
  • Pandora ads will pulse every two weeks for the six months.
  • Spotify ads will pulse every two weeks for the six months.
  • Twitter ads will pulse for two weeks for the six months.
  • Google AdWords will run with the Search Network for everyday of the campaign during the six month duration.
  • Google AdWords will run with the Display Network for everyday of the campaign during the six month duration.

Continuity:

  • For six months out of a full year the ads will for the Elevate Your Style campaign. The months being; February, March, June, October, November & December.

Evaluating Media

Local Radio Stations

  • The strengths of local radio in major cities are, large audiences reached by way of public transit with radio station where our ad plays, easy listening during commuting hours, also easy listening when at work, and when a taxi cabs is taking fares and has the radio on.
  • The weaknesses of local radio in major cities are, people who don’t listen to the radio, satellite Radio preference over local AM or FM stations, loss of signal or reception due to weather interference.
  • Billboard Ads major strengths: In major cities billboards have a high reach potential
    dependent on placement to traffic heavy locations, billboards at airports are common for airlines to advertise their flights, something easy to read and comprehend, especially for passengers in the car.
  • Major Weaknesses for billboards can be; a driver could be in a rush to see the ad, the driver should always keep their eyes on the road, so an ad that doesn’t grab too much of the attention of the driver so as to avoid accidents, graffitti could damage the billboard, or another billboard could go up directly in front of the ad, thus lessening the amount of people the ad is exposed to

Online Social Media Ads

  • Strengths for Facebook: High number of active users, easy to share and like and comment, advertising with Facebook can be very specific to area codes to target audiences
  • Weaknesses for Facebook; users could feel overwhelmed by the amount of ads that pop-up in their feeds, users could be running adblock software for their internet browsers
  • Strengths for Instagram are; high number of daily users, easy to share and tag friends in, a great platform for businesses to connect with their customers, easy to use interface on mobile platforms.
  • Weaknesses for Instagram are; high amount of traffic could pollute the ad, users might feel offended by seeing an ad show up on their newsfeed, cost of advertising on instagram is incredibly high.
  • Strengths for Google AdWords are; easier SEO (Search Engine Optimization) options to make keywords and names easier to find and have a higher chance of showing up in search engines, heavily trafficked search engine, easy connection and integration with many other social media platforms.
  • Weaknesses for Google AdWords, high clutter from competing airlines into keyword search engines, timing to make sure relevant keywords are used and updated regularly
  • Strengths for Twitter; are high traffic, if it trends on twitter it’s trending on the internet, easy feedback from public, Richard Branson is a very active public figure
  • Weaknesses for Twitter; if something negative shows up it can go against the company in bad taste and easily be shared and trending
  • Strengths for Youtube; video sharing platform can easily share and send short enjoyable content across multiple social media platforms simultaneously, high traffic, can organize a video into more keyword demographics instead of just an airline
  • Weaknesses of Youtube, if a video is too long people might not want to watch it.

Print Ads

  • Strengths for Print Ads
  • Condé Nast’s audiences fit right into the 18-34 year old demographic, a print ad lasts forever (so long as the page itself doesn’t get torn up, burned, etc), with the rise of media integration in magazines it can be very easy to send someone from a print ad to a URL via their mobile phone, people like seeing pictures, so give them what they want.
  • Weaknesses for Print Ads; people might look over it, people read less so magazine circulation will slowly drop, could be too cluttered with copy and information, and it could send the wrong image.

Mediums for our campaign

Online Social Media

Google AdWords

  • Cost of using Google AdWords Search Network:
    • $1-2 ($168 for six months)
  • Cost of using Google AdWords Display Network:
    • Average CPC is under $1
  • Using Google AdWords would go towards utilizing SEO for the terms “Elevate” “Virgin” “Virgin America” “Virgin Airlines”

Facebook

  • 7% of Facebook users are between the ages of 25-34.
  • Average time spent on Facebook is 20 minutes
  • 50% of 18-24 year olds check Facebook when they wake up.
    • Cost Per Click (CPC) – $0.24
    • Cost Per 1,000 Ad Views (CPM) – $0.66 as of July 2013
  • The goals of the Facebook ad space would be to target our audience in the major cities, through using location management services where Virgin operates, through promotions for the airlines, flights, prices, and dates.
  • Currently the Virgin America Facebook page has 639,867 likes. The goal for the 6 month campaign will be to increase those likes to 1 million likes.

Instagram

  • Instagram is incredibly selective, but their ad space has ranged between $350,000 to $1 million.
  • Currently the Virgin America Instagram account has 89.4 thousand followers. Ideally it would be great to reach half a million if not more for that account over the 6-month campaign.

Twitter

  • Costs for Twitter advertising:
    • Promoted Tweets $0.50 – $4.00
    • Promoted Accounts $0.50 – $4.00
    • Promoted Trends $200,000 per day
  • Currently the Virgin America Twitter account has 85 thousand followers.

Youtube

  • Pay-per-view of ad with average ranging $0.10-$0.30
  • The Virgin America Youtube Account currently has 22,284 subscribers.
  • Their most viewed video is the Virgin America Safety Video #VXsafetydance at 10,946,723. The video was uploaded on the 29th of October 2013.

Pandora Online Radio

  • In 2014 Pandora had 815 active listeners and 250 million registered users.
  • 175 million in USA
    • 115 million access via smartphone
  • Pandora Pandora typically shows seven display ads per listener hour and runs 2.5 audio ads (of 15 or 30 seconds) per hour. Users might also see a video ad.
  • Visual ads, on a CPM basis, sell for $5-$7; audio ads, $8-$12; and video ads, $15-$25. The sell-through rate — the proportion of premium advertising is sold directly by Pandora — is higher on desktop than mobile.

Spotify Music Listening

  • As of June 2015 Spotify had an estimate of 75 million active users.
  • Spotify advertising must have the advertiser invest a minimum of $10,000 into one or more of their formats:
    • Audio Ads – these include campaign cover art and clickable scrolling text
    • Display Ads – Leaderboard and skyscraper ads
    • Billboard Ads – Behaves like a screensaver
    • Homepage takeovers – Huge, completely unavoidable impression
    • Branded Playlists – Includes brand logo, custom text, and optional link to campaign
    • Lightbox – Overlay window that displays after user clicks ad
  • Advertiser Page – Microsite within Spotify player
  • Small Town radio ad repeated at 20 times per week would cost around $500 per week.
  • Major City radio ad repeated at 20 times per week would cost around $8,000 per week.
  • Major cities would be: Austin, TX | Boston, MA | Chicago, IL | Dallas, TX | Ft. Lauderdale, FL | Honolulu, HI | Las Vegas, NV | Los Angeles, CA | Maui, HI | New York City, NY | Orlando, FL | Palm Springs, CA | Portland, OR | San Diego, CA | San Francisco, CA | Seattle, WA | Washington, DC

Print Magazine(s)

  • Working with Condé Nast will be a great outlet to reach the target audience for the ‘Elevate Campaign’. Because Virgin Airlines is not your plain plane, nor is its flying experience just like ‘blah-blah airlines’, targeting the student and young professional would be great to encourage them to fly with a style that really captures what they’re about.
  • 1 Page Ad into Vogue Magazine.
    • We will insert variations of our “Elevate Your Style” print ad into Vogue Magazines for the months of February, March, June, October, November/December.
      • Total Cost for Vogue Print Ad for six months: $1,134,000
    • The reason we will run ads in Vogue Magazine is to go where no other airlines goes, promoting their brand in a fashion magazine.
  • 1 Page Ad into GQ Magazine.
    • Total cost for GQ Magazine Print Ad for six months: $1,113,246
    • The same strategy with Vogue’s ads will be used for GQ. Being the only airline promoting itself in fashion and lifestyle magazines. We want these readers to not only elevate their fashion sense but also the way they travel. They’re becoming professionals, so why not fly like one too.
  • 1 Page Ad into Details Magazine.
    • Total cost for Details Magazine Print Ad for six months: $641,010
    • The same strategy with GQ magazines, except adjusted to the target audience of Details.
  • 1 Page Ad into The New Yorker.
    • Total cost of 1 Page Ad for New Yorker ad for six months: 1,045,488
    • The same strategy but with an ad more catered to the target audience of The New Yorker.
  • 1 Page Ad into Vanity Fair.
    • Total cost of 1 Page Ad for Vanity Fair ad for six months: $1,339,530
    • The same strategy but with an ad more catered to the target audience of Vanity Fair.

Billboards

  • Billboards typically charge a rental fee for 4-weeks in, the rental fee may vary depending on size of billboard and city. A monthly cost for a billboard would be the minimum amount of billboards used by the cost per billboard.
  • Average 700-sqft billboard ad will cost around $500
    • So if 12 billboards are used in a city like Los Angeles we could look at a cost of around $60,000 per month.

Media Budget Breakdown

  • Google AdWords Search Network – $168 (for six months)
    Google AdWords Display Network – $X (dependent upon number of clicks at $1 per click)
  • Facebook – cost per click is $0.24. Our target will be to have 1,000,000 likes meaning the like button would require 360,133 clicks. A Facebook ad budget of $86,431.92 to meet that goal.
  • Twitter – $840 to promote an account for two weeks every month for the six month duration.
  • Youtube – $0.30 per view by amount of views for video content. If our goal for a video will be to reach 1 million views per month for the 6 month duration of the program then the cost would be: $1,800,000
  • Pandora audio ad- $1,080 at once per day for three months spaced out of the six total.
  • Pandora visual ad- $630 at once per day for three months spaced out of the six total.
  • Spotify ad – $10,000 minimum to advertise with Spotify
  • Print Magazine total cost: $5,273,274

Billboard Costs for 17 major cities:

  • Radio Costs for 17 major cities: est. $2,160,000

Total Media Budget: $9,332,423.92

Agency Cost (15%): 1,399,863.59

References

Advertising on Facebook: https://www.facebook.com/business/products/ads

Belch, G.  E., & Belch, M.  A.  (2012).  Advertising and Promotion: An Integrated                                    Marketing Communications Perspective (9th ed.).  New York, NY: McGraw-Hill.

CAPA. (August 20, 2014). Virgin America SWOT Analysis Part 2: Opportunities for an                           IPO in a more benevolent environment. Retrieved from                      http://centreforaviation.com/analysis/virgin-america-swot-analysis-part-2-opportunities-for-an-ipo-in-a-more-benevolent-environment-182675

Finkle, T. A. (2011). RICHARD BRANSON AND VIRGIN, INC. (). Arden: Jordan Whitney                     Enterprises, Inc. Retrieved from http://ezproxy.lasierra.edu:2048/login?url=http://search.proquest.com/docview/886432663?accountid=25308

Magazine Ad Pricing for Condé Nast. Retrieved from http://www.condenast.com/brands

Moore, M. (2012). Interactive media usage among millennial consumers. The Journal of                            Consumer Marketing, 29(6), 436-444.                                                                                         doi:http://dx.doi.org/10.1108/07363761211259241

Noyes, David (2015) Top 15 Valuable Facebook Statistics on zephoria.com Retrieved

From:https://zephoria.com/top-15-valuable-facebook-statistics/

Population Statistics for major cities gathered from the United States Census Bureau *http://www.census.gov/

Prosser, Mark (16 July 2013) How Much Does Facebook Advertising Cost? on

FitSmallBusiness retrieved from: http://fitsmallbusiness.com/how-much-does-facebook-advertising-cost/

Prosser, Mark (2013) How Much Does Billboard Advertising Cost? on FitSmallBusiness

retrieved from: http://fitsmallbusiness.com/how-much-does-billboard-advertising-cost/

Smith, Craig (2015) By the Numbers: 45 Interesting Pandora Statistics on expandedramblings

via: http://expandedramblings.com/index.php/pandora-statistics/

Spotify | For Brands retrieved from: https://www.spotify.com/us/brands/

Valentine, D. B., & Powers, T. L. (2013). Generation Y values and lifestyle segments. The                        Journal of Consumer Marketing, 30(7), 597-606.                                                                                    doi:http://dx.doi.org/10.1108/JCM-07-2013-0650

Williams, K. C., Page, R. A., Petrosky, A. R., & Hernandez, E. H. (2010).                                                  Multi-generational marketing: Descriptions, characteristics, lifestyles, and attitudes.                     The Journal of Applied Business and Economics, 11(2), 21-36. Retrieved from                     http://ezproxy.lasierra.edu:2048/login?url=http://search.proquest.com/docview/815978214?accountid=25308

Wu, J., Wen, N., Dou, W., & Chen, J. (2015). Exploring the effectiveness of consumer creativity

in online marketing communications. European Journal of Marketing, 49(1), 262.

Retrieved from http://ezproxy.lasierra.edu:2048/login?url=http://search.proquest.com/docview/1649066900?accountid=25308

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