Icelandair's Multi-Part Effort Will Promote Loyalty Club

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Icelandair North America breaks a fresh round of online marketing this month for its Lucky Fares program, an Internet-based loyalty club offering discounts on international air travel tickets.

The airline's Columbia, MD, office is using Carat Interactive's services to target the home market, tourist and business travel to Iceland and the North Atlantic traffic between the United States and Europe.

"Icelandair would like to grow this database to continue to increase awareness about Iceland tourist activities as well as bookings to Iceland via Icelandair," said Jeremy Cornfeldt, director of Carat Interactive, Boston.

The agency will rely on relevant creative, media buying and planning, customer relationship management and cost-per-click search engine marketing to drive traffic to and build the database.

Carat's first task is to create co-registration programs to build the Lucky Fares database. It partnered with WeatherBug, a downloadable application that sits on the desktop, for registration-based targeting.

WeatherBug users who have opted in for travel updates in general and from Icelandair in particular will see the airline's branded look-and-feel in the WeatherBug application's background. Plans call for a link to the airline's site, too.

Other sites in the co-registration plan include, ValueClick, Lycos and Excite/iWon. People registering for a program on those sites will view Icelandair offers via ad units or text links. Clicking through the unit or link and registering generates an auto-responder e-mail.

Icelandair will also use e-mail to promote deals on trips to Iceland and activities like the Iceland Airwaves Music Festival. Another kind of e-mail will promote Lucky Fares alerts. E-mails will go out only from the existing house file.

"We're also using e-mail to increase the look-to-book ratio," said Christopher Harris, client partner at Carat. "We're looking to drive people to the Icelandair site with compelling offers."

The e-mail itself is in for a change. Carat is creating a new template for U.S. subscribers. Ease of use and more eye catching that engenders forwards to friends because of the content are the dual reasons.

"We'll either be paying on a registration or a cost-per-click with e-mail co-registration campaigns that are sent out," Cornfeldt said.

"The Lucky Fares subscribers have high interaction rates with the e-mails, and they book travel online to Iceland," he said. "This database and communication method has been very successful for Icelandair."

Finally, the airline will use keyword buys on Google and Overture to drive traffic online and to the Lucky Fares program.

Icelandair does not disclose the size of its database for competitive reasons. But it is safe to say that a large chunk of those names live near Boston, Baltimore, Minneapolis, New York and Orlando, FL. Icelandair flies out of these cities.

Though this summer began on a rough note for Icelandair, it usually finds little need to discount fares for U.S. customers in that season. The summer customer typically is more affluent, older than 35 and earning more than $75,000 a year in household income.

The profile is starkly different in the colder months -- a lean travel period for most airlines.

"In the winter, they have special fares to encourage people to go to Iceland," Cornfeldt said. "They typically have a younger audience over 19 years, lower-income people going to Iceland in the winter, more college students and young adults a year or two out of college."

Like its rivals, Icelandair is moving part of its advertising to an online medium where bookings increasingly are migrating. According to Jupiter Research, $43 billion worth of travel will sell online this year, or 20 percent of travel bought through all channels.

Online marketing -- or any channel, for that matter -- is critical for the Reykjavik, Iceland-based airline. Like its peers, Icelandair is suffering from curtailed business and leisure traveling, especially in the aftermath of the Sept. 11 tragedy.

The number of passengers flying Icelandair in June, the period last reported, dropped 9 percent versus that month last year. The decrease is 10.3 percent on the North Atlantic routes. And it is down 8.2 percent in the number of passengers flying to and from Iceland.

Also, seat supply in June was 1.2 percent lower versus the same month last year, thus decreasing load factor by 5.6 percent, the airline said.

The picture worsens when measured January through June. The number of passengers flying in the first half of the year dropped 10.7 percent from that period last year. This is attributed to the 25 percent fall in the number of passengers flying North Atlantic routes.

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