Advertisers Climb On Board

American Demographics, Oct 1, 2002

Another new medium is in-flight Internet access. Although negotiations between the major domestic carriers and Connexion by Boeing, a new service to provide Internet servers for airplanes, were put on hold after Sept. 11, several companies are moving ahead with plans for Internet access. Seattle-based Tenzing Corporation markets software that enables in-flight e-mail and some Internet content via a proxy server on an airplane. However, progress has been sluggish. The connection is slower than a 56k modem, and must be routed at least every 15 minutes, resulting in content more "near time" than real time. And planes must be sidelined when the technology is installed. So far, Cathay Pacific and Varig Airlines have signed on for the Tenzing service.

Innovation is also occurring at the low-tech end of the spectrum. Several companies are hoping airlines will allow advertisers to promote products on the airplanes themselves, specifically on tray tables. Tray tops could carry ads that passengers would see each time they lower their trays. So far, no domestic carriers have signed up. The service is offered by two companies, U.K.-based MHM North America, which launched its SkySell last summer, and Chicago-based In-Transit Communications, which sells a similar product, SkyMedia. "Not only is it a new and much-needed revenue stream, it enables airlines to strengthen relationships with current partners and to find ways to work with new retail partners outside in-flight print media," says In-Transit and SkyMedia president Nick Pajic.

Ed Gargano, president of MHM North America, admits tray top ads have been a hard sell to the major American airlines. "They jump from 'Great, another source of revenue,' to 'Oh no, another form of advertising. Will customers be turned off?'" Gargano says. "[Airlines] want the money, but they're hesitant if the word 'advertising' is connected to it."

In fact, another company, Kansas City, Mo.-based Advent Airads, spent three years trying to convince airlines to allow ads to be placed on overhead luggage compartments, to no avail. While Delta Airlines sells space on its first-class meal tray cards, tray table ads are "not currently under consideration for media sales," says Amy Owens, senior account manager of promotional partnerships for Delta. "There's definitely a lot of on-board media opportunities now for advertisers. But it's a constant balance to maintain the value of the service or product for passengers and Delta's own needs, and the revenue that will result from it."

In the meantime, airlines are taking advantage of less intrusive, promotional opportunities. Delta sells ad space on the plastic covers wrapping magazines distributed on-board. The airline also sells ads on in-flight entertainment guides, snack bags, boarding passes, ticket jackets and e-ticket confirmation itinerary inserts. American Airlines recently began offering ad inserts in its headset packages, and plans to allow companies to make sample CDs or DVDs for the personal video recorder systems distributed to premium-class passengers. Last year, according to the London-based In-flight Management Development Center, advertisers paid approximately $360 million worldwide for placements and promotions with airline media.