Jetstar to switch 40% of marketing budget into social media
Budget airline Jetstar has announced a “significant shift in marketing spend”, with 40% of its budget to go into social media.
David May, Jetstar’s head of marketing and PR, said the move – which will be implemented during the next financial year – followed trials during 2009.
The move marks bad news for print, with Jetstar a big newspaper advertiser. Jetstar is the first major brand to make such a dramatic shift of marketing spend into social media.
The announcement coincides with Twitter’s fourth anniversary.
In a release citing “traditional media becoming more expensive and fragmented”, the company said: “The significant shift in marketing spend shows Jetstar’s increased focus on social media and acknowledges the significance of social and digital media as a marketing tool.”
May said: “We’ve conducted some very successful marketing and PR campaigns via social media in the past 18 months, including YouTube and Twitter, and the response has been phenomenal.
“The increase in costs of traditional media compared with the audience reach is significantly higher than with social media, where you can potentially reach hundreds of thousands of consumers with the one simple online message – and digital TV isn’t filling the gap.”
He added: “It’s clear our customers are comfortable in the online space and as Jetstar is essentially an online retailer, it makes sense for us to embrace social media outlets. Online media channels gives us immediate access to our consumers. Social media offers more value for money and is a smarter way to reach our customers.”
Jetstar uses social media as a channel to announce new route launches, highlight special offers and announcements, and respond to customer queries.
Last year, Jetstar ran a sale exclusively on Twitter as part of its fifth birthday celebrations. It offered 1,000 seats for two cents – and sold out in hours. And in August, Jetstar announced a new route launch using Twitter with a “free seats” offer for its new Sydney-Melbourne services.
The airline also launched its customer charter on its YouTube channel last month.
May dicussed the company’s use of social media when he was a guest at Mumbrella Question Time (3.30) earlier this year:
Richard Smith, MD of Maxus, Jetstar’s media buying agency, added: “In line with the increasing need to talk to smaller, interconnected communities; communities that when aggregated deliver large numbers of engaged and involved brand advocates, we are likely to shift a large percentage of Jetstar’s above the line media spend into digital areas, with an increased focus on social media, Mr Smith said.
As well as Maxus, Jetstar uses Haystac for its PR. Much of its digital work is handled in-house.
Linkedin
and the shift begins….
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social media strategists would be pretty aroused right now.
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Selling out 1,000 2c seats in hours…This actually seems like a pretty long time to me.
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Does anyone know what the current % is?
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as long as they save us from the bogan nation tv ads i’ll be happy.
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@Beaudacious – <5% according to another article. Of a total budget of $25 million, assuming that's all ATL, that's an $8m + shift in one FY!
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It’s a nice claim but how do you quantify this? jetstar spend give or take $35m from reports … 40% of this is $14m or thereabouts.
Love the sentiment but the numbers don’t really add up with the current spin.
$14m is a lot of social media strategy people who tell you to do facebook and zynga ads to pay for! Unless this also includes search engine marketing – paid search and seo – plus performance etc etc.
I feel for Maxus – they will be getting a lot of calls from salespeople now.
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Jetstar ought to put some of their marketing dollars towards fixing their crappy online ticketing process and upgrading their call centre call management capabilities. A low cost operation shouldn’t translate to low care – but that’s where Jetstar sit right now. “At least 15 workding days” for a customer care analyst to respond to your online query. remarkable.
I don’t give a flying fig whether I get their messages through FB, Twitter etc if their ‘care’ isn’t up to scratch.
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Oh Rotsa Ruck with that…does this mean Jetstar are planning to engage their customers even if they have a legitimate bitch? Sorry about the flame but really, first hand experience of extracting answers from this organisation had me joining the queue voting with their feet. I do hope they will engage..
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I’m sorry, but how is this effective? Selling tickets for 2 cents or giving them away for free would be a successful and compelling offer in ANY medium – not just social.
If i wanted to test the commerical viablity of media channels to determine which is the most effective, i’d advertise the same message across each – TV, press, online, radio and social – each with a different Call to Action destination and then see which one delivered the most ‘hits’.
But that twitter example is a load of BS – plain and simple dumb.
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Mich is right.
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@Larry – social media strategists you say? they always seem aroused to me – that’s probably because they spend most of their time touching themselves 🙂 in the real world though, I think of them as unicorns .. mythical 🙂
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Great to see old channels that have been hanging onto incumbent positions coming under threat from good research and good results.
I dont know if I should say well done Jet Star, or about time.
Can i use my frequent Facebook smiles?
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Now if they could only spend 40% actually doing a customer charter….
Now that’d be good.
And I agree with other commentators that using a sell-out 2c seat promo as proof of social media is a bit self-serving.
Imagine how bad all these poor 2 center customers will be treated when their full-fare payers are treated like bugs. Probably be hanging onto the wings, with one hand.
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At the end of the video he talks about the financial penalties they have put in place, i’d like to hear more about that.
So if they don’t tell me my flight is delayed then they get penalised? Weird.
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im with Mich
If you want to compare offers then make the same offers across all medias and record the results.
The result may be the same but until you do, it is difficult to measure the effectiveness
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The key words here are cost and effectiveness.
Cost of a national TV, Radio or Print campaign, hundreds of thousands of dollars. Cost of a twitter or facebook campaign, a few hundred dollars (unless you ask a traditional advertising agency) – PRICELESS!
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Traditional ad agencies pinch yourselves and smell the digital roses. Real analytics from digital might result in your fluffy, feel good, wishy washy, very expensive traditional skills no longer required… We shall see?
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Real analytics, as opposed to fake analytics?
Social media isn’t FREE it takes time and effort, someones salary, training, setup and reporting. This doesn’t mean it’s going to cost anything near TV, but it’s achieving a completely different outcome.
You can’t reach 2M people with a message on social media very simply, however, TV wont create the same level of engagement that a direct conversation on Facebook or a blog will create.
On another note, the way I read it Jetstar are moving 40% of their money to Social Media & digital, depending on who you believe… Compare the different articles yourself…
Mumbrella: “Jetstar to switch 40% of marketing budget into social media”
B&T: “shifting up to 40% of its marketing budget to social media and online”
Adnews: “40% of its $25 million marketing budget on social and digital media”
Digital-Media.net.au: “40% of its marketing budget to social media and online”
Who knows…?
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– The key words here are cost and effectiveness.
Yeah 40% of it’s ‘new budget’, they can halve their existing ad budget be twice as effective and communicate more effectively with their audience then again do I really want to be constantly reminded of the Jetstar experience?, no thanks…it makes me rattle like their planes
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has anyone thought that this might be a bit of bluster to negotiate current broadcast and press deals down in price?
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The % allocation / total budget is not the point. Savvy marketers are always looking for the most effective ways to reach / influence / engage their target markets. Social marketing is the latest option that, given the evidence, is worth exploring.
If Jetstar’s decision is deemed a failure after 12 months or so they’ll move on or back to what they’re currently doing. And rightly so.
Helping clients achieve their objectives is the only point of marketing communications. If Social Marketing fits the bill all well & good. The strategy should not get any special treatment just because it’s flavour of the month.
The key is not to carp from the sidelines but to get involved and find out for sure what works & what doesn’t.
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@Ben S – exactly!
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Just to repeat myself, you’re all arguing about the wrong thing people!!!!!! They’re not moving 40% to social media, it’s 40% to social media AND ONLINE!
Read the headlines from B&T, AdNews & Digital Media for yourself…
Mumbrella: “… to switch 40% of marketing budget into social media”
B&T: “…shifting up to 40% of its marketing budget to social media and online”
Adnews: “…40% of its $25 million marketing budget on social and digital media”
Digital-Media.net.au: “…40% of its marketing budget to social media and online”
And what does digital media OR online mean? Basically it’s a big pool of traditional & non-traditional media & creative, search and other NON-SOCIAL things…
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Completely agree w earlier comment – its not rocket science that a roughly free ($0.02) offer is going to sell out. What WOULD be interesting is for them to run an exclusive offer or route (at normal price) on Twitter and see how quick the uptake is.
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Richard Smith from Maxus has hit the nail on the head.
It’s now about smaller interconnected communities of interest. I was glad to read in teh comments that it was a spend across all digital, not just social. I was wondering how they could spend so much on social.
Which is where we are still seeing maintstream agencies, through their digital bolt-on, missing the point, to some degree,
Social media / social networking strategies are not just about marketing, per se. It is about organisations engaging in teh conversation.
I think that ad agencies are going to struggle with this engagement. I think that their clients need to look inward for their social networking / social media strategies. Thet might look at crowdsourcing within their own crowd before hiring out engagement to agencies.
Jimi Bostock
PUSH Agency
Brisbane | Canberra | Sydney | Australia
jimi@pushagency.net
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Online entity spending more on online marketing….shock horror.
Promotion with 2 cent air fares sells out – shock horror
Using the term ‘social media’ to get a headline – shock horror
In summary Jetstar are conducting a ‘test’ to see if they can drive efficiencies via ‘Digital’ versus other channels – groundbreaking I think not
Dressed up in a PR bow to appear as a progressive brand and on the front foot of social media…probably
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1,000 two-cent seats in a couple of hours on Twitter, eh.
I wonder why they chose Twitter? Maybe if they had run the same campaign on TV (which we keep being told is either already dead or dying) it would have melted down their servers and/or call centre in a matter of minutes. Oops, did I say ‘campaign’? I reckon a single spot would do it. So, run stunts on Twitter (and the two-cent seats were a stunt) because the rate of response will be manageble. Run the same stunt on TV or mass-media and there would be bedlam. I suppose it all depends on how you define ‘effectiveness’.
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