FlyingNut724

I totally disagree. The functionality of each category of device is very similar, and the hardware used in each category of device is largely the same. You can get the same apps on an iphone as you can on an android. Certainly the amount of variation between smartphones is similar to the variation in airlines. It is the branding that largely differentiates those products.

EDIT: And, just to add a thought, I think it would be delusional to think that UAs problems over the past year and a half haven't tarnished its brand and driven some consumers to fly other carriers.

UA-NYC

...and yet you have major airlines like AA, DL, WN (not UA anymore I guess) with likely high 8, or even 9 digit billings w/major ad agencies.

How exactly do you explain that then? Or are you just right and the likely hundreds of marketing, branding, creative, etc. types at each of these airlines is a total waste?

Orion

Innovation: AA and their frequent flyer program.
UA and economy plus.
The successful big ideas are few and far between. Both of these were home runs.

DaviddesJ

No one from UA has ever shown up at my house to demand I buy anything.

Maybe you live in the wrong neighborhood!

Of course it's mostly wasted. I think everyone understands that a large fraction of brand advertising is not justified by the return, however, it creates lots of jobs for the people who do it. UA's marketing department isn't going to downsize themselves by saying, our advertising isn't worth what it costs, let's get rid of most of it.

The colossal inefficiency of traditional brand advertising is a big part of why Google was so successful---when your competition sucks, it's easy to outperform it. And if you give people something else to spend part of their budget on, that's a lot more viable than trying to get them to reduce their own budget.

UA-NYC

While there's been a shift to online and other newer media, the bulk of ad spend is still TV. DVRs have been around for years now and continue to gain critical mass, yet TV ad spend goes up and up. IMO this pretty clearly shows it's not wasted.

I think AA's use of it is pretty masterful, helping to deflect consumer worries about BK. UA, you could basically say the opposite - 3+ years later, still no brand campaign. Per marketing reps I talked to at the EWR event, they won't be sitting on the sidelines much longer...but I gess we'll see.

Not sure what Google has to do with advertising - people don't watch TV looking to catalogue all the info in the world.

DaviddesJ

Your argument is that because it keeps happening it must not be wasteful? Really?? CEO salaries also keep going up. Does that prove that CEOs are getting better and better, and must be more and more valuable? All large organizations suffer from agency conflicts. People do things because those things benefit themselves, not because they are objectively good for the organization. Marketing spend is a classic example of that.

Are you joking, or serious? Google is the world's most profitable and most valuable advertising company. Where did you think its revenue comes from?

UA-NYC

If there wasn't some internally generated ROI metrics that showed brand building, advertising & promotions, etc. didn't have a payoff, we wouldn't be seeing them. I don't think that line of business is seen as a "jobs program", in essence as you put it.

If you too are advocating that it's all just a waste (by in essence saying "I don't watch the commercials, all that stuff has no impact on me"), there's no point in having the discussion - you're not going to be convinced otherwise.

Google isn't an "advertising company" - it's a tech company that draws the bulk of its revenues from search.

Google's success has not come at the expense of traditional media you know...it's tough to create an emotional connection with a banner ad or a sponsored link.

anc-ord772

Does everyone even agree there is a problem?

I know the c-suite isn't happy with the financials. The street response seems mixed to mostly positive, and it seems customers are just not responding the way envisioned (paying a premium to travel on the new UNITED).

Assuming there is agreement that UNITED is not making the money (or running an operation) it said it would be at this point, is that even a problem?

eponymous_coward

Two things:

- WN has been leading the majors in the least DOT complaints per passenger for something like decades now. It's probably not a fluke; I never feel like a peon flying them (something an airline that has SuperEncrustedUltraObtainium status and multiple cabins often does make you feel like). There's a great deal of literature on their workplace culture too (that I think helps with their perception).

- By chance are you one of the folks who loved UA's marketing during the 2000's, complete with Rhapsody in Blue? A lot of people seem nostalgic for this- might you be one of them?

This was a time when UA abandoned JFK and MIA and lost a lot of money, and bland CO added a lot of dots to their network. Does that help with giving you data?

And yes, people do select airfare primarily on price. AA's More Room Through Coach wouldn't have failed otherwise. VX wouldn't have taken 5 years to make a buck otherwise (they basically started turning a profit this year by capacity discipline and promising debtors an IPO so they could cash out Really Soon Now).

Search is a way for them to get advertising revenue. Google is selling eyeballs.

Also: are you not noticing newspapers and magazines folding right and left, or being sold for pennies on the dollars they fetched a decade or two ago?

halls120

I'm not talking about door-to-door sales, but I think you knew that, right? Besides, in my neighborhood that is prohibited.

I'm talking about AA taking the time to craft a more personalized e-mail campaign, and UA flooding me with e-mails suggesting that I get the MileagePlus Explorer credit card because it will give me "2 free United Club Passes!!!" All well and good, but I've been a member of the UC since 2002, so why is that aspect of the Explorer Card an enticement?

UA-NYC

Exactly - you're making my point for me. Branding has helped WN overcome a lot of that.

But of course, as I'm sure you knew that - but I also appreciate a good "grounded" campaign (have loved the recent AA, DL, WN work) as much as a higher-order emotional one.

How does this deal w/branding and marketing again? CO abandoned a dot at DEN, DL did at DFW, AA did at STL.

Of course price is key - I've never said otherwise. I'm refuting the (IMO short-sighted) notion that branding & marketing has zero impact on the consumer, is a waste, isn't a differentiator, etc.

I wasn't familiar with the big "airline ad spend in newspapers" business...

Are you noticing the increase in TV channels from 5 to 500+ now?

DaviddesJ

OK, I can't believe you're seriously making this argument. This also means that if Smisek gets a big bonus then he must be doing a great job?

I helped build Google's websearch---I'm very proud of it---but search doesn't generate revenues. It's the advertising that generates revenues. Without Google's advertising system, their stock price wouldn't be any higher than Yahoo's.

And of course a large share of Google's success has come directly at the expense of traditional advertising. Because traditional brand advertising is mostly self-indulgent waste, any alternative that is measurable and effective quickly draws dollars away from the traditional channels. Because it's more effective, it also increases the total budget. But tell anyone who worked in advertising before the 2000s that online advertising doesn't compete with traditional advertising, and they will laugh at you.

N779UA

Please go easy on me, I'm still new.

The UA/CO merger, from my personal POV, has made the highlight of my year (my RT home to England) more expensive, and less fun.

I started flying the LHR-IAH/IAH-LHR trip back in 2003, as my handle indicates, on the old UA. The IFE didn't really work and was clunky, but I got my free beer at the back of the plane and I only paid $400 RT. I used to be able to afford the trip two or three times a year, and I went with whoever lastminute.com (remember them?!), Kayak, Expedia, ebookers or whoever gave me the best deal. I made the trip on DL, AA, NW and eventually it ended up always being CO - sometimes codesharing with VS. Often via a US hub. I enjoyed flying. I sometimes went with the not-quite-cheapest deal to get a ride on an equipment type I'd not rode before or to see an airport I'd not been to.

I was happy with CO, the fares were predictable ($600-700 RT), we had nice 772s and 752s with AVOD and it felt like CO wanted me to travel with them. Hey, I even managed it for free once with my miles that took me seven years to earn.

Then everyone started merging with each other, and the fares started to climb. Dramatically. For my trip in October, ignoring an option ($100 cheaper) to fly via Istanbul with a 20 hour layover each way, UA had the cheapest fare at just the wrong side of $1100. For my $1100, I don't get free beer at the back anymore, and the 772 has been replaced with a 763. No AVOD, no in-seat power, only one free bag (it used to be two) and it doesn't feel like anyone wants my business anymore, especially not the new UA.

I'm paying more to get less. Flying just isn't fun anymore.

I feel better now I've vented.

UA-NYC

He's not doing a great job - he's doing a mediocre job That's why he took a haircut on his bonus you know.

IMO Horton did a GREAT job in 2012...I think part of his payout actually is coming from UA bungling a lot of the merger activities last year.

This is all hugely OT - but the goal of Google is basically to catalogue all the info in the world, right? They did it better than anyone else, thus they got the users, thus they got ad revenue. And because they're still the monster in search, and the product speaks for itself, there's no critical need for any Google branding/ad campaign.

But there's no Google in airlines that just laps the field - so brand building is important.

I now of course understand why you feel this way about trad'l media Google of course has destroyed print advertising (and to your point, it's more effective, so it makes sense). TV seems to be doing pretty well though:

http://www.marketingcharts.com/wp/te...2011-q12013-2/

(Let's not even get into social, where UA is clearly a laggard in its peer group...)

J.Edward

Greeting everyone.

The topic of this thread is: "The Core of UA's Problems: No Innovation, No Creativity".

Safe Travels,

J. Edward
UA Forum co-moderator