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  Article , Travel , Success stories

Virgin Australia gains YoY PPC revenue growth

Time to soar

An icon depicting the rudder of a plane with the word “Virgin” written in red tile case script over it. Below the icon is the word “Australia” in lowercase grey font.

When Virgin Australia launched in 2000, the company saw itself as a new airline for the new century. Back then, it was called Virgin Blue and had one route from Brisbane to Sydney. Now, the company provides flights to 42 destinations within Australia, as well as 460 destinations in total.

The prospect of working for a business that had so successfully transformed itself from a low-cost carrier to a premium, full-service airline, held a lot of appeal for Ben Will, now the airline’s digital media specialist. Born in Germany, he moved to Brisbane hoping to take the airline’s paid search strategies to the next level and continue its upward trajectory.

“I love data and analysing performance, so I think digital is a great playground for me,” says Will.

Alongside David Rossi, national performance director at Columbus, a Merkle Company, one of the largest performance marketing agencies in Australia, Will is celebrating a significant paid search breakthrough. The duo is also looking back at the leap of faith that made it possible.

“As an agency, but also as a team, we have really moved,” says Rossi. “We get challenged by Virgin Australia with very strict targets that we need to achieve. For every additional piece of budget, we need to ensure we’re accountable and that we’re also delivering against the company’s business targets and business goals.”

It has been quite an exciting journey from the beginning, where the Columbus team was mainly focused on search, to now, where we’ve diversified the strategy and we’re supporting the entire business with a performance-driven approach to digital media buying.

— Ben Will, digital media specialist, Virgin Australia

Brand identity

Ben Will, digital media specialist for Virgin Australia, stands against a white background. He is a tawny haired, light skinned man with a goatee in a light blue Oxford shirt.

Ben Will, digital media specialist for Virgin Australia.

As part of Sir Richard Branson’s global phenomenon, the Virgin Group, Virgin Australia shares one of the brand’s key cornerstones: changing business for good. In 2005, the airline was the first in Australia to introduce mobile check-in and has remained at the cutting edge of in-flight entertainment. That early adoption mentality is a key reason Will and Rossi embraced the opportunity to be the first-to-market users of Adobe Audience Manager for the Microsoft Advertising (formerly Bing Ads) Custom Audiences beta in Asia-Pacific markets.

“We were using Audience Manager for several channels within media buying and website personalisation, where previously we only utilised it in terms of display buying because there were no proper integrations with our search campaigns,” remembers Will. “But the possibility to leverage the same segments in search and display is great because that centralises it all and enables us to apply it in the same way. In terms of orchestrations of our multichannel media mix, it provides a better way to align our audiences and create relevancy.”

Using Adobe Audience Manager, Virgin Australia and Columbus have been able to execute audience-targeted digital efforts in Australia, the United States, the United Kingdom and New Zealand across the Microsoft Search Network (formerly the Bing Network) and with display advertising on Microsoft properties.

“We’re always on the lookout for things to test,” Rossi says of their mindset. “Our approach to testing is a 70/20/10 approach: 70% of our budget and time spent is on what we know as our foundation, then we have 20% looking for new opportunities, and the final 10% is focused on trying something we haven’t ever tested before.”

For Will and Rossi, that approach allows them to operate in a sweet spot of sorts, where their successes are maintained, while they remain at the forefront of industry innovation.

“It has been quite an exciting journey from the beginning, where the Columbus team was mainly focused on search, to now, where we’ve diversified the strategy and we’re supporting the entire business with a performance-driven approach to digital media buying,” marvels Will. “We’re always trying to test out the newest features and be very innovative in our approach, so we can utilise data as much as possible in our media buying and ensure we’re efficient and effective in our media spend.”

Rossi started at Columbus nearly five years ago and was particularly thrilled to take on the Virgin Australia account, which was an open-minded working environment. “Working on an account like Virgin Australia is ideal. It’s the account you want to work on because we get to do the coolest things,” he says. “We have flexibility while we get to simultaneously play a pivotal role in a lot of interesting campaigns and deliver case studies such as this one, which really shows the expanse and breadth of the work we’re delivering.”

Better efficiencies, bigger growth

David Rossi, national performance director at Columbus, stands against a gray background. He is a dark haired, light skinned man with a goatee in a blue checkered Oxford shirt.

David Rossi, national performance director at Columbus.

Virgin Australia uses its own data with Microsoft Advertising Custom Audiences to target customers. Custom Audiences help businesses use their own first-party data, collected directly from their customers — for example, data collected from their own website or apps — to create richer audience segments to enhance remarketing efforts. “Virgin Australia applies models based on the likely propensity for users to buy flights to certain destinations,” Rossi says. “The fact that we can feed those models into Bing Ads, straight from our data management platform [DMP], and then set different bid modifiers on top of them gives us increased flexibility and confidence to know that we’re targeting the right users across our search performance and media buy."

The pairing of Adobe Audience Manager and Microsoft Advertising seems to be driving new breakthroughs almost every day — on the company’s terms. “With the DMP, we can authenticate users and refer back to their actual ID in our unique way, giving us the flexibility to apply that authentication that we have across our internal tech stack at Virgin Australia, hosting all that data and making sure we stay in control,” says Will. “That’s just another great advantage of being able to use our own audience management system.”

All of this has led to a recent 18% year-over-year growth. “We increased investment across Bing Ads by 18%, but what was really impressive was an 18% increase in revenue alongside that,” Rossi says. “It means that even with the increase in investment, we actually maintained efficiencies.”

A lot of those efficiencies came from an increase in the average order value of bookings, which increased by 5%. Knowing that they were targeting higher value users — unique searchers on the Microsoft Search Network (formerly the Bing Network) spend 38% more online than the average internet searcher — Will and Rossi were able to drive a 13.4% increase in the conversion rate.

“Those numbers make me feel really good,” says Will. “It’s most exciting after you see another channel where you think you’ve already saturated demand, and then you see such a massive increase in growth. Look, the industry trend is that CPCs are getting more expensive. When you get more competitors, and you have more competition on all the travel search ads, it’s such a relief to see this growth rate, just because you’re applying a new way of targeting or leveraging your audiences better.”

A more affluent audience

With Microsoft Advertising, Virgin Australia has achieved an 18% increase in year over year revenue, a 13.4% increase in conversion rate, a 5% increase in average order value of bookings, and a click-through rate of 23.57%.

Virgin Australia increased its conversion rate and average order value of bookings using Microsoft Advertising and Adobe Audience Manager.

Will and Rossi found that their new strategy brought them a more affluent and likely-to-convert audience. Says Will, “For Virgin Australia, our core customer segmentation aligns more with the Bing Network audience. I think that might be one reason we’ve increased the investment because we've seen that performance growth and the conversion rates.”

“Average order value is really the main point of difference here,” explains Rossi. “It’s 5% higher, and that’s not a small number when we're talking about the amount of bookings that we drive; 5% equates to a significant amount of revenue. So, that allows us to increase our investment across Bing Ads because we know that we’re getting more revenue for each booking.”

In partnership with Columbus, which is seeing some growth of its own following a recent acquisition by Merkle, Virgin Australia is poised to take things even further. Will and Rossi are eager to embrace additional leaps of technological faith.

“You need to be willing to take the risk and try new things in order to become a better marketer and to be more effective,” Will says of the strategy. “The proactive approach to trying out new things and leveraging new technology is embracing whatever we believe to be the best way to conquer our challenges, better sell our airline inventory and ultimately fill up our airplanes.”

Increased revenue, embracing innovation, harnessing the audience — the three would seem to go hand in hand. With that in mind, Virgin Australia and Columbus, a Merkle Company, look to the future.

“There's more buy-in from Virgin Australia to maintain our larger presence with always-on media, such as search through Bing Ads,” Rossi says. “We'll continue to make sure we're encompassing all media channels where performance is being delivered.”

For Virgin Australia, our core customer segmentation aligns more with the Bing Network audience. I think that might be one reason we’ve increased the investment because we've seen that performance growth and the conversion rates.

— Ben Will, digital media specialist, Virgin Australia

See a summary

View or save the infographic to see how Virgin Australia achieved an 18% increase in YoY revenue and a 5% boost in the average order value of bookings using Microsoft Advertising.

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