PORTLAND, OREGON – The digital media market is estimated at more than $1 billion of the overall $10 billion market opportunity for inflight entertainment and connectivity. Little wonder, then, that inflight entertainment (IFE) advertising is emerging as a deeply attractive avenue for airlines.
Fiji Airways has already taken this route, tapping its content service provider (CSP) Global Eagle Entertainment to sell advertising and sponsorship spots, which will begin appearing on the airline’s IFE screens at the beginning of 2016. Global Eagle has also signed an exclusive agreement with American Airlines to provide IFE advertising services to the US major, RGN unearthed today at the APEX Expo in Portland, Oregon.
Under its agreement with American, Global Eagle will provide inflight advertising and brand sponsorships for the carrier’s in-seat and overhead IFE screens and personal electronic devices. A long-time CSP to American, the contract award highlights what Global Eagle sees as the unique strength of its integrated offering to airlines. “Through recent acquisitions and internal investment the company has been expanding its advertising and sponsorship sales capabilities, a key offering of its Digital Media Solutions group. Global Eagle’s effort to grow this business has resulted in multiple wins and share gains in this market segment,” Global Eagle CEO Dave Davis told RGN.
APEX Global Eagle chief commercial officer Wale Adepoju noted during the show that the firm’s continued efforts to build its advertising and sponsorship business both organically and through the integration of recent acquisitions “offers our mobility customers a powerful tool to generate ancillary revenue”.
Inflight advertising is not new; airlines have shown commercials before movies for years, and in some instances tailored adverts for the traveler’s destination. But there is an opportunity to bring it into the 21st century, while ensuring a great passenger experience, according to Tim Letheren, co-founder of PaxLife, a new market player whose digital advertising team looks to shape an airline’s product from Day 1. The goal is to turn a cost center to a profit center for airlines.
But are passengers open to advertising? PaxLife commissioned a global survey of 700 regular flyers between August and September 2015, and found that 73% would be receptive, as “consumers understand the value exchange of advertising for content”.
That may be so. “If there’s a clear benefit to the passenger, such as sponsoring free inflight entertainment like Beats Music on Southwest and Personal Device Entertainment on United, in-flight advertising has a rightful place in the sky,” says Routehappy data research manager Jason Rabinowitz.
“As long as the ad isn’t overly intrusive (plastered on the seat back), I think most passengers are accepting of in-flight advertising.”