Research Projects

Creative Marketing Techniques to Improve Revenue Generation Partnerships In Reserve

The objective of this project is to research how big data and targeted advertising are used to generate revenue in the aviation industry as well as how they are used in other industries, and identify ways those methods can be used by airports to generate revenue from those same sources. One aspect of this research will include identifying potential entities with whom airports can partner strategically, such as airlines, TNC companies, concessionaires, car rental companies, and parking operators, to identify and collect those untapped revenue streams. This research will also quantify any investment that would be required (software, hardware and/or infrastructure) and the potential risks associated with including the use and storage of personal information about travelers.

Background (Describe the current situation or problem in the industry, and how your idea would address it.)

Airports are facing numerous challenges regarding rising operating costs and falling revenue that impact how airports are operated and maintained. Airports need to consider new methods to generate revenue to address those challenges. Traditional airport revenue has come from terminal rent, landing fees and parking. Other common revenue generating sources include terminal concessions, car rental (through a customer facility charge), ground transportation access fees, real estate and leasing facilities and land, and advertising. But what about those new digital sources of revenue such as big data and targeted advertising? Airlines are using them extensively. But what about airports? What can airports do to generate revenue from these sources as well?

Big Data
Big Data, as understood and accepted by most today, is high-volume, high-velocity and high-variety information assets that can create substantial economic value and help with operations, decision-making, risk management and customer service. Big Data is about processing large volumes of data in almost real-time, to create spontaneous value. Airlines are currently using big data analytics to personalize customer experience for all types of travelers. Airlines recognize that they can put their huge volumes of data to work for them in supporting airlines' brand, customer loyalty and profitability. (https://www.ft.com/content/f3a931be-47aa-11e8-8ae9-4b5ddcca99b3 ) For example, United Airlines is assessing big data collected during passenger purchasing activities in real time to determine an individual's likely actions, rather than judge based on an aggregated group of customers, then customizing offers tailored to that individual. This demonstrates United's new data-focused mantra "collect, detect, act". Southwest intelligent, data-based targeting to observe and consider customer online behaviors and actions so that they can offer passengers the best rates and experiences possible. (http://fortune.com/2014/06/19/big-data-airline-industry/) As this information demonstrates, the airlines are using big data to their advantage, to better serve their customer and ultimately to increase profitability.

Targeted Advertising
According to Comtrade Digital Services, a Targeted Advertising Platform (TAP) is a cloud-based service that integrates with an airline's inventory and central reservation systems to reveal contextually relevant information to passengers in real time. From flight-booking websites and confirmation emails, through boarding passes and in-flight entertainment, to mobile application interaction all along the way, these digital interactions provide direct access to passengers without vendors in the middle taking their cut of the revenue. Comtrade Digital Services helps the airline industry leaders implement the most advanced and innovative digital technology solutions. (http://content.comtradedigital.com/targeted-advertising-platform )

TAP uses aspects like algorithmic data filtering, automated real-time auction of advertising space and content, contextual suggestions for improved targeting to send content-appropriate messages to specific passengers who will respond to the advertising. So why not use this same technology to generate revenue for the airport? An inherent problem lies in the airport's access to the passenger data, which the airlines, car rental and TNC companies already have due to the passenger's account information and/or record. The sharing of this data with airports has been controversial in the past.

Strategic Partnerships
Airports are natural partners with airlines, TNC companies, concessionaires, car rental companies, parking operators and hotels and work together in many ways. These synergistic relationships could be used to generate new revenue that may ultimately help reduce operating costs for these airport partners.

Approach (Describe in general terms the steps you think are needed to achieve the objective.)

Conduct an in-
depth literature review
of sources
that document
the use of big data and targeted
advertising in aviation
, in transportation, and other industries
, as appropriate
.
2.
Research partnerships between interested parties in aviation
, transportation and other industries, as
appropriate, to identify those that were productive
, synergistic
and generated revenue for both
parties.
3.
Review and analyze all
documents and data collected.
4.
Develop a
list of opportunities where big data and targeted advertising could generate revenue for airports
including documenting investment that would be required (software, hardware and/or in
frastructure) and
the
potential risks associated with
each.
5.
Document strategic partnerships that
airports
could develop to generate revenue,
such as with airlines, TNC
companies, concessionaires, car rental companies, and parking operators
.
6.
Author final
report.

Cost Estimate and Backup (Provide a cost estimate and support for how you arrived at the estimate.)

This project would involve a 12-
to 15-month research program, with the estimated level of funding being
$300,000. This funding would primarily be used
to fund one or two researchers to gather and analyze the data.
The funds would be used to conduct an in-
depth literature review, analyze the data, develop recommendations,
and author a final report.

Related Research - List related ACRP and other industry research; describe gaps (see link to Research Roadmaps above), and describe how your idea would address these gaps. This is a critical element of a synthesis topic submission.

ACRP Synthesis 1: Innovative Finance and Alternative Sources of Revenue for Airports, March 2007.
(
http://www.trb.org/Publications/Blurbs/158669.aspx
)
2.
ACRP Synthesis 19: Airport Revenue Diversification
, June 2010.
(
http://www.trb.org/Publications/Blurbs/163650.aspx
)
3.
ACRP Synthesis 31: Airline and Airline
–Airport Consortiums to Manage Terminals and Equipment
,
December 5, 2011. (
http://www.trb.org/main/blurbs/166364.aspx
)
4.
ACRP Report 36: Airport/Airline Agreements – Practices and Characteristics, December 2010.
(
http://www.trb.org/Publi
cations/Blurbs/164482.aspx
)
5.
ACRP Report 66: Considering and Evaluating Airport Privatization
, 2012.
(
http://www.trb.org/Publications/Blurbs/167156.aspx
)
6.
ACRP Report 98: Understanding Airline and Passenger Choice in Multi
-Airport Regions
, January 22, 2014.
(
http://www.trb.org/main/blurbs/170194.aspx
)
7.
ACRP Report 111: A Guidebook for Airport
-Airline Consortiums
, 2014.
(
http://www.trb.org/Publications/Blurbs/171247.aspx
)
8.
ACRP Report 121: Innovative Revenue Strategies – An Airport Guide
, 2015.
(
htt
p://www.trb.org/Publications/Blurbs/172699.aspx
)
9.
ACRP Report 176: Generating Revenue from Commercial Development On or Adjacent to Airports
, 2017.
(
http://www.trb.org/Publications/Blurbs/1
76413.aspx
)
10.
ACRP Legal Research Digest 2: Theory and Law of Airport Revenue Diversion
, June 2008.
(
http://www.trb.org/Publications/Blurbs/159962.aspx
)
11.
ACRP Project 03
-47: Rethinking Airport Parking Facilities to Protect and Enhance Non-
Aeronautical
Revenue, 2018. (
http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=4426
)

Requested Allocation (For ACRP Use Only) $300,000

Annotations
Idea No. 118