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Europe’s Small Airports Face Challenges

June 16, 2013 by Leave a Comment

PARIS — For the first time in 16 years as managing director of Linz Airport in northern Austria, Gerhard Kunesch teamed up recently with his local chamber of commerce for help in securing new business.

Normally Mr. Kunesch deals one-to-one with potential partners, approaching airline executives with offers and pitches. But after years of declining passenger numbers in the wake of the 2008 global financial crisis, he decided he needed to try another tack.

Apparently, it worked: Five flights a day now depart from Linz for Vienna, instead of three.

“We are a very small airport,” Mr. Kunesch said in an interview. “We realized that we had to build partnerships and form alliances.”

Now, the success of that approach is redefining Linz Airport’s marketing strategy. Mr. Kunesch said he planned to hire a new employee in August to act as a liaison between the airport and the partnerships that he hopes to develop with tourism operators and local government offices. Together, these organizations can pool their resources and focus jointly on business development.

Linz is not alone in trying new tactics. Europe’s small airports, those serving five million passengers a year or fewer, are facing huge challenges.

With European economies flat-lining in the aftermath of the financial crisis, small airports have struggled to grow, and many are still losing passengers.

On average, their passenger traffic has grown just 1.6 percent a year since 2008, compared with an industry average of 7.3 percent; last year 45 percent of small airports actually lost traffic, according to a presentation given at a regional airports conference in Lyon in April.

Now, they are responding. “The airports used to sit and wait for the airlines to come to them,” said Olivier Jankovec, director general of Airports Council International Europe, a group that represents more than 450 airports in 44 European countries. “But this is no longer the case. You have to go out and lure the airlines to come to serve your destination.”

ACI Europe represents airports of all sizes, from the largest, like London Heathrow, to the smallest, like Linz. Together they handle 90 percent of commercial air traffic in Europe — over 1.5 billion passengers, 18 million tons of freight and more than 20 million aircraft movements each year. Out of this vast traffic, about 400 small airports together account for more than a third of the Continent’s passenger traffic, ACI Europe says.

Yet more than half of these airports are operating at a loss, the group says.

Perhaps the biggest cause of economic instability for small airports is their volatile relationship with low-cost carriers.

Small airports lack the capacity to serve more than a handful of airlines, so they often become highly dependent on those few for revenue. The carriers, however, are under no obligation to guarantee their business. That can leave airports like Glasgow Prestwick, in Scotland, in the greater Glasgow urban area, financially vulnerable. Since Wizz Air pulled out in March, the airport’s sole source of commercial business has been Ryanair.

Still, while their small size creates greater economic pressures for these airports, it also allows for more innovative approaches to recovery. Often, just a handful of people can decide to employ new strategies, like introducing a social media campaign, without having to gain the approval of an entire board or go through a lengthy review process.

“Working at a certain scale allows the company to be more nimble,” Robert O’Meara, director of media and communication at ACI Europe, said in an e-mail. A small airport, he said, “can respond quicker to challenges and opportunities, and experiment a bit in the way it promotes itself.”

New marketing tactics often aim directly at the passenger rather than the airline. Many airports, like Krakow Airport, in Poland, work to foster customers’ loyalty through reward programs offering prizes for frequent visitors, like free or discounted parking.

Article source: http://www.nytimes.com/2013/06/17/business/global/europes-small-airports-face-challenges.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Advertising: Bieber Promotes a Debit Card With High Fees

April 10, 2013 by Leave a Comment

JUSTIN BIEBER earned $55 million in 2012, according to Forbes, but in new videos for the SpendSmart Payments Company, which offers a prepaid debit card for teenagers, the singer talks about his modest upbringing.

“You know when I was a kid, we didn’t have a lot of money, so me and my family had to watch the money that we spent,” Mr. Bieber says in a video directed at his young fans. “I learned if you have $100 or $100 million — if you spend more than you have, you’re going to go broke.”

Mr. Bieber urges viewers to “have a talk with your family about money” in the video. “Managing your money is important,” he says, “and there’s a great company that can help you do that called SpendSmart.”

The video, by BrandFire in Manhattan, will be shared by Mr. Bieber beginning Thursday on his YouTube channel (more than two million subscribers), Facebook page (more than 52.4 million followers), and on Twitter (more than 37.3 million followers).

Subsequent videos, called “Real Talk,” also will feature Mr. Bieber discussing financial literacy and encouraging teenagers to share their videos.

Mr. Bieber is being paid $3.75 million for a 14-month contract, along with potential monthly royalties tied to the growth of active SpendSmart cards, according to documents the company filed with the Securities and Exchange Commission. The deal also, according to the filing, includes a stock option to buy two million shares of SpendSmart stock, which was trading at 38.8 cents a share Wednesday.

Noreen Jenney Laffey, president of Celebrity Endorsement Network, said she would have expected such a deal to earn Mr. Bieber closer to $2 million, but she lauded SpendSmart both for choosing the singer to reach teenagers and for focusing on social media rather than traditional advertising.

“The marketing strategy and the choice of talent for this is brilliant, as is merging it into his social media network,” Ms. Jenney Laffey said.

The SpendSmart card has a number of features intended to teach teenagers financial literacy while enabling parents to monitor them.

When teenagers use the card, which has a MasterCard logo, parents can be alerted instantly to the purchase through text messages and a smartphone app. Parents may pre-emptively block purchases from Web sites, and instantly lock the card after seeing anything objectionable. Real-time monitoring fosters what SpendSmart, in marketing materials, calls “teachable moments.”

Introduced in 2009 as BillMyParents, the card was first marketed mainly as a tool to let teenagers shop online with parental oversight. But for many the name BillMyParents equated parents with A.T.M.’s.

Thus, the company renamed the card and company SpendSmart to highlight its “mission of being a responsible teen spending company,” said Michael R. McCoy, who became chief executive of the company in 2011.

“Parents have an easier time talking about drugs and alcohol with their kids than the family budget and financial literacy,” said Mr. McCoy.

The average SpendSmart cardholder is 16, and the card is used most frequently to buy food (especially fast food), followed by gas, technology (like iTunes, electronics and games) and clothing.

A revamped SpendSmart Web site will be frequently updated with articles about financial literacy from Brafton, a content production agency.

There were seven million prepaid cards in circulation in 2012, more than double the number in 2009, according to CardHub.com, which monitors the industry.

A 2012 report by Consumer Reports criticized prepaid cards over exorbitant fees. Among 15 prepaid cards examined in the report, 13 charged monthly fees (from $2.95 to $9.95), 14 charged for A.T.M. withdrawals, 12 charged for checking balances at A.T.M.’s, and five charged for periods of inactivity.

SpendSmart fees include a monthly fee of $3.95; loading fees of $2.95 from a credit card or 75 cents from a checking account (a single scheduled monthly automatic payment from a checking account is free); $1.50 to withdraw from any A.T.M. (in addition to A.T.M. surcharges), and 50 cents for an A.T.M. balance inquiry; $7.95 for a replacement card; and $3 for 30 days of inactivity.

After reviewing the SpendSmart fee schedule, Michelle Jun, a lawyer with Consumers Union, which publishes Consumer Reports, said SpendSmart fees were not as high or numerous as those for many prepaid cards, but she still advised against the card.

“We would not recommend that parents use prepaid cards for their teens,” Ms. Jun said. “It doesn’t help your teen establish a credit history or a relationship with a financial institution, so we recommend going the traditional route and opening up a checking account at your bank or credit union of choice.”

In an appearance on the Fox Business Network in January, John Ulzheimer, president of consumer education at SmartCredit.com, said that fees for the SpendSmart card were lower than those for many cards. But “that’s like saying my broken arm is not as bad as your broken arm” because it is “comparing two bad things and trying to say that one is actually better,” he said.

“If you just take the monthly fee and nothing else — meaning that you do nothing else punitive so they can hit you with the fees,” Mr. Ulzheimer said of SpendSmart on Fox, “you’re still paying a little over $47 a year as an annual fee to get access to your own money.”

Before joining SpendSmart, Mr. McCoy ran the consumer credit division for Wells Fargo, and he said that during the height of the recession many consumers “got in over their heads because they just flat out spent too much.”

SpendSmart could help teenagers avoid the same fate, he said.

“Instead of trying to teach adults better spending habits, I thought, ‘My goodness, there has to be a different way,’ ” said Mr. McCoy. “We’re helping families to teach youth better spending habits.”

Article source: http://www.nytimes.com/2013/04/11/business/media/bieber-promotes-a-debit-card-with-high-fees.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Corner Office: Kris Duggan of Badgeville, on the ‘Getting Stuff Done’ Index

March 10, 2013 by Leave a Comment

Q. How do you hire?

A. The most important thing is to have a framework that everybody in the company knows. So we said: Let’s just come up with something very simple that is easy to understand and that people can use every day in their interviewing skills.

The first is to hire people who are experts in their domain. It’s really about excellence. So I will ask people, “Are you an expert in your field, and if you are, help me understand your field.” Then I ask, “How did you acquire this knowledge?”

The second thing I’m looking for is “sparkle.” Is this person contagiously enthusiastic? You may be an expert in your field, but if you don’t communicate well, or if you don’t get people excited, or you’re not passionate or enthusiastic, that’s going to be a hindrance. And it’s not the difference between being introverted or extroverted — you can just see it in somebody if they have the magic.

The third thing we look for is people who just get stuff done. We’re very focused on metrics — we have goals and controls, and everybody in the company has them. We even have a rating system we use to score employees, from 1 to 5, based on their “getting stuff done” index every quarter. People take the scoring concept very seriously, and really like the accountability and the transparency around some of these things — and the fact that they’re empowered to get stuff done.

The other critical thing we’ve done in our hiring process is to require every candidate to do homework. It varies by department and by function, but every hiring manager has to have a homework assignment for open positions. We just hired a director-level marketing position, and they had to come in and present their plan for what they would do for the company to drive their marketing strategy.

I’ve found that there are so many biases that we create or imagine when we’re going through the hiring process — this person came from that school or they seem very polished, whatever the biases might be. But when you have them put pen to paper, and compare that against a field of candidates, you get a much clearer picture of how they think and work.

We also don’t set deadlines for handing in the homework. We let them set the deadline, but then we track very closely how they perform relative to that. So we’d never say, “You owe us the homework by tomorrow.” We would say: “We’re very interested in you, and we’d like you to do some homework, and here’s the assignment. Do you have any questions about that? And when would you like to submit the homework?” That’s one way we can test for their behavior — do they get it done on time, or do they make excuses because it’s late? What I’ve found from all the interviews I’ve done in the last 10 years is that whatever nagging suspicion you have during the interview process about their behavior will be magnified 10 times after you hire them.

Q. You mentioned the importance of having shared goals in the organization. Can you elaborate?

A. I think organizations have a hard time communicating up and down the chain of command and getting everybody mobilized to focus on the same goals. I’ve experienced that firsthand — whatever your task or scope of work, you don’t know how that connects to your manager and your manager’s manager, and how that is all kind of interconnected.

So the biggest thing we focus on is this concept of “interlock.” It’s about how we get all the departments connected with their goals — from the C.E.O. to the front-line person — so that all of those goals and controls are transparent. Everybody should know what everybody’s goals and controls are, and everybody should understand their individual ones relative to their department, and their department’s goals relative to the company’s.

This interview has been edited and condensed.

Article source: http://www.nytimes.com/2013/03/10/business/kris-duggan-of-badgeville-on-the-getting-stuff-done-index.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Mattel Gives Max Steel Action Figure New Lease on Life

January 28, 2013 by Leave a Comment

So when Mattel decided to revive its dormant Max Steel line of action figures in the United States, it had a rare opportunity to re-examine the old marketing strategy for the brand. In doing so, it decided this time to shift its focus to multimedia, and let the toys follow.

“We have put focus and discipline around franchise development and content development,” said Tim Kilpin, the senior vice president for global brands at Mattel, the world’s largest toy company based on revenue. Plans for the Max Steel brand include an animated television series, a live-action short movie, an online hub, mobile games, graphic novels and, eventually, toys and other products.

“If there is a new normal, it’s that there is not just one way to reach an audience,” Mr. Kilpin said. “You’ve got to reach them and engage them through all that’s available.”

When Max Steel was introduced in 1999 as a line of boys’ action toys, it found modest success in the United States. But after the terrorist attacks of 2001, it drew scrutiny from its parent.

“There were some themes that we were very concerned about,” Mr. Kilpin said, “so we did not pursue the range of opportunities in the United States.”

Max Steel faded away in this country, but it continued to sell in South America, where it eventually became a blockbuster hit, outselling Mattel’s top lines, Hot Wheels and Barbie. More than a decade later, when Mattel was looking for a new line to start in the United States, it found one in the back of its own closet.

“We stepped back and looked at why it was so successful in Latin America,” Mr. Kilpin said. Mattel found that boys loved the idea of someone who could unlock his potential and become a hero. Mattel tweaked the original concept, making the character Max younger and easier for boys to relate to, and it began to plot a campaign to bring the brand back to the United States.

But times have changed, and children are much more media-wise than they were in the late ’90s. To market the revived brand, Mattel took a page from its Monster High franchise, which was introduced in 2010 as a line of fashion dolls, with an emphasis on multimedia, including young adult novels and a Web site that used videos and games.

Mattel’s focus on multimedia is no surprise, said Sean McGowan, an analyst at Needham Company. “Mattel is a pioneer for creating toys with media property,” he said, citing He-Man and the Masters of the Universe, a boys’ action franchise Mattel started in the 1980s.

Other toy companies have established similar strategies. Hasbro, the No. 2 toy maker, created a production studio in 2009 and worked with Discovery Communications in 2010 to start a cable television channel called the Hub. Last year, the toy maker Jakks Pacific worked with a subsidiary of Dentsu, the Japanese advertising giant, to produce its first animated television series, “Monsuno,” which was supported by a line of toys and other products.

Toy makers are looking for ways to shore up their revenue. Retail toy sales in the United States declined slightly last year, to $16.5 billion from $16.6 billion the year before, according to the NPD Group, a market research company. Mattel is scheduled to report its fourth-quarter earnings on Friday.

Mattel would not reveal the marketing budget for the reintroduction of Max Steel, but Mr. Kilpin said it was “significant.”

“The best way to put perspective around the scale of it is to say it is a major new franchise launch for the company, much like Monster High was,” he said.

Like Monster High, Max Steel will start with a Web site, maxsteel.com, which will begin at the end of February and include games, character biographies and other features. The campaign will include an animated TV series, Mr. Kilpin said, because Max Steel is better suited to episodic television than was Monster High.

In FremantleMedia Enterprises, Mattel found an experienced producer of children’s television entertainment that it said could generate excitement for Max Steel around the globe. The show will have its premiere on March 25 in the United States on the Disney XD channel. Then it will be introduced in more than 100 markets.

The intent of the wide distribution is to create viral marketing on social networks, said Bob Higgins, the executive vice president for children’s and family programming at Fremantle. “Around the world, kids will start hearing about this,” he said. “Kids want to do what their friends do. If they are watching Max Steel, they want to be a part of that party.”

The marketing campaign will also include graphic novels, which help immerse boys deeper into the storytelling, said Elizabeth Kawasaki, senior editorial director at the animé publisher Viz Media.

“There has been always traditional publishing with media tie-in stuff,” she said, but children’s properties once consisted primarily of early reader books and sticker books. “The market has really changed now.”

Other consumer products will follow, including toys that will appear in stores in August. By then, Mattel said it hopes the brand will be embedded in the hearts and minds of boys.

“The first way that they are going to experience the brand is through those storytelling mechanisms,” Mr. Kilpin said. “Marketing ground zero for this franchise will be maxsteel.com.”

“We believe we are experts in play, not just in making toys,” he said. “That’s what our job is today.”

Article source: http://www.nytimes.com/2013/01/28/business/media/mattel-gives-max-steel-action-figure-new-lease-on-life.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,