Perspectives on the Digital Marketplace

Tony Fernandes - Group CEO, AirAsia

Tony used to work for Time Warner and resigned on the spot when the AOL merger was proposed. Saw a commercial on TV in London for ezjet and decided at that point to start something similar in Asia - he had no experience at all.

AirAsia History

• initially an existing airline that had 2 airlines
• Tony inherited $6million in debt.
• use the name as the logo
• 6 years later they have 75 aircraft and transporting 2million passengers a month and have ordered 175 new aircraft
• SARS, bird flu, tsunami, earthquakes and more - always found a way out of the problems

Oil is $129 - Tony jokes that they’re hoping to find a way to power planes on coconuts. On a more serious note they are now generating about 80% of their sales online.

AirAsia is the most profitable airline in the world today and have won many awards - FastCompany stated AirAsia is one of the innovative companies in the world.

AirAsia has 1-2 routes making it the most dense network in South East Asia. They do 12 flights a day to Macau- previously there were no flights to Macau.

They have used a lot of technology to level the competition - e-coupons and online booking and have set a strategic partnership with Microsoft.

The focus of his talk today is about the people. They have worked hard to give incentives and support their employees. There is a focus on togetherness and community. They make the pilots help clean aircraft and cook breakfast for engineers from time to time. This fosters a team effort. Started AirAsia academy to train and launch new employees en mass. Any excuse to have a party is the way of life at AirAsia. AirAsia allows people with great attitude and multiple talents to thrive. Tony feels his job is to polish his diamonds (people). The hanger is dedicated to AirAsia engineers. Tony asked the guy that built his house to build his airplane hanger. Then they put a giant poster of his engineers that says “AirAsia has the best engineers” on the side of the hanger - that side of the hanger points at Malaysian Airlines - Maylaysian Airlines can’t complain because those engineers were trained by them - funny stuff.

Anybody can live their dreams at AirAsia.

Tony’s presentation today has been absolutely inspiring.

The downside of live blogging is that you can’t really capture the jokes and the personality of the speaker. Tony Fernandes is an exceptional speaker. If you ever get a chance to see him speak don’t pass it up.

Arianna Huffington interviewing Cyrus Krohn (Director, RNC eCampaign Division) and Mark Penn (CEO Worldwide, Burson Marsteller)

Arianna just asked if there were any Hungarians in the audience because she’s not good at ducking eggs - haha. That won’t make sense if you didn’t see the news today.

Branding has moved more increasingly to center on campaigns. Sometimes it works and sometimes it doesn’t. Shock and Awe - worked as a brand. The Republican brand has nowhere to go but up. Arianna says that if the Republican party was dog food it would have been taken of the shelf.

Cyrus Krohn is up first to talk about Winning Elections - Winning Brands.
The RNC has a database called Voter Vault that they use for direct mail and lists. It’s been dormant otherwise. Cyrus wants to take the db and use it for micro-targeting voters that consume data in different ways. They used it to support Bobby Jindal’s run for Governor. Jindal campaign took multi phase approach:
- could they register voters online more easily
- could they manage absentee voting more effectively and efficiently
- 75% of voters they reached out to voted

They set up a Valentines day ecard website that got over 700K users and people averaged 2 cards per session. They then used that data to follow up and solicit funds or tell people about the RNC Facebook page.

The RNC has stepped in to Web 2.0 with www.canweask.com - more data capture. You can submit text or video questions and forward it to friends. 50K unique visitors used the site in the first 24 hours. Cyrus is closing by showing an anti Obama commercial from the CanWeAsk website.

Next up is Mark Penn.
Mark opens by stating that Cyrus’ add is too negative to be effective.

We are becoming a society that is making new choices that are breaking down religion and class that used to divide us. The groups are small but having a large impact. Two groups to mention are:
- The Long Attention Spanners - These folks are opposite of ADD. The internet is dominated by people who read and read and absorb information. The average best seller has grown over 100 pages in length and the most popular movie in American was over 3 hours long.
- The Impressionable Elites - Elites are swayed but personality, while regular voters are focused on health care plans, job and college affordability (election issues). Some news outlets are adding personality reporters to their rosters to capture this new data.

These groups are examples of people that are changing the model. One example is when the Hillary Clinton campaign Mark was working on went to Texas they tried new ads. One ad they ran was all stock footage and was very affordable to produce but it asked a question and brought in lots of search engine traffic. The commercial became spoofed on SNL and received broad coverage and became part of popular culture. A little stock footage, creativity and the web can help you create $50million worth of coverage. Commercials simply asked questions but they asked the right question.

Arinna is trying to make the argument that the commercials simply appealed to fear. Mark says the ads actually stimulate a question and cause people to research and debate.

Robbie is talking about connected entertainment and experience entertainment in a social environment. xbox Live has 12 million members. They are there because their friends are there. xbox live has had up to 1 million users online at once.

Connected entertainment is very personal. How do we deliver a targeted message to these people rather than just a general broadcast message? As a leader in the IPTV space they will be able to allow advertisers to target consumers.

Connected entertainment is interactive. Consumers can connect and interact with advertising and it’s not broadcast advertising anymore.

Looking across the world of where people will experience this entertainment: PC, TV, mobile. MS partnership with aQuantive is allowing them to optimize the reach to these 2 screens.

Let’s talk about television:
Gamers love on screen advertising when it’s done right. When it’s a proper experience. The platform enables people to reach to all levels of gamers. Rockband has had 10 million songs downloaded. That’s an opportunity.

Robbie has handed the stage to Mark Kroese. He is demonstrating the 3 screens for us starting with xbox.

He’s signed in to his xbox and there are some ads integrated to the page. Nissan is integrated through the game Forza 2. You can also download a Nissan car to use in the game. The third way is in the game with Nissan display advertising. This advertising can be dynamically inserted into the game through the network.

McDonald’s is also integrated into the xbox dashboard by offering movie downloads.

Nike Sparq training is intergrated - think of it like a microsite that you navigate with your xbox controller. Lots of streaming video through xbox Live.

Doritos ran a one year campaign that invited the xbox audience to participate in a user generated game concept. The winner of the contest is having his game produced and it will be released on xbox live later this year. The contest also ran on xbox.com and msn.com. Doritos achieved a 15% brand lift over the course of the year from this concept.

Robbie is back and we’re now talking about mobile and people on the go. (Zune, pocket pc, etc).

Zune social - share playlists and what you like or don’t with your friends. Zune Social creates a personalize entertainment space.

Phones - in the next 3 years - up to 500 million phones capable of media and gaming etc.

Mark is back demonstrating the Zune Card and how social connections work within the Zune network as well as how that integrates into Facebook. This is all wrapped up in a Doritos promotion that allows for music to be shared and paid for by Doritos as part of the promotion. This is then all synced to the Zune player and the advertising is getting attribution all the way along and the user is still getting value.

The idea is adding real value to the customer and advertising in an integrated campaign that moves between TV the PC and mobile devices.

Michael Eisner is talking to us today about vuguru’s new internet entertainment series and how the internet can and will become an alternative to movie theaters and traditional entertainment mediums. Story driven content is going to be the next big application. Through the history of entertainment it has always been the content guy that wins.

Prom Queen (Internet Series) - 2 minute episodes - $1700 per minute to shot - reached 20 million visitors
- fans have contributed 200K forum posts
- cheap to produce but still need to recover money spent - hello advertisers
- the All-For-Nots internet series will be up to 7 minutes long
- did very well on Verizon V-Cast

New Forays:
- Robin Cook’s next novel “Foreign Body” - August 4/08 release
- launching a web series video prequel for 50 straight days
- on day 51 - actual book release
- brand new way to build and launch
- www.foreignbody.tv

- Back On Topps - sports comedy series
- 24 5min episodes
- internet series

The days of people attending the same 3 movie theaters in their town are going away. The internet has the potential to be a true entertainment medium offering a variety alternative theaters.

The scale of internet series is very very affordable. Internet series running about $5K a min, TV is $50K a min and blockbuster movies are $500K a minute to shoot and produce.

The advertising is minimal and cannot over power the content. For example in a 7 minute internet episode they had no complaints with a 3 second “brought to you by” preroll and a 15 second commercial in the middle.

Steve Baker, a notable Business Week journalist, has just published a story about the growth, trend, usage and consumption of Twitter by journalists and brands. The interesting thing was his approach to developing the story and finding participants for the facts/insights for his article. We saw via twitter that he was drafting a story and reached out to him to contribute. Using Twitter for PR outreach as well as for participant insight collection is novel and something to watch. The article discusses how some brands such as Dell are recognizing revenue/ROI through Twitter/Tweeting. Look for much more conversations about how the Twitter channel continues to grow and moves more into the mainstream.

Blake Cahill

Visible Technologies