Jetstar Advertising Budget

[Mstr Caution]

Jetstar $30m media review takes off
Jetstar is to review its media account, with incumbent Zenith Optimedia facing a battle to hang on to the $30m business.

A spokesman for the low-cost airline brand confirmed that it is in the early stages of a pitch process, with no finalised shortlist as yet. However, Jetstar said that Optimedia will take part in the Melbourne-run process.

“We feel that, in the current economic climate, this is an appropriate time to go out to the market to find the best value,” the spokesman said.

“We have a longstanding and fruitful relationship with Zenith Optimedia, but it’s time to test the market.”

Optimedia has held the Jetstar media account for more than three years, after the airline decided to ditch its launch agency Mindshare. Optimedia already oversaw the media account of Qantas, the company that created the Jetstar brand.

The Jetstar spokesman denied that the company was planning to slash its media spend in the face of the global economic downturn, but hinted that some media duties could be taken in-house.

“We are evaluating all our options at the moment, whether to outsource all our media or to take on components of it ourselves. There are a number of options for our media supply,” he said.

“We are a heavy spender (in media) and there is argument that you should step up to the plate when economic times are tough.”

Belinda Rowe, chief executive of Optimedia, is currently on leave and was unavailable for comment.

Carat handles Jetstar’s media in every Asia Pacific market other than Australia, but the agency would not be drawn on whether it is in talks to extend the relationship. Jetstar said that its creative account, held by Ted Horton’s Big Red agency, is not under review.

According to Nielsen Media Research, Jetstar spent $29.3m in main media between December 2007 and November 2008.

B&T Marketing / Advertising / Media / PR

[Sunstar320]

Their adverstising budget seems bottomless.

Look at Today's Herald sun, both front/back and middle. So many TV ads, so many Billboards...never seen an airline advertise so much:eek:

[blow.n.gasket]

How else are you going to fill the seats?
Return business???:eek::ok::}

[DirectAnywhere]

Not to mention the ENTIRE backpage of yesterday's national broadsheet.

Advertising the "Jetstar Jump" competition - send in a photo of yourself doing the aforementioned physical manoeuvre - with 150 winners at 300 bucks a pop. There's another 45k right there.

A full page ad in the Oz doesn't come cheap.

[lowerlobe]

How else are you going to fill the seats?
Return business??
It's a well known fact that in most business' it costs more to attract new customers than retain your current ones.However,J* might be the odd one out with that theory.....:E

My question.....Is that J* advertising budget sourced wholly from J* revenue or elsewhere?

[Led Zep]

I saw TWO Qantas ads on channel 9 the other day. Yes, QANTAS!!! :}

[Condition lever]

Is that J* advertising budget sourced wholly from J* revenue or elsewhere?

For F*cks sakes Lowerlobe - get over it.
You will give yourself an ulcer!

[lowerlobe]

I think it's a reasonable question Condition lever....

Most people have noticed the amount of adverts for J* compared to QF and have asked the question why.

But,if you can't or don't have an answer then it won't be me getting an ulcer....

[ratpoison]

never seen an airline advertise so much
Really, I've never seen an airline advertise so much on bloody cricket umpires, Melbourne Cups, Syd to HBA yacht races, football and cricket ground stadiums and fence lines, trams, buses and high rise buildings spreading the "good" word on some ragshag outfit in the Middle East.:confused:

[lowerlobe]

ratpoison.....

If you are talking about Emirates I see what you mean but it's like talking about apples and oranges.

On one hand you have a huge legacy carrier like emirates and on the other hand a LCC.

I saw TWO Qantas ads on channel 9 the other day. Yes, QANTAS!!!
Besides the real point is the number Jetstar advertisements compared to Qantas advertising.Compared to jetstar you don't see many ads for Qantas.

[Mstr Caution]

Saw a QF international airfare sale on channel nine leading into the 9 News in Sydney.

Been a while since I've seen QF advertise in a prime time slot!!

However, $30 million bucks hardly seems like budget advertising for a budget airline.

MC

[Shlonghaul]

Good to see Geoffstar spending Qantas' profit :ugh: :E


From the Daily Telegraph

Jelena's ticket to the big time - Jetstar to the rescue

By Justin Vallejo

January 30, 2009

SHE entered the Australian Open wearing donated clothing - a simple blue skirt, white top - after five years without a major sponsor.

But with an estimated $1 million deal over three years signed with Jetstar this week, Jelena Dokic's days of living on hardwood floors are all but over.

Today she will go straight into filming new TV commercials for her new sponsor to be aired during this weekend's tennis coverage.

Her management is fielding and sorting through other offers from more potential sponsors who are all after the signature of Australia's new comeback kid.

It is a remarkable turnaround after three wins and one loss at the Australian Open thrust the 25-year-old out of her father's shadow and into Australian sporting legend.

"We've been struck by her resilience and her capability to go through what she's gone through and to be where she is, and to do it with such style and personality - it's a great Australian story," Jetstar's David May said yesterday.

Dokic's last sponsorship, with clothing giant Fila, ended in 2003.

[genex]

Do please drop it....Jetstar is part of the Qantas Group, is answerable to the Board, and is only there because some other parts of the group cannot do the job required of them. It is not a secret world conspiracy just to annoy you.

Profit is what's left after the spending necessary to generate the income. I don't know how many bazillion dollars have been spent on the "Still call Australia home" stuff....i think its nauseating shmaltz myself...but I figure someone in QF reckons the spend is justified by the results. So be it.

[hotnhigh]

Yeah, what's a depreciation figure between friends, hey genex.
Profit, a number only the dumbest blokes in the room understand!

[genex]

Genex went to Business School many moons ago but even then depreciation was a cost.

I think

Genex is old enough to remember the vast amount of advertising the old Kevin Dennis spent to flog cars. Horrible stuff but it worked.

[breakfastburrito]

As an aside, its not hard to look around at the millions about to, & who have had their lives destroyed, by the few that went to business school, many moons ago.

[lowerlobe]

the "Still call Australia home" stuff....i think its nauseating shmaltz myself
No more shmaltzy than watching Magda or anyone else jump into the air a la Toyota...
(J*) is only there because some other parts of the group cannot do the job required of them.
Ok I'll take the bait...Who said this and how is it justified genex?

But honestly,I would like to see the figures of both J* and QF's advertising budgets compared to both their revenue and profit?

[Shlonghaul]

Do please drop it

No…No….and No Way!!

Jetstar is part of the Qantas Group

With all the advertising and sponsorship they do you would think it was Qantas being part of the Geoffstar Group!!

However, $30 million bucks hardly seems like budget advertising for a budget airline.

Exactly

I saw TWO Qantas ads on channel 9 the other day. Yes, QANTAS!!!

Yes it took Australia Day to trot out some TV ad’s for Qantas!! Hope you recorded them you won’t see anymore for awhile! Virgin Blue, like Qantas, did very well after the collapse of Ansett and used to have regular TV ad’s, but when was the last time you saw a TV ad for Virgin Blue?

But honestly,I would like to see the figures of both J* and QF's advertising budgets compared to both their revenue and profit?

Good point lobey but you probably won’t get an answer and even if you did after the past year’s financial debacle I wouldn’t trust their answer to be truthful. As far as I’m concerned I wouldn’t trust any financial person, or management for that matter, to sit the right way on the toilet!!!

[Mstr Caution]

Could this be the beginning of the end of cross subsidisation of the Jetstar brand?

Clifford wanted to clear up the "accounting" as to who was paying for what & how much.

Big brother pulls the pin on the advertising budget & as a result team orange "reviews" its advertising spend.

But then again, its easier to blame the "current economic climate"

[waren9]

As an aside, its not hard to look around at the millions about to, & who have had their lives destroyed, by the few that went to business school, many moons ago

Play the ball mate and not the man. Cheap shots like this do yourself no favours.

Whether you agree with it or not, just maybe Genex's point of view comes from a background outside of the average pilot

[genex]

First of all let Genex defend his alma mater.......we learned good things there. Other, newer MBAs might have stuffed things up but at our last reunion we all agreed we had used our powers for good only.

But I digress......

No small part of the Jetstar brand is the defense of Qantas yields, a task which by definition the mainline brand cannot do for itself but done by Jetstar as a strength of the group.....and not something yet replicated so successfully, at least in the airline sector. There are of course many other parallels in other business spheres as you would know.

So yes, there is cross-subsidization Mstr Caution and you better hope it continues because without JQ holding up the yields of those who pay your salary you could be selling pencils on the street corner.

[lowerlobe]

So yes, there is cross-subsidization Mstr Caution.
.....Finally a slither of truth about subsidization.
you better hope it continues because without JQ holding up the yields of those who pay your salary you could be selling pencils on the street corner.
Easier said than proven........but the big bad wolf stories are entertaining if not a little monotonous

[mcgrath50]

I don't see what's wrong with cross-subsidisation when they are part of the same group?

Wouldn't Toyota and Lexus do the same, the hotel chains that have multiple levels of hotels and so on?

QANTAS Mainline is just one arm of the QANTAS Group, although I don't like how the QANTAS brand has been left to the dogs a bit, I don't see why cross-subsidisation is bad?

[Keg]

mcgrath, it's bad when the part of the business doing the subsidising (mainline) is told it's too expensive and that J* has been created to solve the problem.

[lowerlobe]

I don't see what's wrong with cross-subsidisation
Another word for creative accounting.....something Wall St and others have excelled at ...........to our detriment.

As Keg said it sort of rankles a bit when we are told that we wouldn't survive if it wasn't for J* but ......the true performance and therefore benefit of J* will never be known because of the creative accounting.....sorry cross subsidization.

It's all too easy to say that it is the only successful example of a legacy airline creating a LCC but how successful would it be if it had to stand on it's own?

I realise it's been asked before but it's a valid question....

Perhaps it would be very successful but it's a question we will probably never get an answer to without some spin and so we will never know.

[Mstr Caution]

Genex - Sounds like the justification an A330 Captain at Jetstar once told some Qantas mainliners. Without him accepting lower terms & conditions, the mainliners would not be enjoying their higher terms & conditions. Qantas mainline managed yields for decades prior to the arrival of the team Orange. QF mainline has endured boom & bust times in the past & is still here today.

Thanks for the careers advice, but I wouldnt choose to sell pencils on the street corner & undercut the local newsagent next door.. Unless of course I could justify it by saying I'm attracting business to his establishement as part of the process.

[ebt]

That may be true Mstr Caution, but could they have managed it against Virgin Blue and any other Tom, Dick or Harry LCC that came into Australia without JQ? Remember, QF tried a couple of tricks against DJ and Impulse but couldn't quite get it to work until they bought Impulse, rejigged it to a new brand and, voila, Jetstar is now the third carrier in the market and is actually able to make money on leisure routes. Without JQ, QF would probably be little more than a trunk route carrier in the domestic market.

Lowerlobe - when QF falls apart because of 'creative accounting', then I'll accept your comment at face value and gladly eat my hat, otherwise it's a steaming pile of something left by an animal out around Cloncurry way.

[Mstr Caution]

ebt - I agree with you. That Jetstar was nothing more than a strategic move by the QF group to limit the growth of VB & deter other operators entering the market.

[strobes_on]

I think the Jetstar strategy is continually evolving.

No doubt it countered VB very well, but are the bean counters now looking at making it the major domestic carrier with further expansion over more and more Qantas sectors.

A lot will depend on the future of VB. If VB hangs around, would JQ expand ?, or if it fails, would there be much less of a reason to reduce Qantas mainline operations because of the higher yield in a less competitive market?

Either way, a lean JQ operation could morph into the Qantas domestic mainline of the future.

[jungle juice]

when QF falls apart because of 'creative accounting', then I'll accept your comment at face value and gladly eat my hat, otherwise it's a steaming pile of something left by an animal out around Cloncurry way.
HUH, ebt, I don't know what your problem is, but I'll bet it's hard to pronounce
but could they have managed it against Virgin Blue and any other Tom, Dick or Harry LCC that came into Australia without JQ?
As Lobey said this repetitious argument is fast becoming a joke.Like it's been said,the big bad wolf scenario is just that,a fairy tale
Without JQ, QF would probably be little more than a trunk route carrier in the domestic market.
So no international flights then,another fairy tale to scare small children but with no substance or proof
Qantas mainline managed yields for decades prior to the arrival of the team Orange. QF mainline has endured boom & bust times in the past & is still here today
Mstr Caution,You've got that right.

[ebt]

JJ - my last checkup yielded no problems, but thanks for your concern. Always nice to know that someone's looking out for me.:ok:

I did not mention the international services as it's probably a given that they would still exist in any circumstance anyway. My comments were about the domestic side of the operation which is probably the most strategically important market for QF. International is a different market with more competition (to which QF has been gradually losing its market share), so that's for another discussion.

Scary fairytale or not, a lot of people in QF Group Strategy got nightmares about the situation in the early 2000s once they saw DJ getting some traction. There were a couple of tricks, such as messing with catering and all Y QF flights, but it wasn't till JQ that they could really take on DJ with a pincer. Strategically, they got a bit of a victory with DJ adjusting its own strategy.

Just for clarity, I am in no way anti Qantas or hold no grudges to anyone here. It just seems that there needs to be some other perspectives put in there.

[genex]

The thing about the dreaded "cross-subsidization" is the need to get beyond emotion and understand the difference focus between "economies of scale" vs "economies of scope".

The latter, put simply says that if an organization is already producing a suite of products in a particular field then it should be cheaper for them to start up a kindred operation that it would be for a third party to start up a "green fields" operation. There are many examples of this. You could even look at the Army.....they can run the SAS much more efficiently and cost effectively than if it were a separate stand alone structure. Does the regular Army subsidize the SAS? Or vice versa? Or is it simply a strength of the Army as a whole that it can do both things better than the sum of two stand alone outfits?

I really do hesitate to suggest that uninformed speculation and comment detracts from rational debate but I fear this is one of those cases where lack of understanding, fuelled by emotion, has led to unwarranted fear and loathing of JQ.

Anyone who really believes that by itself, on its superior brand name and capabilities alone, QF could have held off other LCCs.....is simply wrong. Compass Mark 1 had the old AN within days of bankruptcy. Southwest and Jet Blue continue to have the US majors reeling.

However poorly it was explained, and however much there may be some drooling ideologues who just love to "divide and conquer", and however annoying it is to see shiny jets and promotion rates you'd love to have had......the fact is that it is a business strength that QF could set up JQ and run it so that QF (domestic) and JQ between them are far stronger than had they been stand alone. And in any case, had someone else started up JQ they would have had no compunction in running directly against the CityFlier services, something JQ largely does not do, for the good of the whole Group.

[Keg]

Genex, the strawmen are getting tiresome.

Anyone who really believes that by itself, on its superior brand name and capabilities alone, QF could have held off other LCCs.....is simply wrong.

No one is denying the requirement for J*. The issue is the lack of transparency regarding the real costs and the support provided by mainline as well as the non-stop rhetoric that comes out proclaiming J* to be the saviour whilst mainline directly subsidises- equipment, cheap sign offs at SIT, etc- the J* operation.

Of course, let's not go into the broken promises to the mainline pilot group by Geoff et al, the slight on mainline 'culture', etc despite Geoff's stated requirements (in writing) post the freight debacle to deal 'ethically' in all business dealings. :rolleyes:

[lowerlobe]

genex....

Your analogy regarding the SAS and the regular Army to QF and J* is about as accurate as the comparison between a restaurant and a circus......

The perfect synopsis of this thread is exactly how keg put it...The issue is the lack of transparency

Then of course is the matter of the public having their choice taken away by Darth in places such as Coolangatta...

[Tidbinbilla]

Yet another thread deteriorates to a completely off-topic Qantas vs Jetstar handbags at 10 paces. :ugh: