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The Big Impression
United Airlines’ Mike Petrella on personalizing the in-flight experience
00:21:10
United recently launched Kinective Media, the airline industry’s first media network. Its first-party data could change the future of people’s travel experiences.
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- [00:01]
A
I'm Damian Fowler and welcome to this edition of the current podcast. This week we're delighted to talk with Mike Petrella, the managing director of partnerships at United Airlines. In June, the airline launched a new initiative named Connective Media, which is the airline industry's first media network. The network will use data from its customer profiles to create a personalized and immersive travel journey. This launch comes at a time when retail media networks have become one of the hottest topics in ad tech, allowing brand marketers to target consumers using retailers first party data. We start by asking Mike about why United wanted to move in this direction. Unite's the first travel focused company to develop its own media network called Connective Media by United Airlines. And how is this a boon for the company and its flyers course?
- [00:59]
B
So we consider ourselves a commerce media network and we distinguish ourselves as a commerce media network. Given retail media networks are typically point of purchase, transaction based, the commerce media network embraces the emotion, the journey, the feelings of all parts of the funnel. So when you think about our users, time of planning, time of travel, time of destination, even when they're not thinking about Travel. We have 108 million profiles and the beauty of our data is it's incredibly accurate. You have to be Damien to get on a plane. Your name has to be what it is, your address has to be correct, your phone number and all the other information. So the breadth of that information coupled with the accuracy of it gives us insights and signals that allow us to create these robust profiles of the user. And it's the user at all points. And the commerce nature of this isn't just a point of sale. We are not microtransactions on a constant basis. Rather we think about the interaction of the user at the time of planning, top funnel at the time of trip, or even time of purchase. In an ancillary mindset, purchase path typically generates a significant amount of revenue, be it airline tickets upgrades any purchase path, regardless of whether it is airline ticket or if you're purchasing a ticket to an event, parking, whatever the case is. So for us it's the ability to take that journey, to be able to identify when the right time to send the right message to the right user is. And that message could be an advertisement, it could be content, it could be nothing because it's not the right time. But in each of these cases you can make a use case for any and every brand based on the scale and depth of our data.
- [02:48]
A
Fascinating. And you mentioned that long purchase journey, which is sometimes it can be a long Purchase journey, right. For air travel, or it can't be short, but you do have a lot of scope within that context.
- [03:00]
B
It is, I mean, very few people spontaneously book tickets to destinations. Right. And when you're in that mindset, you're in a planning mindset, not only of the journey, but think about the insights and intelligence we can extract from the signals we receive to say, well, this person happens to frequent a specific hotel chain, a car rental chain, a ride share company. When they land, they frequent a food delivery service. Endemic. But then you think the non endemic piece. And this is the beauty of what we do, the lines of endemic and non endemic are completely blurred to me, at least because I think about when you get on a plane, you may be traveling home to return to normality, which takes you to food shopping, which takes you to the pharmacy, which takes you to the laundromat, which takes you. But my point is, I think the idea of always coupling a travel endemic brand or journey with the traveler is only a piece of it, be it on the road or at home. I may go see a music event, I may go purchase music, I may play music, I may eat pizza, I will eat pizza, just to be clear. But my point is my behaviors, there are some that are going to be unique based on my journey and others that are going to overlap with when I'm traveling for leisure, when I'm home. And so I love the fact that just we can essentially meet the interests of the customer, which is the centric piece of this, and provide value to our partners as well.
- [04:24]
A
It's a very clear example of how non endemic works. And a retail media network, I think, because, you know, when you think about other retail media networks, often think about the retailer and what it sells. But you know, with United, it's a different ball game.
- [04:37]
B
Yeah, it's the breath of commerce. And that's what I enjoyed. That was like when I came here. It was eye opening. I had an idea. Right. But just to see what we can do and really the validation of just how strong our data is and how valuable it is from a customer standpoint. When I say valuable to the customer, it is to spoon feed customers based on their interests. Cafeteria style doesn't work. There are too many choices. So if you're in a planning phase and we can bring about certain things that are of normality to you, booking a restaurant, booking a golf reservation, getting my ride share, it makes the journey easier. It makes it feel like it's Damien Fowler's journey, not just a customer who purchased A seat in one of our planes.
- [05:21]
A
Yeah, I love that. And I just want to take that point a little bit further. Can you give some more examples of how you work with brands, whether endemic or. When I say endemic, that would be travel related, right? Or not. And where that media might appear?
- [05:36]
B
Sure. So today we are our media network extends from our dot com, our in app. We have digital signage within the airports, be it in our clubs and lounges, gate information displays on our planes. We have in flight entertainment or we call IFE or personal device entertainment on your phone. And so as part of United Next, we made an investment to purchase north of 800 planes. And within each of those planes they will be outfitted with the new IFE system. It's meant to be more of an OTT experience versus the current experience, which quite frankly is its legacy. It's the 1950s, it's a small screen with limited choices and it's not what we're used to. We envision this opportunity to have a very personalized experience in which you, you will have your interests displayed on that screen and every person's screen will be different based on that individual. And so for us, we will be retrofitting our current fleet with the exception of a couple planes that will be retired over time. And so over time we will have screens in all planes on a personalized basis. And so for us too, it's, you know, you extend past that. You have email and such. It's a true omnichannel offering. But most importantly, it's the engagement. We have an average of three and a half hour flight time. And so when you're at home, you can get up, use the restroom, go to the kitchen, whatever. If a commercial comes on, you cannot do the same in a plane at the same frequency. I mean, yes, you can get up. The idea of having the ability to engage in an intimate and targeted manner with our users and to be able to show them things of their interest is huge. Yeah, right. And then you think more in lounges and clubs. It's not going to be personalized. If you walk into the club, you don't want to see. Hello, Damon, how are you? Do you need a new green shirt? No, it's creepy.
- [07:27]
A
A little creepy, right?
- [07:28]
B
Yes. So again, you can think about the business traveler travels from Monday at 5am to 11am and Thursdays from 4 to 7. So perhaps we put advertisers endemic to that audience. Families travel on weekends and these are generalities, but through research and through signals, we can begin to capture that and Again the right message at the right time.
- [07:48]
A
What customer insights will help connectiv connect brands with United Flyers?
- [07:53]
B
So we capture over 120 targetable segments or signals I should say. And that is a mix of attitudinal, behavioral, lifestyle and transactional. And today our audience indexed to the highly affluent individual, married, college educated homeowner, household income of 250,000 plus. And so you'll see in some of our launch partners, Bottega Veneta which is a luxury brand. Macallan's a higher end Scotch, very good for that audience. But at the same time we are very diverse in terms of who is on our plane. We our launch partner was Televisa Univision. 25% of the Chicago population is Hispanic. Is it 63 million Spanish speaking Americans in the U.S. right. So the idea of just focusing on one demographic doesn't do anyone justice. Right. Again speaks to that scale of data. And so we there's a use case for every single brand, every single opportunity.
- [08:52]
A
Yeah, that's fascinating to think about the different that nuance that you can bring to it. Advertising is obviously key to this. What strategies does connective employ to personalize ads and offer that to these different segments?
- [09:06]
B
We are a very privacy centric, privacy safe, conservative approach to what we're doing. We sit at top gam, we work with a number of clean rooms. Any and everything we do is meant to uphold the integrity of that customer's data. We will never sell the data as a standalone. It'll always be wrapped with media on a managed basis. And I say that because the sale of data opens up opportunity for bad actors than there are bad actors out there. So when it comes down to it, you know, we want to ensure that we are keeping our customers information and privacy at the forefront and then any and everything we do is in a compliant way. Data collaborations through clean rooms, proper encryption at all specific times, proper measurement and verification. It's a textbooked approach knowing full well that if first party data is currency, you have to protect it and you have to use it in the right manner.
- [10:04]
A
Now you, you launched in June. What kind of interest have you seen from brands or sectors that are especially keen to take part in this opportunity?
- [10:14]
B
It's been overwhelming, honestly. I used to work, I helped startup advertising.com a long time ago and all its brand names up through Yahoo and I was always the one vying for a brand's business to work on a brand site now has been an eye opening experience because you have the problem of choice and the reception to what we've been doing has been incredibly positive and it feels great. Right. The work that we did is meaningful. The work that we did is interesting, but we have to be smart in terms of who we work with. I would say the outreach from partners. We always want to maintain a very premium nature for any owned and operated supply. I think it's important. Again, the brand integrity for United is paramount. But at the same time, as I said earlier, there's a use case for all brands and we're always open to exploration and conversations and then making the right choice based on the United brand, based on the value for our customers and for the overall business.
- [11:15]
A
Yeah. Now, travel has skyrocketed since pandemic times and that's been well reported. Can you describe the change United has seen more generally in people coming back to the skies?
- [11:26]
B
We are the largest airline in the US right now and it's a great position to be in because people fly United for the experience. We do not compete with low cost carriers. That's not our model. People fly for the convenience, for the experience, for the opportunity to increase their loyalty status for the journey in itself. Our app is the number one rated app of all airlines. And I'm not sure if you're a flyer or not. Thank you. If you are.
- [11:52]
A
I am, yes.
- [11:53]
B
You'll see that app is very intuitive in terms of my baggage goes here, my gate is here. And so again, personalization. Right. It may not be specific. Damien, this is your journey. Rather you are flying at this airport. Here is where your luggage is, here's where your gate is. And it's just, it's taking those steps to just again lessen the hassle of travel. And then as you get on the plane, our flight attendants, our ground crew, our pilots are just top caliber. It's the friendliness that you see. Again, the experience extends beyond connective Media provides an opportunity for us to gather what we have from our three core pillars, travel, loyalty and media. And it's that flywheel. We are able to ingest signals based on the profiles that we have and in doing so you begin to see the traveler profile as it begins to matriculate to an actual loyalty partner. 39 million mileage plus loyalty partners. We have a co brand card through Chase. Right. We have our mileage plus partnerships team and we think about that from the avises, the Marriotts, from a travel endemic standpoint, non endemic. The away, well, I guess away luggage is not therabody things to that effect. And so the ability to accrue and redeem Miles as transaction and then with a credit card, the ability to redeem miles or accrue miles, I should say, through transactions. As you go through the flywheel, you come to the media piece, which is the connective tissue to understanding the middle and lower funnel of that transaction. Purchase point, brand affinity options for our users. And then back to the first part, the emotion and the journey and the actual travel. And as we do this flywheel, we have more travelers, which means more signals, which means more opportunities for media, which means more. And it's a self fulfilling flywheel that essentially again with the customer in the middle or the customer as the focus creates that opportunity. To your point of why people are flying more with United now, it's early days.
- [13:49]
A
You just launched this year. What kind of feedback have you had from those customers? What are people's experience, what are people experiencing and how are they sending that back to you?
- [14:00]
B
I think the best part is they've come up and said, I'm so excited you're doing this. Never would have thought of this. Like you're hearing it from the horse's mouth, right? So, yes, and an unbiased manner. What I'm most proud of is the fact that we've come out with a legitimate business with a very, very focused Northstar that is focused solely around the customer, that's unique. And to bring it to market at the speed that we did, with the help that we had from partners and the support that we've had from the industry has been just, it's been amazing.
- [14:33]
A
Now the idea now seems like a very good one. And you're telling me, Mike, how quickly you brought it to market, what, in under a year, really? I mean, it's a good idea. Do you expect that other airlines are going to want to emulate what you've done here with your media network?
- [14:49]
B
Yes, I do. Delta is a very savvy airline. They're a great airline. They're doing certain things with the connect that we're connecting streaming from a device to their seatback screens. They've done partnerships with Walmart plus and such. Whether they come out with a full scale media network, I'm not sure. But United and Delta are the top two airlines in the US and they are very savvy brands. So if they come out, I would not be surprised. I don't know about the others. You know, for me it's not one's better than the other. It's just where I see the next. That would be my prediction.
- [15:23]
A
In general, while we're on the topic of predictions when you look ahead to the rest of this year and to next as you build this offering out, what are the kind of trends you're looking for in terms of that merging of travel and media that you just talked about?
- [15:38]
B
The ecosystem is incredibly fat right now and first seen through streaming. Right. In my opinion, it's a glorified cable model where you have certain networks or certain streamers holding certain episodes hostage and you know, in order to get content you need to subscribe. And it's really the. You and I grew up. You had to pay for hbo, you had to pay for espn. It's a similar model and you're seeing consolidation M and A start in that sector. There's too many choices for consumers today. There's 273 retail media networks. That is not scalable. Right. Marketers and agencies already have too many choices to make. And at the same time, the uniqueness of that data, depending on the sector is it may not be all that unique. I do think there's going to be consolidation. There has to be. And for me I would expect that. I think we're in a very good position just given the unique position that we're in. And quite frankly, like the three pillars, right. Scale, accuracy and omnichannel. And we can say we have that with confidence. I would say, like to your point of expectations, there has to be consolidation. I think the introduction of AI, it wouldn't be a podcast without saying AI. Yeah, you've got to say AI said flywheels. If there's another one, I need to say, but I do think the introduction of AI into not only the purchase path, but more importantly the analytics. Yeah, right. Humans know which questions to ask. AI will figure out what other questions to ask. And as we constantly feed these models, you're going to have just from an analytics standpoint, the ability to extract new data, new intelligence, new insights. And we want to be on the forefront there to ensure that we modernize our offering at a pace that is quicker than what the industry is seeing.
- [17:28]
A
Do you anticipate that your media network and what you're offering might have some kind of partnerships with some of those streaming platforms?
- [17:36]
B
Yeah, it's my job. So like I do, I think there's opportunity for partnership. It's the power of many versus the power of one. Yeah, you have to be selective. Right. If you partner with everyone, you partner with no one. So I think there's opportunities in the travel space. I do think there's opportunities in the non endemic space too. We're at really early stages. So honestly, like, having been on the. The platform side, I'm not used to this much attention. And I love it. We brought friends in to build this business. I'm working with my friends. I absolutely love it. And so together we're kind of sitting down and putting our heads together and say, okay, like, we got to the starting line. Yeah, we busted our asses for nine months and we got to the starting line. How do we run this race and always be the leader? Yeah, because there's going to be people coming up after us. And that challenge with one another is. It's great because we're pushing one another to be better. And it's not 10. It's not intense in the sense that, like, any conversations with emotion are meant for constructive and collaboration. And I think we're all being better because we're constantly pushing one another, but more importantly, we're supporting one another.
- [18:46]
A
Yeah, you do see some relationships with broadcasters, with inflight entertainment, but I imagine this is going to go to a different level.
- [18:55]
B
This is the early stage of the business. This is the exciting part. We're the bright, shiny object right now. And I think it's good to revel in that. Just to, to pat yourself on the back and say, hey, we did it. But realistically, like, complacency doesn't get you anywhere. Right. So everyone else has got. Has gotten to the starting line. There's been 273 other companies that got to the starting line, and some are running the race faster than others, and some are not even on the same course anymore. So for us, I think it's about heads down and just constantly push and to be the best. Right.
- [19:28]
A
Let me ask you a question. Obviously, in this context, the retail media space is highly competitive. Do you feel the pressure?
- [19:37]
B
I don't feel the pressure from the industry. I feel the pressure to deliver. Me personally, I. I hold the bar very high for myself, and I'm my worst critic. I know what it's like to be successful. I helped launch advertising.com and I can tell you those first five years were by far like, the highlight of my life. From a professional standpoint, these last nine months are on par with that. And if I can make the next four years and three months the same or better, I'm going to do everything I can to do it. And if there's 23 years, 18 more years to follow that, great. I hope to retire at some point in my life, but I'm just excited because this is real and it's good, and we will be responsible for our success. So I'm really excited about it.
- [20:21]
A
Thank you so much for these insights. It's, it's been great.
- [20:24]
B
It's a pleasure to speak with you, Damian. Thank you.
- [20:32]
A
And that's it for this edition of the Current Podcast. We'll be back next week, so stay tuned.
- [20:37]
B
The current podcast theme is by Love and Caliber.
- [20:40]
A
The current team includes Kat Fessy and Sydney Cairns.
- [20:43]
B
And remember, identify when the right time to send the right message to the right user is. And that message could be an advertisement, it could be content, it could be nothing, because it's not the right time.
- [20:56]
A
I'm Damian. And I'm Ilise. And we'll see you next time. And if you like what you hear, please subscribe and leave us a review. Also, tune into our other podcast, the Current Report.