Since 2020, Adswerve and Alaska Airlines have built a trusted relationship, working together to improve the leading airline’s digital marketing infrastructure and strategies to increase return on ad spend (ROAS).

Headquartered in Seattle, Alaska Airlines has deep roots in the Pacific Northwest with name recognition and popularity in that region. They’ve expanded significantly through organic growth and a recent acquisition of Hawaiian Airlines, which has positioned them to serve more than 140 destinations across the U.S., North America, Asia, the Pacific and soon, Europe. They’re also a part of the oneworld Alliance, a partnership with a network of other airlines.

Like many expanding brands, Alaska Airlines wanted to understand the best mix of marketing channels and budgets to get the most ROAS. Beyond digital, they invest in a mix of traditional channels, including TV, radio and out-of-home. While the offline channels lift brand awareness, Alaska had difficulty measuring their impact on business KPIs like bookings and revenue.

To optimize its marketing spend, Alaska wanted a smart, flexible way to understand the impact of each of their marketing channels, not only individually, but also how they work together across the entire customer journey. And, ultimately, receive clear, data-driven budget recommendations with predicted returns to guide their optimizations across their entire marketing mix. The team turned to Adswerve to build the solution.

We worked closely with Alaska Airlines’ teams, building an advanced marketing mix model (MMM) using Google’s open-source MMM tool Meridian, to allow them to understand how each marketing channel impacts revenue. 

The first step was working with Alaska and its other various marketing partners and departments to collect and unify its data from several disparate sources so we could normalize it and input it into the model. Using Meridian as our MMM tool, we could also access Google-specific data like Google Query Volume (GQV) to help understand historical search data, and input it along with media spend, brand and generic keywords, organic media, frequency, reach and control variables like holidays, weather, world events and competitor activity.

Using Meridian also allows Alaska to fragment historical data into geographical regions to identify trends in specific areas, which is helpful for an airline that focuses heavily on the Pacific Northwest and Hawaii. Alaska can merge the regional data for a more global view, too.

Collecting and inputting control variables into Meridian ensured that, moving forward, the model won’t mistakenly attribute revenue to marketing activities when it may be due to an external factor. For instance, there was a spike in GQV around the time of the Hawaiian Airlines acquisition, and we could account for the correlation in the model.

The COVID pandemic was another major outside factor that had a massive impact on travel. We applied BigQuery’s public dataset about infections to the model so the trending decrease — and subsequent increase — in bookings across the entire industry wouldn’t be misrepresented in the baseline data.

After we normalized the data we collected and Alaska’s revenue information on the same time basis and expertly imported it into Meridian, the model ran thousands of simulations to identify how Alaska’s various marketing channels contribute to performance.

We used our deep MMM expertise and experience as one of only six certified Meridian partners in the U.S to iterate on the model, test assumptions and validate that the model worked correctly and was set up to run functions like budget optimization. 

We then integrated our custom Meridian dashboard with the MMM's budget optimizer tool, enabling Alaska Airlines to interactively adjust channel budgets and instantly see the ROI impact and optimal budget mix for maximum return.

After just three months of strategic data collection and normalization, development and testing, we delivered Alaska Airlines an advanced MMM based on accurate data that accounts for control variables. And provided them with an intuitive interactive dashboard they can use to see how dialing up or down their spend in each channel impacts revenue, taking into account channel saturation and marketing dollar decay. 

Now, the airline can confidently make smarter budget decisions and invest in advertising that will drive the most return. Our analysis projects that optimizing their budgets using Meridian can yield Alaska Airlines an 11% increase in addressable advertising revenue and a 3% higher return on investment (ROI). And most impressively, this could boost revenue by some $100 million.