Emirates airline's advertising budget has grown by Dh156 million to reach just over Dh1 billion, the airline's financial report has revealed.
The carrier has maintained an average advertising spend over the years of three per cent of its revenues, but used only 2.8 per cent of its Dh31.1bn total income in 2006. However the following year group revenues exceeded all expectations to hit Dh 41.2 billion – and the Dubai-based airline is planning to spend around 2.5 per cent of this amount. "Last year was a record one for the airline – the boom in the country's economy contributed to its performance, along with many other factors," said Mike Simon, senior vice-president of Emirates Corporate Communications. "However the coming year will be a challenging one as the price of oil is touching $135 and will probably go higher.
"In 2006 we allocated around 3.5 per cent of revenues to advertising but eventually spent only 2.8 per cent – a saving amounting to Dh130m over the year."
An advertising and marketing spend of 3.5 per cent of the 2006 revenues would have meant an investment of Dh1.08 billion, but in the event the carrier spent only Dh870m. Simon revealed how the advertising spend had grown over the years. "In the early years of the airline we allocated 2.2 per cent of revenues to advertising and marketing," he said.
"This included advertising fees, media buying and sponsorships. This figure steadily climbed to 2.5 per cent and touched a peak of 3.5 per cent. However, once the brand was established all over the world the aim was to reinstate our presence and emphasise the expansion."
Emirates has been an active sponsor of many major sporting events locally and internationally. The world's richest horse race, the Dubai World Cup, is one of the biggest sponsorship deals.
The costliest investment abroad was the purchase of the naming rights for Arsenal's new ground – the Emirates Stadium – for Dh720m for 15 years. In addition the airline sponsors many other football teams in leading European leagues. In cricket, the airline sponsored the Australian team when they won the last cricket World Cup and umpires at all ICC tournaments wear Emirates jerseys, providing regular exposure all over the world. The financial report says: "The Emirates Group has doubled in size approximately every four years and continues to set the benchmark for an ever-competitive airline industry.
"Keeping its messaging, advertising and branding fresh and unique in this context has been incredibly hard, but Emirates employs a full range of classic and contemporary elements in its marketing mix to ensure it stays ahead of the game."
For effective marketing the airline has a network of 120 public relations and advertising agencies around the globe linked through its EmPower extranet.
When the airline plans to launch a new campaign it distributes a briefing, invites agencies to submit a concept and then chooses the best. Through such links each local agency is effectively part of a global agency.
Rise of the airline
Emirates airline was launched with $10 million in 1985 and now pays back Dh1 billion in dividends to its shareholders.
It has 182 wide-bodied aircraft worth $58bn on order and maintains an 80 per cent seat load factor.
On major routes the airline runs flights at full capacity. Emirates saved Dh888 million by hedging fuel.