Flying in the face of conventional marketing wisdom, Northwest Airlines Corp. has stopped all advertising and for the first time in decades does not have an ad agency of record.
The Eagan carrier's contract with Minneapolis agency Carmichael Lynch expired on May 31 and has not been renewed.
Jim Herlihy, a spokesman for Northwest, confirmed that the airline has quit advertising for the time being and is instead focusing on several product initiatives that emerged after customer research.
"As such, we're not conducting an advertising campaign at this time," he said.
The decision by the nation's fourth largest airline to ground its advertising mirrors efforts by many cash-strapped national airlines to discard conventional - but expensive - print and broadcast advertising from their marketing budgets.
Northwest, which in its glory days spent more than $100 million on advertising, has spent between $45 million and $50 million annually on brand advertising in recent years.
Greg Kurowski, president and chief executive officer of Minneapolis ad agency Periscope, criticized the airline's decision not to run advertising.
"When your brand has as much potential to cast a negative brand impression upon its customers as Northwest - monopoly, labor problems and treating your employees poorly - you would be naïve not to run advertising," Kurowski said.
But Robert Mann, president of Port Washington, N.Y.-based airline industry consultancy R.W. Mann & Co., said the move is part of a trend in the airline industry.
For example, Chicago-based United Airlines slashed its marketing budget from $75 million to $15 million after the carrier emerged from bankruptcy in early 2006.
Mann said consolidation within the industry has reduced the need for traditional ad campaigns.
"The need to run broadsheet and broadcast advertising no longer exists," he said. "Northwest may be on the bleeding edge of this. By the time you've run a Frequent Flyer program for 25 years, it's managed to ... create a database of existing and possible customers. "
Still, Mann said it is surprising when "someone goes bare. "
"It's kind of like a decision to self-insure. But 25 years into customer database building, it's clearly the most efficient way of doing business," he said.
Airline passenger traffic and revenues plummeted after the Sept. 11 terror attacks - an unexpected chapter in aviation history that included a multi-billion-dollar industry bailout by Congress.
Since then, three of the nation's largest airlines - Delta Airlines, NWA and United Airlines - have filed for bankruptcy, faced with high fuel costs and steep competition from cut-rate carriers.
Northwest emerged from bankruptcy on May 31. But the cost-cutting, along with the slashing of jobs and wages, included less advertising.
Airline advertising traditionally has hailed the beauty and splendor of flying or touted extraordinary service or flight experience.
In recent years, however, airlines began gravitating toward online marketing to save money.
"The bigger and better known the carrier, the more likely you are to find them breaking out in this direction," Mann said. "The idea of running waves and waves and waves of broadsheet or broadcast material just isn't very appealing anymore. "
There are exceptions, however. Some airlines have used "tactical advertising" to promote specific routes or services.
One tactical marketing opportunity began unfolding this week when several airlines, including NWA, began competing for six nonstop routes to China.
NWA's announcement on its Web site at www.nwa.com includes a hyperlink that allows the public to send e-mails to the U.S. Department of Transportation expressing support for awarding one or more of the China routes to Northwest.
Chicago-based United Airlines, which will be flying U.S. Olympic athletes to and from Beijing as part of the 2008 Summer Olympic Games, has applied to the agency for daily nonstop flights to China.
United's ad agency, startup Minneapolis firm Barrie D'Rozario Murphy (BDM), is banking on an increase in United's ad spending from about $15 million in 2006 to more than $100 million leading up to the 2008 Summer Olympic Games in Beijing.
BDM was founded last November by two executives of Fallon Minneapolis, Bob Barrie and Stuart D'Rozario. They created United's "It's time to fly" ad campaign before leaving Fallon to form BDM.
While United plans to use the 2008 Olympics as a marketing opportunity, smaller airlines such as Mendota Heights-based Sun Country Airlines Inc. are trying to steal market share - and attention - from rival NWA.
Sun Country in May began running a multi-million-dollar TV, print and online campaign that features three 30-second TV ads, one of which promotes that airline's free cheeseburgers.
"I think the difference is that Sun Country definitely has something to say," said Bruce Bildsten, a founder of Minneapolis firm Brew: A Creative Collaborative. "It just happened to coincide with Northwest coming back out of bankruptcy. "
The ad executive said Northwest passengers are aware that Sun County offers better food on its flights, thanks for the campaign.
A passenger sitting next to Bildsten during a recent NWA business flight even asked a flight attendant if free cheeseburgers were being served.
Mann, though, said the impact of smaller airlines is minimal. "There's not a widespread effectiveness of their operations or even knowledge of where they fly. "
Meanwhile, Periscope's Kurowski maintained that Northwest, which over the decades has used Minneapolis agencies Campbell Mithun, Fallon and Carmichael Lynch to create its advertising, needs to include a mass media component in its marketing plan.
"It's like a diet of anything," he said. "Any good brand needs a well-rounded diet of branding disciplines. "
He believes that Northwest ultimately will have to return to traditional advertising if it hopes to survive.
"Let's go back to the Roman Empire. Julius Caesar also decided not to run advertising," he said.
