Article by Greg Lindsay
Fast Company  |  May 2007

Flight Plan

The math wizards at Dayjet are building a smarter air taxi--and it could change the way you do business.

Flight Plan, by Greg Lindsay

It’s only fitting that a service pitched to traveling salesmen should find itself confronting an especially nasty version of what’s known as the “traveling-salesman problem.” Stated simply: Given a salesman and a certain number of cities, what’s the shortest possible path he should take before returning home? It’s a classic conundrum of resource allocation that rears its ugly head in industries ranging from logistics (especially trucking) to circuit design to, yes, flesh-and-blood traveling salesmen: How do you minimize the cost and maximize your efficiency of movement?

Back in 2002, that was the question facing DayJet, a new air-taxi service hoping to take off this spring. Based in Delray Beach, Florida, DayJet will fly planes, but its business model isn’t built around its growing fleet of spanking-new Eclipse 500 light jets. It’s built on math and silicon, and the near-prophetic powers that have in turn emerged from them. “We’re a software and logistics company that only happens to make money flying planes,” insists Ed Iacobucci, an IBM veteran and cofounder of Citrix Systems, who started DayJet as his third act.

The advent of affordable air taxis has been heralded by a steady drumbeat of press over the past few years, with an understandable fixation on the sexy new technology that’s generally credited with making the market possible: the planes. The Eclipse 500 is a clean-sheet design for a tiny jet that seats up to six and costs about $1.5 million (the Federal Aviation Administration may clear it for mass production as early as next month). It is also the most fuel-efficient certified jet in the sky. Cessna, meanwhile, has rolled out its own, if pricier, “very light jet” (VLJ), with Honda’s set to appear in 2010. No less an authority than The Innovator’s Dilemma author and Harvard Business School professor Clayton Christensen has mused in print that the E500 and its ilk “could radically change the airline industry” by disrupting the hub-and-spoke system we all know and despise.

But Iacobucci, who wrote a check long ago for more than 300 orders and options on Eclipse’s first planes, isn’t relying on the aircraft to make or break him. Instead, it’s his company’s software platform—and the novel way it attacks the traveling-salesman problem—that will set DayJet apart. On day one of operations, flying from just five cities in Florida with only 12 planes, DayJet’s dispatchers will already have millions of interlocking flight plans to choose from. As the company’s geographic footprint spreads (with luck) across the Southeast—and as its fleet expands as well—the computational challenge only gets worse. Factor in such variables as pilot availability, plane maintenance schedules, and the downpours that drench the peninsula like clockwork in the summer, and well, you get the idea: Finding the shortest, fastest, and least-expensive combination of routes could take every computer in the universe until the end of time.

“I knew what the complexities were and how the problem degenerates once you reach a threshold,” Iacobucci says. So he didn’t try to find the optimal solution. Instead, DayJet began looking for a family of options that create positive (if imperfect) results—following a discipline known as “complexity science.”

For the past five years, with no planes, pilots, or customers, DayJet has been running every aspect of its business thousands of times a day, every day, in silicon. Feeding in whatever data they could find, Iacobucci and his colleagues were determined to see how the business would actually someday behave. When DayJet finally starts flying, they’ll switch to real-time flight data, using their operating system to shuttle planes back and forth the way computers shuttle around bits and bytes.

Iacobucci is an expert at building operating systems—he did it for decades at IBM and Citrix. Because of that, he has zero interest in the loosey-goosey world of Web 2.0. He sees the next great opportunities in business as a series of operating systems designed to model activities in the real world. DayJet looks to be the first, but he has no doubt there will be others, and that new companies, and even new industries, will appear overnight as computers tease answers out of previously intractable problems.

Which brings us back to the traveling salesmen. Iacobucci says his computer models predict that DayJet’s true competitors are not the airlines, but Bimmers and Benzes—he says 80% of his revenue will come from business travelers who would otherwise drive. In other words, DayJet, which closed an additional $50 million round of financing in March, is creating a market where none exists, an astonishing mathematical feat. To get there, all Iacobucci needed was five years, a professor with a bank of 16 parallel processors, two so-called Ant Farmers, and a pair of “Russian rocket scientists” who, it turns out, are neither Russian nor rocket scientists.

“This is way nastier than any of the other airline-scheduling work we’ve ever done,” says Georgia Tech professor George Nemhauser, whose PhD students have been helping to map the scope of DayJet’s mountain-sized scheduling dilemma. “You can think of this as a traveling-salesman problem with a million cities, and that’s a problem DayJet has to solve every day.”

Tapping into the school’s computing power, Nemhauser and his students have figured out how to calculate a near-perfect solution for 20 planes in a few seconds’ worth of computing time and a solution for 300 planes in 30 hours. But as impressive as that is, in the real world, it’s not nearly enough. That’s because in order for DayJet’s reservations system to succeed, Iacobucci and company need an answer and a price in less than five seconds, the limit for anyone conditioned to Orbitz or Expedia. Because DayJet has no preset schedule—and because overbooking is out of the question (DayJet will fly two pilots and three passengers maximum)—any request to add another customer to a given day’s equation requires its software to crunch the entire thing again.

One of Iacobucci’s oldest pals and investors, former Microsoft CFO and Nasdaq chairman Mike Brown, pointed him toward a shortcut—a way to cheat on the math. Brown had retired with his stock options to pursue his pet projects in then bleeding-edge topics such as pattern recognition, artificial intelligence, nonlinear optimization, and computational modeling. His dabblings led him first to Wall Street, where he invested in a trading algorithm named FATKAT and eventually to Santa Fe, New Mexico, ground zero for complexity science.

Invented by scientists at the nearby Los Alamos National Laboratory in the 1980s, complexity science is a gumbo of insights drawn from fields as diverse as biology, physics, and economics. At its core is the belief that any seemingly complex and utterly random system or phenomenon—from natural selection to the stock market—emerges from the simple behavior of thousands or millions of individuals. Using computer algorithms to stand in for those individual “agents,” scientists discovered they could build fantastically powerful and detailed models of these systems if only they could nail down the right set of rules.

When Brown arrived in town in the late 1990s, many of the scientists-in-residence at the Santa Fe Institute—the serene think tank dedicated to the contemplation of complexity—were rushing to commercialize their favorite research topics. The Prediction Co. was profitably gaming Wall Street by spotting and exploiting small pockets of predictability in capital flows. An outfit called Complexica was working on a simulator that could basically model the entire insurance industry, acting as a giant virtual brain to foresee the implications of any disaster. And the BiosGroup was perfecting agent-based models that today would fall under the heading of “artificial life.”

By the time Iacobucci mentioned his logistical dilemma to Brown in 2002, however, most of Santa Fe’s Info Mesa startups were bobbing in the dotcom wreckage. But Brown knew that Bios had produced astonishingly elegant solutions a few years earlier by creating virtual “ants” that, when turned loose, revealed how a few false assumptions or bottlenecks could throw an entire system out of whack. A model Bios built of Southwest’s cargo operations, for example, cost $60,000 and found a way to save the airline $2 million a year.

Brown proposed that Iacobucci supplement his tool kit with a healthy dose of complexity science. Iacobucci was already hard at work building an “optimizer” program that employed nonlinear algorithms and other mathematical shortcuts to generate scheduling solutions in seconds. But what he really needed, Brown suggested, was an agent-based model (ABM) that would supply phantom traveling salesmen to train the optimizer. Without it, he’d essentially be guessing at the potential number and behavior of his future customers. “Eddy took no convincing,” Brown says. “He was telling me, ‘Get some guys down here and let’s do this.’”

Brown dug up the Ant Farmers, a pair of Bios refugees and expert modelers named Bruce Sawhill and Jim Herriot. Sawhill had been a theoretical physicist at the Santa Fe Institute, while Herriot had been a member of the original team that invented Java at Sun Microsystems. Together, they’re DayJet’s own Mutt and Jeff, with Herriot playing congenial science professor and Sawhill his mischievous sidekick.

Meanwhile, to build the optimizer, Iacobucci recruited his pair of Russian rocket scientists: Alex Khmelnitsky and Eugene Taits, mathematical wizards he’d hired once before at Citrix. Rather than tackle every scheduling contingency via brute-force computing, the not-Russians cheated by slicing and dicing them into more manageable chunks. They used opaque mathematical techniques such as heuristics and algebraic multigrids, which elegantly subdivide a sprawling problem like this one into discrete patches that can be solved (within limits) simultaneously.

Ironically, the more they slaved over the problem, the less it seemed that throwing a perfect bull’s-eye every time was the key to their salvation. The speed of their solutions was proving to be more crucial. If they could provide DayJet with a minute-to-minute snapshot of near- perfect solutions, the system could essentially run the company for them. DayJet would become faster—both in the air and operationally—than any of its competitors could ever hope to be.

With one team working on modeling demand and the other calculating baroque flight plans, Iacobucci and his engineers then concocted a third software system called the Virtual Operation Center. The VOC runs the company in silicon, feeding the phantom customers inside the ABM into the optimizer, which does its best to meet each of their demands with optimal efficiency and maximum gain. Seen on-screen, the VOC is a time-lapse photograph of DayJet’s daily operations, also drawing upon maintenance and real-time weather information to produce a final data feed that factors in nearly every facet of the business. Iacobucci compares each run of the VOC with a game of baseball in which the ABM is continually pitching to the optimizer; DayJet has already played several thousand lifetimes’ worth of seasons.

Armed with its real-time operating system, DayJet is pursuing a very different idea of optimality than, say, the airlines. With their decades of expertise in the dark arts of yield management, the airlines know exactly how to squeeze every last dollar out of their seats, which is indeed pretty optimal. But they also lack an effective plan B—let alone a plan C or D—in the event that the weather intervenes and schedules collapse. In fact, while, say, JetBlue may now finally have a contingency plan or two, DayJet’s business model is nothing but contingency plans.

Herriot offers another sports metaphor: “Total soccer,” popularized by the Dutch in the 1970s, replaced brute-force attacks to the goal with continuous ball movement. “Moving straight to the goal is an excellent way to score, except for one slight problem—the other team,” Herriot says. “They’re a human version of Murphy’s Law. In total soccer, you continually place the ball in a position with not the straightest but the greatest number of ways to reach the goal, the richest set of pathways.”

“Each individual pathway may have a lower possibility of reaching the goal than a straight shot,” Sawhill chimes in, “but the combinatorial multiplicity overwhelms the other team.” The Dutch discovered that a better strategy was a series of good, seamlessly connected solutions rather than a single brittle one.

“The Dutch won a lot of games that way,” Herriot adds. “It also created a different kind of player, a more agile, intelligent one. In some sense, we’re teaching DayJet how to play total soccer.”

In complexity lingo, a chart of all the pathways those Dutch teams exploited would be called a “fitness landscape,” a sort of topographical map of every theoretical solution in which the best are visualized as peaks and the worst as deep valleys. “We’re dealing with a problem where the problem specification itself is changing as you go along,” Sawhill says. “You no longer want to find the best solution—you want to be living in a space of good solutions, so when the problem changes, you’re still there.” Fluidity is the greater goal than perfection.

To that end, the company has been changing the problem inside its simulators every day for the past four and a half years, looking for those broad mesas of good solutions. And after a million or so spins of the VOC, DayJet has produced a clear vision of the total market and its likely place in it. Iacobucci expects to siphon off somewhere between 1% and 1.5% of all regional business trips within DayJet’s markets by 2008, with “regional trips” defined as being between 100 and 500 miles. In the southeast states the company initially has its eye on, that’s 500,000 to 750,000 trips a year, out of a total of 52 million, more than 80% of which are currently traversed by car. Yes, DayJet’s life-or-death competition is Florida’s SUV dealerships, not the airlines. DayJet may even help the airlines slightly: The model predicts some customers who fly DayJet one way will take a commercial flight back home.

The reams of data produced by the VOC have already coalesced into a thick sheaf of battle plans framing best- to worst-case scenarios. And having run the scenarios so relentlessly for so long, Iacobucci is now utterly sanguine about his prospects. When I ask over dinner for the dozenth time about DayJet’s presumptive break-even number, he flat out admits there isn’t one. “Within the realm of all realistic possibilities—at least 25% of our projected demand to 125% demand—we maintain profitability.” Even at 25%? “Sure,” Iacobucci replies, “it just takes longer, and takes more [airports], and the margin is much lower. But this isn’t going to be what the venture capitalists call the ‘walking dead.’ If it’s a hit, it’s going to be a hit pretty quickly.”

I’m not the only one who has trouble wrapping his head around the numbers, or lack thereof. Iacobucci tells the story of one analyst asked to crunch the numbers ahead of an investment. “He asked a direct question: ‘All I want to know is, what formula do I put into this cell to tell me how you come up with a revenue number?’” Iacobucci says. “I told him, ‘There ain’t no formula to put in that cell! It can’t be done! We’ll sit you down with our modelers, who will explain the range of numbers we came up with, but they can’t be encapsulated in a spreadsheet.’” The would-be investors passed.

Not everyone is so put out by the math involved. Esther Dyson, the veteran technologist and venture capitalist, now runs an annual conference called “Flight School,” in which DayJet has played a starring role. “I have no doubt it will work,” she says, referring to the software, “and I have no doubt they will spend time refining it and that there will be glitches here and there. But I do think Ed knows how to design very highly available systems”—a reference to his days building operating systems—“and that’s exactly what they’re doing.”

Mike Brown, who did ante up and today sits on DayJet’s board, is convinced that businesses big and small will increasingly turn to modeling as a way of developing—or troubleshooting—their business plans, mapping out strategies and market expectations that go far, far beyond spreadsheets and PowerPoint decks. “We’ll see more and more companies integrate modeling into the heart of their business. This is just like the Internet: One day no one had heard of it, the next day we were all using it.”

Since Iacobucci sees himself as being in the operating-systems business, he has no intention of giving that system away. (He learned that lesson the hard way at IBM.) He doesn’t want to build what he calls “horizontal” software that gets shared, e.g., Web 2.0 and Windows, the two great platforms for which every programmer in Silicon Valley seems to be writing widgets these days. Where everyone else in the business sees limitless opportunities in snap-together applications, Iacobucci sees a playing field so flat as to have no barriers to entry at all, and he doesn’t like it.

According to Dyson, DayJet’s competitors have so far pooh-poohed its software, assuming they’ll be able to buy their own off the shelf at some point. Eclipse Aviation’s Vern Raburn hopes Iacobucci might be persuaded to license his tools, because Raburn’s own business model depends upon air taxis’ taking off. Iacobucci says that isn’t going to happen. “There’s a shift away from building another platform toward building highly integrated, vertical, special-purpose, high-performance systems,” he argues. Iacobucci envisions more companies like his own, in which the competitive advantage resides in custom-built, deeply proprietary, real-world operating systems that don’t just streamline accounting, but become the central nervous systems of entirely new, scalable businesses. He’s looking to build barriers to entry out of brainpower—so much of it that rivals can never catch up. (“It’s like in Dr. Strangelove,” Sawhill quips. “‘Our German scientists are better than their German scientists.’”)

Iacobucci points to Google as an example of what a vertical system can accomplish. While everyone raves about free services on Google, the largely invisible supercomputers in Google’s data centers are themselves invisibly tackling a variation on the traveling-salesman problem: How do you solve millions of searches in parallel at any given second? “When you get into mesh computing,” the name for Google’s technique, “that’s what it’s all about: managing the complexity,” Iacobucci insists.

But no company has ever built a business model around complexity from the ground up—until DayJet. Thumbing his nose at the prevailing ethos in software circles of “the wisdom of crowds,” let alone that “IT doesn’t matter,” Iacobucci has set out to first invent and then dominate a market he might have otherwise just sold software to. “When we built generic software at IBM and Citrix, the other side would always reverse-engineer it,” he says. “The only thing the customer sees here is an incredible service. This is ‘software as a service.’”

Fast Company  |  July 2006

Rise of the Aerotropolis

As competition shrinks the globe, the world is building giant airport-cities. They look monstrous to American eyes--and that could be a problem.

Rise of the Aerotropolis, by Greg Lindsay

The name wasn’t terribly auspicious: Nong Ngu Hao, the “Cobra Swamp.” But the location, a mammoth piece of ground in the sparsely settled landscape between Bangkok and the southern coast, was nearly perfect. Thailand’s leader at the time, the visionary-if-dictatorial field marshal Sarit Thanarat, had chosen this spot to build his country’s bridge to the 21st century, in the form of a gleaming international airport. It would be a long time coming.

The field marshal died suddenly in 1963, and the airport was postponed for decades; meanwhile, Thailand’s neighbors either eviscerated themselves or else offered up their cities as the First World’s factories. By the time the 21st century actually came into view, the field marshal’s democratically elected heirs watched enviously as the Dells, Seagates, and Motorolas of the world parceled out pieces of their sprawling supply chains across Indochina, creating hundreds of thousands of jobs for lottery-winning cities such as Kuala Lumpur and Singapore.

But before the end of this year, on a still-soggy tract that now lies at the creeping border of Bangkok’s suburbs, a new $4 billion mega-airport will finally open, forming the heart of a nascent city. When it’s finished, the erstwhile Cobra Swamp, now Suvarnabhumi (the “Golden Land”), will pump more than 100 million passengers a year through its glass portals, about as many as JFK, LaGuardia, and Newark aiports combined. Within 30 years, a city of 3.3 million citizens—larger than Chicago now—will have emerged from the swampland.

To the jaundiced American eye, such a project might appear to be the terminal metastasis of the sprawl represented by O’Hare, LAX, or JFK. But to dismiss it as the product of Asia’s infatuation with all things mega would be to miss the carefully calibrated machinery underneath. It’s a machine U.S. companies ignore at their peril at this time of escalating global trade and frictionless competition. It even has a name, the “aerotropolis,” and a creator, John Kasarda.

In the relatively obscure world of urban planning, Kasarda, a professor at the University of North Carolina’s Kenan-Flagler Business School, has made a name for himself over the past decade with his radical (some might say bone-chilling) vision of the future: Rather than banish airports to the edges of cities and then do our best to avoid them, he argues, we should move them to the center and build our cities around them. Kasarda’s research has laid bare the invisible plexus of air-cargo networks that have shrunk the globe (much as railroads did for the American West). And his conclusions are expressible as a series of simple numbers: Over the past 30 years, Kasarda will tell you, global GDP has risen 154%, and the value of world trade has grown 355%. But the value of air cargo has climbed an astonishing 1,395%. Today, 40% of the total economic value of all goods produced in the world, barely comprising 1% of the total weight, is shipped by air (and that goes for more than 50% of total U.S. exports, which are valued at $554 billion). Raw materials and bulkier stuff still take the slow boats, but virtually everything we associate with our postindustrial, value-added economy—microelectronics, pharmaceuticals, medical devices, Louis Vuitton handbags, sushi-grade tuna—travels via jumbo jet. We may think of the 1960s as the jet-set era, but the supremacy of (soft) airpower has only now begun to reshape our ideas about how cities should look, how they should function. “They’re now effectively a part of global production systems,” Kasarda says, “and without that connectivity, you’re out of the game.”

Those statistics lay out much of the story line of the coming age of global competition, and it’s a story being written by many of our most formidable current and future rivals. Hong Kong is premising its entire world-trade strategy on the primacy of the airport: Its Chek Lap Kok already has a mini-city stationed on a nearby island for its 45,000 workers, and SkyCity, a complex of office towers, convention centers, and hotels will soon be visible from its ticket counters. On the Chinese mainland, construction has begun on Beijing Capital Airport City, a $12 billion master-planned city of 400,000, and a massive airport expansion is coming to the city of Guangzhou, in the Pearl River Delta. Thirty-three miles to the south of Seoul, New Songdo City, billed as the most ambitious privately financed project in history, is taking shape in the Yellow Sea: The metropolis of 350,000 people, many of them expatriates living and working on-site for multinationals, is being built on a man-made peninsula the size of Boston. The estimated $20 billion cost is being underwritten by Korea’s largest steel producer and by the real-estate developers from the U.S.-based Gale International.

The same process is taking place elsewhere in the world as well. Several cities in India will see their airports dramatically scaled up in the coming years. The endless building spree in Dubai includes construction of the world’s largest aerotropolis—Dubai World Central—which will begin opening in stages as early as next year. (By the time it’s completed, DWC will have more than twice the capacity of Frankfurt’s airport and a permanent population of 750,000, all at an estimated cost of $33 billion.) In Amsterdam, office space next door to Schiphol Airport costs more per square foot than an open loft on one of the city’s picturesque 17th-century canals.

The aerotropolis represents the logic of globalization made flesh in the form of cities. Whether we consider globalization to be good or simply inevitable, it holds these truths to be self-evident: that customers on the far side of the world may matter more than those next door; that costs must continually be wrung from every process; that greater efficiency is paramount, followed closely by agility; and that distance equals time, which equals friction. To cope with these demands, we’ve already taken to living much of our lives in the digital world. But for every laptop order that zips to Penang via email, a real 747 must wing its way back with the laptop itself in its hold. If the airport is the mechanism making that possible, everything else—factories, offices, homes, schools—will be built in relation to it. “This is the union of urban planning, airport planning, and business strategy,” Kasarda says. “And the whole will be something altogether different than the sum of its parts.”

A Well-Oiled Machine

Historically, cities have sprung up at the junctions of oceans and rivers (New Orleans) or railroad networks (Chicago), which made the docks or the blocks around the central station the choicest real estate in town. But “cities are always shaped by the state-of-the-art transportation devices present at the time of their founding,” observes Joel Garreau, author of Edge City and chronicler of American sprawl. “The state of the art today is the automobile, the jet plane, and the networked computer. Because of the airport, it’s possible to imagine a world capital in a place that was once an absolute backwater—a Los Angeles or a Dallas appearing in an utterly improbable location, including Bangkok.”

The budding city surrounding Suvarnabhumi illustrates Kasarda’s claim that “the three essential rules of real estate have changed from ‘location, location, location’ to ‘accessibility, accessibility, accessibility.’ There’s a new metric. It’s no longer space; it’s time and cost. And if you look closely at the aerotropolis, what appears to be sprawl is slowly evolving into a reticulated system aimed at reducing both.” In his sketches for Suvarnabhumi, the outermost rings extend nearly 20 miles into the countryside from the runways. There, giant clusters of apartment towers and bungalows will take shape; the former will house Thais working the assembly lines and cargo hubs in the inner rings, the latter the expatriate armies imported by the various multinationals expected to set up shop around the airport. (No fewer than 10 golf courses are planned to keep the expats happy, not to mention shopping malls, movie theaters, and schools that seem airlifted straight from southern California.)

Moving in from the residential rings, the next layer will likely be occupied by the manicured campuses of those same multi-nationals—the back offices, R&D labs, and regional headquarters of the Dells and Motorolas that have been persuaded to relocate. Here, one will also find the hotels, merchandise marts, convention centers—anything and everything to sustain the knowledge workers laboring in the shadow of the airport. In the innermost rings, essentially abutting the runway fences, will be the free-trade zones, factories, warehouses, and logistics hubs designed for the FedEx/DHL/UPS combine—the just-in-time manufacturers and suppliers for whom time and distance from the belly of the 747 equals, quite literally, cost. New six-lane highways will link the inner and outer rings, with semitrailers barreling down dedicated “aerolanes” while residents stroll along prefab boulevards. A high-speed rail link costing more than a half- billion dollars will connect Suvarnabhumi to Bangkok.

“This is the key to Thailand’s growth over the next five years,” says Suwat Wanisubut, director of the Suvarnabhumi Airport Development Committee. “No other project is this big. It will bring high-tech companies to this region from Malaysia, Singapore, and even southern China. We are now competing directly with them, and even with Korea and Japan.”

Despite a fondness for Olympian pronouncements, Kasarda is neither a Le Corbusier nor a Robert Moses (to name just two men who wanted to mold cityscapes in their own images). He sheepishly concedes that his visions of monstrous highways and multimodal cargo hubs would make Jane Jacobs—the late patron saint of human-scale cities—toss and turn in her grave. But Kasarda has moved beyond the comfy, retro dictates of the New Urbanists. He isn’t concerned with “the way we live now” but with the naked realities of how we do business now.

Is the United States prepared for those realities? The closest thing to an aerotropolis in America today is Memphis International, home for 25 years to FedEx. Memphis has been the busiest cargo airport in the world now for 14 years running, a fact visitors learn before they’ve even left baggage claim. Ninety-four percent of that title is owed to FedEx, whose nightly “sort” is still one of the logistical wonders of the world: 200 planes descend in a swarm, disgorging more than a million packages and overnight letters that must pass through the interlaced conveyor belts and chutes of the “primary matrix” before being reloaded and shipped out.

Since its first sort in 1973, FedEx has become the largest private employer in a metropolitan area of close to 1 million people. The University of Memphis concluded in a study two years ago that the airport (and essentially FedEx) was directly and indirectly responsible for more than $20 billion in annual output and for 166,000 jobs—one of every four in the region. Only 30,000 or so of those are on FedEx’s payroll; the rest have flourished within the ecosystem of warehouses, trucking firms, factories, and offices nestled within its footprint.

To calculate the value of setting up shop in Memphis, just compare its informal FedEx drop-off deadlines with your own: Midnight or even 1 a.m. versus 9 p.m. on the East Coast and as early as 4 p.m. out West. That’s a lot of extra production. Jo Ferreira, FedEx’s managing director of hub-area business development, routinely juggles the requests of as many as 40 to 50 companies jockeying for space around Memphis and smaller hubs like Indianapolis, Phoenix, and Oakland. “Proximity matters more and more to them,” she says, and Memphis offers an ideal combination of inexpensive, semiskilled labor, acres of turnkey warehouse space, and the junction of three states all fighting for their business. “But the biggest driver,” Ferreira says, “is the growing urge that when we want something, we want it now. And as soon as one company relocates here or to any of our hubs, the next thing that happens is that three or four of its competitors come calling.”

But while Memphis might qualify as a proto-aerotropolis—with the FedEx hub providing just enough gravity to keep its customers from spinning out of orbit into Mississippi or Arkansas—few other American cities are even remotely ready to build their own analogues. The zoning is too haphazard, the NIMBY-ism too rampant, the love of the strip mall and ranch house too profound. In other words, there’s a reason Kasarda could get his vision built in Bangkok but not Atlanta. And that could be dangerous in the long run: “Individual companies don’t compete,” he says. “Supply chains compete. Networks and systems compete.” People forget that FedEx started in Little Rock, Arkansas, but the airport there couldn’t keep up—so FedEx founder Fred Smith looked around until he found one that could.

Kasarda is fond of quoting the biologist Sir D’Arcy Wentworth Thompson’s insight that growth creates form, but form limits growth. The challenge facing our airports today is the same confronting any company that has at last bumped up against the limits of its growth and is contemplating some creative destruction. Much like Microsoft and its dilemma about what to do with Windows, our airports are the operating system underlying a network that endlessly crisscrosses the globe. And like the software giant, they are bound to maintain backward compatibility with everything that has come to flourish around them. But whereas Microsoft only has to worry about its third-party developers, urban planners attempting to retrofit an aerotropolis will be forced to choose between optimization and saving people’s homes. The consequences of each decision are equally stark: Either risk building competitive disadvantage into the very fabric of cities, or begin unwinding the fabric itself.

The Thais and other governments across the developing world play the part of Apple or Linux in this metaphor. Their willingness to break with the past in pursuit of something truly new stems largely from their having so little to protect. Indeed, the imposition of an aerotropolis may be one of the only remaining ways some developing countries can restore order to their collapsing urban grids, a process made considerably easier by the relatively weak civil rights of their citizens. In Dubai, for example, the emirate’s ruler and “CEO,” Sheikh Mohammed bin Rashid Al Maktoum, has been building an aerotropolis basically by fiat for at least the last decade. Essentially a finger of sand jutting into the Persian Gulf, Dubai is almost always approached from the air. It also happens to sit less than an eight-hour flight from half the world’s population. The $33 billion Dubai World Central, probably the purest expression of the aerotropolis concept to date, will unwrap its first ring late next year—a logistics hub with more than three times the capacity of FedEx’s in Memphis. Dubai Logistics City is to have its own access to the runways, a forest of warehouses and office space, “e-customs” processing for anyone operating within the zone, and enough on-site housing for 40,000 workers. Some 1.2 million square meters of factory and warehouse space will serve customers including Boeing, Caterpillar, Chanel, LVMH, Mitsubishi, Porsche, and Rolls-Royce. In the second ring, free-trade zones like Dubai Internet City are to host the regional outposts of titans such as IBM, Microsoft, and Oracle. And in the outermost ring, prepackaged burbs such as Dubai Festival City will warehouse 77,000 residents, who will pass their days in one of the world’s largest malls, on a Four Seasons–maintained golf course, or working in one of the on-site office towers that offer, according to its promotional Web site, “a thriving, dynamic centerpoint situated just two kilometers from the emirate’s award-winning international airport.”

I paid a visit to Dubai in February and found little more than a few apartment buildings, an Ikea, and a six-lane highway leading to the airport a mile or so away. The man in charge of selling this city to its future inhabitants was an affable Canadian mall-developer named Phil McArthur. At the end of my tour—which included all 18 holes on the golf course and watching Pakistani laborers getting bused back into the desert—I grilled him about whether anyone would want to live in “hillside villas” built into the sides of sand dunes. “I already live here,” he said, shrugging. “But then again, I know what’s coming, and when, so that makes me a little different from everyone else.”

A Cure for What Ails Us?

John Kasarda obviously sees the aerotropolis as key to America’s competitive agility, and a critical one at that. Implicit in his thinking is a coming world of exponential population increase and cutthroat competition for resources and profits. His vision may evoke everything Americans find terrifying about globalization—a civilization cast in quick-drying cement, packed with worker drones—but if you grant Kasarda’s seemingly implacable logic, you have to ask: How willing or able are we to adapt? Ours is a country, after all, that allowed Denver’s Stapleton to be abandoned outright after encroaching suburbs cut off its oxygen supply. Compare that with Suvarnabhumi, slated to become a self-contained province governed by the prime minister himself, and it’s clear our squeamishness about dictating how and where our cities grow could ultimately come back to haunt us.

Nearly a decade ago, Kasarda met with World Bank officials in Bangkok to convince them of the broad social benefits an aerotropolis would bring. His sales pitch was ingenious: By helping to connect the city and the surrounding countryside to the rest of the world, Thailand would actually be furthering its own, seemingly unrelated goals for the region. It would improve the lot of women (by bringing in manufacturing jobs), help farmers and fishermen sell their orchids and tiger prawns overseas (by connecting them to foreign markets), and stem the flood of farmers into overcrowded cities such as Bangkok (by creating a new population center with a tremendous hunger for labor). Kasarda’s plea got nowhere at the time, but his thinking eventually won the Thais over.

In January, Kasarda made a similar pitch to another hard-bitten city: Detroit. He had been asked to make his usual stump speech for a group of 60 or so University of Michigan architecture students who were about to undergo an annual urban-planning exercise known as a “charrette.” Held every year by the dean of Michigan’s architecture school, each charrette contemplates a different aspect of Detroit’s ongoing attempt at urban renewal—which makes for plenty of ground to cover.

This year’s installment opened with the possibility of a Detroit aerotropolis as its premise. Nearly unique among major U.S. cities, Detroit has 25,000 acres of woods and open fields surrounding its main airport, a hub for Northwest Airlines. Just seven miles to the west—a straight shot along I-94—is a second, smaller airport, Willow Run, which caters to the chartered cargo and corporate jets of the Big Three automakers and their assorted suppliers. If one were to link the airfields with the highway, and with mass transit stretching to downtown Detroit, the spine for an aerotropolis would be in place.

Upon emerging three days later, three student teams presented master plans that offered everything from full-fledged logistics hubs around Willow Run to a grand boulevard running through a greenbelt of mixed-use neighborhoods and office parks designed in the high style of Silicon Valley. The aerotropolis, they concluded, could stem the massive brain drain from local universities and the entire region. It could anchor a new city, with 100,000 new residents, in Wayne County’s western suburbs. Kasarda was ecstatic: “This could turn around all of southeastern Michigan!” And his hosts became his newest converts.

Three months later, Mulu Birru, Wayne County’s economic development guru, presented a “best of” compilation of the students’ designs to his boss, Wayne County executive Robert Ficano, along with a “nonbinding memorandum of understanding” for building the aerotropolis—a plea to the governor to grant them the cash and the planning powers necessary to bring Detroit and adjoining communities to the table. Birru, who worked a minor miracle by helping to turn Pittsburgh around, sees a Detroit aerotropolis as a haven for “green” architecture and a magnet for auto suppliers, biotech firms, ethanol plants, and just about any other technology-intensive business you can think of. In fact, auto-parts outfits such as Visteon, Magna, and the Chinese entrant Century Automotive have either built or are eyeing new campuses in the aerotropolis zone. (Many auto components today are lightweight and digital, and thus easily shipped by air.)

After our meeting, Birru’s deputy and I drive off for another aerotropolis-site inspection, wending our way through the parking lot of Visteon Village, home to some 3,000 auto-parts workers and nearly as self-contained as the 19th-century New England mill town it resembles. We take the back roads to the future grounds of the Pinnacle Aeropark, a parcel of open land just south of Detroit’s airport that will serve as a prototype for the aerotropolis when ground is broken next year.

At one point, we pull over next to a field of dandelions less than a mile from the runways. These thousand acres are set to become the Entertainment Center, a Magna-supported vision that could have been a leftover sketch from Suvarnabhumi. Hotels, a casino, a performing-arts center, retail, and even a horse-racing track (Magna’s entertainment division happens to own Pimlico) would all sit here, cheek by jowl.

When you stand there, the airport peeking out from behind the overpass suddenly seems an optimistic symbol. It makes as much sense—and probably more—for the people of Detroit to orbit a new global portal as it does for them to cling to some frayed and decrepit version of Jane Jacobs’s ideal. It’s an opportunity for the city to start fresh, to recast itself in our networked economy’s own image. It’s a chance that Detroit, of all places, can ill afford to miss. The rest of us had better take good notes.

Advertising Age  |  September 2005

A Marketing Reporter’s Journey Into Airworld I

A three-week daily series.

Airworld 1


As I write this, I am cinching my luggage tight and preparing to head out for JFK International Airport on the first leg of an Advertising Age reporting trip that will take me and my readers across a globe-spanning swath of “Airworld.”

My reports will appear here on during the next three weeks and in two large special reports in the weekly print edition of Advertising Age after that.

Airworld is the name we have given to the invisible country that begins on the other side of the x-ray machines and extends in all directions beyond the concourses as the air corridors through which our airplanes fly. Among other things, this closed system of terminals and shuttling aircraft is its own vast media and retail ecosystem. Taken as a whole, it is one of the largest coherent stand-alone marketing venues on earth.

Airworld is a nation populated by nearly 100 million travelers in the U.S. alone, and passenger traffic—even after 9/11—is expected to double in 15 years. The airports at the center of Airworld are the hubs of our economy, circulating the people and consumer goods that can’t be reduced to digital bits. They already generate tens of billions of revenues on their own, more than half of which has nothing to do with aviation. They’ve also evolved into giant hubs for the consumption of media—billboards, magazines, duty-free and CNN Airport news—key to the continued success of advertising and media giants like Clear Channel, JC Decaux and Time Warner.

Airworld is also a petri dish in which to test the ongoing evolution of brands. The domestic airline industry is facing the greatest shakeout in recent history, with Delta and Northwest mulling chapter 11. By the end of this year, nearly a quarter of all domestic flights might be flying under bankruptcy protection. With oil at $70 per barrel or higher, can airlines persuade passengers to turn away from the lowest possible price they found online and opt for a more expensive ticket? And how will they do that without superior branding, marketing and customer relations—the skill set that enabled Southwest and JetBlue to succeed where so many low-fare carriers have failed.

I will be spending the next three weeks living the story in airports, watching this retail universe at work, and meeting with airline executives, passengers and grizzled road warriors.

And that sounds like something out of Steven Spielberg’s 2004 movie The Terminal, the story of an Eastern European traveler who becomes stranded in New York’s JFK airport as his homeland collapses in political chaos that renders his passport invalid. Unable to go home or enter the U.S., he becomes an inhabitant of the terminal’s international transit lounge and the tightly closed universe of Airworld. As one of my goals on this journey, I plan to meet the man whose real-life experience inspired the movie.

Stop by every day to read my latest reports and if you have ideas or questions about the project, don’t hesitate to drop me an e-mail.

That’s it for this first dispatch—I have to run because for me, Airworld is now boarding.


A ‘Cheap Chic’ Flight With a MarketingTrendsetter
September 13, 2005

ORLANDO—For my first day’s foray into Airworld, I lift off on JetBlue. What better airline to choose for the start of this exploration of the aviation marketing business than the one that has played such a key role in revolutionizing the industry?.

JetBlue was the first low-fare carrier to rebrand flying as a “cheap chic” experience. Southwest may have become an industry giant with the no-frills formula its executives feel they perfected back in the ‘70s (57 consecutive profitable quarters can’t be wrong, can they?), but JetBlue is the first of Southwest’s descendants to evolve the formula and to arguably make flying JetBlue a sign of one’s good taste.

Price-setting power
Thanks to a combination of technological innovations (the seatback satellite TV), an extraordinarily high level of customer service and espirt de corps, and a dollop of style (the new Airbus planes, with their leather seats, the Terra Blue chips), the JetBlue brand transcended the airline industry. The architect David Rockwell, who is designing the interiors of JetBlue’s new $875 million terminal, compares—with a straight face—JetBlue to the iPod (the ne plus ultra of compliments.) JetBlue, a low-fare carrier, is not the least expensive fare on many of its flights. Thanks to a superior product and brand, JetBlue has actually regained at least a little of its power to set prices. In an Orbitz-, Expedia- and Travelocity-powered marketplace of near-perfect information about low fares, I would argue this is a fairly significant development.

One of the premises I hope to test on this trip is the idea that the “trading up” phenomenon described in the book of the same name is finally beginning to appear in the airline industry years after sweeping through many retail products. At the low-fare end of the market, JetBlue and Song are building sleek brands that are recasting air travel as a lifestyle experience rather than simply cheap transport from A to B. At the high end of the market, Virgin Atlantic and other foreign carriers like Qantas, Emirates, Singapore Airlines, and Cathay Pacific had crafted boutique luxury brands. And the middle of the market—the Big Six of American, United, Delta, Northwest, Us Air/America West and Continental—would eventually fall away. (With Delta and Northwest teetering on the edge of chapter 11, that doesn’t seem too far-fetched.)
I began the day with a cab ride to John F. Kennedy International Airport, where JetBlue currently occupies Terminal 6, the former home of National Airlines built around 40 years ago by I.M. Pei. Next door is Eero Saarinen’s iconic and deserted TWA terminal, behind which JetBlue will build its new terminal starting next month and due to be finished by 2008.

Inside the terminal, my JetBlue baby-sitter for the day, Bryan, was waiting. He would fly with me down to Orlando, Fla., and accompany me on a tour of the airline’s $25 million pilot and flight crew training center, which opened this summer next door to the similarly new $22 million hangar where the fleet’s seatback TVs are installed. (This was the price I paid for the complimentary flight.)

Bryan gamely allowed me to wander the terminal for a while to see the sights before our flight. While on the one hand it’s overcrowded—JetBlue is spending another $25 million on temporary gates to tide passenger traffic over until the new terminal opens—JetBlue’s terminal also houses a day spa and sushi bar (where the chef was already beginning to prep at 9 a.m.).

JetBlue took Southwest’s successful marketing concept and evolved it into a lifestyle sell.
I wanted to ask at least one person why they chose to fly JetBlue, and rather than ask the usual suspects (college students, families likely to be on their way to Florida with me) I approached what had to be the sharpest-dressed man in the terminal, resplendent in a pin-striped suit with pocket square and equipped with handsomely battered luggage. You’re obviously a business traveler, I asked. Why are you flying JetBlue?

‘You don’t screw things up’
“You know,” he said, “I was sitting next to a senior operations guy for the airline on my last flight, and he asked me the same thing. I told him ‘You don’t screw things up.’”

The well-dressed man was David B. Stetson, managing partner of Burlington, Vt.-based D.B. Stetson & Associates (“Catalysts for Growth,” his card said), and he listed his favorite aspects of the airline: “Being on time, and just the sheer operational competence.”

He went on. “Most flights I take on JetBlue are too short to be about the TV. I just read something I bring along. If I fly coast-to-coast, then I’ll fly United and request an upgrade. But I don’t want to fly any other carrier if I can’t fly first class. I’d be interested in a premium JetBlue product—a different class flight.”

Did you voice this desire to the JetBlue exec you bumped into? I ask. And what did he think of that, considering how obsessed JetBlue is with streamlined operations (introducing a first-class cabin is an operational headache that low-fare-carriers expressly want to avoid)?

“What I told them was to start another brand completely, pitched at customers like me. Any flight under two hours, I’ll fly JetBlue right now. But I’d want more for longer flights. I’d also like Starbucks coffee on the flight, and I’ll pay more to get it. But they’ve never screwed me, and in the end, I fly them for that.”

After I entered the cabin for my own flight to Orlando, I began what Bryan called “the JetBlue experience,” which for me means that I am gobbling smoked almonds and trying not to be distracted by a Jerry Springer retrospective on VH1 as I write this first entry.

All of the little JetBlue touches were on display: the serendipity of channel surfing live TV, the bountiful bags of nonperishable snack food and the chipper staff.

A JetBlue car picked us up from Orlando International and drove us to the edge of the airport, to “JetBlue U.,” where a steadily increasing percentage of the airline’s pilots and flight crew were trained. The place is barely three months old, but plans are already on the drawing board to knock down one of the walls to make room for more flight simulators at $25 million per. In size and appearance, the devices resemble nothing so much as lunar landers.

The classrooms for flight crew would be overflowing soon, too, it seemed. The airline hired somewhere between 400 to 500 crew members last year, would add 600 this year and was looking at 900 more next year.

The reason? The imminent arrival on Aug. 14 of JetBlue’s first E190 jet from Embraer, the Brazilian aerospace consortium and the continuing rebound of air travel. The dramatic drop-off in passenger traffic following 9/11 is over for now (barring some new disaster). Among other things, JetBlue’s frantic expansion plans tell us that as a country, we are no longer afraid to fly.

That horiffic September day’s biggest economic victims were the airlines, which have collectively lost more than $30 billion since then. The aftermath of 9/11—the Iraq invasion and resulting spike in oil prices—is still hang as a potential threat to dismantle the industry as we know it.

As I continue my contemplation of the JetBlue experience in its larger context, I also take the time to WiFi my way to Jason Brown’s “Sleeping in Airports,” the online resource for anyone interested in crashing overnight at their local terminal. I’ve been reading up on Los Angeles International Airport, which isn’t likely to prove as accommodating as this one in Orlando. Last night, following Brown’s advice, I found the leather couch hidden behind the Hyatt’s ballroom. And behind that, I found an even more obscure carpeted corridor where I could hide. Grabbing one of the cushions from the couch, I slipped on my eyeshade and put in my earplugs, popped two Tylenol PM and sprawled on the floor.

I slept well enough ... until the hotel’s security guard nudged me awake with his toe. He suggested I try the terminal level “just find a corner and sleep there, but you can’t stay in the hotel” but I opted for plan B, a quiet spot near the baggage claim, which didn’t fire up until 7 a.m..

Why was I sleeping in the airport? Well, the answer is not exactly clear, even as it is in keeping with the overall spirit of this project, in which I plan to physically integrate myself into the landscape of Airworld. It isn’t about money; it’s about point-making-masochism.

I suppose I’m underscoring the essential inhumanity of airports—they’re extremely efficient at processing passengers from the curb to the gates, but should you choose to stick around, well, the tile gets pretty cold at night. Still, maybe it’s a sign that I’m finally acclimating to my new bizarre existence. Or maybe there are more Hyatts, Hiltons, Sheratons and Ramadas in my future. Stay tuned to find out.


The Curious Effect of Terminal Isolation on the Traveling Psyche
September 14, 2005

AIRBORNE—Enfolded in a blessedly cushioned airline seat and leveling off after a climb out of Orlando, I am inclined to seriously rethink my original idea that sleeping in airports will be some great adventure. Airworld, it turns out, can be as much a grim gulag as a glitzy shopping mall.

As I leave Florida behind and rocket west toward Los Angeles, I feel a sudden sense of deep kinship with those disheveled wretches one sees in newspaper photos that document every blizzard, electrical outage, aviation workers strike and assorted security incidents that suddenly shut airports, stranding the travelers within. It also took only two days entombed in the sterile bowels of Orlando’s terminal for me to gain a new appreciation of the true ordeal of psychological endurance dramatized in the movie The Terminal.

I also have new respect for frequent fliers and their Darwinian cousins, the road warriors, who more or less “live” continuously in such conditions. The latter really do live in an Airworld ecosystem where seemingly every decision—where to fly, who to fly, what to drive, where to stay, what to eat—adds frequent flier miles, or points, or some other form of sub-currency that either circulates through Airworld in an endless series of upgrades or else is cashed in for something occasionally tangible—magazine subscriptions or whatever.

I’ve been trying live this lifestyle vicariously for months on online communities like and the brand-new (think Friendster for the frequent-flying set) but learning to read the algebraic postings on those sites (no one will ever say “I’m flying to Orlando on JetBlue tomorrow” when they can post “B6, JFK -> MCO, 9/9/05” instead) is no substitute for experience.

And unlike the legions of management consultants who seem to populate Airworld (an extraordinarily lucrative demographic who become more monastic the more they fly), my life as a freelancer isn’t underwritten by a generous corporate patron (in exchange for every minute of my waking life, of course.)

I also wanted to answer another, more existential question: what would happen if you went to the airport with no intention to leave? I began to find A typical stranded terminal refugee during a recent airport closing. out that first morning after a bad sleep as I faced the prospect of killing nearly two more days before I could leave this place. At either end of the terminal are the security checkpoints for the “A” and “B” gates, which lie past a pair of public squares—one of which is anchored by a Hyatt Regency, its rooms arrayed around an 8-story atrium—- connected by a mall and a food court.

Until one heads out to the gates –- separate satellites connected by monorail trains on the far side of security –- there is little, other than the ticket counters, to dispel the notion that I’m in some random Floridian mall replete with a Chick-Fil-A, a fountain, inviting wooden benches and wicker chairs, pastels and palm trees.

What I want to know is: Did I have a headache already and didn’t notice or did the headache start upon realizing that this mall really was home?

My first priority was WiFi, and thanks to the Hyatt, the entire atrium was filled with it. My e-mail client wasn’t working properly, and 10 hours’ worth of e-mail mysteriously disappeared from the server, but at least I had a lifeline out to the real world.

But I was exhausted, I had a throbbing head, I needed sleep and it was only 6:30 p.m. I ordered a beer from the Hyatt’s lobby bar (suddenly I couldn’t bear to face the terminal—I’m went to hide out in this plushly carpeted corner of Airworld for a while) and screw my face together so the bartender won’t see my panic.

I was panicking because I didn’t feel like I could wait until midnight for the terminal to quiet down so I can sleep. I couldn’t sleep in the airport that night anyway—I needed real sleep, not four hours of catnapping. I’m never going to be able to entertain myself in this mall for two days, I thought. And I’m never going to last 21 days breathing endlessly recirculated air, eating $10 sandwiches and power bars and sleeping on an air mattress. I was my 8-year-old self again, the one who got homesick on his very first sleepover at a friend’s place. I e-mail Sophie: “Please call. I need to be talked off the ledge.”
She does, and she has a succinct recommendation: Get a room. And keep getting them as the trip goes on.

“You’re already spending 18 hours a day in an entirely enclosed space watched by the FAA,” she says. “You’ve got to get out of there occasionally. You can’t push yourself in every direction at once; think about the hierarchy of needs—you’ve left behind shelter, food, the woman who loooooves you. You have to get one of them back, and I think it should be sleep. If you’re continually exhausted and hungry, then no matter what you do, the world will just suck. If you really want to write about this, you need to splurge now and then on a room in order to be at your best.”

Of course, the whole point of this trip is to explore just how badly airports can become when your exposure is more than the typical two hours—just long enough that the combination of McDonalds, the SeaWorld store and the Fox Sports Bar & Grill to sufficiently dull your senses. I mutter something about “wanting to experience psychic breakage” with my real life back home, but clearly I don’t have the mental toughness at the moment to sincerely mean it.

Airworld isn’t home right now. It’s alien and frightening, and I have too much mental static to cope. I hand over my credit card at the front desk of the Hyatt and pay the going rate. After I explain to the manager on duty that I had intended to sleep on the floor again tonight, he takes pity on me and hands me two drink tickets.

I’ll need them tomorrow, but right then I headed up to my room, strip and sleep for 12 hours. At one point during the night I dream about plane crashes.

The next morning, I don’t feel refreshed. Don’t fight it, I kept telling myself. I’m the one who wanted to live in the most secure malls in America for three weeks. Like others who are forced to, I need to accept the airport on its own terms.

I gathered my wits, took a determined deep breathe and thought, If I’m going to be stuck in a mall for this long, there is only one thing to do: Go shopping.

I started at Starbucks, a place of reassuring comfort for me. Even with the security queues piling up just outside, the blonde wood tables and piped-in Dylan successfully preserved that “third space” the company is always talking about. (They preserved it so well that Starbucks became my command center for the rest of the day—it was the only place in the airport that remotely hinted of home.)

In an effort to lighten up, I pass the Busch Garden’s boutique and slip across the way to have my photo taken with Snow White before wandering into the Disney “Earport” to buy an accompanying frame inscribed with “I can still remember the magic of our first visit to Walt Disney World ...” ($16).

Nearby, I could have bought a flight suit or a stick of freeze-dried ice cream or a $20 talking “astrochimp” named “Ham” from the Kennedy Space Center, just next door to the Earport. A pair of tourists browsing the racks beside me asked the cashier “Is all of this available at the Space Center?” “Everything and more,” she replied. “Same prices?” “Same prices.”

Not that this or the SpongeBob t-shirt from the Universal Studios store or the alligator seasoning sauce from the “Florida Market” or the short boards on display at Ron Jon’s Surf Shop are atypical of terminal commercial life.

Airports’ evolution into secure shopping malls has been in the works for nearly a decade now. According to the Airports Council International, non-aeronautical revenues began outstripping the aeronautical kind as far back as 1997. In 2002 (the last year for which I currently have data), U.S. airports generated roughly $14 billion in revenue, 58% of which (or $8.15 billion) stemmed from “non-aeronautical” sources—the services and concessions that have become as integral a part of Airworld as glass walls and escalators.

At Orlando International—the fourth busiest airport in the U.S.—concession revenue grew 9.3% in fiscal 2004, to the point where “concessions” (defined as food, shopping, rental cars and parking) comprised 50% of revenues, or 60% if you tossed in the Hyatt.

After some more interviews about the logistics of Airworld, of which I will write later, I am focused and back in sync with the project. But when I finally trudge down the boarding ramp and climb into this airliner bound for Los Angeles, I am taken by a sense of sudden lightness and relief. It’s probably the drug-like elation experienced by those frequent-flier junkies who travel for the sake of the movement itself and the chance to go anywhere other than the place where there are right now.


The Odd Airport That Has Long Banned Advertising
September 15, 2005

LOS ANGELES—I purposefully chose Song rather than JetBlue for the five-and-a-half-hour transcontinental flight to Los Angeles. After all, it was a name in the news as well as the conversation all around me along the way. In fact, not long after I landed, its parent, Delta Air Lines, filed for chapter 11 as everyone predicted.

There is a certain sense of adventure surrounding Song, whose innovative marketing strategies could all be for naught if it is ultimately strangled by the tightening financial troubles of Delta. On another level, it is effectively spearheading Delta’s attempt to reinvent itself out of bankruptcy as something of a low-cost carrier overall, as demonstrated in Delta’s new “Simplifares” programs and lower walk-up ticket prices.

Back in New York JetBlue’s sales and marketing executives had obliquely dissed Song as too “product-focused,” which I interpreted as “gimmicky.”

But personally, I found that JetBlue had struck a nice balance between style and efficiency, while Song was attempting to win market share on behalf of Delta with a blizzard of branding initiatives—organic food by chef Dave Lieberman, cocktails by Rande Gerber, uniforms (and stationery) by Kate and Andy Spade, Song Records (a partnership with Artemis Records, with CDs available on the flight for $14), a pair of Song-inspired $200 jeans by Chip & Pepper and the temporary Song store that had opened with a splash in SoHo back in New York. Song seemed like Virgin Atlantic in reverse—an airline giving birth to a constellation of brands rather than emerging from one.

Song doesn’t just have live satellite TV—there are pay-per-view movies (including Breakfast At Tiffanys for anyone truly longing for the Jet Set era of 1961 again), and onboard MP3s, and even a music trivia contest.

Being a bit of a Jet Set nostalgist myself, I thoroughly enjoyed sipping an $8 cocktail at 40,000 feet while listening to The Thievery Corporation track “International Flight” followed by Air’s “Universal Traveler.”

Still, my seatmate –- who was neither a woman nor leisure traveler, both of which are Song’s targets –- only flew Song “because of the price. You can’t beat the price on this route.”

The flight attendant we struck up a conversation with didn’t see it quite the same way. “It’s not about the things as much as it is the people, still,” he said. “And you don’t walk into a Cadillac dealership expecting a VW price.

A Song airliner sits on the tarmac at LAX. The main terminal building is in the background. But you can make a difference with the little things.”

Later, the flight attendant told me, “The best thing [former Delta CEO Leo] Mullin could have told [original Song president John] Selvaggio was to totally separate this operation from Delta. Because if they had gone through Delta’s regular marketing department, all they would have heard was ‘Don’t do that.’ It was still all the old thinking.”

Of course, Selvaggio fled Delta before long into the arms of Virgin, where he is supposed to be developing Virgin America, its nascent low-cost carrier. (When it comes to the new generation of low-fare carriers, all roads seemingly lead to and from Virgin.) His former chief of marketing, Joanne Smith, is Song’s president now, and we’re due to meet next week in Atlanta. What I really want to know is whether Song will actually live long enough to answer the questions it and JetBlue have posed to the airline industry: Is there any way to differentiate yourself in an era of commodity products and perfect pricing? (And in the interest of full disclosure, thanks to Smith, I flew Song for a song—actually, for free.)

Shortly after touching down at LAX, I crashed for the night at a Super 8 motel in the sprawl just beyond the airport. I unwittingly helped justify Cendant’s $1.25 billion purchase of online ticketing engine Orbitz a year ago, as I used the site to chase down a rock-bottom fare for the night (I had no idea until later that Cendant owned, among seven other chains, the Super 8 brand). The next night, I was a guest (compliments of the house) of the Four Points Sheraton, a budget business traveler’s brand in the Starwood family. “This is the largest concentration of hotels on the coast,” the Four Points general manager, Phil Baxter, said, referring to the surrounding cluster of hotel towers as dense as L.A.‘s actual downtown. “We have 570 rooms and we’re just medium-sized.”
Cendant and Starwood are just two of the giant holding companies owning dozens of brands hovering at the periphery of Airworld.

It only took me minutes to realize why LAX was such a different kind of place within Airworld when I first entered it from the Song gate. It is the busiest origin and destination airport (i.e. non-hub) in the world. It’s the home airport for the second-largest media market in the country, the hub of the entertainment industry, but there isn’t a scrap of advertising anywhere. Its concourses are literally blank slates.

LAX has held out for decades against what its executive management once decried as crass commercialism—back in the 1970s, there was even a board resolution expressly forbidding any ads from going up. Besides institutional inertia, other reasons for the city’s uncharacteristic sense of restraint include spartan facilities and limited terminal space (LAX is so devoted to the pure function of processing passengers onto planes that it doesn’t even really have a name after all, just an airport code) and aesthetics. The architects and engineers in management really liked those white walls.

But all of that is about to change. LAX is only a few weeks away from awarding a contract worth $30 million a year or more over the next decade in terms of gross revenues to either Clear Channel or JCDecaux, the airport “outdoor” giants that consolidated their way to the top over the past decade, and are now engaged in a full-tilt struggle to win the last unclaimed piece of airport real estate.

On Monday, JCDecaux officially announced it had renewed its contracts in New York with JFK and LaGuardia, and had wrested away Newark Liberty from Clear Channel, creating the second-largest regional airport advertising platform in the world, with 100 million annual passengers. (The largest is comprised of the London airports, which is also controlled by JCDecaux.)

LAX—Los Angeles International Airport—has long banned all advertising from its terminal and concourses. But that’s about to change dramatically. The New York win was a huge one for JCDecaux, which currently trails behind Clear Channel in the U.S. (Denver and Chicago O’Hare, my next airports, are both Clear Channel affiliates.)

If JCDecaux wins LAX (along with the regional Ontario airport), it will effectively control the air corridor that is the cultural spine of blue state America. If Clear Channel wins, it can slam the door on another market in the U.S.—the winner will receive a five-year contract, with a five-year option to renew.

At lunch, LAX concessions manager Karen Tozer and her deputy, Mark Miodovsky, and the airport’s public relations director, Nancy Castles, filled me in on the the last laps of the two-year race for the airport contract. The process began with a request for proposals and eventually yielded 400 potential locations around the airport for static signage, banners, touch screen kiosks, plasma screens and sponsorships similar to what airports like Dallas-Ft. Worth and London Heathrow have done—the former granted exclusive pouring rights in all terminals to Pepsi, while the latter (with the help of JCDecaux) has set aside areas for passenger-friendly services (like banks of power outlets) sponsored by the likes of Vodafone. Planning accordingly, both sides have marshaled small armies of potential sponsors as part of the their LAX bids.

But the winner won’t be the one who slams the most advertisers into the most slots but rather the one that devises the most elegant, non-vulgar commercial messaging tactics that make maximum use of new technologies. “We wanted to really embrace technology,” Tozer said. But all of my lunch companions recoiled when someone brought up the enormous new plasma screens in the baggage claim of Las Vegas’ McCarran airport, which blast non-stop casino ads at their captive audience.

Before lunch, Miodovsky gave me a quick tour of Terminal 2—served by Northwest, Air France, KLM, and several other carriers—to see what he meant. He pointed to the ancient hotel and rental car information kiosks that consisted of little other than postcards and converted rotary phones. “Those could become touch screen kiosks with up-to-date information about a lot more than just hotels. They could be Web-based or custom built.” Upstairs, he pointed at blank walls where banners might be hung, and to a planter containing drooping, sickly palms that “could become display areas that generate revenue,” he said.

Whether that happens will ultimately depend upon the ingenuity of Clear Channel’s and JCDecaux’s final inspection teams and the willingness of LAX to implement them. With best and final offers due is less than two weeks, those planters could well sprout plasma screens by the time Angelenos fly home after Christmas.

PAGE 1  |  Page 2  |  Page 3

Advertising Age  |  September 2005

A Marketing Reporter’s Journey Into Airworld II

A three-week daily series.

Page 1  |  PAGE 2  |  Page 3

Airworld 2


The Eerie Isolation of Denver International Airport
September 16, 2005

DENVER—“The tendency in airport gestalt is toward ever-greater autonomy,” architect Rem Koolhaas once wrote. “Sometimes, they’re even practically unrelated to a specific, generic city. Becoming bigger and bigger, equipped with more and more facilities unconnected to travel, they are on the way to replacing the city. The in-transit condition is becoming more universal. Together, airports contain populations of millions—plus the largest daily workforce.”

The words seemed to take on new meaning for me as my ATA flight lowered for its approach toward the incredible 53-square-mile expanse of the Colorado Piedmont, across which sprawls the Denver International Airport. Making the scene below all the more otherworldly were was the central cluster of enormous tent-like buildings that could well pass for the exotic encampment of some alien race in a George Lucas science fiction epic.

It’s easy to sound glib when describing airports as “invisible cities” on the edges of the ones we call home. But the vast, isolated facilities of DIA deserve the title—a decade after opening, it still sits well beyond city limits, protected by four miles of farmland in every direction to prevent Denver’s suburbs from creeping too close. DIA was the last American airport built from scratch (and had been the first since Dallas-Ft. Worth opened 22 years earlier) and may well be the last for another two decades. Just as the mega-airports of Asia—Hong Kong, Seoul and Osaka—were built on islands reclaimed from the ocean, DIA itself is an island reclaimed from the plains.

Although it serves Denver—and is in fact a city agency—the airport’s directors have realized that DIA’s future depends on self-sufficiency and less reliance on the entities it serves—those mercurial, endangered species known as airlines. During a tour of DIA’s concourses, Airport Property Officer Pete Gingras explained its economics to me. DIA breaks even on its revenue from the airlines -– landing fees, rent, etc.—while posting a substantial profit (technically “revenues in excess of expenses,” as DIA is a nonprofit) of $70 million on revenues of $166 million last year, including $31 million from concessions and advertising alone.

Revenues are expected to rise 10% this year, as the low-fare slugging match between Ted and Frontier boosts traffic and drives concessions. Thanks to that cash-flow, Gingras said, DIA is debt-free and able to finance future expansion without taxpayer dollars. (The airport cost $4 billion to build in the first place.) It’s also theoretically able to lower the airlines’ fees as an encouragement for them to stick around.

The facility has just issued new design guidelines for the retail marketers and restaurants in terminals (“We think good design can boost sales 15% to 30%, so it’s really about ROI [return on investment], not just a whim,” Gingras said) and the airport staff is constantly searching for ways to bring in new businesses and tap new revenue streams. DIA even farms the surrounding 16,000 acres with wheat, millet and a sunflower seed field that brought in $300,000 worth last year and drills for oil and natural gas on the property ($1.8 million in 2004, and the airport is planning to drill more wells).

The airport has its own full-sized post office and recruiting center. The concessionaires must constantly replace employees who burn out on the 30-minute commute from Denver, the shuttle buses from employee parking lots, the background checks (the FBI combs back through the last 10 years of each applicant’s past), and the daily crawl through the thick membrane of security. The joke here is that when an employee misses four days but shows up on the fifth, the managers high-five them and thank them for coming back.

But those who stick around—employees and concessionaires alike—are encouraged to experiment. When the franchiser Quizno’s Sandwiches took over its first and only (and now it’s highest-grossing) outlet here, the airport encouraged the chain to open a slightly higher-end bistro offering sit-down meals. “You can’t be everything to everyone in the restaurant business, but in airports, you have to,” said Pete Pflum, vice president of airport operations for Quizno’s.

When the snow begins falling in the winter, each week brings the possibility of being snowed in, forcing the airport to take the final step, if only for a few days, toward total self-reliance. In March 2003, when a blizzard dumped seven feet of snow on each square inch of the mylar-coated roof, the tent began to sag dangerously, forcing its evacuation. There was nowhere to go for 8,000 stranded passengers but deeper into the terminals (the highways leading to the airport were snowed shut). “It’s never 8-to-5 here, ever,” Pflum said.

The decision by DIA’s master planners to keep the airport separate from the city for at least another decade means there is nothing but Airworld for literally miles around. I chose to stay at the hotel closest to the airport, a Ramada tucked inside a pocket of urban sprawl that would not exist without the nearby airport.

This is Airworld’s suburb, which we commute to via shuttle buses that scoop up guests for a half dozen different hotels at a time—the Courtyard by Marriott, the La Quinta, the Days Inn—underscoring their essential interchangeability (or at the very least their common ownership by a local franchisee.) “Holiday Inn Express or Holiday Inn Airport?” my driver asked one passenger. “Which number did you call?” “I don’t remember,” the rider replied wearily. “That was so long ago.”

Out here, we’re reduced for the night to the sum of our brand preferences and loyalty programs. Hertz, Avis or Budget? The Embassy Suites or the Radisson? Dinner at Bennigan’s or the Village Inn? Which one are you? Does it matter? One night, lying in bed, I flipped through a booklet listing every Ramada in the world, and landed on the one at Narita, the international airport outside Tokyo. Narita was once farmland, too, before the Japanese government declared eminent domain and began building. That Ramada and mine must be sisters, I thought. (My stay at my Ramada was comped by the general manager after a few unsuccessful attempts to arrange an interview about his usual customers.)

I walked across the highway the first night for a drink at Bennigan’s. Sitting next to me at the bar was Pete Kourkoubes, a silver-haired salesman for Toromont, a manufacturer of gas compression equipment, who was on the road and eating dinner with a younger colleague. They were in town for a 12-hour meeting that had let out only a half hour before, “and this was the first thing we found,” he said. “This might be the only thing around, we thought.”

He lives in Houston (“I moved there so I wouldn’t fly as much—only 50 times a year now instead of 100.”), flies Continental, likes renting from Hertz (“There’s no paperwork, and I’m gone.”) and was staying at the La Quinta with a corporate rate.

“I have around 300,000 miles,” he said, “and I can’t use them fast enough. I probably have a few free hotel stays somewhere, but I’ll never get around to using those, either. When you’re home, you never really want to travel.”


Navigating the Gastronomic Wasteland of Airport Food
September 19, 2005

DETROIT—I woke up Sunday with a sore throat. It was inevitable. After all, what are airliners if not giant flying thermos bottles that enable every passenger to efficiently share his microbial spew with every other passenger? Before I left,

Sophie had fretted endlessly about the super-germs I was sure to inhale or absorb over the course of my travels. Multiply Los Angeles International Airport’s 60 million passengers per year by the billions of microscopic life forms each one was carrying, and surely something was eventually going to slip by my immune system. To avoid contamination, I shouldn’t just wash my hands, she advised me, but instead wash all the way up to the elbows, the way a surgeon scrubs before entering the O.R. I, in turn, joked that I had a 50-50 chance of coming home early with a severe upper respiratory ailment.

But my weakened condition, I suspected, had less to do with what I was inhaling (although spending another night on the floor at O’Hare probably didn’t help) and more to do with what I’d been eating.

During my first week in Airworld, I’ve eaten a half dozen Clif Bars (for breakfast), in-flight almonds, peanuts, pretzels and trail mix, grazed my way through Presidents Clubs, Crown Room Clubs, Red Carpet Clubs, Admirals’ Clubs and Worldclubs, and eaten more turkey sandwiches that I could bear to count. I’d eaten “Wild Turkeys” in Orlando (because the pepperjack cheese apparently drives them wild), turkey paninis from Starbucks and a turkey on ciabatta from a Chili’s Too at O’Hare that was so stale the bread had the consistency of a Nerf football. I can’t complain about the airline food because in this day and age in coach class, there isn’t any (with the exception of the $8 jerk chicken sandwich I bought on my Song flight, which trumped the turkeys across the board). The best meals so far have been flank steak at Encounter, the ambitious, vaguely Trekkie-themed restaurant in the iconic Theme Building at LAX, and tuna steak Saturday night at DEMA, the restaurant in the Westin Hotel attached to the airport. (Westin PR was paying.)

While still at LAX, I smirked when I spotted Malibu Al’s Beach Bar in Terminal 5, which provided Alan Richman a jumping off point for a sweeping takedown of Airport cuisine (can that word even be used without sarcasm?) in the August issue of Condé Nast Traveler.

“At a time when air travel is expanding,” he wrote, “in-flight meals are disappearing, and time spent in airports is lengthening—a formula one might expect would herald a golden age of in-terminal dining—the food is certainly no better and probably worse than it has ever been: bland, formulaic, and in the case of establishments like Malibu Al’s, dispiriting.”

Richman wonders whether the majority of travelers are so desperate for distraction before boarding that they’re willing to eat just about anything—setting the bar pretty low for airport concessionaires. He’s right, but passengers have only themselves to blame. According to my new friends at the trade publication Airport Revenue News, the “primary dining style” of most airport visitors in 2004 was “indifference.”

When Denver International was still only on the drawing board back in 1991, the master plan called for no sit-down restaurants of any kind because prospective passengers indicated they didn’t want any. Instead, they got the food courts they deserved. When the Quiznos brain trust opened Chef Jimmy’s bistro as an experiment on one of the concourses a year ago, passengers practically fell to their knees to give thanks for the medley of cooked, rather than merely reheated, dishes on the menu. DIA executives told me this shift away from fast food and more toward fast-casual has been 10 years in the making, and that a new round of passenger surveys (the first since 1991) are in the works.

Not that Richman should hold his breath for a “renaissance” anytime soon. After indifference, most passengers care about “healthful” and “low-carb” food, which has translated to the packaged sandwiches I’ve been subsisting on for the past week. The supremacy of fast food has given way to “fast casual,” which would explain why Chili’s Too is seemingly everywhere –- from Orlando to O’Hare to Detroit –- and why Orlando’s latest showpiece restaurant is Romano’s Macaroni Grill.

Airworld is fertile ground for chains, possessing the double advantages of familiarity (with customer) and a reliable track record (appeasing airport operators) that freeze local favorites out. And once a chain has a beachhead in Airworld, it’s only a matter of time before its marketing department is studying timetables and plotting expansion at the most popular destinations. As one restaurant consultant put it in Airport Revenue News, “my recommendation to them if I were doing consulting is if it’s a hit in say, Dulles, then look at the major airports Dulles flies to and then open it up in those airports as well so you can get that brand recognition.”

But sometimes brand recognition blurs into brand mutation. What am I supposed to make of the Fox Sports Skybox bars and grills I’ve spotted in Orlando and O’Hare? What does a burger prepared by an also-ran cable channel taste like? What about the tacos at the Jose Cuervo Tequileria here in Detroit, or the “Caribbean specialties” at the Casa Bacardi in Tampa? (Richman confirmed that the former, at least, had drifted away from its core competency: “The tortillas appeared to have been made out of white flour and chewing gum,” he wrote.) And then there is the Cafe, which I haven’t seen, and which must possess brand synergies I can’t quite imagine (“low fare” has a different connotation in the restaurant business) but which apparently boasts an average customer check 54% higher “than a generic airport bar,” according to its creator, HMShost.

HMSHost (formerly Host Marriott Services) is to airport concessions what Clear Channel and JCDecaux are to their advertising. According to its Web site, HMShost has annual revenues of $1.6 billion and 71 airport locations. It doesn’t just install chains, but invents or imports those seemingly unviable local brands when the opportunity presents itself. When it won the $28 million contract for San Antonio’s airport in 2001, it promised to install a pair of Starbucks, a brew pub, a new sports bar brand created in partnership with former NBA star George “Iceman” Gervin and a Chelsea Sandwiches of Texas.

While passing through O’Hare last week, I decided to taste test the airport’s offered delicacies. I grew up south of Chicago, and so had a mental benchmark against which I could judge the local brands present in United’s wing –- especially the divey Billy Goat Tavern and The Berghoff, a German institution in the Loop. I couldn’t bear to actually eat the O’Hare Billy Goat’s greasy burgers (the same goes for the heat-lamped deep dish pizzas I spotted), but I did make it out to the Berghoff Cafe on United’s outer concourse in order to sample a corned beef sandwich and the Berghoff’s own beer. It only took about a minute for the cafe to deliver a body blow to my expectations when the carver announced my corned beef-on-rye would go without the rye. “We’re out. Whole wheat or a Kaiser.” I chose the Kaiser. He repeated this exchange with nearly every customer. “What do you mean, no rye?” one demanded. “I want to see the manager. I’m serious!”

The meat was cold, the cafe was packed, and despite the wood paneling and stained-glass chandelier, I remained unconvinced that I was anywhere but another outpost of Airworld. I’ll stick to the turkey sandwiches and start taking my vitamins.


Inside the ‘FlyerTalk’ Community
September 20, 2005

ATLANTA—When he coined the term in his 2001 novel Up In the Air, Walter Kirn wrote that Airworld “is a nation within a nation, with its own language, architecture, mood and even its own currency—the token economy of airline bonus miles that I’ve come to value more than dollars. Inflation doesn’t degrade them. They’re not taxed. They’re private property in its purest form.”

The details of this “private property” have changed somewhat since then; frequent-flier miles have been devalued by restrictions and the always-falling price of an economy-class ticket, but they continue to underpin a huge sub-economy and, indeed, a curiously elitest society within the framework of Airworld.

Let’s look at the demographics. Last summer, the media research firm Arbitron released its Airport Advertising Study, a thorough survey of the income and spending habits of American air travelers. Keep in mind that this study was conducted during 2002-03, and that air traffic has only risen, to pre-9/11 levels, since then.

Arbitron found that 92 million Americans had flown at least once in the past 12 months, and that there was a clear demarcation in income between those who fly and those who don’t. Eighteen percent of all passengers have a household income of $100,000 or more, compared to only 10% of the non-flying public. More than half of all passengers had incomes of $50,000 or more, compared to 37% of those who weren’t.

The difference between the “frequent flyers” in Arbitron’s study—someone who taken four or more round trips over the past year—and non-flyers was even more drastic. A third of all frequent flyers make $100,000 or more. They’re luxury consumers, more male (58%) than female, and although they comprised just 18% of all passengers, they absorb 60% of all airport advertising impressions thanks to frequency. There’s a reason Arbitron subtitled the report “Exploring an Undiscovered Upscale Medium.”

But Arbitron’s definition of the frequent flyer doesn’t shed much light on the “road warrior” we know to be at the apex of this demographic pyramid. Who are they? How many of them are there? What do they want? And, of course, what can we sell them?

The best place to start such an investigation is to mouse on over to that point in cyberspace where large numbers of frequent fliers regularly gather:

FlyerTalk is the community adjunct of the WebFlyer network of Web sites edited and published by Randy Petersen, the media’s go-to-guy on the subject of frequent-flyer miles. But that dry description doesn’t do justice to the impassioned FlyerTalkers who spend a healthy percentage of their non-billable waking life there.

These are, in effect, the airlines’ best customers, and I would argue that in five years or less, they won’t look much different from your best customers –- knowledgeable, permanently plugged-in, eager to be engaged directly by the brands they love (or at least are forced to put up with) and willing to do whatever it takes to arbitrage the opportunities offered to them as consumers into something much grander. FlyerTalkers burn up the message boards with grumpy dissections of bad service, the minutiae of their last trip in first class to Hong Kong and back (there’s at least one thread on FlyerTalk right now criticizing these Airworld dispatches as too bland) and fielding any travel-related question that might appear. “They’re my human-powered, travel-related Google,” one regular told me.

I don’t have FlyerTalk’s membership stats at my fingertips, but the site commands enough power and attention that Continental Airlines CEO Lawrence Kellner invited 274 FlyerTalkers to Houston in April to give their complaints and suggestions a hearing over dinner and drinks. The New York Times caught wind of this meeting a few months later and soberly concluded that “blogs may be grabbing all the media headlines, but online communities like FlyerTalk are wielding a different kind of influence in the corporate world, providing instant feedback from those critics who marketers have called influencers. Just by logging on, companies can study, learn from and even respond to the cacophony of opinions about what they are doing wrong and what they are doing right without spending a dime on focus groups or market research.”

A pack of Scandanavian FlyerTalkers repeated this experiment last month in Stockholm with executives from SAS, and considering the ongoing shift by the major domestic carriers away from highly competitive short-haul U.S. routes and more toward long-haul, international ones (American has shifted 10% to 15% of its capacity in this direction, and United 14%), these kinds of confabs and direct communication with customers will only become more commonplace. FlyerTalk and similarly-minded sites like,, and are testbeds for the idea proposed by blogging’s standard-bearers that markets and media are conversations, not dumb, one-way messages.

So who are these people who are so carefully watched by aviation CEOs? I met up with a trio of FlyerTalkers at Chicago O’Hare in American Airlines’ Admirals Club to drink on FlyerTalk’s dime and talk about marketers’ pursuit of them. Over the course of two hours, we whipped out our laptops to scour the Web for upcoming deals and surf FlyerTalk (of course!); determined how easy it is to print fake boarding passes at home good enough to bear the initial scrutiny of security screeners (they’re ideal for sneaking into Red Carpet Clubs, for example) and rolled our eyes at the exploits of the mileage runners –- those inveterate flyers who frequently take 24- or 48-hour trips to nowhere in order to pass their accounts or requalify for some lofty status again next year. “It’s like a drug addiction,” said Jennifer Moody, co-founder of the two-person health-care strategy firm AmeriMed Consulting (and FlyerTalk moderator). “Only you’re addicted to the perks and the status.”

“I’ve read that in recent years, Best Buy has tried to weed out what it calls its ‘demon customers.’” said Sameeer Bakhda, a doctor who lives in Chicago. “They’re the ones who clip every coupon, fight over every deal, and basically make themselves a nuisance. Well, we are the airlines demon customers.”

FlyerTalkers have successfully used their communal intelligence and ever-increasing access to formerly privileged information (such as the the airlines’ “fare buckets,” i.e. the pricing data, on each flight) to substitute better information for cash. Thanks to endless cycles of dirt-cheap mileage runs and employer-underwritten travel, they’re able to qualify for elite customer status at a half-dozen different institutions, which in turn pass around free upgrades, tickets, hotel stays, etc. that create the illusion of wealth and a willingness to flaunt it when the reality is often much difference.

While Arbitron’s airport survey might give the impression that the more you fly, the more you make (witness private jet owners), FlyerTalkers’ savviness has essentially decoupled frequent flying from its traditional demographics. They’re younger and more female than the stereotype of the middle-aged, upper-middle-class aerial commuter you’d expect to find in business class. Not that anyone in Airworld wants to hear it.

“A lot of the advertisers still see that same perception,” Moody said. “We had a long thread on FlyerTalk—actually I posted it in both the women traveler’s and American forum—and the reaction in each was 180 degrees different.” She had discovered a job posting on American’s site at American Way, the airline’s in-flight magazine. The posting described the magazine’s readers as “upper-middle class affluent MALES in their forties travelers.”

“Apparently they’ve made some determination that these are their readers. Not that I even flip through it. It gets boring looking at ads for matchmaking services, cigars and condos in Miami.” In any case, the reaction to her post on the women travelers forum was a lot of knowing virtual nodding. The reaction on the American thread by the men present was indignation. “I wouldn’t mind if marketers were targeting me,” she said, “but they’re not.”


The Commodity Airlines That Wish They Weren’t
September 21, 2005

ATLANTA—Today was just another day in Airworld. As they say, if it’s Tuesday, is must be ... Atlanta, in my case. I rolled out of bed (next to gate E18), jumped in the shower (at the Delta Crown Room Club), checked e-mail and somehow still managed to set off late for the office (at gate C20), where I was due to meet AirTran’s director of marketing.

Actually, it was one of the busiest days I’ve spent in transit so far. I was lucky enough to be invited to a party—Song’s unveiling of a pink plane in honor of October’s Breast Cancer Awareness Month—held in one of Delta’s hangars. Several hundred Song employees grabbed sack lunches and milled about as the airline-within-an-airline’s president, Joanne Smith, introduced a video of cancer survivor testimonials. The tie-in makes perfect sense considering the airline’s target demographic, women.

Song was launched after Delta’s internal research demonstrated that 62% of leisure travelers were women, 75% booked their families’ travel plans, and 90% were making the decisions on when and where to travel. Ergo, Song would speak first and foremost as a brand to women.

But that’s a relatively narrow reading of the data, which revealed a broader sentiment among travelers that “uniformity was the enemy, and that travel was tiresome,” said Smith. “What if you could bring the glamour back to air travel? What the industry needs to deliver is a low fare and a better experience.”

The small galaxy of brands that surrounded Song at its birth and continue to do so today—the Dave Lieberman sandwiches, the Rande Gerber cocktails, the Spades’ uniforms, etc.—were designed to link Song with the brands its desired customers have already aligned themselves with, e.g. Whole Foods, the W Hotels, Kate Spade and Jack Spade. (Last month, when I breathlessly explained my premise to the architect David Rockwell, who is designing the interiors of rival JetBlue’s new terminal, he just shrugged. “Of course. People are interested in synergistic lifestyle experiences.” Duh.)

That was the theory. What I wanted to know form Smith and her chief of marketing, Tim Mapes, was whether it was working. The short answer is, Who knows? Its financial performance is buried deep inside Delta’s hemorrhaging balance sheet, and neither Smith nor Mapes is willing to reveal any useful numbers—load factors, costs or revenues per passenger seat mile, passenger yields, anything—“that will almost certainly be read by our competitors,” according to Mapes.

But they did offer a few vague pieces of evidence. Load factors hover around a respectable 80%, Smith said. (Southwest’s and JetBlue’s are stilll higher.) Yields and fares are both rising, and Song is hitting its internal benchmarks, said Smith, whatever they might be. Mapes said some fares have risen about $35 since Song’s inception two years ago, which just about covers the corresponding increase in oil prices during that span. They both vow that the airline’s blizzard of branded amenities—which its competitors view as needless, expensive frills—are profit centers.

“It’s an extremely attractive proposition, that’s all I’ll say,” Mapes said. “It’s more attractive than flying people ... which isn’t that much these days.” Smith was more measured in her answer: “It’s a small profit, and we ultimately have to fill the plane. ... The reality is that there is only a very thin margin from those customers willing to pay. But if [the flight] is priced the same as our competitors and we get the sale, then we’re happy with that. In this market, a thin margin ...” she trails off.

She believes the airline industry isn’t doomed to become a pure commodity business (“Brands will become more important”). And now that Delta is in chapter 11, looking to potentially shed its pension obligations and whatever other costs it can find, Delta is learning a lot from Song—faster turnaround times, greater productivity. It’s not much of a stretch to argue that at this point, if Song were a stand-alone entity, it’d be more valuable than Delta itself.

One of the reasons Delta landed in chapter 11 was because an old-school, low-cost carrier set up shop on its home turf, driving down fares. That was AirTran, the airline formerly known as ValueJet until the infamous 1996 Everglades crash and ValueJet’s subsequent purchase of the smaller (and untainted) AirTran. AirTran has low fares, a business class cabin (upgrades are just $35) and a fleet full of young “baby Boeing” 717s and workhorse 737s. The net result, according to Director of Marketing Tad Hutcheson, “looks like a legacy airline,” with lower fares (and a smaller route system, of course). It looks close enough to have increased its market share at Atlanta Hartsfield—Delta’s home and the busiest hub in the world—from 5% to around 14% during Hutcheson’s time there.

Out west in Denver, Frontier Airlines has pulled a similar trick on United. In July, the airport’s busiest month ever, Frontier increased its market share to a record high 18.5%, mostly at United’s expense. “They started Ted because of us,” said Diane Willmann, the Frontier’s director of advertising. United executives didn’t respond when I brought this assertion up in conversation last week in Chicago, but it is clear that United has spent the last two years trying to swat low-cost carriers popping up in its hubs at Denver (where Ted launched with a legendarily weird guerilla marketing campaign) and Washington Dulles, where Independence Air emerged last year to cannibalize the fares of its former partner. (In a previous life, it was one of United’s regional partners.)

My Independence flight Tuesday night would be the last U.S. leg of my journey before heading abroad Thursday, leaving the low-fare carriers—and the American pod of Airworld—behind.


Ruminations on the Zen of Terminal Structures
September 22, 2005

NEW YORK—I’m home, sort of. By “home” I mean the terminals of John F. Kennedy International, New Yorkers’ airport of last resort; a place with a history of crime, grime and unmet expectations.

But even as it trails behind other New York metro airports JFK is finally experiencing some much needed gentrification.

When the original terminals were completed in the mid-1960s, they were unsarcastically referred to as the “Seven Wonders.” Between the soaring arch of the International Arrivals Building (IAB), the instantly iconic Eero Saarinen TWA terminal, the flying saucer of the Pan Am Worldport or the largest stained-glass window in the world on the front of American’s terminal, JFK was the last word in flashy, chic airport design. And then it gradually all fell apart, as passenger levels reached capacity and continued to climb, ultimately outstripping the infrastructure. The 220-acre Liberty Plaza in the middle of the infield was torn up for more parking. So were the chapels that overlooked their own grotto. Eastern and Pan Am went out of business. American finally abandoned Saarinen’s woefully underequipped terminal after completing the absorption of TWA in 2001.

But the airlines began to reverse JFK’s entropy in the late 1990s, tearing down Eastern’s deserted building with a new terminal for a consortium of foreign carriers, followed by the death and rebirth of the IAB as Terminal 4, a miniature version of Amsterdam’s much-admired Schipol airport.

And this summer, American finally opened its new $1.1 billion terminal to replace the crumbling Terminals 8 and 9. Nearly put into cryogenic suspension during American’s brush with chapter 11 a few years ago, the new terminal is the first one built for a single airline at JFK since the ‘60s.

Next up is JetBlue’s $875 million new home slated to be built behind Saarinen’s terminal, which will be preserved as a restaurant or a museum, or something along those lines. (An RFP is being prepared by JetBlue.) The groundbreaking is set for next month, and is due for completion in 2008. (Don’t expect any delays –- JetBlue has been forced to spend another $25 million on temporary gates at its current terminal just to tide over its swelling number of flights.)

Which is to say that JFK is once again the best-tested in the country for answering this question: What do we want from our airport? What we don’t want is a decrepit, overcrowded mall (Atlanta) or a sprawling amoeba with seemingly a dozen different limbs. But do we want a bigger, brighter mall with lots of breathing room (like the new international Terminal D at Dallas-Ft. Worth) or something else completely?

American’s new terminal might best be described as “reliably handsome.” It has the requisite soaring ceilings in the ticketing hall (rising to 65 feet high), an exposed steel skeleton and acres of terrazzo flooring. It isn’t claustrophobic, it certainly doesn’t look cheap, and if it isn’t as inspirational as Saarinen’s terminal across the infield, then so be it.

“Like in everything else, form follows function,” the terminal’s onetime project manager, architect David Brown, told me. “Because you have these flows of people, you need large spaces, and you have to put the ceilings high. It’s obvious in hindsight.” He added, “Airports and the design of terminals are sort of mini-urban design programs, like building a road or a high-rise. There are all these concepts at play, and all the airlines know them.” In other words, it may not be a classic, but it wasn’t obsolete by the time it opened, either.

But is there another way? Maybe David Rockwell will find one. “You’re so unaware when you go to an airport that you’re getting on these many-tonned metal machines when you take off,” he explained. “What are the emotional needs of passengers leaving New York, and arriving in New York?”

JetBlue has hired Rockwell to develop the master plan for its proposed terminal’s interiors (the overall design is by the architectural firm Gensler). Rockwelll and his firm are best known for their playful and theatrical designs of restaurants, theaters, baseball parks and even a children’s hospital, but never an airport. (As fate would have it, he is currently working on the theatrical staging of Catch Me If You Can, the Steven Spielberg film partially shot inside Saarinen’s building.)

As it happens, airports have been on Rockwell’s mind for years. He most recently chaired a discussion group at the Technology Entertainment Design conference in Monterey, Calif., in which one of the younger participants argued that the ideal terminal is a non-one: You should just be able to walk up, walk through security and get on the plane.

I met with Rockwell in his office last month to talk about the guiding principles he planned to bring to the terminal. His hiring, I believed, was symbolically significant –- it meant that airports were ready to move beyond being merely gargantuan people-processors efficiently spitting passengers onto planes after they’ve been sedated by greasy food and shopping. Perhaps they could assume a starring role again in the urban framework.

His approach would be guided by three ideas, he said: “New Yorkness,” i.e., creating a sense of place; “JetBlue-ness,” i.e., reflecting the brand; and “usefulness,” i.e., no frills or empty gestures. In practice, that meant no soaring ticket hall –- because passengers have less and less need for ticket counters thanks to kiosks and Internet check-in –- and toward a “great space” on the far side of security.

Within this great space, illumination will be provided by a giant ring of departure and arrival screens (“What if we can de-escalate the tension of not knowing as soon as they arrive?” he asked rhetorically) and viewing platforms placed in the center of the hall will divert departing passengers away from arriving ones even as they provide the sort of voyeuristic function that stoops and the steps at the Metropolitan Museum of Art perform in the city itself. If any of that sounds corny, don’t even ask about the choreographer he brought in to help discern the flow of traffic.

“What was romantic about that 1960 era was that it was sexy, it was glamorous, it was the Jet Set and you could go anywhere,” he said. “None of that matters anymore –- sex is already everywhere. Our sense of style in this terminal will come out of solving problems, and making an airport feel like a sedate mall. I don’t know that getting food quickly leads toward Taco Bell and McDonald’s. You could just as easily have sandwiches provided by Jean-Georges [Vongerichten]. When we did Vong [one of Vongerichten’s restaurants], we put in a cafe there which essentially serves fast-food, pre-packaged sandwiches.” (They will undoubtedly have turkey if this vision comes to pass.)

“And the retail, when it opens, will have roll-up garage doors, so it’s more analogous to a market. I look at Union Square Market from my window every day, and I see how it’s a multipurpose space. A terminal is like that—it’s a microcosm, a miniature version of a thing that exists somewhere else. And making it a mall is not the best solution. I don’t think it’s very vibrant.”

He’ll have his chance soon enough.


Three New Carriers Take ‘Lifestyle’ Marketing to the Next Level
September 23, 2005

LONDON—As my Virgin Atlantic flight delivered me into the European pod of Airworld, I couldn’t help but reflect on how the marketing of such international travel is being revolutionized.

In fact, I’ve been flying through some of the changes in real time this last week. Just days ago, I attended a plane’s debut in a Delta hanger in Atlanta with a few hundred Delta/Song employees. But today I wonder how many of those same people will be gone after Delta completes its chapter 11 restructuring. The plan calls for up to 9,000 layoffs as well, reducing domestic capacity by up to 20% in favor of boosting the number of international seats by 25%.

Delta is following American and United, which have already shifted 10% to 15% of their domestic fleets to international services. Why? Because there are fewer low-cost competitors and higher margins along those global routes. The legacy U.S. airline brands are now subsidizing their unprofitable domestic businesses with fat margins from their international operations. But even as Delta catches on to this established trend, the trend itself is about to change.

The “lifestyle” flight services popularized with the American masses by JetBlue and Song have laid the groundwork for a new niche of higher-level lifestyle international flight services. Just days ago a business-class start-up named Eos Airlines began booking fares for its inaugural flight between New York’s JFK International and London. Simultaneously, another business-class-only carrier called MaxJet also began service from JFK to London.

Three months from now, MiMa, a members-only luxury charter airline whose name is a MoMA-esque abbreviation of “Milano-Manhattan” will fly between Milan and New York.

Both Eos and MaxJet aim to undercut the fares offered by the heavyweights on the JFK/London Heathrow route, which is already served by 17 flights each day. Eos is promising the more luxurious service, having outfitted its three Boeing 757s with just 48 seats (a normal configuration has about 180) that offers more leg room than the square footage of most cubicles. And its full-fare price of $6,500 round trip is about 20% lower than comparable fares on British Airways or Virgin Atlantic.

MaxJet is offering a more traditional product on Boeing 767s configured entirely with business-class seats, but at the relatively rock-bottom base fare of $1,600 round trip. “We’re after the business fare traveler looking to book close in [to their departure date],” said MaxJet CEO Gary Rogliano. “We’ve taken the low-fare model and used it in the business cabin.”

MiMa is taking the unique approach of encouraging individuals and corporations to enroll as “members” in its (as yet unpriced) service, which may end up including concierges in both cities it serves, and a top-secret, high-speed transport to and from Milan’s airport. One of its professed goals is to promote “greater cultural understanding” between the financial elites of Wall Street and Italy. Unlike Eos or MaxJet, it won’t sell seats at a discount on its route. “We want to give a private jet experience priced at a little higher than normal business class,” said Armando Brunini, vice president and chief commercial officer of Eurofly, the company that will operate MiMa’s service.

They aren’t the first business class- or first class-only carriers to emerge against the Big Six domestic carriers. Kirk Kerkorian lost a bundle on his MGM Grand airline, and Legend Air once challenged American Airlines on its home turf in Dallas before disappearing into bankruptcy. And even if all three newcomers launch with full flights, their impact on their competitors’ earnings next year will still be negligible. Eos, for example, hopes to have 20 aircraft flying on a handful of routes after five years. (During the same span, JetBlue took possession of more than 80 aircraft and now serves 33 destinations.)

However, the important point is what their sudden collective appearance symbolizes—the beginnings of a wave of boutique brands made possible by the airline industry’s non-existent barriers to entry. Twenty-five years ago, Anouska Hempel and Ian Schrager ushered in the era of the boutique hotel; we now appear to be witnessing the birth of the same movement in the airline industry.

All three are deploying JetBlue’s successful variation on the low-cost-carrier model to business and first-class flights. All three are well-capitalized, all three are flying new planes, and all three plan to undercut the appeal of the establish carriers along their routes using the combination of lower fares and a level of product and service that’s the same or better than the competition.

With passengers gravitating toward flights that are either very inexpensive (the domain of the low cost/low fare carriers) or luxurious (especially on long-haul routes) and doing their best to avoid the middle—the usual hub-and-spoke flights, which Delta also plans to reduce while in bankruptcy—the airline industry may finally be bifurcating.

“Go into the terminals and watch the cross-section of people walking by,” Eos CEO David Spurlock commanded me when we spoke. “The world hasn’t seen that kind of cross-section of customers since Sears & Roebuck lost its relevance decades ago. Retail went through its bifurcation in the ‘70s and ‘80s, the auto manufacturing business went through its bifurcation in the ‘60s, and the PC business went through it in the ‘90s. And the airline industry is leaps and bounds behind them.”

Before launching Eos, Spurlock was the director of strategy at British Airways, in charge of developing the carrier’s route network. “The hub-and-spoke carriers try to be all things to all people. They serve short- and long-haul point-to-point passengers using giant hubs to navigate their journeys—typically in lowest cost fashion available. That structure doesn’t work, and the low-cost carriers have proven they can just sweep the domestic market away. We feel we’re Tiffany about to take on Sears in the jewelry market. They’ve got losses, and they’re hoping that jewelry will foot the bill for their other loss-generating product categories.”

That may be true, and the reason I’ve embarked on the international leg of this trip is to test a few of the luxurious long-haul carriers that Eos, MaxJet and increasingly desperate domestic carriers would rather compete with than Southwest. I’ll have a better idea of what they’re up against a week from now, when I’m stuffed with satay in Sinagpore Airlines’ Raffles (i.e. business) class en route over the North Pole.


JCDecaux’s Man in London Provides an Educational Tour of Heathrow
September 26, 2005

LONDON—Here at Heathrow I’ve hooked up with JCDecaux Airport’s managing director in the U.K., Don Sperring, who volunteered to help me better understand how to “read” the advertising landscape of an airport.

Puckish and passionate about airports –- “glass cathedrals,” as he describes them—Sperring’s domains included five in and around London (Heathrow, Gatwick, Stansted, Luton and Southampton) and three in Scotland. He and I were of like minds as far as Airworld was concerned. Before the tour, he loaded up his standard-issue deck of Powerpoint slides for pitches. “Imagine a city with a population over 128 million. ... A city that regenerates itself every day. ... A city with dynamic growth. ... A city with a population unlike anywhere on Earth. ... A city called Airport.”

That “city” is larger than Tokyo, New York, London and Paris combined, if you’re willing to accept the 128 million annual passengers who flow through the five London airports under contract with JCDecaux (a sixth, London City, isn’t) as full-fledged citizens of this city in the sky. Within this aeropolis, Heathrow is analogous to The City (i.e., London’s financial district), with 26 million business travelers per year; Stansted is a suburb of 20-somethings; and Luton (the home of easyJet) is evidently the airport equivalent of New York’s Williamsburg, a hub for cheap-thrills-seeking hipsters.

But, like in any city, there are good blocks and bad ones, hopelessly cluttered public plazas and tony addresses that command premium rates. Near the beginning of our tour, Sperring led me away from the pandemonium of Terminal 1’s general check-in area toward British Airway’s exclusive private reserve for elite passengers. Near the entrance, the floor-to-low-ceiling advertising light boxes were filled with blue-chip financial services, technology and consulting companies. Because of their proximity to British Airway, Sperring explained, these cost “four to five times more” than the lightboxes in the main hall. And inside the check-in lounge itself, Accenture had secured the exclusive presence of its ubiquitous Tiger Woods ads. “What they’re getting out of it is the direct association with this premium audience,” he said.

And how much does premium placement like this cost? Well, Sperring said, he doesn’t have a rate card. “It’s a bit like how you would value real estate,” he said. “You’re always constrained by the question of what is other advertising in that environment worth? You’re always benchmarking to X for that ad, or Y for that one, but how much else have you got for sale? There is an enormous amount of elasticity here in the airport, whether you’re talking about airline tickets or the media for sale. The prices are this wide,” he said, holding his arms apart, “and the market will more often than not decide for you. The equation might be something like, ‘We’re getting X for this ad, and Y for that one, and 67 million passengers come through here each year, and how much wow-factor does the space have, and who else is interested in the space?’ And then you say, ‘Right, that’ll be 160,000 pounds.’ Eighty percent of what we sell here is bespoke for our advertisers. It’s less of a science than an art.”

There aren’t many spaces with a “wow factor” inside Terminal 1, one of the oldest and most extended of Heathrow’s five terminals. (Terminal 5, which is still under construction, is the future home of British Air’s Heathrow operations and will begin life with 30 million passengers a year from the day it opens in 2008.) The low ceilings and narrow corridors make huge banners or vista impossible, and every square inch of the walls seems covered in JCDecaux’s advertising, plugs for the terminal’s duty-free shopping, signage or all of the above. “It’s like they’re afraid of white walls here,” Sperring said at one point.

Still, whether it’s JCDecaux, ClearChannel or one of the handful of smaller players in the market, airport advertisers have a knack for continually squeezing new inventory out of an overlooked wall, or out of the side of a parking garage that could bear to have a banner mounted it, or even from the ventilation ducts. The week before, during my tour of O’Hare with Clear Channel’s operations manager, William Hickok, he pointed out a ubiquitous Toyota campaign that had been themed to a recent convention in town. It had been an excuse to place ads in previously uncharted territory –- banners hanging from formerly blank hallways; wall mounts where there had been none before. Winning approval from the City of Chicago Department of Aviation had been a bear, as usual. “You have to go through 50 phone calls and 10 meetings” before they consider anything, Hickok said, and some advertisers will never be found in departure halls. “I got a call from a guy in Atlanta selling vodka who wanted to advertise,” Hickok told me. “I made a call, and O’Hare said ‘No thanks.’”

But as long as there’s demand, inventory will be found. Sperring also showed me the pitch for the “Lightwave” site, a complex billboard/optical illusion that will fill a traffic island in the center of Heathrow’s terminal complex after the latest fit of construction is finished. The initial asking price for the site is half a million pounds—about $887,000—although I was unclear on the duration of the deal. Even more amazing is the scale model of the Concorde British Airways had paid to place at the traffic entrance to Heathrow, which I heard on deep background cost the airline 850,000 pounds for a long-term deal. (Sperring had no comment on it.)

The workhorses of airport advertising, however, are the light boxes lining the walls (especially prevalent at O’Hare and elsewhere in the U.S.) and the stumpy, rotating kiosks throughout Heathrow. Sperring believes these will eventually give way to new technology: “They were built for older airports, really. And as airports start to change, and become more of a glass cathedral, things like this have fulfilled their usefulness and evolve into screens.” A few screens are already visible at Terminal 1, where ads share space with arrival and departure information, “but in Europe, we haven’t reached that tipping point yet. I don’t think you can say ‘no’ to them, however. I think it will be the future of small-form airport advertising.” Back in America, O’Hare has already received a few digital displays in the food court of American Airlines’ terminal (which had yet to display any ads), but a few are slated to hang in the vaulted ceiling of United’s terminal, and Accenture has been pressuring Clear Channel to install interactive touch screens for its ads in some O’Hare’s most prime real estate.

An ultimately more important trend, in Sperring’s opinion, is the underwriting and branding of airport services. To give you an idea of what that means, consider this: While waiting for my flight from Heathrow to Paris Charles de Gaulle to board, I watched CNN’s coverage of Hurricane Rita on a Samsung flat screen not 20 feet from a T-Mobile stand advertising its pan-airport Wi-fi coverage, while nearby, a row of Internet terminals sponsored by offered pay-by-the-minute Internet access. And then there is the massive Vodafone display in the heart of Terminal 1 –- a semi-permanent theme park where “you can physically put brands into people’s hands without the fear that they’re going to run off with the stuff,” Sperring said. “They’re having a direct interaction with their clients at a time, perhaps, when their service is most valued. And, of course, those people have a lot of dwell time on their hands, so what else are they going to do?”

Vodafone’s stand also serves Sperring’s goal of moving away from static, pre-sized displays and more toward ads that morph to fit specific contexts. As new “glass cathedrals” have come into being in Europe (at Charles de Gaulle) in America (new terminals at JFK and Dallas-Ft. Worth) and especially Asia, the challenge has been to find a place for advertising within giant glass boxes or halls hundred of feet wide. “We try to borrow from the building’s structure,” he said, and one example with a high wow-factor is the elliptical Emporio Armani ad that covers one entire end of Terminal 2F at Charles de Gaulle.

As both the airports and airlines realize there is more and more essentially free money to be had by covering every available space in ads, the advertisers themselves have responded by marching through the airport, down through the jetways (which United has begun selling at O’Hare, and which Sperring sells to HSBC inside and out at Heathrow) onto the tray tables (a company called Skymedia already has deals with America West and US Airways) and eventually onto the planes themselves (Ryanair, the lowest of the lowest cost European carriers, has experimented with this).

Next up might be your cell phone. Considering that the airlines (and perhaps, by extension, the airport) know when you’re leaving and know where you’ll be leaving from, text messages paid for by duty free boutiques or local concessions could apprise travelers of their existence or offer them coupons. “But who owns that information?” asks Sperring. “I think the airport would argue that it owns the flight information, but the airline would argue that it owns the passenger.” And I argue that in the U.S. at least, the sharing of that information between those entities, no matter what the size of the cut involved, would be seen as an egregious breach in privacy.

The relationship between the airport, airlines and the advertising overseer is always a touchy matter. Sperring has it easy in London because Heathrow’s parent, BAA, unequivocally controls the airport, while at LAX, for example, all but a few of the terminals are leased to the airlines, and even at O’Hare, Clear Channel only controls the central corridors –- the carpeted gate areas are the airlines’ own. This leads to sticky situations like the one I stumbled into in Chicago. Clear Channel’s Hickok was under the impression that American Airlines will agree to lease it one of the choicest pieces of real estate in the entire complex –- a blank wall where American’s terminal splits in two. It’s Accenture’s ideal location for its touch screen, but American apparently isn’t having any of it. “They can’t have it,” the airline’s local rep told me, and she made it clear this was American’s last word on the subject.

And even the airport itself may have ideas that run counter to advertising. At Heathrow, which at times resembles a collection of luxury shopping malls with extremely tight security, Sperring and his team have made less headway placing ads in the main shopping corridors. “The lounges are the final frontier,” he said. “Here in the U.K., they want to keep passengers shopping and keep them eating.” His comment echoed what LAX’s Mark Miodovski had told me two weeks before about one of the airport’s historical objections to advertising: “If they’re looking at an ad, they aren’t busy buying things.”

Speaking of LAX, final bids are due today in the bake-off between JCDecaux and Clear Channel for the next 10 years of its advertising existence. Plasma screens, floor-to-ceiling displays, omnipresent billboards and temples to telecom companies—- do they know what they’re in for either way it goes?

Page 1  |  PAGE 2  |  Page 3

Advertising Age  |  September 2005

A Marketing Reporter’s Journey Into Airworld III

A three-week daily series.

Page 1  |  Page 2  |  PAGE 3


And Preparing to Meet the Real ‘Terminal Man’
September 27, 2005

PARIS—I wanted to prove on this trip that Airworld is a closed system—that it’s possible to circulate through it endlessly, just like the germ-laden air that circulates through the airplanes and airports that is Airworld. We like to think that airports are connected to the cities they serve, but in reality, Airworld faces inward, increasingly connecting airports only to each other, and to the ecosystem of brands flourishing there.

Airports are “non-places,” a nice bit of academic jargon that describes their ultimate interchangeability. This is what makes them so hospitable to brands. As far as passengers are concerned, airports have neither a real past nor a future, just a continual present that reliably offers a consistent set of choices—flight schedules, duty free, fast food—day after day after day. Airworld is, in a sense, a single, giant franchised operation.

Of course, airports’ human operators don’t like to see things this way. As the employees of local or regional governments (whether that be the city of Denver, or the Port Authority of New York/New Jersey, or BAA, Heathrow’s parent), their duty is to keep the airport firmly tethered to home. It’s when an airport is about to achieve critical mass and escape –- to become what Rem Koolhaas has dubbed the “Generic City” –- that local establishments imported from the neighboring city begin to appear. They might be locally famous cantinas, museums, German beer halls and dives, not to mention the boutiques selling Native American jewelry and offerings by local artisans. Koolhaas likened these attempts at anchoring the airport to “a drastic perfume demonstration—photomurals, vegetation, local costumes give a first concentrated blast of the local identity (sometimes it is also the last).”

As in any good branding exercise, the city’s attributes are boiled down to an essence that’s memorable, portable and can be consumed before the final boarding call. Detroit’s mall-like expanses include outlets of the Henry Ford Museum, the GM Experience, a store selling Motown Records nostalgia and enough University of Michigan and Michigan State clothing to outfit alumni for a lifetime. Here in Paris Charles de Gaulle, there is a branch of the famous Parisian restaurant Maxim’s, and if I were to have dinner there tonight, would I be able to say “I have dined at Maxim’s”?

An integral part of the structure at Paris’ Charles de Gaulle airport, the Sheraton is a building shaped like a cruise ship. That, in a nutshell, is the paradox of visiting Charles de Gaulle but not Paris. Is anything I’m consuming here –- the brie-on-baguette sandwiches, the Bordeaux at the bistros –- authentically “French”?

Even the most unique outpost is transformed, sooner or later, into a reliably franchised brand. While in Denver, I met the manager of a store named Colorado West. It sold the aforementioned Navajo jewelry alongside fringed jackets and vaguely Southwestern art objects. “We’re passengers’ last shot to buy a piece of Colorado after they’ve come down from the mountains and before they leave,” he said. But Colorado West is just one link in the chain of airport retail assembled by Minneapolis-based CBR, which owns similar outpost concessions there, in Chicago, Cincinnati and New Jersey (the latter are simply called Jersey). While visiting Dallas-Ft. Worth’s new international Terminal D this summer, I spoke to the owner of La Duni, a local institution that had chosen to open its second branch here in the airport. “It’s the perfect opportunity to experiment with a more fast-casual concept,” he told me. “It’s a chance to expose our brand of food to an entirely new audience.”

But sometimes the real world does bleed into Airworld in organic, unintended ways. The hotels on the outskirts of Airworld all begin to blend together (some would say this is their charm), but there is a distinctly different character to the few hotels connected to the airports themselves. They are extensions of the terminal itself –- an air pocket perfect for sales meetings or board meetings or taking depositions, a neutral site adjacent to everyone and absent of distractions. At the Westin Detroit Metropolitan Airport, which has its own dedicated security gate to and from the terminal (and where I was a guest at a drastically reduced rate), I wasn’t surprised to see that Home Depot would be occupying the conference facilities in force the next Monday, but I was amused to find a Muslim wedding banquet in progress when I arrived. Women in ceremonial dress in streamed through the lobby, past the plasma departure information screens and the boarding pass printers, down into the ballroom.

On other occasions, I was told, couples have chosen to say their vows in the hotel’s atrium before adjourning to the basement, performing the ceremony before a copse of bamboo trees after the bride had made her entrance by riding the clear glass elevators down to the lobby in full view of the guests. It wasn’t that they were keen to be married at the airport (the Westin is the first luxury hotel to open in Detroit in years), but I wonder if the roar of takeoffs rattling through the ducts has ever disturbed anyone’s “I dos.” Just married in Airworld –- why not?

I spent this past Sunday at my desk in the Sheraton Charles de Gaulle (where I was the hotel’s guest), writing and watching the ebb and flow of Air France 747s to and from the gates. Like the Westin, the hotel is an extension of Airworld, not an escape from it. It’s an essential piece of the infrastructure -– resting atop the train station that leads to Paris, and its oval-shaped mirrors the elliptical terminals on either side of it. It was designed by Charles de Gaulle’s master planner, the architect Paul Andreu. One of the definitions of a “non-place” is transience -– no one really belongs to the airport –- but as I watched the sun move across the sky on Sunday and listened to the dull rumble of takeoffs through the double-paned glass, at least for one afternoon Airworld felt like home.

Two weeks into my stay here (in Airworld, not the hotel), I have lost seven pounds (five of them water, I’m convinced), gained a persistent cough and switched from a diet of turkey sandwiches to a diet of brie. And I have a confession to make about why I’m here in Paris. It isn’t to visit outdoor media giant JCDecaux on its home turf. It’s to find him –- Mehran Karimi Nasseri, a.k.a Sir Alfred, a.k.a The Terminal Man, who’s been living here for 17 years.

Before I left, whenever I described my airport project—that I would eat, read and even sleep in the terminals –- the person’s response was always along the lines of “Oh, you’ll be just like that guy in The Terminal,” as if three weeks of sleeping on concrete (and, more often than not, in hotels) could compare to the good chunk of his lifetime spent on a red bench in the basement of Charles de Gaulle. If we are all subconsciously aware that airports are “non-places” not meant for human habitation, then he was the exception that commanded our attention. I had to meet him. And I knew where to find him.

My first night at the airport, I caught a shuttle bus to the concrete doughnut of Terminal 1, which sits more than a mile away from the more modern Terminal(s) 2. His red bench, salvaged from one of the terminal’s defunct restaurants, was easy enough to spot, as it was covered with more than a decade’s worth of FedEx boxes, McDonald’s paper cups, and salvaged luggage. He was reclining on that bench when I approached, as if perched on some luxurious divan.

“Sir Alfred?” I asked, careful to keep a respectful distance.

He nodded. “Yes,” he said, with a toothless smile.

I hadn’t known what I would say to him, and by default, I fell back on cliche.

“I’m an American journalist. I’ve come a long way to meet you ...”


My Paris Airport Encounters With Sir Alfred Mehran
September 28, 2005

PARIS—On my first night at Charles de Gaulle, I went in search of The Terminal Man—the real person whose predicament inspired Steven Spielberg’s 2004 movie The Terminal. He wasn’t hard to find, as he spends every day, all day, for the majority of 17 years, sitting on a red bench in the lowest level of Terminal 1, one of the most out-of-the-way pockets in all of Airworld. Through sheer persistence, and with the help of his refugee status, which immunizes him from removal, he has become part of the airport itself.

Back in Chicago, an American Airlines representative had assured me that The Terminal “could never happen now,” but au contraire, here he was, unbothered by police or Aeroport de Paris staff. Even Terminal 1’s ongoing renovations, which have closed a third of the enormous concrete ring, couldn’t manage to expel him. He simply moved his belongings—his bench, his FedEx and Lufthansa cargo boxes, his mismatched set of discarded carry-on luggage—a few notches around the ring and settled in again. He will manage to outlive this building, or at least its interiors.

It was if he was waiting for me—he was reclined on his bench, his eyes alert, and dressed in the same manner I was, a windbreaker over a polo, as a guard against the chill. I had brought an offering, McDonald’s French fries, which he eats every day along with his usual Filet-o-Fish. “Thank you,” he said, and motioned for me to place them on a small table he had appropriated from one of the cafes. I sat on one of two chairs. His voice was soft, tremulous. I wondered how often he spoke these days, and whether he was slowly forgetting to say the words. It didn’t help that English was at least his second language. He shook his head at a microphone-equipped iPod—no tape recorders—and so his quotes in the story represent the best I could decipher them.

I tell him I’m a journalist, that I’m spending three weeks living in airports, that I’ve read his book—at this point I produce it from my bag—and his blank expression finally fills with some interest. “Is that the new edition?” he says, and begins paging through, looking for errors, maybe, or refreshing himself on his own history.

The story of Mehran Karimi Nasseri is a sad one, and has been told many times already in newspapers, and best by Michael Paterniti two years ago in GQ. It was tragic before he ever landed at Charles de Gaulle. Born in Iran during the reign of the Shah, he was 27 years old when his father died and his mother confronted him: “You are not my son,” she told him. His birth mother was a British nurse who had worked with his father, a surgeon at the Anglo-Iranian Oil Co., and they had had an affair. Now he was dead, and his mother—no, not his mother—would send him to study in England, where he could look for his mother, his real one. As he wrote in his diary, “I am standing in the main room of someone else’s home in Tehran and I do not know who I am any more.”

Before he hands his memoir back to me, he opens it to a page, points to a passage and says, “Yes, I wrote that.” The passage described his fast-forward accounting to his lawyer of how he came to be stuck here, and so I’ll share it: “So while Monsieur Bourget smokes his pipe, I relate my story: how I left my home, and went to the University of Bradford in England; how the money stopped coming; how I returned to Iran; how I was arrested; how I was released; how I went to England and claimed asylum; how they refused; and how I was refused asylum in the Netherlands, Italy, Germany and France. And finally, how I came to Charles de Gaulle without my passport and got on a plane to England, and how they sent me back.” Along the way he threw away his Iranian exit visa, while claiming he’d been mugged. Later, he obtained refugee papers from Belgium, which he mailed back to Brussels before one of his attempts to enter England. He caught the attention of France’s top human rights lawyer, Christian Bourget, who spent nine years retrieving Nasseri’s papers from bureaucratic limbo, only to watch him refuse to sign because the signature needed was that of “Mehran Karimi Nasseri,” and he had become someone else after all those years at CDG: “Sir Alfred.” That man is still sitting on the bench here.

Why are you still here, Sir Alfred? Do you not have a visa yet? “Yes, I must get a passport and visa,” even though there has been one waiting for him under his former name since 1999.

“We have to arrange it with our film company, and DreamWorks.” Dreamworks?
I didn’t understand what DreamWorks had to do with any of this; had I mangled the question? I asked whether he had the money he would need to travel one day thanks to DreamWorks and The Terminal—he was rumored to have been paid anywhere between $275,000 and $1 million for his life story as protection from a future lawsuit, and then there were royalties from his memoirs. “Yes, I have credit from the film—recently, and in the past.”

So where will you go when you’re finally free?

“Yes, we have reserved for Hollywood, Europe and Scandinavia…”

Later, I laughed picturing him, passport in hand, showing up at DreamWorks’ offices demanding to know why there hadn’t been a sequel, or where his share of the DVD gross was. And when Spielberg refused to see him, he would simply resign himself to waiting in the lobby. And waiting. And waiting…

In real life, there have been sequels. A Kenyan man camped out in Nairobi’s airport for more than a year before finally being granted his wish this past July for British citizenship. A Palestinian refugee spent seven months sleeping on the floor of Prague’s airport until the Czech government granted him asylum. When I was at LAX, the airport’s director of public relations told me the stories of three Vietnamese men who had recently spent months there searching for a way to re-enter their home country. Two found flights to Cambodia, crossed the border, and were immediately arrested. The third set up shop in LAX for another month, accepting handouts and continually praying, before he too, caught a flight to Asia and was never heard from again. There is also a woman at LAX, I was told, who in the wake of 9/11 arrived from San Francisco and spends her nights in Terminal 1, sleeping standing up and with her eyes open. When airport police asked why, she said she was afraid—she wanted to be in a place filled with people and security. I looked, but I never found her.

We are fascinated by them, by Nasseri, and by The Terminal, because in each case they stand in opposition to Airworld’s basic condition—that everyone within it is in transit to somewhere else. Their refusal to cooperate illuminates the otherwise invisible processes that govern how airports operate, how we are absorbed through the membrane of security, how we consume in an effort to make ourselves comfortable, how we are continually on the clock for an on-time departure. Unlike The Terminal, where Tom Hanks’ character finds a job, makes a home and has a brush with love (all in nine months, before his victorious arrival on U.S. soil), Nasseri has survived here by becoming a silent part of the terminal, ignored, and thus unmolested.

I ask if he still receives visits from journalists like me. His memoir implies that one of us is always plopping themselves down, but “no,” he says. “Not anymore. I’m afraid because I should leave.”

When, Alfred? When will you leave?

“Very soon ... or later.”

I’m out of questions. My heart is beating fast; I’m sweating for the first time in a week of climate-controlled environments. I thank him and ask to take his picture. He refuses. “No pictures. No video cameras.” He asks my name, and where I’m from. “You write in America? In London?” I write down my name and Advertising Age’s on a page of notebook paper, along with my e-mail address if, by some absurd chance, Terminal 1’s renovations include a WiFi network and one of his future possessions happens to be a laptop. From the look on his face, it’s the first time he’s seen one—he’s been here since 1988, after all.

As a consolation prize, I ask if he’ll sign my copy of his book. Yes, I want it as a souvenir of this pilgrimage, but part of me wonders if he can really still write his own name. To my shame, I underestimate him—he signs it “For Greg, Sir Alfred Mehran,” and dates it correctly without a moment’s hesitation. My hero worships also pays off—he agrees to a portrait, and wriggles a bit in his seat to show his good side. I’m pressing my luck at this point—I have everything I could have asked for from this trip, and it’s only my first night in Charles de Gaulle. I thank him, and back away slowly. I’ll be back, I think. After all, I’ve only just got here.

Two nights later, I’m in Terminal 1 again, this time with my luggage. My flight to Singapore isn’t until the next afternoon, but I had checked out of the Sheraton that morning. If I’d stayed another night, I would have gone to ground in my room, just as I had Sunday, while Sir Alfred had another dreamless night’s sleep on his red bench. I could either hide in Airworld’s lap, or sack out on my air mattress halfway around the ring from him. In between us, a homeless man (a non-permanent resident) slept on one row of benches, while a pair of Asian boys who might have been on my flight amused themselves with a Sony P2P. I speak no French and knew no one. I already knew how we’d pass the night—the cleaning staff would buff the floors, the submachine gun-toting troops in full camo and berets would patrol, smoke, then patrol some more—and we would sleep. For one night, Nasseri and I would share a sliver of his existence.

I have questions prepared this time. I’d run his name again through Nexis during the interval between my visits, and it seemed he’d given his last interview only a few weeks before. At the end of the interview, when the Paris correspondent for The Jakarta Post had asked if he had anything to say to the people of Indonesia, he answered: “I’m not mad.” Word had finally gotten back to him that he was a case study now, a living, breathing icon of post-modern confusion. So was he? Didn’t he have to be? It didn’t seem to be a subject up for debate. The Hamlet question—is he crazy or pretending?—wouldn’t seem to apply when the argument for sanity is that he’d be better off living out his days here, in CDG’s cellar.

When morning comes, the guards roust us all for our flights, but Nasseri just sits on his bench, his hair wet, washing his face carefully with McDonald’s napkins. From somewhere within the piles of bags and boxes he has produced a tiny radio he is listening to when I approach to ask if he’d like anything for breakfast. I sit down at his table again a few minutes later with a croissant and espresso for each of us. He’s still chewing when I start in with questions again—I’m some demented fanboy who can’t restrain them. The first one is technical: has he mastered the art of sleeping in terminals? “Naaaah,” he says. “This is good,” patting the bench, “but there is always too much noise.” The announcements here are prefaced with a few notes that sound like a chorus of angels, then give way to a musical tone. I laid awake for an hour last night being lectured on the smoking ban.

“Alfred, you told your last interviewer, ‘I’m not mad.’ Has anyone ever accused you of being mad?”

His eyes go wide, and he leans back on the bench. “Maybe medical services. ... He become dead; he become mad –- medical services ...”

When was the last time you stepped outside?

He shakes his head. “Years and years ago.”

Do strangers ever visit with you? He shakes his head.

Do you ever call out to anyone? He shakes his head.

Do you want company? He shakes his head.

“They identified American parents, the gendarmes did,” he offers. This is new, if true. “The gendarmes identified me.” Wait, did they find your parents, or did your parents find you? “I don’t you,” and the veil of incomprehension comes down.

Are you a practicing Muslim? Do you believe in God?

“God?” He laughs.

Do you know why you’re here? Do you know why I’m here to see you? Do you know why you’re famous? Why you matter? I’m trying to talk metaphysics, but either he doesn’t think that way or I can’t get the nuance across.

“To be identified,” he says. “Identification. A year ago, in June, I hear from filmmakers. They call by telephone, and we talk for 5-10 minutes. Then if I have papers, I leave.”

This is DreamWorks?

“Yes, Dreamworks.”

And then our conversations seem to rewind and repeat. “They made a movie, The Terminal… I had trouble by air. In France, they de-Anglicize me. By boat, by air ... that’s why I came here ...”

I pick up my tray, thank him, and go to leave.

“Good luck, Sir Alfred. I hope you can leave soon.” He nods, and after that, I don’t look back.


Marketing the Ultimate Luxury in Sky Travel
September 29, 2005

SINGAPORE—Ascending through translucent tubes in Terminal 1 of Paris’ airport, I head into what passes for heaven in Airworld: a dozen hours of nonstop pampering in Raffles Class aboard Singapore Airlines.

I had one stop left, Singapore itself, before the airline would carry me home on the longest flight in the world—18-something hours over the North Pole to Newark, and if nothing else, I’d be well-rested at the end of three weeks on the road. When it’s all over, I will have spent more time aloft on those two flights than during the rest of my three-week trip combined.

This visit wasn’t some boondoggle I’d stapled onto the end, but was actually a chance to brush up against the science-fiction version of Airworld that has sprung into existence in Asia. While airlines in the U.S. were laboring to build new terminals for under a billion, the governments out here spend three or four times as much just on landfill—the artificial islands reclaimed from the sea on which Osaka’s and Hong Kong’s airports were built. And if JetBlue, Frontier and Song represented the future of the low-fare-carrier model at home, then Singapore Airlines, Emirates, Cathay Pacific, Virgin Atlantic and Qantas sit at the other end of the curve, battling for the full-fare business and first-class passengers on long-haul routes. Singapore Airlines is the most profitable airline in the world, in fact, posting a record net profit in its last fiscal year of $820 million. Although I’m certainly no expert on airline accounting, I can only imagine what tax and other advantages stem from the airline’s being 57% owned by Singapore’s government.

And Singapore Airlines, in turn, owns 49% of Virgin Atlantic, which I happened to fly to London in Upper Class—its typically cheeky name for a business/first-class hybrid offering. Virgin has perhaps the most clearly articulated brand positioning of any airline flying in the U.S. today, thanks in large part to the efforts of its advertising agency, Crispin Porter & Bogusky. (As for how I was able to afford all of this, Virgin upgraded me after I paid a nominal fare, while Singapore booked me for free without a second thought.)

But if I’d simply wanted to engorge myself on raw amenities, I might have ended up in Frankfurt instead, ensconced at the new $18 million terminal Lufthansa has built for its first-class passengers, who are ferried to their planes across the tarmac in a Porsche. Or I could have accepted Emirates’ offer of an upgrade to a “privacy suite” aboard one of its fleet of A340-500s, essentially enclosed seats that the airline paid $125,000 apiece to install.

“The key word is differentiation—between our competitors and between our customers,” Lufthansa’s vice president in charge of innovation recently told Newsweek. “We have to give those who are prepared to pay extra an extra-special product.”

While U.S. legacy carriers seem stuck in a race to the bottom in terms of amenities at home, they are increasingly betting that they will be able to keep up—using their vast route networks, multicarrier alliances and frequent-flyer programs—in the luxury arms race that is already well underway. Lie-flat beds, once the last word in first-class luxury, are practically a business-class commodity, and the next lines in the sand will be drawn when Singapore, Emirates and the other launch customers of Airbus’ behemoth A380s finally take possession of their custom-configured planes. The mechanized “SpaceBed” I napped in on the way here will likely be rendered obsolete when the first one lands here at the end of 2006. Both Airbus and Boeing expect 2005 to be a record year in terms of the number of planes ordered, thanks to overwhelming demand for fuel-efficient long-haul models.

While all of the airlines above are battling for “the business traveler,” only Virgin and Crispin have concocted an entire back story and rationale for their target customer’s existence. The “jetrosexual,” introduced two years ago as an obvious play on metrosexual, was the cornerstone of an ambitious attempt to not only cast the airline as the true inheritor of Jet Set panache, but also to invite the road warrior contingent of the so-called creative class to self-identify themselves as jetrosexuals, and thus side with Virgin. I’m not sure how well that’s working out for them—none of the fellow Upper Class passengers I chatted up in the JFK Clubhouse before our flight identified themselves as such, or even knew what it meant—but Crispin’s faux boarding passes inserted in magazines and similar work comprise the most distinctive airline campaign currently in circulation. More important, the actual experience lived up to the hype.
I really did find myself at the onboard bar at midnight for a nightcap while wearing my “Sleep Suit” pajamas and carrying on simultaneous conversations with a buyer for Marks & Spencer and an intellectual property manager for Diageo.

“Nobody’s really rooting for the guy wrecking his life on road. We wanted to find a way to get behind him,” said Jeff Steinhour, managing partner, director of account management at Crispin. “If they’re tied to their frequent-flyer miles somewhere else, then how can we break the back of that resistance, and have them approach this as an event, rather than as enduring six hours sealed in a tube?”

And while one would expect to find an airline’s biggest supporters drinking its wine in its clubhouse before a flight, the passengers on the flight that night (Flight 010, “The Suite Dream” you see in Virgin ads everywhere) raved about the airline in similar terms. “They’re innovative, they’re modern, they get it,” said Nicola Burden, the IP manager for Diageo. “It isn’t like [British Airways] where the staff is 70 years old.”

Comments like that must thrill Virgin’s chief executive/mascot Sir Richard Branson, whose feud with BA goes back decades, but even the outsider hired to rebrand BA’s first-class service in the face of challenges from Virgin and other carriers is willing to give the airline its props. “One thing that they have done, and BA has done, and other carriers have done is completely focus on the experience,” said David Melancon, president of FutureBrand North America, a unit of IPG. On FutureBrand’s watch, BA introduced lie-flat beds in business class and opened travel spas at Heathrow with Molton Brown-branded skin-care products.

“I have a mental picture of who the Virgin customer is, vs. who the BA customer is, because they’re both offering very consistent, high-quality experiences,” said Melancon. “BA is more traditional, and Virgin is a little less so, but they both do an amazing job. We diminish that by saying ‘That’s the European way,’ or ‘That’s the Asian way,’ in the case of Singapore or Cathay Pacific, but that’s bull, because what you’re doing is creating an experience. If you want to talk about what American carriers are doing, my grandmother used to have a saying about burning the furniture –- it may keep you warm for the moment, but you’ve burned something you need.”

Not that BA itself should be one to talk after its dispute with the catering service Gate Gourmet snowballed into a wildcat strike by crucial staff that led to nearly 10,000 passengers being stranded at Heathrow—a memorable experience, to be sure. More than a month later, there’s nothing but tea and coffee available on BA’s short-haul flights, a fact the captain apologized endlessly for during my shuttle run to Paris.

But still, I have better understanding of what he meant after a week overseas spent making new friends at Virgin’s onboard bar and being fawned over by the unreconstructed eye candy known as the “Singapore Girls” on my flight from Paris Charles de Gaulle. I’ll need that again tomorrow, when I’ll be sealed in a tube for another 18 hours before finally –- finally –- coming home.


Zen Ponds, Garden Walks, Rooftop Pool, Movie Theater, Free Video Game Arcade
September 30, 2005

SINGAPORE—Don’t believe the date line. I’m not in Singapore. I’m Nowhere, and I have the absence of passport stamps to prove it.

I’ve spent the last 48 hours in the Transit Area of Singapore Changi airport. I’m in diplomatic limbo, neither here nor there, and fortunately for me, Changi was designed with limbo in mind. Airside here is a virtual theme park, with duty free malls, Zen ponds, rooftop gardens, free arcades and smoking lounges all crammed into an architectural blender switched on to purée. Changi is relentlessly over the top by American standards, but the airborne commuters used to long hauls over oceans and 10-hour layovers don’t even blink. (After complaining at the bar one night that American airports are hopelessly drab by comparison, the guy next to me sympathized with: “Yes, it could be worse. You could be stuck at LAX.”)

On my flight from Paris, unable to sleep because of the jetlag piling up on jetlag, I ordered up a description of Changi from the aircraft’s in-flight entertainment system: “While Changi’s legendary efficiency means travelers need spend the minimum amount of time in the airport, the facilities’ offerings include showers, gym and sauna, fitness centers, putting green, rooftop pool (a must) and Jacuzzi, hairdressing salons, laundry service, karaoke lounge, mini supermarket, movie theater, TV lounges, children’s play area, nursery, smoking room, medical centre and prayer room.”

And I intended to try them all.

It can’t be a coincidence that four of the world’s most renowned airports in terms of size and facilities—Changi, Hong Kong, Dubai and Amsterdam’s Schiphol—host four of the world’s top airlines (Singapore, Cathay Pacific, Emirates and KLM, respectively) and all have literally centuries of heritage as free ports, as independent nation states, or, in the case of the Netherlands, was once one of the world’s great maritime powers. To thrive in Airworld, all they had to do was reapply their historical skill sets. (And for a great examination of how Emirates did just that in Dubai, where its planes operate and passengers shop around the clock, check out Matthew Maier’s story on the airline in the October issue of Business 2.0.) In the 2005 installment of the annual Skytrax Survey Awards—which poll passengers in 80 countries—Changi was runner-up to Hong Kong for the title of the best airport in the world, while Dubai and Schiphol finished further down the list.

My own two days here have been a succession of Lost in Translation outtakes, beginning the moment I stepped off the plane, where a pair of Singapore Airlines hostesses met me at the gate holding a placard reading “Mr. Gregory Thomas Lindsay” (in Airworld, your name is whatever is printed on your passport) and who hustled me into the airline’s flagship Silver Kris Lounge for a shower. I liked the lounge so much that I stayed for 12 hours, eating, napping, writing and repeating, and watching the waves of in-transit business travelers roll in during Southeast Asia’s aerial rush hours.

When I finally staggered out of the lounge, I wandered through the duty-free boutiques until I heard a piano playing, of all things, “The Girl From Ipanema.” The pianist wore tails and segued into a Cole Porter medley while Australians barked into their cellphones only a few feet away at Sports Bar (not a sports bar, but “Sports Bar”), where all the chairs appeared to be made of half-deflated basketballs and soccer balls and the most popular beer wasn’t the hometown Tiger brand or even something regional, like Asahi, but Carlsberg, a brand whose home turf is Copenhagen. (It turns out that Carlsberg has a brewery next door in Malaysia.)

Everything in the terminal was like that—a copy of a copy or else carved out of its natural contexts. I watched a young Malaysian man toss pizzas at a Italian restaurant that advertised its branches in Naples and Rome. The piped-in music—and there is a constant sound track in Changi—isn’t just American pop, but only covers of American pop: anonymous rockabilly renditions of “Nothing Compares 2 U” or muzak versions of Enya (which is this close to being redundant).

Or maybe it was just me. My friend at the bar, Raja, was in transit between New Zealand and Johannesburg, and killing time before his 2:15 a.m. flight. “New Zealand, Hong Kong, Kuala Lampur, here—all more or less the same,” he said. “Only the currency is different, or one might be bigger, but if you blindfolded me, by the sounds I’d think I was still in New Zealand.”

He might be right, but the stores here accept four different currencies, at least—Singapore, U.S. and Australian dollars, plus the Yen—and you could conceivably pay in whatever the exchange rates favored that day. (Every store has those helpfully posted as well.)

I saved Changi for the end of this trip because if I was right—if Airworld really is a nation with its own internal coherence, then I could reasonably expect to find the same magazines on the racks here as I would at JFK, the same New York Times bestsellers being touted at the Hudson Books in O’Hare, the same Calvin Klein fragrances at duty free, and the same “Some Big Company runs SAP” ads mounted on the walls. And?

At the newsstand, US Weekly sat next to Star, next to their U.K. forerunners Closer and Heat. I had my choice of a dozen different international versions of Vogue (I bought Australian spin-off Vogue Living for Sophie), Fortune, Business Week, Business 2.0, Fast Company and the rest, the same as it ever was in Denver.

Midway through the trip, I decided that if our airports reflected the most important and vital thinkers of the age back to us, then the omnipresence of Malcolm Gladwell’s The Tipping Point and Blink rate him as a modern-day Descartes. Following the same standards, Jim Collins (Built to Last, Good To Great) is Ricardo and Freakonomics is the 21st century’s Wealth of Nations. They were all here in force, too.

I finally broke down and bought a copy of Candace Bushnell’s Lipstick Jungle after seeing copies of it stacked at literally every Hudson branch I saw. That book was everywhere, if by “everywhere” you meant the airport.

Duty free was a sea of familiar faces—Burberry, Gucci, Prada, Hermes, Bulgari, Tag Heuer and Toblerone. ... I knew they’d be here, for if the luxury goods business has an Achilles heel, it’s the continued dependence on Asia, and Asia travelers in particular, to drive sales at home (wherever the brand might call home) and overseas. Hermes derives 48% of its sales from Japan and the rest of Asia. Burberry? 26%. Bulgari? 43%. LVMH? 30%. And it was from one of LVMH’s global chain of DFS-branded duty-free stores that I picked out a Paul Smith scarf. Revenues in LVMH’s “selected retailing” division (which also includes Sephora) grew 15% in the first half of this year, thanks to “sustained growth in Asia, benefiting from an increase in tourism,” according to the company’s report.

The “24-hour mini-mart” was actually the best stocked 7-11 I’d ever seen, selling everything from boxers to boxes of ramen to cheap, boxy luggage. Based purely on the size and prominence of its stands in the vice wing of duty free, one would think Jack Daniels is the native spirit of Singapore.

And while I didn’t spot any SAP ads, I only wish that JCDecaux’s Don Sperring could have been here to see to the massive TV lounge filled with Panasonic flat screens, or the free, Samsung-underwritten Internet terminals scattered throughout the airport. Or the Xbox arcade upstairs. “The future is already here,” William Gibson once wrote, “it’s just not evenly distributed.” Changi and its fellow Asian airports may have more than their fair share.

As for me, I never did find the karaoke bar or the putting green, but I did get a haircut and a massage and strolled through the sunflower and cactus gardens in the steamy mid-morning heat. And I’ll never forget how it felt to sip Singapore Slings (what else?) by the pool on top of Terminal 1, where the only sounds were of swimmers in the water and the white noise of parked jet engines down below.

By the time you read this, assuming you’re reading this on Friday morning, I should be passing within 1 degree of the North Pole, halfway through my flight halfway around the world. The 18-hour flight seems more like time travel to me than anything else—we’ll shed 12 time zones along the way and live an entire waking day inside a tube 40,000 feet above the most remote reaches on Earth. We’ll vanish in one place and reappear, just like that, at home only six hours after we left, according to the clock. It will have felt like three weeks.

Page 1  |  Page 2  |  PAGE 3

Advertising Age  |  June 13, 2005

Man vs. Man

Did marketing kill the Great American Alpha Male? The author sifts through the evidence.

For an upcoming issue of Maxim, the magazine’s editors phoned a who’s who of famed “tough guys” to rate the masculinity of the youngest generation of men. Turns out Merle Haggard, Evel Knievel, G. Gordon Liddy and Jack La Lanne are not impressed. They’re a Greek chorus announcing the end of Man as they’ve known Him: “We’re spoiled, we’re tenderfoots,” spits Haggard. We’re also soft, insecure, lacking drive and a clarity of purpose, and why the hell are we shaving our asses?

And those are their kind words. The rest of the interviews follow a similar and predictable vein: Today’s man is irresponsible; he’s happily let women wear the pants in relationships; courtship is outdated; soldiers aren’t tough enough and Viagra truly is a wonder drug.

Such are the twilight ruminations of the Great American Alpha Male. When Haggard, Knievel & Co. die, they and their generation will take the masculine ideals that forged them in the 1940s and ‘50s—that they must be husband, breadwinner, father and warrior—with them.

But Maxim‘s readers are not their heirs. Despite the playful “retrosexual” tone of the magazine and the ad campaign it concocted with Crispin, Porter & Bogusky last fall (which presented men as an endangered species suffering from a degenerative disease called “Mantropy”) the “lads” Maxim first championed on these shores live their lives with a degree of self-consciousness that G. Gordon Liddy would find unthinkable.

The very existence of Maxim—and of the massive media and marketing machinery that has sprung into existence in the past 25 years in order to instruct men on how to act and what to buy—is convincing evidence that contemporary young men have forgotten how to act “natural.” And that collective memory lapse amounts to an identity crisis for the American man.

It also amounts to a crisis for marketers trying to reach them. They have had to invest thousands of hours and millions of dollars in a massive exercise of psychoanalysis, which so far has produced inconclusive and conflicting results.

Consider the highly image-sensitive categories of men’s fashion and grooming, which posted combined sales of nearly $65 billion last year. While apparel makers keep wondering whether 20-somethings will take to suits they way their fathers did (or whether the blue blazer will go the way of the fedora), the metrosexual’s unquenchable thirst for moisturizer has propelled sales of men’s skin-care products into the stratosphere. No wonder Merle Haggard can’t recognize these guys.

Advertisers are also struggling to master the nuances and tone for speaking to a generation of men who filter masculine icons through a complex process of irony.

In Levi’s new and much-talked about Web commercial, “Uncomplicated,” G.I. Joe is metrosexualized via a thoroughly emasculating makeover involving striped shirts and chest waxings. He eventually strips and flees home to his trusted 501 jeans. Created by a team at McCann Erickson, it’s a funny broadside, but to hear a Levi Strauss spokeswoman tell it, it has nothing to do with manhood at all: “The notion is to pare back to what’s authentic and the most organic things you could possibly need.”

Still, the target audience only recognizes that impulse as nostalgia.

There is a rush by sociologists (followed close behind by trendspotters) to identify and define the next “natural” man. Buzzwords are already flying. Proposed successors to the metrosexual and lad include the “übersexual” and “New Bloke,” while “masculinism” and “M-ness” have been offered as terms for the identity crisis itself. But lost in the rush to solve young men’s identity crisis through consumption is the story of what happened to them and why.


Defining and redefining “masculinity” is a complex enough task to keep gender-studies departments humming night and day. But there is a bit of consensus on how the inner lives of men have evolved in the post-World War II era, when they returned home from saving the world to two-car garages and suburban malaise. The social codes of the Greatest Generation, like those of the generations before them, would ultimately prove too oppressive to women, ethnic minorities and homosexuals. But they offered relief to white heterosexual males, who had a ready-made identity waiting for them at the onset of adulthood.

Upon the completion of his education, he was expected to promptly find work and marry, purchase a home and raise children. (To quote G. Gordon Liddy on the subject: “Men were more responsible. They did what it took to finish high school, go to college, earn a degree, get a job and keep it. They’d marry and stay married, provide for and raise a family, create a legacy and leave an inheritance of some sort to their loved ones.”) Then feminism happened. Women’s demands for choice—to marry when they wished or not at all, to earn an independent living from an equal wage, to have children with or without fathers—meant that men suddenly had to bear the consequences. The masculine archetype, which had carried men along with the momentum and single-minded purpose of a freight train, began to derail when confronted with the paralyzing freedoms of unlimited choice.

The first generation of men born after feminism is graduating from college and returning home in large numbers (40% of men under the age of 26 will move back in with their parents for at least a short period), deferring marriage until their late 20s, divorcing young and remarrying (giving rise to “the starter marriage”) and deferring fatherhood even further, into their 30s. A gap between the end of adolescence and the onset of adulthood has appeared in a man’s early- to mid-20s, a period in which no traditional markers of manhood apply and income is almost entirely disposable.

These men are left to piece together a male identity armed only with their wallets. What happens next is inevitable.

“The metrosexual appears at a certain time in a man’s life, when men in this age group are kind of clueless about what masculinity even means,” said Michael Kimmel, a professor of sociology at State University of New York at Stony Brook and the author of “Manhood in America: A Cultural History.” His next book, titled “Guyland” and due out next year, will explore the inner lives of men from the ages of 18 to 26.

“The traditional agents of socialization—family, school, church and your peers—have receded,” Mr. Kimmel continued. “By the time you graduate college, you’re supposed to be automatically socialized, and you’re supposed to be such a media-savvy consumer that you don’t get sucked in by advertising. But what are the agents of socialization now? There aren’t any! So you go back to peers and to the media again, and now you have metrosexuals and guys living in cities who have done their best to recreate their former frat-house lifestyles.”

Mr. Kimmel’s conclusions uncannily align with recent market research by the likes of Unilever’s Axe Deodorant team. Launched only three years ago in the U.S., Axe has already sprinted past Old Spice and your father’s other brands to the No. 1 position in the marketplace by targeting 18-to-21-year-olds with a cartoonishly virile campaign demonstrating Axe’s ability to drive women wild. “The Axe guy is confident, he’s comfortable, and every now and then, he needs a little boost,” said Kevin George, marketing director for the brand. “At that age, girls hold all the cards. We’re trying to give them an edge.” He added, “Guys in this age group know what they want out of life, but they’re just not ready to do it yet.”

But how could traditional socialization have disappeared so completely in just one or two generations after women’s liberation? Mr. Kimmel and his peers are quick to point out that today’s men are faster to form friendships with women and gay men than any generation before them—they have embraced, rather than resisted what had been the twin threats to their grandfathers’ and even their fathers’ manhood. While those old-timers fight to hold on to their last preserves (the golf course and other disappearing men-only clubs), their sons and grandsons have been raised to happily accept gender equality rather than resent it, even if it has meant groping for a new identity.

One of feminism’s aftershocks was the spike in divorce rates through the 1970s and into the early ‘80s toward 50%, when the men just now turning 30 were being born. A sharp rise in single-mother households (made possible for the first time by the feminist movement) went hand-in-hand with the divorce rate, and even today, in 90% of divorces, the mother retains custody. And five years after the divorce, over one-third of fathers see their children little or not at all.

“Some of these guys have heard from their single mothers that the ideal man is everything their fathers weren’t,” said Mr. Kimmel. “It also means they grew up without an immediate role model. The implicit conceit of dad as role model is no longer assumed.”

And the values dad implicitly passed from his father down to his sons—stoicism, selflessness and the acceptance of adulthood—should no longer be assumed by marketers, either. Lacking wives, children and the need to provide for them, his sons are selfish, not selfless. And they’re well aware of how they fail to measure up, of how the messages that resonated with him feel like lies when aimed at them.

Their brothers are the antiheroes of Chuck Palahniuk’s 1994 novel (and later the 1999 film) “Fight Club.” Jack (played in the movie by Edward Norton) is a proto-metrosexual with a weakness for Ikea furniture; Tyler (played by Brad Pitt) is his preposterously masculine roommate and the Fight Club’s founder. The surprise ending is that Jack is schizophrenic; Tyler is his alter ego, a figment of his imagination. But that doesn’t stop Tyler from recognizing their plight: “We’re a generation of men raised by women. I’m wondering if another woman is what we need.”


The metrosexual was fortunate enough to have two parents. His father was a particularly biting gay British sociologist named Mark Simpson. His mother was Marian Salzman, buzzword-coiner extraordinaire (and now exec VP-director of strategic content for JWT). He isn’t especially loved by either of them.

Mr. Simpson, who coined the word the same year “Fight Club” was published, has always seen his brainchild as a radical, toxic break with prior masculine traditions. “It may seem slightly deranged, or self-aggrandizing, but I’m increasingly of the opinion that metrosexuality is nothing short of an historical epoch,” he wrote in an e-mail. “The ‘New Man,’” the popular name for sensitive ‘80s men in Britain, “was in fact an early manifestation of metrosexuality, as was New Lad, which was supposedly a reaction to New Man but was in fact a continuation of the same process.

“Both were inventions of marketeers and glossy magazines, both were commodified, aestheticized versions of masculinity. However, both were in varying degrees of denial: The New Man pretended to exist entirely for women; the New Lad pretended to be there for his mates (and performed an increasingly hysterical pantomime of heterosexuality—which sometimes seemed to be more about proving they weren’t fags than about being interested in women). Both were in fact manifestations of male narcissism and selfishness and isolation: That is, after all, what consumer culture faithfully delivers to us.

“At the beginning of the 21st century the process had gone so far and so fey there was no longer any need for denial. The metrosexual finally came out of the closet for what he was: a commodity fetishist, a collector of fantasies about the male sold to him by advertising.”

The metrosexual and the Maxim reader are as schizoid in their own way as Jack and Tyler in “Fight Club.” Portrayed in the media (and portrayed in the opening of this story) as the battling claimants to the empty throne of manhood, they’re actually the same man, reassembled in slightly different configurations where one set of brands is swapped out for another.

And both have been raised without fathers. “Males are being raised more and more by single mothers—and corporate capitalism,” Mr. Simpson wrote. “Boys are fathered by Nike, Sony, MTV. Boys are emulating their heroes, but their heroes are delivered to them by Madison Avenue, in a highly incestuous/eroticized package.”

(Firebrand post-feminist Camille Paglia e-mailed her concurrence on the subject: “Over the past century dominated by Hollywood,” she wrote, “it’s advertising and popular culture, not social reality, that have become the primary reservoir for cultural images of masculinity. What this means, of course, is that gender roles, for good or ill, have become creatures of shifting fantasy.”)

Ms. Salzman, who borrowed Mr. Simpson’s word in 2003 and used it to launch a thousand trend stories (including this one), has left the metrosexual behind in favor of intellectual offspring from a different marriage. She’s reunited with her former Euro RSCG colleagues and co-authors of her book “Buzz” to write “The Future of Men,” due out in September.

“The Future of Men” is a pop-sociology catalog of all the ways men have fallen from grace since feminism. Drawing upon everything from fallen sperm counts and the degeneration of the Y chromosome to the gender divide in college enrollment and dropout rates and the fat husbands/hot wives trend in sitcoms, Ms. Salzman & Co. have coined the term “M-ness” to describe the new, self-consciously constructed masculinity just beginning to form in the post-feminist era.

From Ms. Salzman’s perspective, today’s men are not only lost, they are losing a little bit more of themselves every day. “None of what they used to think is theirs is actually theirs anymore,” she said. “They are trying very hard to find something to hold on to. What room in the house do they own? What’s still theirs?” They’re in psychic shock and on the verge of cultural and biological redundancy—once women master the art of cloning, will there be any reason to keep men around?

While that may sound a bit apocalyptic, “The Future of Men” argues somewhat persuasively that men must redefine masculinity to incorporate traditionally feminine traits like nurturing and cooperation, and include a measure of deference for the females of the species.

The metrosexual, who was the first to break free of the masculine straitjacket, was a necessary first step toward Ms. Salzman’s new archetypes: the “New Bloke,” essentially a lad who’s comfortable approaching women openly as an equal; and the “übersexual,” an evolved metrosexual who has chosen from the smorgasbord of lifestyle choices and successfully channeled his narcissistic impulses into a personal style and credo that doesn’t change with the seasons. In the future, we will all be George Clooney for 15 minutes.

While not exactly a marketing handbook, “The Future of Men” does offer a handful of ad campaigns fully in-touch with their M-ness. The reintroduction of the Ford Mustang in a TV spot using a “Field of Dreams” motif starring a resurrected Steve McQueen covers all the bases: “Innocence. Father-son bonding. Mysticism. And pure Alpha male. All in one package. M-ness means men don’t have to settle for less.”

Mr. Kimmel offers a similar prescription. “Men should go home,” he said, to their wives and families and to a redefinition of masculinity around truly equal participation in domestic tasks and child care. Rather than ask their wives to “do it all” while they fade into irrelevance, American men need to engage with their families in a manner similar to their western and northern European counterparts, who already receive generous paternity leaves and other benefits. “Men in their 20s now are actively searching for an identity, and there isn’t going to be anything that actively presents itself. But men in their early teens now will have a history of more involved fathers.”

He assumes—as do Marian Salzman, Camille Paglia, and G. Gordon Liddy—that the youngest generation of men are an immature blip in the history of masculinity, or at least a transition period away from the remnants of Alpha Male-dom and toward an unapologetically softer and softer-skinned future. But what if that transition has already happened? What if the identity crisis itself has become a rite of passage on the way to becoming a man?

Jeffrey Arnett, a professor of human development at the University of Maryland, began investigating what he has since called “emerging adulthood” back in the mid-90s (which now appears to be the formative years for Generation Y). Mr. Arnett, who also edits the Journal of Adolescent Research, spent a decade interviewing college students and 20-somethings and publishing a flurry of papers in academic journals arguing that the malaise of Generation X heralded a new phase in psychological development, at least in developed Western societies.

“Emerging adulthood” recasts the masculine crisis as a subplot in a larger drama of what will become a repeated generational experience—men and women alike will delay the onset of adulthood in order to grapple with the bewildering array of choices about education, work, marriage and children. Thirty is the new 20, and emerging adulthood lies in between. Which means the real problem facing a generation of young men today is that they’re really still a generation of boys.

Endangered Species

When Maxim tapped Crispin Porter last year to rebrand the magazine for a post-lad existence, the agency concocted, with typical flair, a request to the U.S. Fish and Wildlife Service to have men declared an endangered species. The creative team filed the paperwork last fall, and hasn’t heard anything since. But in a perhaps prescient ruling in the ‘80s—after the Wildlife Service had been taken to court to recognize a dwindling tribe of Native Americans as endangered—the judge ruled that Man is a domestic animal, not a wild one, and thus ineligible for federal intervention.

Asked if he personally needed the protection, David Schiff, the creative director who cooked up the scheme, laughed. “I don’t consider myself a man’s man. I consider myself an overgrown boy, which I imagine most men consider themselves to be. If you can take care of your responsibilities, I think you can stop worrying about it.”

Business 2.0  |  June 2004

What Makes Nick Tick?

The smartest publisher in the blogosphere says there's no money online. So why doesn't anyone believe him?

Nick Denton
Nick Denton won’t talk to me. I’ve been after him for weeks. But the man behind the wittiest, bitchiest, most irresistible weblogs going—the gossipy Gawker and Wonkette, the gadget pageant Gizmodo, and the smut aggregator Fleshbot—is shutting me out, claiming he’s overexposed. He’s so serious about not commenting that he’s ordered his stable of blog writers not to talk to me either.

To drive home the point, Gawker gives me the silent treatment. I—and my media stories for Women’s Wear Daily—had been a running joke on the site, which once sized me up as a former “parboiled-ham-in-a-suit” and relentlessly questioned my sexual preferences. (“Greg Lindsay Comes Out” was a headline last fall.) Gawker is so beloved in New York’s media circles that this actually made my friends jealous.

But now, clearly, I am unloved.

So I’m a bit surprised the morning I receive this e-mail:

From: Nick Denton
To: Greg Lindsay
Subject: Calacanis
Date: Tue,13 Apr 2004 11:16:27 -0400

Hey, Greg—not sure whether you’re still doing your business-of-blogging story. But here’s a possible peg.

[Jason] Calacanis has commitments for $4M from Mark Cuban and an Israeli investor, possibly Yossi Vardi. You didn’t hear it from me.

Like I told you, Calacanis is a much better business story than I am.


Could Denton be capitulating? Maybe his Calacanis gambit was a bid to pique my interest. Jason Calacanis, as you may know, was biggish during the bubble years as, among other things, the publisher of the now-defunct Silicon Alley Reporter in New York City. He’s the closest thing Denton has to a competitor these days. But as a blog impresario, he’s not a business story.

Denton, on the other hand, may be quietly figuring out the most vexing problem of new media—how to make it pay. That’s the more provocative scenario, anyway. Less interesting is the possibility that he’s simply manipulating me to write about him. After all, he’s an expert at getting the right kind of buzz, which helps inflate his properties’ value. And that could be the real endgame: finding someone to unload his business on at the right time. Sound too cynical? One of Denton’s first companies threw networking parties for dotcom naifs. And that one sold for millions at the top of the bubble.

Any way you look at it, you have to conclude that Denton is wily. Consider his blog business model. A decade ago, media companies sank untold millions of dollars into building and staffing websites. Most of them are still in the red. It turned out that most Net users don’t want to pay for content, so new-media publishers had to rely on the trickle of revenue that came from online ads.

Denton learned from that debacle and embraced weblogs, which are the LEDs of the media firmament: They require almost no resources to run. His mini media empire, Gawker Media, has no offices, no proprietary technology, and no full-time employees, yet it can attract audiences big enough to generate ad revenue. Better still, the “content” is virtually free, since it consists of little more than snarky comments pointing to other sites (mostly newspapers and magazines) that do spend money or time creating content. It’s so dumb, it works: Denton’s blog model is leaner than a George Foreman turkey burger. And it’s apparently already returning a modest profit—with the potential to deliver substantially more within a few years.

Of course, if it were that simple, everyone would be doing it. Denton, 37, has figured out a couple of tricks. By offering fame rather than fortune, he’s persuaded talented writers to work for him for less money than they’d make pulling cappuccinos at Starbucks. And he picks subjects for his blogs that are irresistible to the chattering classes—media, power, sex, and toys. In the end, it costs Denton a few thousand bucks per month for each site, in return for a monthly audience of about 1.6 million young, media-savvy readers. Several Internet user studies recently concluded that the total blogger audience is only 13 million to 14 million readers. Denton is skimming off the demographic cream—the influential chatterati.

How does he turn that cream into milk money? The revenues at his flagships, Gawker and Gizmodo, have nearly tripled since last fall, to about $6,000 a month each. Both are in the black, several Denton associates claim. Based on current rates and inventory, a quick calculation suggests Denton may be grossing about $250,000 a year.

Given the rate of growth, he could be taking in $1 million annually by next year—and that’s assuming he doesn’t add more sites. Naturally, he does plan to add more: Defamer, an L.A. version of Gawker, debuted in May with a buzz-provoking anonymous byline, and Denton is considering launching a travel blog.

“My guess is that Nick has been downplaying the size of the opportunity of blogging,” says Fred Wilson, a venture capitalist and blogger himself, “because he’s not excited about the prospect of lots of capital coming in and creating competition for him.”

It sounds ambitious for a man who has consistently talked down his own financial ambitions. So what really makes Nick tick?

Denton came from nowhere, although he wasn’t a nobody. Half-English and half-Hungarian, he was Oxford-educated and lucky to be in Budapest when the Berlin Wall fell. He covered the end of communist Romania for a London newspaper and parlayed that into a gig at the Financial Times through the ‘90s, eventually covering Silicon Valley. Then he caught the bug, having perversely decided that journalists were expendable. He launched a company called Moreover, whose goal was to aggregate on one site all the world’s news, disintermediating most of his former profession. (This is a theme; when I first met Denton before working on this piece, he promised that Gawker would commoditize my then-job of media reporter.)

Back in London, he began hosting dotcommer parties that grew so big, he and his three partners decided there must be a revenue stream in them somewhere. After throwing half a dozen events, Denton bounced between London, San Francisco, and New York, raising money for Moreover. His partners carried on with what became First Tuesday—a face-to-face network that connected entrepreneurs with investors over drinks—which they sold at the peak of the bubble, in July 2000, to the Israeli firm Yazam. Though no one involved will say how much, if anything, Denton made from the deal, the four partners and their investors got a reported $50 million in cash and stock in the combined company. Six months later, Yazam sold First Tuesday for a pittance and shortly thereafter sold itself to a company that ran manufacturing facilities in prisons using inmate labor. It was a valuable lesson.

“Nick understands the difference between valuation and value,” says one of First Tuesday’s co-founders, former Wired UK editor John Browning. “He’s perfectly able to say, ‘This is undervalued and worth investment,’ and he’s equally willing to say that the market is valuing this business at more than its underlying worth.” Denton’s modus operandi is to buy the former and sell the latter.

While negotiating First Tuesday’s sale, he was simultaneously trying to raise a decisive round for Moreover. He succeeded, finding $21 million, but stepped down as CEO in August 2001 in favor of someone with more salesmanship. He then left for London to care for his ailing mother. Moreover still slogs toward profitability today, having become little more than a search tool for publicists.

Well before he left, Denton had plans for a new kind of site: a blog built around gossip. In early 2001 he even asked Valley gossip queen Chris Nolan if she’d run it. She declined, and now recalls, “He knew then what his business model would be. He knew how much he wanted to pay. He wanted one person to blog gossip. He wanted to pay [the writer] $1,000 a month, with a set number of entries a day.”

As a sort of shakedown cruise, in August 2002 he launched his first blog, Gizmodo. Denton hired Pete Rojas, a gadget specialist he had met in the Moreover days, and started applying some of the techniques that he would later perfect. His insight from having read so many blogs during his downtime after Moreover was that blogging’s laws of popularity revolved around the frequency of posts, not the density. Readers wanted ever-quicker hits, not chewiness. Of course, tone and attitude were also key.

Elizabeth Spiers, a former securities analyst he had met at a party of bloggers in early 2002, had exactly the right bite for his gossip site. He liked her scathing prose, and hired her as editor at $1,000 a month. They launched Gawker in December 2002.

It scored instant points with Manhattan media types by sniping at the biggest targets, everyone from Donald Trump to former New Yorker editor Tina Brown. But Spiers’s breakthrough came within a month of Gawker’s launch, when she published “The Quest for the Perfect Coke Dealer.” The piece was a taped interview with an anonymous “Ivy-educated Wall Streeter in her late 20s” who railed about customer service in the narcotics business. Spiers quickly became the “it” girl, prompting showers of party and dinner invitations from the very people she mocked.

By last summer their relationship was becoming strained, her friends said. The two bickered incessantly—symptoms of a professional marriage heading for divorce. So when New York magazine gave Spiers a weeklong audition for a staff job in September, Denton replaced her.

He quickly launched two more blogs. First was Fleshbot, making Denton a pornographer-by-proxy with its hard-core links. Having timed Fleshbot’s debut for the day the Paris Hilton tape went wide on the Web, Denton earned another plug in the New York Times.

Wonkette followed in January, filling a niche that was genuinely underserved: scorched-earth gossip from inside the Beltway. Its editor, old new-media hand Ana Marie Cox (once the editor of the now-closed, predictably roiled the locals, leading to the obligatory Times piece. This time the paper tut-tutted the site’s willingness to run just about anything, even rumors that reputable journalists had already passed on. Denton’s response to the paper and potential litigation: Bring it on.

The Gawker Media sites continued to race ahead. The only speed bump occurred at Gizmodo, where Rojas grew sick of working for the Man. It was Spiers all over again, with a twist: When Denton refused to give Rojas a piece of the action, the editor quit on a Friday and started a competing blog, Engadget, the following Monday. His 50-50 partner: Jason Calacanis.

Calacanis is late to the blogging game, or at least later than he was to the rise and subsequent overinflation of New York’s Silicon Alley. His strategy appears to be to exploit Denton’s weakness. Rather than paying bloggers a pittance, he’s partnering with them, letting them keep their sites and half the revenue generated by ads. His company is the Weblogs Inc. Network. Get it? WIN.

While Denton courts the media, Calacanis is busy trying to hijack the business-to-business newsletter trade with a convoy of vertically focused blogs covering business, science, entertainment, and tech. He wants to make his fortune through volume, by selling low-cost ads and sponsorships across what he hopes will be several hundred sites. He’ll also sell his own company’s blogging software (called Blogsmith) and use his blogs as rallying points to sell conferences and research. This was essentially the model behind Silicon Alley Reporter, which morphed several times after the bust before it was sold last year to Wicks Business Information, now a part of Dow Jones.

Perhaps Calacanis had the answer to the riddle of the Denton. As luck would have it, I ran into him at the semiannual blogger confab BloggerCon at Harvard this spring. I asked him about Mark Cuban and Nick’s e-mail.

Calacanis smirked. “I don’t ever answer that question,” he said. “Why would I want people to know I have money? Why would I want to legitimize the space?” Clearly, he and Denton were playing a game of chicken, each desperate to avoid the stigma of having touched off more hype and encouraged speculators to enter the nascent market. Yet, while Calacanis wouldn’t discuss his own plans, he was happy to assay Denton’s. “He’s going to keep the cash burn low, build a brand, and then flip it,” Calacanis claimed. And he wished Denton luck. “Whoever he sells Gizmodo to, two years from now, sets the bidding for Engadget, and whoever loses will buy Engadget for a higher price.” Two weeks later Calacanis suggested that Weblogs Inc. might one day be worth $30 million.

One thing that appears to be part of Denton’s game plan—and perhaps simply a faulty part—is Kinja, a blog-search site that debuted to great fanfare in April. Kinja had been Denton’s top-secret project for more than a year. Built by Meg Hourihan—who co-invented the breakout-hit self-publishing program Blogger and thus blogging itself as a mass medium—Kinja was originally conceived as a tool for marketers. It was to be an algorithmic divining rod that would scour blog links for trends. How much would Nike or Burger King or Sony pay to watch the tipping point happen in real time?

After only a few months in the lab, the Kinja team scrapped the marketing-tool angle. The project persisted as a kind of Google for blogs, and at launch, to no one’s surprise, the New York Times ran a piece about it. But so far, the thing has turned out to be an overhyped bust on par with “push technology.” Hourihan quit the day of its launch. Power bloggers eschew it as a weaker version of the programs they already use, the blog-gathering RSS applications, which keep tabs on hundreds of blogs at once. People new to the blogging world, of course, don’t look at it at all.

Not long after I receive my first e-mail from Denton, he sends another. “OK, you win,” he writes. But he has ground rules. I can’t use his words to further what he perceives as my agenda—i.e., whipping up a frenzy of big-money interest in what he has come to consider his sandbox. Not a problem, I say. Then he sets the terms of the exchange: e-mailed questions only, with final answers subject to approval. We continue to haggle, and finally he agrees to a telephone interview.

Denton begins by bemoaning my interest in his story. “I’m nostalgic for the recession,” he says. “There was no excitement, no interest on the part of venture capitalists or journalists. You could just plug away without the distraction of inflated expectations—or greed.”

But that’s over, I tell him. The excitement’s back; tech’s back. People do care. During lunch at BloggerCon, someone pointed out that it felt like InternetWorld ‘94 all over again—that blogging, while big, was about to get huge. The bloggers seemed to want it that way. They packed the room for a session on blogging as a business and decided that what they really needed was a blogging trade association. They were practically ready to form a union.

“People are starting to get excited—overexcited—about the revenue potential,” Denton concedes. But then he objects: “Who the hell knows how big blogs are going to be in 10 years? Right now, they are small businesses, but they get all this attention because the media is obsessed by media. A blog empire? That’s a joke. I’m not looking for outside money. Which is why I don’t have to hype the potential.”

I ask Denton what will happen to the next editor who decides he or she wants a piece. He explains that since he has no plans to take his company public, he won’t offer equity positions. “I’m a traditionalist: I believe that writing is a job and writers should get paychecks. It would be entirely bogus to offer people empty revenue-share promises or meaningless equity.”

So what’s he really after?

That’s easy, Denton says: Freedom. Freedom of the press. Freedom of speech. Freedom from the rules that bind our profession.

He insists that what’s in it for him is the thrill of having invented a media business that doesn’t behave like other media. His sites are breaking fizzy, glamorous scoops, spreading dirt, and reaping the buzz. He’s running a tabloid out of his house—and loving it. “We don’t have to kowtow to investors,” he says. “We don’t have to suck up to advertising. And it means almost complete editorial freedom—which shows in the exuberance of the sites.”

He starts to sway me. Media today is repressed and apologetic and not at all the woolly way to make a living it once was. It’s hardly fun anymore. Gawker Media is media acting out, unencumbered by the pressures of advertising or ethics. I get that, and it moves me.

But later, after talking to him, I run the numbers again. If he were simply looking for truly free speech, why would he need half a dozen sites? Why would he keep trying to grow Gawker Media? Why would he be so carefully trying to work me? I think back to Browning’s comments. For now, running a blog business is a blast for Denton; Gawker gets him into parties where he rubs shoulders with New York’s media elite. But once the thrill of invention is gone? After the crowds rush the door? Denton’s got an uncanny knack for knowing when a scene is over—and for finding someone willing to pay face value for his entrance ticket.

Page 3 of 3 pages  < 1 2 3

About Greg Lindsay

» Folllow me on Twitter.
» Email me.
» See upcoming events.

Greg Lindsay is a generalist, urbanist, futurist, and speaker. He is a 2022-2023 urban tech fellow at Cornell Tech’s Jacobs Institute, where he leads The Metaverse Metropolis — a new initiative exploring the implications of augmented reality at urban scale. He is also a senior fellow of MIT’s Future Urban Collectives Lab, a senior advisor to Climate Alpha, and a non-resident senior fellow of the Atlantic Council’s Scowcroft Strategy Initiative.

» More about Greg Lindsay

Articles by Greg Lindsay

-----  |  August 3, 2023

Microtargeting Unmasked

-----  |  July 1, 2023

2023 Speaking Topics

CityLab  |  June 12, 2023

Augmented Reality Is Coming for Cities

CityLab  |  April 25, 2023

The Line Is Blurring Between Remote Workers and Tourists

CityLab  |  December 7, 2021

The Dark Side of 15-Minute Grocery Delivery

Fast Company  |  June 2021

Why the Great Lakes need to be the center of our climate strategy

Fast Company  |  March 2020

How to design a smart city that’s built on empowerment–not corporate surveillance

URBAN-X  |  December 2019


CityLab  |  December 10, 2018

The State of Play: Connected Mobility in San Francisco, Boston, and Detroit

Harvard Business Review  |  September 24, 2018

Why Companies Are Creating Their Own Coworking Spaces

CityLab  |  July 2018

The State of Play: Connected Mobility + U.S. Cities

Medium  |  May 1, 2017

The Engine Room

Fast Company  |  January 19, 2017

The Collaboration Software That’s Rejuvenating The Young Global Leaders Of Davos

The Guardian  |  January 13, 2017

What If Uber Kills Public Transport Instead of Cars

Backchannel  |  January 4, 2017

The Office of the Future Is… an Office

New Cities Foundation  |  October 2016

Now Arriving: A Connected Mobility Roadmap for Public Transport

Inc.  |  October 2016

Why Every Business Should Start in a Co-Working Space

Popular Mechanics  |  May 11, 2016

Can the World’s Worst Traffic Problem Be Solved?

The New Republic  |  January/February 2016

Hacking The City

Fast Company  |  September 22, 2015

We Spent Two Weeks Wearing Employee Trackers: Here’s What We Learned

» See all articles


December 01, 2023

“The Age of Principled AI” (Video)

November 28, 2023

Fast Company & Curbed: Cars broke Los Angeles. Could a new form of transit fix it?

November 14, 2023

Have Deck, Will Travel: Fall 2023

November 13, 2023

Welcome to the Age of “Principled AI”

» More blog posts