A UK start-up aims to “level the playing field” in marketing for smaller tour operators with a channel that helps them reduce the cost of customer acquisition.
Horizon Guides – one of three start-ups to pitch to delegates at the Travolution Summit this year – publishes digital travel guides targeted to consumers in the “consideration stage” of buying a holiday.
Matthew Barker, founder and chief executive at the Sheffield-based company, says some smaller tour operators can pay as much as $200 for a single lead by promoting themselves through Google AdWords and says this has “wiped them out” in the SEO arena.
Content marketing, he says, is the way forward and if not done poorly can fall flat. So, in summer 2016, Horizon Guides was born.
The idea stemmed from Barker’s background working in marketing for a small tour operation. He said: “Back in 2011 there was a rush for ‘content’. All of a sudden, people were frantically running around looking for quality content, but nobody knew what quality content was.”
Barker moved on to set up a consultancy called Influence and Inspiration [I&I], which worked with small and medium-sized tour operators “helping them get their heads around what this whole drive for content was all about. They didn’t have a clue how that translates into strategy and how you use content to get bums on seats.”
He explains: “It’s marketing at the end of the day, the whole idea is to sell trips.”
But the stumbling block was not convincing small and medium-sized operators to go down the content road, it was finding the cash in their budgets.
“A big part of the battle was educating people that this wasn’t optional,” Barker added. “Finally that message sunk in. But how was it possible with the available resources?
“It’s ironic because while demand for authentic and ‘experiential’ travel is increasing, these independent businesses with all the passion and expertise are finding it harder than ever to reach their customers. We want to level the playing field and make it easier for these guys to compete.”
Horizon Guides goes to businesses and finds out what their audience looks like and what they need to know when planning a holiday – then its copywriters produce a downloadable travel guide in an ebook format. Not only do they create the content, they push it out through marketing channels forged through I&I as well.
“I realised there was a huge opportunity” Barker adds. “Rather than doing every customers projects for an individual travel brand , we would create the content and publish it ourselves, building a media brand of our own.
“We generate the audiences and then licence them off to our partners. It has huge potential for scale.
“We pass on the benefits of scale to the guys that don’t have it. We are aggregating the audience and passing around the benefits to the tour operator.”
So far, Horizon Guides has produced 20 guides and has signed 11 partners – creating 1,000 new leads per month, which it claims can reduce its partners’ advertising costs by up to 80%. It is targeting 65 partners in the next 18 months. Most of its clients so far are based in America, but Horizon Guides is also targeting operators that sell to the UK and European markets.
It has a team of three in the office but hires from a network of freelancers to produce the travel guides.
If a company, which charges $380 a month for its services, is averaging a $150 cost per acquisition via SEO, Barker says Horizon Guides can reduce that to as little as $15 per customer.
Most partner operators are single destination specialists. Nick Wright, marketing manager at Ker Downey Africa said: “Horizon Guides has done all the hard work to generate content, and then given us the revenue generation potential.”
At the moment, Horizon Guides remains focussed on small and medium-sized operators, but Barker says that once they gather enough data and start to expand “we will become very interesting to bigger tour operators”.
“We know who you are, when you like to travel and which destinations you are interested in,” he added. “The whole thing is built around a segmented user base.”
After 12 months of testing, the firm is seeking a $150,000 investment to fund expansion via crowdfunding site Crowdcube and has raised more than £40,000 towards that from 74 investors thus far.
The cash will be spent on “labour intensive” content and will help it preserve its “first mover advantage” by scaling quickly, Barker said.
He summed up: “We provide an alternative approach. We produce genuinely quality content that our readers can trust, and we distribute it to consumers when they’re proactively planning a trip, generating leads for our partners. By aggregating the process at scale, we’re able to acquire leads for far less than an individual company on their own.”