OnHolidayGroup launched Google Bypass this week in a bid to reward Facebook users with money for travel leads, instead of paying advertising fees to Google.
The move is being touted as the first personal affiliate scheme in travel (at least in the UK) and utilises different concepts including social networking, email marketing and good old fashioned travel agent-style commissions.
Run through OHG’s Holiday Nights accommodation-only B2C brand, Google Bypass is handing out £25 to Facebook users if they refer a friend to a product on the system which they eventually buy.
The title of the scheme, Google Bypass, was clearly created for the PR value within the travel and web industries rather than making much sense to consumers – “no comment”, says CEO Steve Endacott, a figure not exactly known for his love of the Big G and the keyword advertising model.
Endacott claims Google takes on average around 75% of an agent’s (off or online) commission through PPC costs, so he would rather give the commission it would ordinarily pay to the search giant to an individual with, presumably, better loyalty and the chance of recommending a product or company again and again.
So how does it work?
- Holiday Nights customers are sent an invitation to participate.
- Each is given access to lists of offers within the system.
- Each offer has a unique identifying URL, matching the user to the product.
- Members of the scheme are then encouraged to send the URL around their various social networks such as Twitter and Facebook.
- When a friend or follower clicks on the link and makes a booking, the originator gets £25 wired immediately via Paypal.
Much of the management of the system is contained within a Facebook application, meaning users can throw offers around their network easily and see how their various campaigns are performing.
Endacott predicts the scheme will be mostly taken on by individuals, rather than offline travel agencies.
Although currently limited to the bed-focused Holiday Nights brand, plans are in place to extend to other areas of the OHG business including its dynamic packaging service.
The idea behind the project (alongside presumably avoiding the Google cash drain) is to turn individuals into powerful advocates for a service or brand, an area once the preserve off the agent but now through networks such as Facebook allowing consumers to wade in.
Early stages of the project are “pretty good”, says Endacott.
Around 4,000 opt-in members of the Holiday Nights database were emailed last week. Approximately 150 registered and the average pass-on was to nine people. The early phase has generated nine bookings, totalling £225 in commission.
The company may licence the Facebook integration and other elements of the technology to third parties, Endacott adds. The project is a collaboration between OHG, RateGain and ClickWithTechnology.
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About Kevin May
I like this idea but I wonder how the considerations went regarding running using coupon codes passed around rather than URLs.
For coupon codes
- people know how they work
- there is a big group of coupon code websites you can tap into
- No fear of clicking on unknown links
For URLs
- The link leads somewhere – useful for consumers to see what it is about
- The link leads somewhere – and if left on a website – could generate SEO benefits
- You can track them as they are sent around the system
Also one question that I would like to know. At what point is the 25 GBP paid out? Conventionally an affiliate might be paid out post travel. Will “friends” have to wait many months to get their 25 GBP? If so, will this delayed gratification put them off from promoting the links?
This relies on offers generated from the website (not the friend finding a product). Probably only makes sense on bookings over 500 GBP right? (due to the % involved) (taking into account there are probably other costs above the 25 GBP each time one of these is activated). Would a % that worked over all products have been a viable alternative (like an affiliate scheme)?
Will this force more multi-room bookings to become single room bookings? E.g. Imagine you are a group of 5 going on holiday. Now you end up with a URL you can use multiple times (to get a kickback to someone you know). Great, so now you split your booking up as much as you can into tiny pieces. Each piece is quite separate legally – so if any suppliers happen to go bust
then you have lots of tiny bookings to move around – and you don’t have to move them around as a 5. So this is quite a nice way of mitigating supplier failure responsibilities right? (or have I got that wrong!)
Extra point of clarification about the coupon alternative. Coupons (as they are used in the industry today) tend to give discounts to the booker who supplies the coupon code.
What I should probably have said was “reference code”. This code would have given the 25 GBP back to the original referrer just like the current system. Not saying this is better / worse than URLs, just I would have liked to have heard the discussion
Did anyone else just hear the echo of OHG expletives after this business model was destroyed in a matter of keystrokes and minutes?… Awwwkwaaard.
In all seriousness, I too really like this concept. But all were very valid points from Alex. Curious to see the answers to those questions because I’m rooting for this one.
Alex,
All good challenges so here was my thought process.
1. URL links where chosen so we could track uptake and activity in much more detail e.g. You only get a report when a coupon is actually used. With URL’s you can see when customer visit the site and who generated the lead, which is useful when understanding what messages and offers are creating
the greatest reach.
2. I do not think URL and coupons are mutually exclusive and we will be looking at adding a coupon scheme when we start marketing outside of our core customers database.
3. Payment. I wanted a scheme that was easy to communicate and easy to administer and therefore took a a broad brush to things. Yes we are exposed to exploitation by splitting bookings and low booking values but in the real world most customers are not that sneaky and if they are we will simply change the rules before we lose much money!!! An advantage of not being locked into voucher codes possibly?
Anyway….many thanks for the feedback….its really welcome as we really our in the infancy of this scheme and will/have made mistakes that we would benefit from people pointing out. So thanks again,
Steve
Thanks Steve for commenting here.
Think a few people will be watching this closely and looking forward to iteration #2 to see which direction you end up going.
Its brave being first as you might end up with 1000 customers locked into iteration #1 meaning that someone else might be more agile at getting to iteration #2 before you!
And as if by magic…
Just as I was bemoaning the lack of hard data on the cost of customer acquisition via Google, following another Tnoox story, along comes this little gem.
Thanks guys, keep it coming.
Dan G.
@Dan G: we aim to please
I do think this is a really good idea. The one thing I’m unsure about though is whether they will be de-duping the activity. As well as using this to diversify their method of acquisition, they will want to reduce – or at least maintain – their current cost of acquisition. Because of this you’d think that they would de-dupe the activity against PPC and their existing affiliate scheme – so if someone clicks on a Google Bypass link and then clicks on a Google paid link before they finally purchase, the former no longer gets the £25 payout. The problem with this is whereas a professional affiliate will understand this kind of de-duping, and is used to playing the odds, a consumer isn’t. If you know that a friend has clicked on the Google Bypass link and then later made a booking but you don’t get a payment, you’ll lose confidence in the scheme and turn from an advocate into a detractor. All this suggests that you shouldn’t de-dupe, but then how does this help your cost of acquisition?
Elliott
Great question. I reckon they will pay out to everyone right?
After all THEY control the offers. So if they only put offers on 1000 GBP and above products then 25 GBP is a minimal amount and could be supported alongside other marketing costs.
Still think I would have put 2% on everything – not 25 GBP on what will turn out to be 750-1000 GBP and above bookings only. Its just a clearer proposition isn’t it?
It would also mean that “someone” could create an offer themselves to send to their friends – rather that constantly monitor (which takes effort) a feed of offers coming through – most of which won’t be of interest – and those that are of interest might come and the wrong time.
Your absolutely right….we would like to de-dupe but customers would simply not understand it or accept it…..one of the reasons why we have pitched it at £25 and not our full Google cost which is slightly higher….we can monitor this however via the software and again it may impact on what we can afford to pay going forward.
Steve
Quite interesting…
Regular social media initiatives like fan pages and creation of official accounts fail to or simply don’t know how toextend brand visibility beyond the direct network of fans & followers. This limits the exponential potential of social networks and stalls the online sales process.
I strongly feel that this innovative concept of Google Bypass Scheme, based on RateGain’s rumbido provides the opportunity to rapidly increase buzz for OnHoliday Group in social networks that can easily convert to new customers.
In today’s fast moving world, who better than your customers are trusted per-se but their word is “Trusted” within their sphere of social influence (i.e. their friends, family and followers) to help grow your business. Further, with two thirds of the Internet population visiting social network sites, businesses cannot afford to ignore social media.
rumbido allows Hotels, OTAs and Airlines to engage and reward their customers as they emerge into brand ambassadors and open up a new and cost efficient channel of distribution.
Steve,
Curious if you evaluated that Blastoff Network movement as a case study of sorts in building your business model? If memory serves me, it’s a similar concept in online retail with your network of friends and family and you get paid if they link through and buy based on your referral, etc etc.
The other question is… What’s the new name going to be once the lawsuit inevitably comes through?
We know you’re too smart to not already have that flip ready to switch.
-SKE
How cynical you are about the name….!!! No we do not look at Blastoff…..could you forward me any links or details you have so we could evaluate it…..see what we can learn.
Steve.endacott@onholidaygroup.com
@steve
thanks for chiming in here today, not many CEOs are happy to debate the merits (or not) of a new service on launch day.
The Tnooz crowd are quite an unforgiving, cynical but mostly clever lot, so I’m glad you appreciated their feedback.
I like the idea and innovation here.
I think if it was my holiday company I would prefer to give my customers credit towards their next booking with me rather than cash through paypal. Better for cashflow as well as customer retention.
I do also like the idea and the welling to reduce throwing money on Google without securing the return! “with the amount of OTA’s now i see adwords now more like gambling”
Get Idea, Great Concept. I have started to see Google as more like a online tax instead of Pay Per performance advertising system, when it comes to online Travel. Way Way to much competition.
Also I noticed Google, or someone gives these major travel company keywords to target. when i first started my adwords competition was nothing. I was dominating. My keyword in no way relates to travel. after 3 months i notice my empty ad spots being filled with every travel company on the web “expedia, travelocity, hotels, etc. Good for my adsense units, bad for my conversions.
If you typed in my search term, no ads at all, now if you type it in Every Major Band is targeting it “in 3 months”. Price went from $.05 to over $1.85 in 3 months LOL.
I’m going to implement a system like this my self for the next season. I would rather offer a free hotel room if a customer refers 20 people, or pay 2% referral then to watch as Google rape my profits.
With Google CPC travel is becoming a commodity product, where only sheer numbers “millions plus” can earn you any type of return.
Facebook is wide open for now, and i’m loving it.
My cocncern is if publishing affiliate links by Facebook users does not violate Facebook terms. I mean this one: “You will not use your personal profile for your own commercial gain (such as selling your status update to an advertiser).”
You trying to get me into trouble Tnooz???
Steve
@steve – wouldn’t dream of it?
you referring to the Google response?
here:
http://www.tnooz.com/2010/08/30/news/google-tight-lipped-over-google-bypass-project/
if so, we had to ask the question…