TLabs Showcase on travel startups featuring UK-based AdNet Media's Affiliate Widgets, an affiliate marketing widget service for travel advertisers and publishers.
Who and what are you (including personnel and backgrounds)?
We are James Dunford Wood and Al James. We launched World Reviewer four years ago and Adnet, the UK travel ad network (used in the descriptive sense, lawyers please note!) just over two years ago.
Adnet was our answer to the question of how do you monetise a travel website that does not transact. Al has a PHD in computer science from East Anglia Uni, and I have been in online travel since 1999, when I founded Travel Intelligence.
What financial support did you have to launch the business?
No cash support, but we have invested time and resources from our other business.
What problem are you trying to solve?
Two principal headaches:
- First, the difficulty we encountered via Adnet of getting publisher websites to integrate our ad serving solutions. It's a pain. Also, most travel widgets on the market need filtering to 'set' them to display the correct product for the destinations or holiday product reviewed on the page.
- Second, merchants and affiliate networks are constantly having to get affiliates to retire old creatives. They end up with a bunch of quite generic ones, which are easier to manage.
Affiliate Widgets runs off the proprietary travel context engine developed by Adnet – so publishers can get the product they want on the pages they want with one simple javascript cut and paste.
Second, merchants and networks can manage creatives centrally, confident that the right creative will appear on the most relevant page, and if they need retiring, the widget will default to the generic ads.
Describe the business, core products and services?
We develop contextual widgets for travel merchants. These can either be branded in a standardised way, which is free to the merchant, or custom built for a small charge.
We then charge the merchant a CPA override for any bookings generated through using these widgets. Occasionally merchants prefer us to charge the publisher, in which case it is a small % rev share.
Widgets can be built to serve contextually from product feeds, which we process from XML or text files, as well as pre-designed creatives.
Core to the success and accuracy of our matching algorithms is the fact that our context engine is looking for keywords that it recognises – so it knows, for example, that Paris is in France, and that it is also a city break destination.
Merchants and affiliate networks help market these widgets to their affiliates, and we are also able to acquire new affiliates fro them directly through our Affiliate Widgets site.
Who are your key customers and users at launch?
Easyjet Holidays, LowCost Holidays and G Adventures. We have also created widgets for Expedia, Isango, Thomson and First Choice, and display campaign creatives (auto-generated from XML) for Olympic Holidays, Vintage Travel, Beachcomber and a dozen others.
Did you have customers validate your idea before investors?
Since we are effectively the investors, we knew from our experience of running contextual ad units on Adnet that we could achieve click through rates many times better than from standard non-contextual units – provided the data was compelling.
What is the business AND revenue model, strategy for profitability?
The business is profitable from day one, in the sense that the overheads are very low, and to date the bulk of the marketing has been done for us by merchants and networks.
However, in order to grow the revenue into meaningful numbers, we need a much wider take up, and we will also spread out into other verticals. Currently we are designing retail widgets, for example, for a large retail client.
We also recognise that the data we could collect from serving these units – tracking the intentions of potential travellers across the web – could be very valuable for re-targeting by our clients in the future.
However, we need to tread carefully here, for reasons of data integrity and transparency.
SWOT analysis – strengths, weaknesses, opportunities and threats?
Strengths:
- Proven technology, successful model. For example our widgets, used by us to deliver CPA products, give us a 2-to-1 return on capital invested in online marketing channels.
Weaknesses:
- This model will only fly when we get volume. Otherwise the revenues are 'nice to have', but we won't be retiring to Iru Fushi or Kuda Huraa anytime soon.
Opportunities:
- The re-targeting opportunity is an obvious one, if it is handled correctly. There are also huge opportunities in other verticals, where competition is less fierce.
Threats:
- As with any technologically-driven business, what you do can be replicated by someone with deeper pockets. However, we believe what we have built is hard to copy, because the contextual technology it relies on has taken a long time to build and perfect.
Who advised you your idea isn't going to be successful and why didn't you listen to them?We advised each other not to get sidetracked from growing Adnet, and we didn't listen to ourselves because we love innovating. The curse of travel tech!
What is your success metric 12 months from now?
Millions of impressions served via our widgets and contextual display units. Whether daily, weekly or monthly will determine how far we have got along the path.
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.