Horizon Guides wants to offer an almost off-the-shelf content marketing solution to the tours and activities sector.
It's angle is that customer acquisition has become prohibitively expensive forcing smaller companies to look at content marketing.
But, the result has not been great so far and the startup would argue that content marketing requires its own dedicated resources and skill-set.
Here's a clip:
Q&A with Matthew Barker, CEO, Horizon Guides
What problem does your business solve?
We make it easier – and much cheaper – for SME tour operators to reach their customers.
Online marketing has always been a challenge for SME businesses in the tours & activities segment, but recently it has become intolerably painful.
Most of them have been forced out of SEO and into paid channels like Adwords and Facebook. That has driven their cost-per-acquisition to sky-high levels – we often see businesses spending $200+ per lead.
For many it’s just not sustainable.
The reaction has been to resort to “content marketing” to try and win eyeballs and customers.
Unfortunately most small businesses have neither the time, the resources or the expertise to do it properly, and the end result is poor quality content, non-existent ROI and a terrible user experience.
Horizon Guides fixes the problem for tour operators and travellers alike. By separating the business from the content creation we focus on producing quality, impartial travel content that our readers can trust.
We promote our guides to readers when they’re proactively researching a trip. The content is aimed at people in the consideration stages of a travel purchase. They typically encounter our guides when they start to research the basics of a trip: where, when, why, how.
Meanwhile our partners get a reliable stream of leads and audiences. When a reader downloads a guide they can opt-in to receive further information. This is passed onto the partner to complete the booking, at significantly lower cost – we’ve helped our partners reduce their Adwords CPA by up to 80%.
Names of founders, their management roles, and number of full-time paid staff?
Three founders:
Matthew Barker, CEO
Mike Beech, CTO
Simon Ross Gill, head of creative
Funding arrangements?
We’ve bootstrapped our MVP and first 11 partners. We’re now raising a £150,000 seed round via the Crowdcube equity crowdfunding platform.
Revenue model?
Our partners pay us on a monthly recurring basis in return for a consistent flow of leads and audiences. Our pricing tiers vary according to volume and add-ons, but range between $300 and $600 per month.
Our margins comes from the difference between acquiring traffic and selling leads. At the moment we use a lot of paid traffic, plus referrals and email marketing. As we expand we’ll start to benefit from organic acquisition and user retention (recommending trips/guides to existing users).
Why do you think the pain point you’re solving is painful enough that customers are willing to pay for your solution?
We’ve been in this industry for a combined two decades and we’ve seen just how painful customer acquisition has become for the segment. Studies have shown that it’s the primary negative factor on profit projections. Anything that offers even marginal savings on the cost-per-acquisition is tremendously valuable.
External validation?
We’ve demonstrated our proof of concept with a successful MVP and signed 11 partners.
We benefit from a stellar advisory board which includes Paul Smith (formerly CEO of the Ignite accelerator and head of programme at Dubai Future Accelerators), Jeremy Head (widely published travel journalist and authority in digital marketing and publishing) and Ed Fry (former head of growth at Inbound.org (Hubspot) and currently head of growth at Hull.io).
Tnooz view:
It's hard to argue with Horizon Guides' view on on the cost of customer acquisition, it's tough to be visible out there.
Even the big companies are doing content - think Expedia and its Viewfinder blog.
And, Marriott has said it has received a boost in hotel bookings for properties features in its branded content.
But content marketing can be very hit and miss so it seems like a good plan to outsource it to experts who can give it a consistent approach.
A starting price of $300 for ongoing leads and audience is at a point where most businesses could afford to give it a go especially with the promise of "leads and audience."
From the outside the guides themselves make you want to travel to the destination and travellers can decide whether they want to receive advice from the companies behind the guides.
Gaining traction, although 11 partners is a good start, won't be obvious as the startup needs to continue to produce high-quality content at one end and then get it in front of consumers.
But hopefully it will begin to be self-perpetuating in the sense that good content attracts more eyeballs who then consider and trust different content from the same source...
Lastly, there's a solid team in place with digital experience and a strong advisory board to back it up.