Holiday Pirates has more Facebook fans than Expedia, spends nothing on Google ads and just 7% on paid traffic. Even Pamela Whitby is surprised
Who said the traditional media model is dead?
Certainly, not Holiday Pirates, a sort-of social media driven metasearch for travel deals, which seems to be riding a wave in the travel space that nobody else has yet caught.
“Our model is a bit like traditional media, where journalists write copy that is totally independent of any commercial ads or promotions in the magazine or newspaper,” says David Armstrong, CEO of Holiday Pirates, which launched its first website in Germany in 2011. “It’s more or less the same with our travel hunters and editors – they are really focused on deals and value for money and pay no attention to the commercial deals behind them.”
It seems to be working. Since launching in Germany, Holiday Pirates has accumulated 8.8 million Facebook fans, its app has been downloaded 8 million times, and – wait for it – it has achieved all this without shelling out a penny to Google. Although Armstrong won't share turnover, he says in 2016 they processed transactions to the tune of €258 million.
Today the firm employs 192 people across Europe in the UK, Spain, Italy, France, Austria and Switzerland, to name a few countries; most recently, in 2016, it set sail across the pond to open an office in Boston. “Yes, we’re trying to conquer the US but it’s a slightly bigger task than going into Luxembourg,” says Armstrong.
What distinguishes Holiday Pirates from others in the travel ecosystem, be they operators, OTAs or metasearches, is that it does not spend a single pound or Euro on Google ads.
"We only receive Google organic traffic,” says Armstrong, which "is quite different to other travel companies, which have to pour substantial funds into Google but also other types of paid media like TV, to acquire traffic."
Where the company does spend money, however, is on social media advertising, predominantly on Facebook. However, you could hardly call this splashing the cash. “The portion of our paid traffic has been only 7% up until now and that is only through social media,” Armstrong says.
Aside from organic traffic via Google or social media, about 30% recurs through its app, or as a result of CRM initiatives following an email or WhatsApp campaign.
Armstrong admits: “One could argue that okay we are not there yet, and as we get larger and more well-known, we might also have to go and acquire through traditional channels. But we don’t see that happening now nor do we see it in the near future – not at all."
Competition and Captain Content
What about competition; is there any? These questions are followed by a lengthy pause, as if Armstrong can hardly believe that the answer is, in fact, “No”.
There is no competition, he says, because this traditional media mindset makes it difficult for others in the online travel sphere to copy, and be successful. “You really have to a different set up in your organisation, a different mindset to take this non-sales led approach,” he says.
What is fundamental to being successful on social media is that the customer must come first, the business second. “If you don’t keep that in mind, in the first place then the customer will notice very fast that the brand is not authentic, and that you are only trying to sell them something,” he says.
So, what’s the secret? It seems that for Holiday Pirates content really, and truly, is the captain.
According to Armstrong, their success stems from the uniqueness of the content, and the way it is addressed towards their target group, of which 60-65% fall between the ages of 16 and 40.
“It’s quite a wide target group, but it’s really important that we understand how to approach them, and what wording we use in order to be authentic. This is something we manage to do well,” he says.
'Authenticity', admits Armstrong, is just another one of those industry buzzwords that marketers like to bandy about but if done properly, really does make a difference.
People seem to believe and trust the brand, because of the complete lack of a hard sell
People seem to believe and trust the brand, because of the complete lack of a hard sell. Instead, the approach is to make recommendations – ‘guys, we found this or that’, ‘take it or leave it’, ‘go check it out but, if not, don’t worry’ are the sort of phrases fans might hear. “We just don’t push things. When we push these messages, people don’t perceive it as a push thing. They see it as a great deal that they want to share,” he says.
The sharing piece is also important so recommendations also need to be 'relevant', another marketing buzzword. But relevance is something the team continues to work on, because people are not only interested in the deals themselves, but like to share them with friends and family – and, it’s this dynamic that drives organic traffic from social media. “People share things and if they see a recommendation from a good friend on Facebook or in a WhatsApp group, then if the person trusts the brand, they will say ‘have a look’,” Armstrong says.
This is backed up by consumer research from Nielsen which finds that 92% of consumers trust recommendations from people they know, and people are four times more likely to buy when referred by a friend.
With a brand like Expedia or booking.com it’s different, because people know they want to sell you something.
So what is the business model?
Quite simply Holiday Pirates promotes good deals, found by the ‘editorial’ team, regardless of whether there is a commercial partnership or not. They also publish partner deals – from airlines, OTAs, hotels, metas and so on – but only if they fit the editorial line.
“Not every deal is ‘awesome’ value for money. So either it’s a good deal or it isn’t. And that’s what we want to promote,” Armstrong stresses.
Not every deal is ‘awesome’ value for money
Holiday Pirates seems to have nailed social media content, which it sees as central to its business model. “We are investing a lot into our own media content but also actively encouraging fans to generate UGC”.
In terms of channels, Facebook is obviously crucial, but sometimes users are overwhelmed with information in the newsfeed and might miss a deal. For this reason, the firm is increasingly focusing its energy on WhatsApp, which it’s pushing strongly, as well as Instagram and SnapChat.
WhatsApp works for a number of reasons including:
The mechanism of sharing and ‘virality’ is quite similar to Facebook
Subscribers tend to be heavy users; they don’t want to miss out on anything
It’s a direct and personal form of communication
Holiday Pirates is also looking at opportunities for Facebook Messenger because with its number of fans pushing 9 million globally, and an ability to reach 500 million users every month its media reach is, as Armstrong puts it “quite something”.
No understatement there then.
Join us in Amsterdam for Digital Strategies for Europe 2017 (Nov 29-30) where David Armstrong will be speaking on a panel titled David & Goliath: Challenge Monopolies with Digital Partnerships
November 2017, Amsterdam