Moneysupermarket PLC, the parent company of Travelsupermarket, released its preliminary results for 2008 to the London Stock Exchange yesterday.
We'll leave the analysis of the results and worrying moves in the financial services sector to the experts - but we were keen to learn more about the how well (or not) the travel division performs within the overall group.
* Travel accounts for 11% of the group's revenues but 41% of overall traffic.
This hasn't changed particularly since the company floated in 2007.
However, ask about the huge variation, which to some might seem quite obvious, but you get an interesting answer - if anything, simply demonstrating how fundamentally different travel meta search works from its counterparts in the financial services.
* Revenue per transaction (that's revenue per click) in insurance, for example, is £4.49.
* Revenue per transaction in travel is £0.44.
Now this raises a number of interesting points:
1) Who would - without the breadth of product and traffic that the likes of Travelsupermarket, Kayak, Skyscanner et al have - take a punt on travel meta search right now?
2) Equally, the big meta search engines, someone said to me the other day, must be thanking their lucky stars that the recession has happened because price has become king once more. (We have seen some traffic and financial data recently which indicates that for some things aren't bad at all)
3) What does a small (in traffic terms) travel meta search engine do in order to survive?
It's a fascinating area of the industry, which has grown fast in recent years, so we would be keen to hear your thoughts...
On the last point, they could:
1. Find a strategic partner with the traffic, ie a telly or newspaper group.
2. Share the £commissions (qv Microsoft/Kelkoo cash-back engines). Grow community off back.
3. Partner with a content provider to differentiate.
4. Remain small.
5. Take their technology/experience and go find another gap :-)
3) What does a small (in traffic terms) travel meta search engine do in order to survive?
Not sure at what point do you become 'big', but compared to the likes of Kayak or Travelsupermarket, at WhichBudget.com we still think we are relatively small.
Anyways, although we were never at the point of 'having to survive', we did make several strategic decisions in 2008 to increase revenue:
- on top of being a directory of budget airlines' routes, we have built a price comparison engine including non-budget airlines
- added online travel agents' content
- built a hotel search engine
- increased customer interraction, loyalty, word-of-click and networking aspects via Twitter, Linkedin and Facebook
- on our sister site, www.thetravelmagazine.net, moved from CPM to CPA model
- ... and are still working on the whole host of new projects/features.
Anyways, as you said, being in the budget niche is a good niche to be in when the economy is suffering. Still, our advice to any small travel meta search engine is: diversify your offering, but remain focused on your core market.
Something I've been ruminating on too (as you do) How do metasearch engines differentiate themselves when it's all about price and little else?
As a content person... I'd say content.
Both UGC and PGC...
Cheapflights does this increasingly well.
Will there be metacontent to go with metasearch? Hmm.
Q: "3) What does a small (in traffic terms) travel meta search engine do in order to survive?"
A: 1. Stop beeing small and increase traffic. Invest in marketing.
2. Offer services and technologies other Meta's don't have (e.g. swoodoo API etc. )
But most important is 1. - Marketing is the key. Be different, be better and tell this the people.
And I fully agree. A simple "me too" metasearch won't have big chances nowadays. There are better markets to start metasearches. We should chat about this on ITB ;)