By Katie on Monday, December 8th, 2014 in Random.
We read an article recently that discussed the acquisition of Buuteeq by Priceline Group and found this very interesting considering this is the first OTA to directly enter the business to business hotel marketing arena. What does this mean, and how does it effect anyone that does business with Buuteeq? Well let’s look at the business model that Buuteeq follows.
When you work with agencies like, Buuteeq you get a nice monthly fee with some terms and conditions, but generally you get a nice cancel anytime agreement. This is a very sexy offer on the surface, all the marketing you want and a website for a low monthly fee instead of paying the agency $10-$100k upfront for a website. This is the major drawing factor to these types of agencies as their costs “appear” lower; however, don’t let his mislead you! Where agencies with this business model truly succeed is the fact that when you hitch your wagon to their business model, any progress you make is only progress within the company. Should you stop working with the company in the future you lose all of the work you’ve paid for over the years.
Let’s look at that last statement in detail to break down what you get and you lose should you leave a marketing company like this. For your low monthly fee you get a website, but it’s not your website it’s the marketing agencies property, and their tool to help your business. Also don’t forget you are still paying for a website in your monthly fee. Agencies like this don’t just give you a website, they add this cost to your monthly fee. So you are paying for a website, but when you cancel your working relationship with the company or if they go out of business (or are bought by an OTA) you leave empty handed.
What else do you lose? Managed advertising campaigns, whose years in use only raises their value for you and your advertising efforts in the future. It’s great that an agencies can build your PPC and Travel ad campaigns, but if these don’t leave the agencies with you, your business constantly runs the risk of losing these highly valuable assets. The longer you run advertising campaigns, the more efficient and effective they become. Why would you want to find another agency empty handed losing years of advertising work that you’ve already paid for?
Any other issues? Absolutely. Most agencies boast about their “proprietary CMS” as if it is a blessing for your company. Gut check time, it’s not– it’s a bloody curse. Want to switch to a different platform? Not going to happen. Moving agencies? Guess what, you just lost all of the content on your website because it’s not going to be compatible with the new agencies CMS. Want to hire a 3rd party that is cheaper or shop around for web maintenance? Again, not going to happen. Why? Because only employees at the company will know how to edit and work on their beloved proprietary CMS.
The fact is, that signing on with agencies that retain the rights to the tools, accounts, and the software that run your business leave you throwing away money each month. Should something happen that makes you want to move agencies you will have to pay for all of these services again.
In today’s marketing world, your website and online presence is your greatest asset to reach your bottom line every year, and giving another company ownership of those assets is a scary proposition. Don’t pay someone thousands of dollars every year, just to make progress with something that can be taken away so easily. This type of business model effectively makes you a “renter” for your online presence, and the longer you stay with said model, the harder it is to break away. When you reach the point where you’ve been “renting” your online presence for years, ending the relationship with that marketing agency runs the risk of losing years of SEO progress, PPC progress, website style and familiarity.
So what’s the solution? A different business model. Don’t partner with companies that tout “proprietary” or “exclusivity,” these are buzz words that stink of money in the garbage. Look for companies using “open source” and tools being used by other agencies. Tools being used by multiple agencies means a few things for your business: the tools are useful, you can find other agencies to work with, your content can be compatible to be imported should you switch in the future.
Also look for the fine print and ask the agencies you work with, “who retains the rights?” For some agencies they will squirm at this question, and you know to walk away. Others will happily tell you that your business pays for the services and tools and gets to walk away with all of it should you choose to; this is a sign that the agency has your best interest in mind, rather than just your dollar.