Monetizing in channels
I was thinking about channels this week - the pipes that some intermediary companies are able to create between their customer group and the brands trying to target them.
Tablet Hotels is a great example of a company doing it well. Tablet has handpicked the best hotels in the nicest destinations, and built a repository of amazing places to stay around the world. It has become the trusted source for advice on where to stay for a particular destination. The calibre of their range means that many of their users now use Tablet to select their entire choice of vacation, motivated by a recommendation for a particular great hotel.
Tablet receives a direct benefit through affiliate fees from bookings made through the site, but it has done a really smart job of extending the revenue model further. Such is its reputation with users, Tablet offers a membership package to customers in return for access to the best deals and discounts, as well as a host of special amenities at many of the hotels in its system (free upgrades, free transfers, champagne on arrival, etc). A huge number of its customers have converted to this paid membership scheme (most of whom don’t end up recouping anywhere near the value of the membership fee in perks).
The third branch of the model is in the relationship with the hotels themselves. Providing brands (hotels, in the case of Tablet) with a channel to a tough demographic (here, the hip travelling set) comes with value attached - most of the hotels pay to be included on the site.
As it turns out, ‘advertising’ through a trusted partner is a far more successful model for brands trying to reach these hard-to-reach demographics than going after them directly. There are many ways to monetize on this type of channel - Tablet are doing a great job of pulling in value from all sides of the equation.
