Eskom announced on Friday morning that it will implement load shedding, amid an extensive cold front in South Africa. The power utility made the…
Since its re-launch in 2006, WAYN has managed to become one of the few social startups to secure funding despite a recent downturn in social media investment. After changing its market strategy over the years, the ‘Pinterest for travelers’ has relaunched its site once again in February. WAYN (Where Are You Now?) claims to be the world’s largest travel and social network and tries to fuse commerce with social. WAYN has, and still is, showing interest in key emerging markets such as South Africa, India and Indonesia and is planning on localising the site in Brazil, China and Russia in coming months.
Founders, Peter Ward and Jerome Touze ‘provide people with inspiration on new places to discover, fun things to do and interesting people to meet.’ Like other social networks, users of the site have profiles, can upload pictures or rate (or ‘like’) other users, places or services. The social network houses user data for 21.5 million users in over 193 different countries, making it a compelling option to potential advertisers.
Advertising and user monetisation have become the company’s two main sources of revenue. Advertising has a strong presence as tourist offices have started relying on social networks to strengthen their online presence. Since February WAYN has tried to revamp its business position as well as commercial image. It has a ‘differentiated commercial offering compared to Facebook and other online social ad platforms.’ The company now focuses more on ‘integrated advertising, social engagement [and] market research.’ Despite investor confidence in social startups having been in decline in general, the monetisation of WAYN’s user base through a credit system has managed to retain investor attention.
Advertisements and market research
Two weeks ago WAYN released it’s top seven dream destinations by encouraging users to partake in surveys incentivised through earning credit or winning prizes. Surveys like these have become part of designated market research the company offers. Customer participation and polling services are highly encouraged. Like other social media platforms, advertisers can target its users based on interests, intentions, location and behaviour.’ Personal information as well as polling information is extremely valuable for advertisers as the company ‘collects 70k data points every day on where people have been, where they want to go, what they like and love and what they have done and would love to do.’
By bringing the popularity of social media to the table, the company has an advantage over content publishers like Lonely Planet, for example. This sets it apart from competing travel websites. WAYN has achieved this by mostly tapping into national country tourism boards of emerging markets who want to engage more closely with their target markets. It has made industry-specific organisation contributions to partnerships ‘over 50 global tourist boards, airlines, hotels and travel operators.’
Emerging market integration
WAYN has managed to gain a foothold in emerging markets by localising itself by having offices in London (UK) and New York (US), but more importantly Cape Town (South Africa), Szczcecin (Poland) and New Delhi (India). The company also wants to ‘open up to’ other emerging markets and localise itself in key regions such as Brazil, China and Russia in coming months. By trying to enhance its presence in the emerging market sector shows that the company has invested interest in maintaining itself in key growing markets.
By having signed deals with, among others, companies like India Today Group (ITG), Indonesian Tourism, Airbnb and South Africa Tourism, WAYN has managed to gain access to millions of people’s travel data in countries with a strong growing middle class. India for example, which together with its booming middle class, has more than 137 million users online. It’s estimated that ITG has access to almost ‘100 million of India’s educated population, via 38 magazines, four Television channels, seven radio stations, 12 web portals and 56 apps across mobile and tablets.’ India alone has more than 130 million internet users with China, Brazil and Russia also under the top six.
User Monetisation via incentives and viral marketing
There has been a definite decline in social startup investment recently. At the height of the social media frenzy in 2006, WAYN secured series A funding to the tune of US$11-million, but more intriguingly, when investment in social startups started to decline, WAYN closed a series B round of US$5.5 million in 2012. This shows that even though the market has grown weak, investors are still interested in throwing their money at social networks with prolific business models. So what sets WAYN apart from the rest? The way it monetises its user base via incentives is one reason. Another is the fact that the company has its feet in both the social-lifestyle and travel industry. This makes it appealing to advertisers. Although there is a VIP service option users aren’t charged registration fees and monetisation of its user base is based on the idea of buying credits in order to gain website benefits.
It’s important as noted by Peter Ward that ‘money vs traffic is the trade-off.’ Premium vs freemium subscriptions. WAYN tries to find the sweet spot in between. Users used to pay for a premium service in order to interact with other users but can now merely choose to upgrade based on incentives. Premium VIP members accounts for only one percent of the site’s users but for 10% of user traffic.
Users can pay up to US$14.99 for a VIP subscription fee. WAYN encourages users to earn credits either through PayPal payments, sharing personal information, taking part in surveys or inviting friends. Unlike TripAdvisor WAYN wants its users to be ‘discovering new things to do, engaging with users and sharing experiences beyond reviews, via their profile.’ The subscription service does has its perks in revenue but hints at the cringe-worthy characteristics of a dating site.
The site undergoes a similar popularity-voting system such as Zuckerberg’s infamous Facemash where users earn ‘likes’ or can rate each other’s photos. Users can increase their popularity (or earn), by buying certain benefits such as having your profile picture shown first when other users are seeking nearby friends. Basically the more active your are or information you put online, the more credit and popularity you gain, the more WAYN can ‘commercialise user data’ and the more advertisers will flock to the website.
This might come at a cost as the website’s ‘openess’ and constant viral attempts can tarnish its reputation. The company is known for its incentive based marketing tactics. For example, users can ‘Invite 30 friends to join and get a 30 day free VIP subscription’, earn credits when a friend accepts your invitation or partake in polls. At the end of the day all of these incentives generates more personal data which adds to its advertising revenue. The company has a history of founding itself under the criticism of unhappy users, claiming it’s marketing tactics are unethical. Criticism ranges from claiming spam-driven tactics to stealing user data.
Some might find some of the company’s viral and popularity tactics unsavoury. These tactics seem to be working though. Among other things, WAYN’s monetisation of its users and viral strategies seems to be paying off though as the company remains afloat in an increasing dog-eat-dog environment of social media. The company’s interest in emerging markets adds to its success as its increasing an already successful foothold.