Cruise Firm Finds Smooth Seas in Pay-Per-Call

Mike Monahan was facing a problem. Monahan directs marketing and e-commerce for CruiseOne and Cruises Inc., two Fort Lauderdale, FL-based companies selling cruises on major ship lines as subsidiaries of National leisure Group. And his advertising was starting to underperform.

“We’re in 70 newspapers weekly or biweekly,” he says. “We’re a persistent presence there. But it’s just not as effective as it was two years ago, so we’re trying to do less in that channel. It’s a shrinking marketplace for us.”

So when search engine marketing (SEM) came along, Monahan thought it would be an excellent way to drive traffic to his company’s Web sites, and he was an early adopter of pay-per-click (PPC) advertising with the major engines. “We started doing SEM four years ago, back when Overture was still Go2. We jumped in with both feet and found it was very effective.”

But recently, elevated keyword prices in the travel and cruise sectors have eroded Monahan’s return on investment in SEM, to the point where it’s no longer the single answer for generating traffic. That’s what led Monahan to try something new for digging up new business at Cruises Inc. and CruiseOne: pay-per-call advertising, where visitors who respond to an ad call a toll-free number rather than clicking through to a Web site. Monahan’s company pays only when calls are completed.

He started in February by testing pay-per-call ads within the FindWhat network and was intrigued but “not blown away” by the results; new calls came in and some new business was booked, but the volumes were low. But a few months later, AOL announced that it would begin offering pay-per-call advertising using a platform by Ingenio. Monahan decided to do a trial run on the AOL network with an ad that routed calls to two of the agents affiliated with his company.

“I was stunned by the response,” he says. “We got 20 phone calls in a day. Four were solid prospects who wound up booking cruises, and one other was for a group vacation for 16 people—eight cabins.” When he spoke to DirectTips, he had just enlisted 18 more agents as a call group to rotate the job of taking calls from the ads—which also expanded to include more keywords and phrases, including “Caribbean travel”.

There’s no big adjustment involved for the agents who are part of Monahan’s network because they don’t compete with local travel agencies; they’re used to booking trips for vacationers who are far removed geographically. They’re also used to handling the phone traffic. In fact, although travelers can book their entire trip on the Web sites for Cruise One and Cruises Inc., only about 2% of their sales have ever come through without some phone contact with an agent, Monahan says.

“With pay-per-click ads, we found that about half the prospects would get to our Web sites, find our phone number and call us directly,” he says. “Most of the others would submit a request for information online and we’d call them back. That seems to be a truth about the cruise business: If you’re going to lay out $1,500 to $2,000 for a trip, you want some kind of accountability from a live person. You need somebody to blame.”

Since buying a cruise is a more complex, high-touch transaction than purchasing an airline ticket, pay-per-call advertising seems simply to eliminate the middle step and bring Monahan’s agents closer to their potential customers. “Pay-per-call fits with our business model,” he says. “I can’t say it would work for everyone, but it suits more complex transactions—maybe insurance brokers, lawyers, something where counseling is part of the service.”

While the prices for pay-per-call keywords are higher than for those under pay-per-click, the chance to speak directly to more highly motivated buyers makes the conversion rate better and protects Monahan’s ROI. “To get phone calls in a cost-per-click medium, I have to calculate on reaching lots of prospects and motivating some of them to pick up the phone,” he says. “That would cost a lot more than I pay now with pay-per-call. And now I’m paying for what I really want: to talk to somebody. That makes our ad budget stretch much farther.”

It also reduces a risk that Monahan has run into several times on PPC networks, that of click fraud. He says he’s found instances where his PPC ads got ten times the expected number of clickthroughs and once traced those clicks back to a Web page operator in a search engine’s ad networks. “They credited us for the clicks but didn’t discontinue the partnership with the page owner,” he says. “That ticked me off. When we left, I’m sure someone else started getting those fraudulent clicks.” Now, unless some bad actor sets up a call center to dial Monahan’s toll-free number over and over, he’s confident fraud won’t eat into his marketing budget.

CruiseOne and Cruises Inc. both still do some pay-per-click SEM. But now Monahan times his PPC bids on particularly expensive keywords to certain days and even dayparts, both to control ROI and to reduce exposure to fraud. “We used to bid on the search term ‘cruise’ 24/7, 365 days of the year,” he says. “Now we’re targeting those times when we really want to be in the results. I’ll still fight for a position on a Sunday, but on Wednesday it’s not worth battling it out at $2 a click.”

Meanwhile, pay-per-call ads have been such a success for Monahan that he’s trying to decide whether he’ll shift money from his newspaper ads or from his SEM. One or the other is going to get its budget cut, he says, and the resources re-allocated to more pay-per-call ads.