Understanding the not-so-glamorous hidden gem of travel marketing

Affiliate marketing is a blind spot for the travel industry. Unlike social media marketing, chatbots, voice-activated technologies and other buzzwords, media rarely pay attention to CPA [cost-per-action] strategies.

For neophytes, performance is equal to gambling or adult content; however, in certain cases, affiliate marketing provides up to 30% of the revenue in the online travel. 

Dichotomy of affiliate programs

In this regard, the most prominent example is Booking.com. The accommodation giant created the widest network for partners of any kind. You've probably seen Booking's links and widgets on travel blogs, holiday websites or mobile apps. The third-party affiliate is a middleman between the online travel agency and the customer. The relations are based on the revenue share model, and Booking.com pays out 25% of its profit to the partner.

It might be a dummy case, though it shows how the system works. The same is relevant for other in-house solutions like Expedia Affiliate Network, hotel affiliate program by HotelsCombined and Skyscanner’s affiliate products.

Meanwhile, instead of creating their own platform, it's also possible to join an affiliate network. It provides a variety of offers by different companies (not exclusively travel), so webmasters could choose the suitable ones.

For instance, eDreams and Lastminute.com work with Awin, and there are also such networks as CJ affiliate and Travelpayouts (designed for the holiday market solely). The cooperation with external CPA platforms seems more manageable, especially for the newcomers.

However, multi-channel performance strategy is also an option for the advanced marketers. For example, Booking.com combines both, the in-house affiliate program and external networks.

All about the money

The backbone of the affiliate marketing is good math. For the last few years, the cost per click in the online travel segment has increased by 15%. The biggest spenders here are Expedia ($5.3 billion on marketing in 2017) and Booking Holdings (respectively, $4.1 billion).

It is not that easy to compete in PPC with huge budgets holders; it makes CPA networks some kind of safe haven or at least the option to consider. Besides, a short-term strategy could generate even negative ROI, while CPA tactics remain "in plus" since you’re paying for real bookings.

The next big thing is organic search. Here you need to deal with the constantly changing SEO environment. You have to be 100% up to date with the latest Google policies and be ready to alternate the content any minute.

Sadly, it’s not only about keywords anymore. Mobile optimization, inbound strategies – it’s just the visible part of the iceberg. Though every cloud has a silver lining. The good news is you’re not alone. Affiliates could be your SEO flotation device. Even being dumped out from SERPs [search engine results pages] by the search engine, you still have hundreds of pages related to your brand. Obviously, it is not a panacea but better than nothing.

However, affiliate marketing is not only a plan B for your omnichannel workflow. By knowing the economy of the product, you could implement an entirely new approach to your marketing routines.

CPA challenges

Despite the fact that affiliate schemes look fruitful, certain marketers believe it might jeopardize the brand equity. A brand manager’s nightmare: A branded link or widget appears next to a, let’s say, questionable piece of content. But at the end of the day, it depends on you. The CPA offer might be available for the pre-selected affiliates only - this is how to minimize risks.

The next challenge is overheated PPC costs. Technically, affiliates can’t use branded keywords. Technically!

In real life, you’d better monitor SERPs, or an affiliate network can help you with it. At Travelpayouts, we operate a zero-tolerance policy to such violators. Unfortunately, it is not the only example of CPA fraud. Stealing clients by cookie stuffing is quite popular nowadays but – again! – manageable. Besides, there are plenty of anti-fraud solutions, so it shouldn’t be a deal-breaker.

Last but not least, the challenge is to find the right person. Affiliate marketing’s scope rarely can be handled by the general marketing team, hence you need an external candidate. Although it’s still worth exploring, especially considering market opportunities.

Hottest trends to consider

Experts believe the value generated by non-aviation and non-hotels categories in affiliate networks would double in the next 12 months, as online travelers use these services more often. Recently, Musement, a leading in-destination experience discovery and booking service, has joined Travelpayouts. The in-house data reveals that webmasters who are working on the experiences travel segment earn $4,000 to $5,000 monthly, and this amount is steadily growing. 

The market demands new CPA instruments. The era of banners is gone. Affiliates want more widgets, white labels, APIs, mobile SDK and other options to customize their products.

Product is the king, and it leads us to the third trend - forget about the funnel! Product is the only measure of success, whether it’s a blog, a travel search, bargain tickets club or mobile guide.

Put the interests of your audience above numbers! Brands like Booking.com, BlaBlaCar, Aviasales, Rail Europe learned this lesson pretty well and are already accustomed to this specific distribution channel. Affiliate marketing could rocket your performance, so don't miss the opportunity.