NB: This is a guest article by Lee Brignell-Cash, co-founder and COO at FusePump.
Travel brands who market products and services online via affiliates are seeking the most efficient ways to drive traffic, conversion rates and profitability as the channel continues to grow and diversify.
That's a reasonable simple statement to make.
So maybe we should examine how innovation in technology can make marketing products online easier and more profitable for merchants and affiliates in the ultra-competitive travel sector.
Affiliate marketing remains one of the fastest growing and most efficient means of online advertising. It accounts for 30% of bookings made through online travel websites and demands high brand visibility given the countless number of companies vying for the same carefully considered purchases.
Consumers need to trust the brand and clearly understand the advantages of booking with one provider over another.
Travel brands therefore need to be able to communicate their prices and USP clearly to consumers. Working with affiliate partners can add legitimacy to a travel brand, expedite word-of-mouth referrals and greatly increase reach. It can also strengthen a brand’s long-term positioning in an extremely cost-effective way.
However, the complexity of the relationships and resource needed to optimise the affiliate channel can frequently lead to badly run and poorly-performing campaigns.
The affiliate or performance marketing channel has undergone immense change since its inception in the mid-1990s. It has branched into new areas including comparison and group buying sites as well as making footsteps into social media and mobile.
It has become more professional, with affiliate networks and super affiliates investing in technology platforms and it has diversified with the emergence of micro-affiliates catering for the longer tail specialised search terms of the web.
The proliferation of streams within the affiliate channel makes it much harder for travel brands to work successfully across them all. This is why development of rich product level data feeds and innovative tools for their creation, distribution and management are so important.
High-quality data feeds allow travel brands to create a single platform of distribution under which brand consistency and product visibility is maximised, while affiliates can more easily tailor rich product information (i.e. promotional text) into higher-converting consumer-facing content.
Consumer engagement drives channel diversity
The internet remains a key focus for consumer holiday spend and is the biggest growth area within the travel industry.
According to the European travel index report from the Centre for Economics and Business Research, 54% of all internet users in Europe research and book travel-related services online. Meanwhile, recent research by Affilinet confirmed travel as the leading advertiser sector within the affiliate channel.
The evolution in the way in which consumers engage with brands online is driving diversity throughout the affiliate channel. Consumers are using a much wider selection of applications to help them choose holiday packages, including search engines, online comparison websites, group buying websites and comparison shopping engines.
They are also engaging more with voucher codes and discount offers, which means travel brands must ensure their products appear on sites offering value for money. Discount codes can make a big difference to a high-value considered purchase and can be a powerful way to boost sales with price-savvy customers at key times.
Recommendation engines such as Trip Advisor and Lonely Planet are also becoming increasingly important for travel companies. A recent survey by Havas Media Social and Lightspeed Research found that 53% of consumers were more likely to look up a brand if a friend had recommended it.
This boom in user-generated content and the power of recommendations has led to the emergence of micro-affiliates – i.e. the sites that form the web’s ‘long-tail’ of niche search product categories.
Historically, the micro-affiliate stream (including bloggers) was perceived as uneconomical in terms of the administrative burden in managing a huge number of tiny commissions. The tide is turning though as brands begin to appreciate their ‘collective’ influence in driving click-through activity.
Indeed, long-tail search terms are now recognised as a huge opportunity to drive traffic back to their sites, generate buzz and spread messages virally
For example, an affiliate focused on long-tail search terms – e.g. "holiday" + "destination" + "accommodation type" + "price" – will most likely see lower traffic volumes but a higher rate of conversion. Whereas those bidding on generic search terms – eg. "Spanish holidays" – will drive higher traffic volumes but have a lower rate of conversion.
Affiliate opportunities
For affiliates, the change in consumers’ online behaviour means they have more ways in which to drive and monetise traffic. Organic or ‘natural search’ traffic via SEO remains one of their preferred methods, while Pay Per Click (PPC) is also popular.
Other widely-adopted models include loyalty and reward schemes, email marketing (affiliates that build their own data lists to target a travel brand’s potential customers with newsletters or dedicated email campaigns), co-registration, voucher-code and group-buying affiliates. Notable brands in the UK, for example, include Travelsupermarket, Lastminute.com and TripAdvisor.
Each affiliate stream results in a different quality and quantity of leads, which impacts on the incoming revenue they can generate.
What remains constant however is the affiliate’s aim to drive performance by bringing travel brands closer to their visitors, and ensure the incremental revenue generated as a result is greater than the amount invested initially to build and promote the site.
Based on this premise, selecting the merchant to partner with becomes a question of scale, efficiency and lowest cost for the affiliate.
In the second part of this series we will look at product feeds, tools and partner benefits.
NB: This is a guest article by Lee Brignell-Cash, co-founder and COO at FusePump.