Travel

Affiliate marketing in travel is dead [or should be]

Jul 4.2012

NB:  This is a guest article by Martin MacDonald, SEO director at Expedia Affiliate Network. covering SEO and social media.

A few weeks ago I was lucky enough to be asked to speak at the A4U Europe Conference in Barcelona.

One of the panels was looking at the future of affiliate marketing, and the last question that we were posed was as follows:

What is the number one hint you could give an affiliate?

The answer given elicited a round of applause from the audience – which was made even stranger as my rebuttal was:

Stop being an affiliate, take control of the conversion funnel, and build something with substance and value.

Now that may have seemed a crazy thing to say, especially at an affiliate focused conference, but allow me to qualify my reasoning.

Affiliates lack control

Building a credible business which attracts converting traffic is neither an easy, nor a cheap matter for most businesses. Content production and marketing costs alone can run into the tens of thousands of dollars for even a reasonably basic site.

If your investment hinges on the conversion abilities of another merchant, you are exposing yourself massively to that other brand.

Apart from the lack of influence in the conversion funnel, as an affiliate you are also losing (most of the time) the ability to market and remarket directly to your qualified leads – the people that have purchased a product previously after being through your site; aka your customers.

The last thing on a the topic of control is the ability to run specific campaigns that work for your customers – merchant websites generally have to cover as wide a set of demographics as possible, but you might operate within a very distinctive niche which may have specific needs.

Affiliate websites are hated by Google

This is a tough one, affiliate websites have for the past few years been one of Google’s main projects to make life difficult in the results.

This may seem unfair, but if we switch things around and look at this from the search engine’s perspective, I think its perfectly reasonable.

Let’s say you were looking for a hotel in Southern Spain for a family holiday, and you google something relevant, maybe family hotels costa del sol , and the first ten results are all pretty much carbon copies of each other, that’s hardly a good experience for the consumer.

That’s why google have really cracked down in the last two years on affiliate sites built using database information as opposed to unique content.

To break it down simply, its pretty easy to spot which sites have been created by some clever manipulation of data files (be it a list of hotels from Expedia, right through to a list of discount codes from an affiliate network), as opposed to a site which has been hand written with unique and interesting information.

So what’s the solution?

The perfect solution is to stop sending your valuable traffic to a merchant site to convert – vertical integration of the supply path.

That’s simply not a practical proposition though for most affiliates in most industries. I spent many years working in the online gambling industry, where developing your own product can costs hundreds of thousands of dollars, and even white label solutions start in excess of $20,000 in set-up costs.

Luckily travel doesn’t operate like that – there are plenty of fully white label solutions out there which are free to use and get setup on, from almost every main supplier of travel products.

With these products you can offer a seamless experience to your visitors by allowing them to find your site, research the product on your site, and convert on your site.

Crucially of course, you then keep the data, and they purchased the product from you, NOT from the merchant, therefore you are more likely to receive the added benefit of repeat orders.

Another consideration here is one of branding – when you are looking to build a business with longevity online, the branding is one of the primary assets.

After all, with an online (affiliate model) business physical location and stock etc. rarely come into play.

An example from another vertical is moneysavingexpert.com – on the face of it, it is just a financial affiliate site – but as a brand it has become synonymous in the UK with financial products, which is why it managed to sell at a value in excess of $130 million.

That valuation is based on the brand of the website, NOT the revenue.

More examples (again from the finance industry) of the importance of the brand, is the extraordinary lengths major affiliates are going to these days even where it seems impossible to build something that is fun, on topic and resonates with consumers.

UK financial services site CompareTheMarket realized this in the creation of its Meerkat campaigns ; GoCompare  likewise with the tenor campaign – and the list goes on.

That’s the secret sauce that every merchant operates their affiliate program in the knowledge of.

While the affiliates might refer good leads at an expensive cost (vertical dependant), merchants are fully aware that they get to keep the repeat business, and even if no sale is made they get qualified traffic for free – additionally helping the branding.

Attracting the customers in the first place though is one of the toughest parts of the value chain. Don’t sacrifice any more of your marketing efforts – bring your sales funnel in house using white label solutions, and build additional value into your business!

NB:  This is a guest article by Martin MacDonald, SEO director at Expedia Affiliate Network. covering SEO and social media.