How affiliates drive hotel marketing

In the latest of our series on changes within the hotels sector, our Affiliate Team Leader Sean Mahon discusses the latest affiliate strategies that are driving performance for clients.

The transformation in travel

We are fortunate enough to work on some truly fantastic travel brands here at Equator. Working together as an integrated marketing team across PPC, SEO, Display and Affiliates on these accounts enables us to quickly pick up on cross-channel activity and any shifts within the sector. As we’ve already read in previous instalments in this series from Marketing Director Fiona Robertson, Display Team Leader Emma Blair and PPC Manager Stuart Maclean, there is a lot of change afoot in the travel sector currently. I think it is fair to say that the last twelve months or so has really seen the battle for direct bookings intensify between the hotels themselves and the main OTA (Online Travel Agents) players in the space. Indeed, a recent survey by Triptease indicated that 63 per cent of Expedia bookers visit a brand.com hotel website before returning to Expedia to make their booking. You may ask why people return to Expedia and ditch the main hotel site? Well, a whopping 76 per cent of them believe they will find the same price, or cheaper, on an OTA site.

So what can the hotel chains themselves do to stem the flow of OTA bookings and really get customers to engage with their brands? How can they encourage a positive uplift in direct bookings?

What can Affiliate Marketing do?

While I am in no way suggesting that Affiliate Marketing is the silver bullet to solve this dilemma, I still believe the channel offers some of the best solutions for new customer acquisition. Indeed, recent figures published by top UK network Affiliate Window indicated 2015 growth rates in the sector rising to a six year high. Overall, hotel brands in the affiliate space experienced YoY growth of 6.9 per cent with an ABV of £264 reported in 2015 (up significantly form £172 in 2014). So how can we utilise the strength of this affiliate performance to help hotel brands in their battle for direct bookings? I suggest we investigate this under three key areas – Cost, Technology and Partnerships.

Cost

Put simply, the bedrock of affiliate marketing is founded upon the Cost Per Acquisition (CPA) model. The ‘you only pay for the sales you make’ approach still holds importance today, and affiliate marketing remains a relatively safe channel for brands to engage with because of this. Affiliates also offers us the opportunity to be strategic and dynamic with our commission rate structures. We can increase commission on certain need location hotels a client may have, or we can segment commission pay-outs on new versus existing customers. The beauty of this flexibility is that it allows us to adapt to a specific client’s needs quickly and clearly communicate to all affiliates how they will be rewarded for promoting the brand.

Commission to conversion

Recent changes to the commission structures within affiliate marketing have enabled us to stay relevant in a dynamic marketplace. Commission by assist tools enable us to move away from the old school last click reward model and instead start to look at various attribution touchpoints in the customer journey. For example, we recently ran a content publisher incentive for one of our hotel brands that looked to reward blogger and travel content affiliates who generated the first click in a customer journey. As we recognise these types of affiliates as having a more important part to play in the long tail influence, we can now reward them as such as part of their overall contribution to driving awareness and bookings for the brand. As well as opening up new opportunities with different publisher types, this kind of activity is also helping us to present a clearer picture to our hotel clients as to the role that various channels play in the overall path to conversion.

Technology

Perhaps the biggest advancement in the last five years within the affiliate industry has been the number of new technology partners entering the space. We have seen some great innovation come from both publisher and network side that has really tackled some of the big issues within the travel industry. According to remarketing solution providers Salecycle, current website abandonment rates within the travel industry site at a sky-high 81 per cent. Salecycle, along with a number of other tech providers such as Ve Interactive and Yieldify, have crafted a number of powerful tools and apps that look to tackle basket abandonment through onsite overlays, email retargeting and even SMS remarketing techniques. These technologies are relatively easy for clients to implement tracking for onsite and still fall under the umbrella of the CPA affiliate cost model.

Keeping the focus on the consumer

Whilst the technology offered by these partners is now commonplace within the market, the challenge still remains to make this type of activity relative and non-obtrusive to the end user. We have all seen and experienced some terrible retargeting examples across the web. Indeed, Adweek is predicting that by 2017, almost a third of all internet users will be using some form of ad blocker to stop this kind of intrusive form of remarketing. The challenge now exists for affiliate marketers to use the technology at our disposable responsibly and with a clear focus on aiding the consumer, not just focusing on the hard sell. Working closely with our Insights team at Equator, we use these tools to not only optimise conversion for our travel clients, but also reducing bounce rate onsite on specific pages with high traffic volumes (e.g. PPC landing pages). We’ve also been able to harness the advances in this retargeting technology to tailor the approach around the consumer (e.g. making our messaging location, offer or rate specific, as well as incorporating multilingual options into the mix).

The figures

Recent figures released by Travel Weekly indicate a whopping 75 per cent of customers take an average of 30-60 days between researching their hotel and actually booking it. Rising mobile usage and longer lead times are some of the key factors in the travel industry that we are currently experiencing across all channels. A key area where affiliate marketing has really pushed some great technological advances has been in the area of mobile marketing. Recent figures released by Affiliate Window indicate that in 2015 42 per cent of all sales tracked through the network originated on a mobile device and a further 38 per cent actually converted on their mobiles. In response to these changes, the strategy team at Affiliate Window has really dug into the data tracked through the network and provided us with a number of tools to gain actionable insight into customer behaviour. The recently launched Cross Device Tracking report allows us to track customers through multiple logged-in devices and see how they interact with our clients’ sites, be it on mobile, desktop or tablet. This has provided us with a glimpse into the various paths and customer journeys that are being undertaken across multiple devices and gives us the power to tackle subjects such as multi device attribution and restructuring cookie periods.

Partnerships

Arguably our strongest calling card as affiliate marketers remains our ability to build relationships with publishers and harness the power of integrated partnerships to better promote our clients’ brands. For example, we recently coordinated one of our hotel client’s fantastic offers with a top travel content partner’s (7m+ Facebook followers) travel-savvy audience. The campaign generated 56k traffic to the brand.com site and an additional 1.5k bookings and £65k revenue within the first twelve months of launching an affiliate campaign for them. We also ran exclusive competitions with the UK’s leading reward site (6m+ members) throughout the year for this client, generating an average 1500 per cent MoM increase in incremental traffic through the channel and over 3k competition entries.

Optimising your database

Where we’ve seen this kind of practice evolve within the travel sector is with the sharing of data between brands and publishers. Take for example the UK’s leading cashback site. With a database of over 6million and a primetime TV campaign behind it, the site has become a household brand in its own right. It also has a wealth of first party data on its users as they are required to have an account onsite in order to claim cashback. This means we are able to tap into a stream of quality data (buying patterns, average spends, preferred retailers) and optimise our campaigns accordingly. As opposed to trying to mass market to 6million users, we are now able to segment by preferred customer type. Take for example a recent campaign we ran for one of our boutique hotel clients. By working with the client, we helped identify certain retail brands that were deemed desirable within its customer profile. As opposed to just marketing directly to customers of rival hotel brands, we instead looked at customers who had shopped at these premium retail brands and created a customer segmentation group around them. This allowed us to market to them directly, making them aware of specific offers and giving them ‘sneak peaks’ at exclusive rates. This kind of audience segmentation has allowed travel brands to really get smart with their affiliate partnerships during 2016.

Summary

We’ve demonstrated how affiliate marketing continues to evolve and remain a key component of any online marketing strategy. Given the rapidly changing nature of the travel sector, it is promising to see the channel continue to innovate and demonstrate its worth to travel brands. We’ve moved away from the dated perception of affiliate marketing as solely a channel for discounting through voucher code and cashback sites, and instead outlined some of the current opportunities available to really drive performance for travel brands through the channel.