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.
NB2: Gravestone image via Shutterstock.
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White Label Solutions… I swear we left these back in the 90′s/early 2000′s in the box labelled ‘Never Converts’. No affiliate or content publisher in their right mind would rely on duplicated content from a white label to drive their business.
Chris – a real “white label” solution is one where you have complete control over the conversion funnel. If its not converting its your fault
If you are talking about templates used in “psuedo” white label sites (ie. ExpediaEAN’s Chameleon service) then things have moved on a bit in the last decade! Lets be honest though, those are to serve a purpose: easy integration. Nothing else.
My preference would be to see everyone who is currently sending traffic to a brand, take control of the conversion by bringing it into their own site – NOT simply referring the traffic on.
I agree with you Martin, we use a hotel white label page not because it’s got fantastic conversions but because it’s “easy integration”. Proper API/XML integration is a much more powerful solution, given the affiliate full control over the conversion process, but it takes time to implement and maintain.
Btw, great article!
Bringing product conversion onto your own site for some affiliates like myself, would negate the strength of my brand and therefore the integrity of my site – some of us need to remain impartial. One size does not fit all.
Conversion has never really been an issue, one of my former brands is now owned by Expedia.
Great article Marin, wholeheartedly agree with your position on this.
thanks Bobby!
Lest we forget, the likes of American Express, AARP and AOL have long been “affiliates” of the majors and the affiliate business drives a significant amount of revenue to the OTAs (including Martin’s company). So the model is hardly dead or even drawing its last breath.
There is clearly a difference between those that do nothing more than put a wrapper on the out of the box partner solutions from Expedia, Travelocity, Orbitz and Priceline and those that invest in building out unique solutions utilizing the inventory and service capabilities of these companies.
It would seem that Martin’s comments are about the former and not the latter.
There is still a place for this collaborative approach to building out new capabilities for consumers, as it is simply not realistic for every individual travel web venture to connect to all of the various inventory sources on their own.
Affiliate programs and the old fashioned approach of becoming a GDS powered travel agency remain the two primary models at play, but not the only option.
The sheer availability (or lack thereof) of XML solutions by the OTAs for any product type beyond hotel is what is driving the need for new solutions, but what also drives the need for sophisticated systems integration This is where the bulk of the up front cost comes in for launching a new site.
But Martin is right. Brand building, coming up with differentiated services and keeping your content fresh (and searchable) are not for the faint of heart.
Great piece! For content creators like me, we truly are entering a golden age – our next hurdle is to convince more marketers to spend money on us rather than shiny new tools or slick ways to game the system. By supporting unique content creators who help fulfill a brand promise, not only will the websites be more useful to the user, but they will also be more appealing overall as an acquisition target.
Content marketing is one of the key parts of organic search, which has to be one of the key parts of anyone’s marketing these days.
I think its fairly safe to say that you guys should have a good few years coming up!
While your points are valid, I think there is some exaggeration in the main statements (and the title
I think that the logic for cooperation between travel brands and partners (whether they are OTA’s, Metas or anyone’s affiliates) has always been: you do the marketing, we do the servicing. Everything below this equation is details (the bigger you are the bigger your share is, the marketer (should) earn the larger share of the pie because it is increasing the pie etc) and above all: the better the product of the travel brand, the more likely an affiliate is to succeed. Better includes both commission + actual service provided to the customer.
Having taken all of that of the table, Martin wants to tell us that Expedia has a new white label which is better than the competition. Thanks for the tip Martin, and more than that, thank you for innovating for affiliates, it helps improve the niche and makes our success chances better
Hi Oz,
as for a sensationalist headline, guilty!! Its actually a bit of a meme from the SEO industry (where Ive worked for over a decade).
One thing though I must point out – I’m not really commenting on whether our whitelabel / templates / integration / conversion rates are any better than other companies. Its really a comment on the industry, where it is going, rather than a marketing piece to attract more partners to EAN.
thanks for your comment!
M
Interesting article. It’s true affiliates need to take control. Product feeds / dynamic content can give affiliates control so they can target the products based on their visitor demographics. Agree that affiliates need to build a brand like moneysavingexpert and develop a community and not just a simple referral to the brand. Brand building is really expensive though and can take time. Smaller affiliates can do this via social marketing. Relevant and original content could help increase the organic traffic providing search engine friendly context to product information. But it would work best in combination with targeted and highly optimized ads and data feeds again could be used for that. You can find out more on our website: http://www.fusepump.com/our-services
Nice article, Martin – although you do scare our userbase somewhat!
I think you’ve made some valid points about the need to differentiate your affiliate offering. It’s not uncommon knowledge and a main reason why the many copywriting agencies are cropping up quite rapidly to service the need for unique content.
In terms of getting hold of the conversion funnel, I think its important to note that there are many affiliates who are actually touching more points along the customer journey than ever before, on a multi-channel level too, and something we expect to continue as affiliates start digging deeper into their data, pinpointing their userbase and targeting them more specifically.
As the start of the customer journey continues to increase through other platforms i.e social / mobile / video it will become more important to influence the customer journey to source traffic to affiliate websites than relying purely on the SERPS.
Chris J
Hey Chris,
thanks for the comment – and yes, I am a little prone to bouts of sensationalism!
I of course agree – there are plenty of affiliates that are incredibly advanced, and understand the profiling of their customers is key. I know for instance that lots of major affiliates in gambling have gone down this route, but its not typical of the mass market.
If everyone did this kind of stuff, I wouldn’t have any complaints though
In a nutshell, the article reads “if you know how to attract quality traffic, become a service provider, not an affiliate”. It’s a questionable advice to say the least.
Obviously since you represent Expedia, you have a muscle over your affiliates; that’s understandable. On the other hand, many affiliates have a muscle over their suppliers, believe it or not; they (affiliates) switch suppliers if they have poorly converting landing pages, are slow with payments, etc. Also, affiliates are more flexible and generally deliver better value to consumers when they can plug multiple suppliers and pick the most suitable for their customers – be it on the basis of price, geography, product or something else.
What I fully agree with you on is that affiliates usually don’t retain any relationship with their customers, unless they build a brand. There are other ways of doing it, too.
Hi Max,
sorry – that’s not fundamentally what I’m saying, my point was more “if you know how to attract quality traffic, try and keep as much of the rest of the value chain that you can”.
Pragmatically, there is zero chance that 99.999% of affiliate sites could start negotiating their own supply and so on, thats where deeper integration with affiliate platforms (yes, like EAN, but also like many other white label suppliers in a lot of verticals) can be a great value add.
I don’t represent Expedia (brand sites), my position is here at Expedia Affiliate Networks which is a 100% whitelabel/full integration platform – and my core responsibility is ensuring that our partners maximise their profits. This in turn naturally has a positive impact on our business, but the point is I’m not here trying to drum up publicity for, or present a viewpoint from, Expedia’s branded businesses.
The concept of delivering better value to consumers by presenting choice – totally agree! Aggregators or price comparison websites by their very nature do not lend themselves to white label solutions.
To sum up: there are of course plenty of situations where it doesn’t make sense for an affiliate to have a white label solution, but right now I would hazard the guess that there are a large number of sites that would benefit from retaining control and information for the long term.
Mr. Martin MacDonald,
it’s very easy to promote EAN as the “… the perfect solution is to stop sending your valuable traffic to a merchant site to convert …” while you “convert” locally via an API.
How many OTAs like Expedia have this? I can count them on my fingers.
What is the quality and reliability of these APIs? What about niches ? What is the quality/reliability of the ‘tracking’ process? Cookies? Redirects?
My point is this product’s culture needs to change rapidly!
Ideally, ‘API first’ should be in every OTA mind targeting simple and rapid mashups, on both sides. What are all these half-baked products?
On the other hand travel mashups, take pinterest-clones, don’t offer anything to OTAs to integrate and benefit from ‘unique & social’ content while trading the “conversion”. Everyone is building their own Ark while things should be much more simple!
Hi M.
Totally agree with your point, people should think API first as much as possible!
Regarding the tracking, Im not entirely sure if you mean through referrals or a straight XML integration, so I will cover both:
1) straight XML integration: there is no way to book through our API currently and “lose” the transaction, the partner ID (cid) is passed with the details of the booking itself, so its 100% reliable – UNLESS the whole API system is unresponsive, and our uptime rate is something like 99.98% (dont quote me on that, Im not in the office).
2) referral type integration: (ie. you pass the visitor to a merchant site). There are multiple ways of tracking this, all of which have some flaws: a) JS redirect with cookie based tracking, benefits = easy to implement, drawbacks = not 100% accurate, ie. JS disabled on client.. b) referrer based tracking, benefits = SEO links, drawbacks = doesnt work if you are passing from http/https c) iframe tracking, easy to implement, doesnt track on some browsers with max security settings….
NOT EXPEDIA DATA (purely experience from other industries, where I was able to match up real bookings in the database to affiliate payments across a network, but I have typically seen from 97 to 98% success through referral tracking….. 100% in API tracking.
Hi, I like this post and expressing true facts that Google is playing with affiliates. White labels are also a great solution to bring and retain traffic on affiliates websites. apart from that we in Hello Travel also give JS forms, where traveler fills the form and stays on the affiliates website. Therefore retaining the traffic on affiliates website. and guess what its not expensive as compared to white labels to integrate Hello Travel forms.
Huh?
How exactly is integrating your Hello Travel product cheaper than FREE white labels, provided by people like EAN (us), HotelsCombined etc.?
I spoke with a perspective of individual affiliates, who have shortage of resources. And can’t hire tech guys on permanent basis to do complicated integrations. As in affiliate marketing, there few niche affiliates and there is a long tale of affiliates who are have a niche on specific keywords or lack of resources. You can correct me if I am wrong.
Also traveller books a trip on OTA’S and in Hello Travel you just inquire, so that we send the best tour quotes and you choose the one with whom you want to book.
Akhil – I think you are misunderstanding…
White Labels are easy to integrate in a few mouse clicks, existing templates that you just add your logo or some styling if you wish.
And free from almost every major online travel company.
API integrations using XML/JSON etc. are more complex and require someone with development experience to integrate.
One final thing in the subject, white labels are not a great way of bringing traffic to affiliate websites, if by “bring” you mean “get new traffic”.
They are a great way of monetising existing traffic however.
White labels for travel sites are one of the better white label options out there for affiliates. They key with any affiliate program is always traffic, and for travel it’s quality traffic, that will take action and create leads. Everyone is looking for the next best travel deal so a well defined site with seamless white label integration and good key words in the domain should be successful.
Don, you are right on some level. White-labels do create a good option for travelers looking for the best travel deals. However, that will work best for big publishers. For the small and medium publishers, a mechanism for sending leads is very important which must be very easy to incorporate. I have been working with Hello Travel Affiliate program for the past 1 year and they seem to fulfill that criteria. Their forms are java-script , easy to use and non-redirectable.
Maybe one approach would be to do a hybrid model including both EAN inventory and more niche inventory that is negotiated directly with smaller suppliers. Does anyone know what range EAN typically pays in commissions? Is it even profitable when you truly analyze your cost-per-acquisition because even organic search traffic has a cost when you consider the cost to produce the content and build a social audience.