[Interview] How Affiliate Marketing Is Saving Online Business

Why are search engine contextual ads killing online business, how are businesses across different industries responding, and what new or existing solutions can be used to stop the bidding arms race? I had the opportunity to sit down and talk about these issues in greater detail with Tatiana Buyanova, a head of business development at Travelpayouts, the biggest affiliate network for companies involved in the travel business.

One of the top trends right now is the rapid development of businesses connected to experiences. In the travel industry these are tours, excursions, everything that allows you to enrich your experience from the trip and get new knowledge or emotions. This is actively moving online, and demand is huge!

Another notable trend affects how companies compete for new customers. The travel market has relatively low margins, while competition is intense. This leads to the steady growth in marketing spending. 

For example, companies like Airbnb or Booking.com are paying more and more to attract new customers each year. Social platforms are no way better in this sense, as they use the same bidding model for advertising. 

Companies are forced to search for new marketing channels that may provide cost-effective customer acquisition solutions and offer low inflation of the cost over time. Affiliate marketing is one such channel that works well as there is no bidding and there is the opportunity to serve more loyal users that search engines can usually provide. 

The third trend we observe from our side is the fall of  so-called ‘influencer’ marketing. Not too long ago, every Instagram blogger with a few dozen subscribers could declare himself or herself an influencer, approach a brand, and ask for free services in exchange for a post. Now companies are less likely to use this channel due to its inefficiency and the complexity of the ROI calculation. 

In the CPA model, the business pays for a completed action, like purchase or completed form. Such an approach better suits  companies as they tend to work only with those influencers who can join their affiliate program and provide relevant high-conversion traffic to earn money.

Not at all. Even more so, nowadays, affiliate marketing is turning into fuel for the entire internet. It perfectly suits a performance-based approach to marketing, which businesses have been actively looking for for years. 

Also, as there are more and more affiliate networks to join, the process of getting up and running is simplified. Nowadays, affiliates do not have to even create a website. They can just use links, or whatever their network has to offer, and start acquiring leads and earning money with a profile on their favorite social network.

For end-users, it is also good, as they cannot be sold as anonymized traffic. Instead, websites participating in different affiliate programs now aim at delivering high-quality content to explain why people should take advantage of a particular offer. There is no need to trick users as the affiliate program participant won't get paid for traffic that is never converted.

I lead the Travelpayouts project business development team. We run a travel affiliate network, not an affiliate program. This means we work not only with the products, services, and offers of our parent company (an airfare search engine called Aviasales) but also with other companies' offers. The critical factor is that all these offers relate to the travel industry: from airplane tickets or hotels to sightseeing gigs, hotel transfers, or insurance.

So, our affiliates are content projects (websites, communities, etc.) dedicated solely to any kind of travel. This means our network unites both travel blogs and "professional" websites, say, owned by airports, or other big companies that can work with travellers like mobile networks or even banks.

Yes, there are some specific points you need to know before diving into affiliate marketing as a website/community owner or a brand. First of all, travel requires a lot of effort and resources from an end customer. You need to plan everything, book tickets, stay somewhere, think about transfers, manage your finances, negotiate days off at work. And, eventually, pay a lot of money to implement everything you've planned. 

Everything is much more complicated than in e-commerce or another niche. Also, competition in the travel industry is very high. All these factors lead to the extension of a so-called conversion window, i.e., a time a person needs to go through the conversion funnel from the "just searching" stage to purchase. At the same time, commissions on this market are lower than in, say, e-commerce or finance.

Not everyone can successfully work with traffic in such conditions. You have to be passionate about travel and run a project with a like-minded audience to persuade them to buy, therefore earning your commission. Also, you should be willing to learn something new, and experiment with your community and traffic. To boost this process, we publish lots of educational materials covering the basics and advanced affiliate marketing tactics.

Well, first of all, as an affiliate you have to run some numbers to understand the market share, what partners you're comfortable working with, what end customers need, how marketing offers are usually delivered right now, and so on.

A common mistake here is thinking that once you've got into an affiliate network like ours, you're done. Nope, nothing happens from scratch, the main job is still to be done. 

You need to learn new stuff about the product/service you're promoting, prepare marketing materials, think about engaging your audience while monetizing it smartly.

For example, we teach our affiliates everything: what offers to promote, when it is better to use an affiliate form vs. link when to publish specific content; we even provide them with drafts of the content they can start with. As a network, we serve as a mediator, teaching affiliates how to earn, and showing advertisers best practices for brand promotion.

We have a particular process for the introduction of a new advertiser into our network. We create an email newsletter and a blog post describing the essential products and services the company has to offer and explaining why they are worthy of attention. Such information allows our affiliates to understand why they should work with this partner, whether it suits their profile, etc.

Also, we have a webinar platform which we invite our advertisers to, so that affiliates can ask their questions directly. Another thing to encourage affiliates to join the new advertiser is a dedicated marketing campaign. For example, right now, we are holding a competition among affiliates which is sponsored by several partners. They provide prizes like Mac laptops or trips and money (up to ~ $15k in total). These methods combined allow making onboarding quicker and more effective.

Affiliate marketing is a performance-based channel, so the top metrics are revenues, conversions, bounce, and shopping cart abandonment rates. All these mean you will be into tracking, ROI calculation, A/B testing, and so on.

The CPA model is much less prone to manipulation than CPC. However, there will still be attempts to trick the system. To avoid potential losses, you have to monitor unusual activity in the network, examine traffic spikes, analyze why there were a lot of orders that were later canceled, and so on.

Also, to build a really successful affiliate program or network, you need to build long-lasting relationships with your affiliates. So, you should ensure they are paid regularly and are happy with all the available options. Also, you should make sure that the sales tracking is working smoothly and no data is lost (especially on purchases!)

For example, we at Travelpayouts have guaranteed payments dates. This means that, even if we have not yet obtained payment from a partner, but our system has checked the conversions for a particular affiliate, he or she will still get paid on schedule anyway. 

It is hard to describe the average person or project. Affiliate marketing consists of multiple pieces. Someone runs a website, another person is into mobile apps: you can't forget about communities built on top of existing platforms like social networks. All these resources have different mechanics, technologies, audience etc.

The main thing all these successful affiliates have in common is an enormous passion for what they are doing: their industry. Also, it is the readiness to invest effort and resources in content creation for several months at least before the real profit pops up.

According to our stats, a first-time affiliate on average can expect first payments in 50-60 days. The amount of money at the beginning is usually not that high, so to make a living from an affiliate program, you need to spend a lot of time and resources. But this is totally possible, as we have affiliates earning $3k, $5k, and even $10k monthly.