How Affiliate Marketing Can Benefit Travel and Tourism Businesses

Affiliate programs are already used extensively by large companies, especially in travel. But also small to medium tourism operators can benefit from getting into affiliate marketing.

Affiliate programs have become very popular. They enable businesses to get cheap marketing for their products and expand their reach, while members appreciate the opportunity to make money in a largely passive way.

In travel and tourism there are many examples of companies offering affiliate programs. Some examples of the best known and biggest and most successful travel affiliate programs out there are (links refer to their affiliate programs):

For tourism there are affiliate programs offered by companies like:

Others make use of ‘affiliate networks’:

Affiliate Marketing Can Also be Used By Small Businesses

As a small tourism operator you can set up your own affiliate program. And you will see below there are many benefits of having your own affiliate program:

  • It is cost-effective and you only have to pay for performance.
  • It helps you grow your online audience, leads and finally visits and revenues.
  • You can develop a large base of loyal ‘affiliates’ who like to work for you.
  • It allows you to have full control over the marketing expenses and commissions you pay.

In this post I will explain what affiliate marketing is. And what needs to be in place before you start and how (even small) tourism operators and destinations can benefit from it. And why it is such a great idea, especially for small travel and tourism businesses to set up their own affiliate program.

WHAT IS TOURISM & TRAVEL AFFILIATE MARKETING?

Affiliate marketing is the marketing strategy in which a relationship between a merchant (advertiser, in our case a travel/tourism operator) and an affiliate (publisher, blogger) is formed.

The merchant pays commissions to affiliates for performance, like referring sales, leads, subscribers or other desired results.

The example in tourism and travel would be:

  • travel bloggers (called ‘affiliates’ or ‘publishers’)
  • putting links on their sites, blogs and in their social media channels (called ‘affiliate links’)
  • referring to pages with products and services on the sites of tourism operators or travel companies (so-called ‘merchants’ or ‘advertisers’)
  • for which – if leading to the desired result – they get a fee (called ‘commission’).

AFFILIATE MARKETING DEFINITIONS

Here are a few definitions that may help you better understand affiliate marketing in the context of travel and tourism (which both includes hospitality):

  • Merchant (or Advertiser) – A merchant is a company (like a small tourism business or an online travel company like Booking.com) or a person (selling online travel products) that markets and sells products and services of such merchants on the web.
  • Affiliate (or Publisher) – An affiliate is a person (like a travel blogger) or a company (like a colleague tourism operator in your destination) that assists the merchant in marketing products and services in return for a commission.
  • Merchant-Affiliate Relationship (or Affiliation) – In the merchant-affiliate relationship,
    • The affiliate acts as an independent “salesperson” who promotes the merchants travel and tourism products and services.
    • The merchant tracks the incoming visitors to determine which affiliate sent them the sale.
  • Tracking and Management Solution – In order to track the incoming traffic to their sites referred by the affiliate(s), merchants need to purchase (a license) or create software. This will track and manage their affiliates and their activities from third parties third party tracking solutions or providers.
  • Click-through – A click-through is the action that takes place when a visitor clicks on a banner or a link on an affiliate’s site which refers to the merchant’s site.
  • Impression (or Page Views) – An impression occurs when a page containing the merchant’s banner code is loaded on an affiliate’s site.
  • Two-Tier – A two-tier commission structure pays an affiliate commission on each sale (or lead or click-through) they refer AND a commission on each sale referred by any affiliates they have referred.
  • Affiliate Link – An affiliate link is a hyperlink (https://www.yourname.com) or an image or text that contains a hyperlink to a merchant’s site. The affiliate link is placed on the site by the affiliate and when clicked on leads the visitor to the merchants’ sites.
  • Entry Page – An entry page is the web page that your affiliates direct traffic to. Visitors coming from your affiliates’ sites will enter your site at this page.

In this post I will explain what affiliate marketing is, what needs to be in place before you start and how (even small) tourism operators and destinations can benefit from it and would need an affiliate program.

An Introduction to Affiliate Marketing

What is affiliate marketing? When your tourism business would have its own affiliate program, it offers a commission to people who are willing to market your tourism products or services on their own sites or blogs. They are called ‘affiliates’.

When one of your affiliates successfully refers a lead to you who ends up making a purchase or booking, that affiliate earns a small percentage of the sale (‘pay-per-sale’ or PPS). In some cases companies also pay for the lead only regardless whether it converted into a purchase or booking (‘pay-per-lead’ or PPL). So affiliates are paid based on performance.

An affiliate program looks in most cases like this:

  • Affiliate merchant: the business running the affiliate program. This would be you.
  • Affiliate software: the tool(s) you use to run the program.
  • Affiliate network: a third party that manages the tool(s) you use to run the program.
  • Affiliate marketers or ‘Affiliates’: the people who are promoting your products or services by adding your affiliate links in their websites, social media channels or blogs.
  • Customers: leads who click on affiliate links and ultimately make purchases.

The affiliates can be everything from other companies promoting you via their websites to travel bloggers working from home writing posts or messages on social media that include your affiliate links.

And her a nice tip. You can also yourself become an affiliate by joining the affiliate programs of other companies and pacing their links on your site. In that way your site can earn some extra money for you.

BEFORE YOU START WITH AFFILIATE MARKETING

Before you start with setting up an affiliate program yourself you need to have some basics in place before you start:

  1. First and foremost make sure you offer a great product or service that customers like and demand and about which affiliates will like to write.
  2. Then make sure your web presence is optimized (website and local marketing): especially an optimized website will be the centre of your online universe. It will play an important role in your affiliate program. On your site both your audience (potential customers) and your affiliates (selling your product) can find information about your product offering. Affiliates can find more information about your affiliate program, the commission structure, how and when you will be paid and more.
  3. Define you objectives and goals (see later).

How Small Businesses Can Benefit from Affiliate Marketing

As we’ve made clear, affiliate marketing is not just a tool that can help large companies increase their profits. In fact, it can be particularly useful for smaller businesses, for a number of reasons. For example, affiliate marketing programs:

  1. Higher revenues – It contributes to your goals of increased visits, sales and revenues to your site and your location.
  2. Lower costs – It is cost-effective and you only have to pay for performance! It is more cost effective than other forms of online marketing. Search Engine Marketing (Google Ads) advertising can cost you from a few cents to a few euros for every click-through to your site or every impression on the advertiser’s site. With affiliate marketing you do not have to pay anything until your placements result in a sale or any other action you desire.
  3. Performance-based Marketing – Your affiliates will be motivated to perform well so that they will be compensated well. Affiliates will try to find the best possible placements for your ads and promotional materials. And you pay only for results. When your affiliates perform. It allows you to pay for any action you desire. This means that you can pay an affiliate when they refer a sale, when they refer a subscriber, when they refer a qualified lead or any other action you choose. But mainly you should pay only when it leads to a sale.
  4. Reach – Affiliate marketing allows you to reach out across the Internet without requiring you to increase or invest more in your inventory, payroll, Internet real estate, physical real estate, equipment, and more. Affiliate marketing allows you to bring more visitors and customers into your existing business. You continue handling and controlling your sales, customer service, development, order fulfillment, and support yourself. While your affiliates concentrate on marketing your products and services to more people. You only need to expand after you generate new business with your affiliate program generates in response to growing demand. See again 1. Higher revenues!
  5. Global – It can generate a real world-wide market. Affiliate marketing can easily open the door to international marketing and recognition. Affiliates come from all over the world. International affiliates can introduce and market your products and services to a market that you may not know of or would even consider. They know the local practices, customs, currencies and languages of their fellow countrymen. This can broaden your reach to the entire global market.
  6. Versatility – Affiliate marketing can be used by just about any company or organization on the planet. It works for large companies like hotel chains, airlines and online travel companies. And it also works for small businesses like ‘mom-and-pop’ tourism operators, guesthouses, attractions. There are many other companies that are already reaching your target market. So there are also thousands of potential affiliates out there. For tourism operators these could well be blogging residents in your destination.
  7. Long-term – Affiliates leave your ads and promotional material in their sites for long times and even increase its exposure when they are earning good money from it.
  8. Direct targeting – With affiliate marketing you can effective reach your target audience time after time. Because your affiliates will be individuals, companies and organizations that are already reaching your target market. And only those sites that are reaching or have the potential to reach your target market will be signing up for your affiliate program.
  9. Brand – It will increase your brand recognition. When people searching on the web see your name, your products ann services more than once on Internet – your brand will become more and more known and remembered.
  10. Experiment – It allows you to experiment for free. You can try out your promotional material on your target audience and pay for it only if it works. Your affiliates will test it for you. No results? No pay. If it does work, you will get more customers and your affiliates will be rewarded with higher commissions.
  11. Tracking other online marketing efforts – It can also help you track your other paid advertising activities. Affiliate marketing software includes several different tracking features. It is meant to track leads, sales, click-throughs, impressions, page views and so on. It is mainly used to track affiliate activity, but it can also be used to track your paid advertising efforts. Your affiliate tracking mechanisms will help you determine how effective your placements are.

Affiliate Marketing is Relatively Easy to Set Up

Affiliate marketing is an easily to set up online marketing technique. In which merchants (so in our case travel companies or tourism operators) pay commission to affiliates or ‘publishers’ (like in our case bloggers or other tourism businesses). The affiliates efficiently promote the travel companies’ or tourism operators’ products and services.

While many businesses have high barriers of entry, both in terms of financial resources and an in-depth knowledge necessary to start, affiliate marketing is a relatively simple and cost-effective way of making money. Both for merchants as for affiliates.

REASONS TO START AN AFFILIATE PROGRAM

So also small to medium travel and tourism operators can benefit from getting into affiliate marketing. Whether or not you are already doing business on the Internet (like bookings or tickets), you should consider setting up an affiliate program. Especially if you want to increase exposure, traffic ands revenue while decreasing time, money and advertising needs. This guide will help you.

While affiliate marketing can be immensely beneficial, it is not without potential downsides. For example, because you are relying on people outside your company, you do not have 100% say in how your products or services are marketed and sold. But this is no reason not to start an affiliate program, since the upside is much higher.

BEFORE YOU START: OBJECTIVE AND GOALS

This site will help you to design an affiliate program in six stages:

  1. The Pre-Planning Stages – developing your goals and objectives needed for the affiliate marketing plan you need to create.
  2. Structuring Your Affiliate Program – Materials and plans needed to start and run your affiliate program.
  3. Launching Your Affiliate Program – Activities you needed to do to put your plans into action.
  4. Promoting Your Affiliate Program – How to promote your Affiliate Program and find new Affiliates.
  5. Managing Your Affiliate Program – Managing an Affiliate Program including day-to-day tasks.
  6. Setting and Following Benchmarks – How, when and what measures to asses your progress.

Conclusion

Affiliate programs are already used extensively by large companies, especially in travel. But also small to medium tourism operators can benefit from getting into affiliate marketing.

For a small business, an affiliate program might seem like a big step. However, the truth is that affiliate marketing offers a ton of benefits, and does not have to be as time-consuming as you might expect. It lets you advertise your products or services in a cost-effective manner, driven by affiliates who earn commissions based on how well they perform.

In the following weeks we will write blogs to help you create a completely customized, sophisticated affiliate marketing strategy. You will be able to tailor it to fit your unique needs and form from which you as a travel or tourism operator can fully benefit.

In the next post we will be looking at the pre-planning stage.

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