- Written by Robert Davinson on
The Q1 travel peak is well under way once again, as consumers banish the post-holiday blues with thoughts of booking vacations for the year ahead.
The Q1 travel peak is well under way once again, as consumers banish the post-holiday blues with thoughts of booking vacations for the year ahead.
On the first Awin Talks episode of 2020, we get things started in the new decade with a couple of in-depth discussions with three leading industry figures.
First up, Awin's Content Analyst Rob Davinson discusses the state of the travel sector in the affiliate channel with Colin Carter, director of the travel site Weather2Travel, and with Maria Chatterton-White of the tours and activities specialist Viator, A TripAdvisor Company. We get the respective views of a publisher and an advertiser working in the travel sector on some of the challenges they face in today’s climate, and what particular nuances of the travel sector can play out in the affiliate industry.
Awin's Global Strategy Director Kevin Edwards then speaks to Kate Knight, attending in her capacity as a representative of the newly-formed Publisher Board in the UK. The Publisher Board is a new working group of affiliates representing a variety of different websites in the UK that have come together to advocate for improving standards in the channel and building partnerships. Kate discusses the Board’s recently released 'Best Practice Guidelines for Advertisers,' their aims as a working body, and how they hope to achieve progress on some of the long-standing issues that affiliates have faced operating in the digital industry.
This month’s episode also looks forward to the imminent release of the brand new Awin Report 2020 at Affiliate Summit West (it has since been released, and you can download a digital copy here.)
Read Colin and Maria's interview below.
How long have you worked in the travel industry, and how long in the affiliate industry?
Colin Carter (CC): We started in travel back in 2005 as a B2B provider of weather and climate information to holiday companies. Soon after, and seeing the potential benefit for travelers, we launched Weather2Travel.com as a B2C venture, showing climate guides for the whole world with a very basic website.
We were introduced to affiliate marketing in 2006 and signed up to a few networks running travel programs. Our affiliate relationships have grown massively since then, working with an extensive list of top travel brands across all product types.
As you can imagine, both the travel and affiliate industries have changed quite a lot since then.
Maria Chatterton-White (MCW): Personally, I’ve worked in the travel sector for over 10 years and in the affiliate space for eight. After starting my career in SEM, retargeting, display and social, I progressed onto affiliate marketing where my team and I manage the global affiliate program for TripAdvisor Experiences/Viator.
What is it that your respective companies do?
CC: We’re an online travel publisher and content creator helping people to decide where and when to go on holiday based on their preferred weather.
Weather2Travel.com has evolved into a complete research tool helping people find the right holiday destination for them and sharing the very best deals from holiday companies, OTAs, airlines and much more to help them get away for less. We also publish authentic tried-and-tested travel content written by expert travel writers to promote destinations around the globe, inspiring all types of travelers.
MCW: Viator/TripAdvisor Experiences specializes in the things to do/experiences sub-vertical of travel. We have over 300,000 bookable tours and activities around the world, making it easier for travelers to plan and book just about anything they could want to do while traveling. That includes experiences, tours or activities all around the world, whether you are on holiday or exploring your own hometown.
The travel industry has faced its fair share of challenges in recent times (Thomas Cook’s demise, terror attacks in tourist hotspots, the impact of Brexit and subsequent exchange rate fluctuations, etc.) What are the biggest challenges you currently face as a business operating in travel?
CC: There is a whole host of challenges we face in travel, including the ones you’ve mentioned. The common theme is uncertainty and its effect on people’s travel habits. If people are worried about Brexit, political unrest, threats of terrorism and natural disasters, they will change their travel plans or cancel them altogether.
We’ve seen a sluggish autumn in terms of sales, for the second year in a row, so Q1 is an important period for everyone in travel. As an online publisher we can often get hit from both sides - if people aren’t looking to book, they won’t research plus travel brands will often be cautious with budgets and promotions.
The demise of travel brands such as Thomas Cook, Monarch and low-cost holidays before it, has both a negative and positive effect. The loss of income and the legacy brand, on the one hand, turns into an opportunity for a competitor on the other.
As a content provider, a challenge we face is the constant battle to stay up to date with changes by travel brands including mergers and acquisitions along with rebrands and major website updates.
It is certainly underestimated how much maintenance is required to update brand messaging, URLs and assets in a fast-moving industry. This is even before we consider the movement and changes that frequently occur within the affiliate world.
We’re now in the midst of the traditional travel peak at the start of the year. How has that peak changed over the years and what role does seasonality play in your own business?
MCW: The role of seasonality in experiences is slightly different to that of other travel sub-verticals. Typically, in the ‘things to do’ space, consumers book their tours a few weeks prior to travel. In some cases, we do see longer lead times on experiences that are likely to sell out or seasonal tours with a limited window, like seeing the cherry blossoms in Japan, which is typically between March and mid-April. However, we have seen a shift towards booking closer to your travel date and a growth of in-destination bookings.
For travel in general, seasonality is very important, and it’s typical to see spikes in sales around events like Easter and summer holidays. Within the affiliate space, this is when you will see advertisers and publishers running travel-focused campaigns. For instance, everyone in the affiliate space knows that Q1 is the travel-focused quarter, so it is not uncommon to see dedicated campaigns on affiliates’ sites promoting travel deals and/or articles centered around the next big destinations for 2020.
CC: I’m not sure the travel peak has changed that much over the years. It’s still the most important period in the travel industry. We are certainly seeing an appetite from customers looking to spend more time researching their holiday than before.
These days it is probably true to say that "people spend more time researching their holidays than they do taking them."
There could be holiday companies who won’t last the year if they have a poor Q1. We all rely on future bookings - if a company can’t fill their flights, hotels or tours, for example, they will struggle for the remainder of the year.
Those external issues and uncertainties, such as Brexit, just add to the pressure on the travel industry. What we’ve seen change this year is that holiday companies are looking further into the future sooner to get those early bookings in.
This is slightly different for other types of travel products such as activities and attractions or airport parking where the lead time between booking and traveling tends to be less. The basket size is also smaller, so it tends to be less of a considered purchase than the holiday itself.
What aspects of the travel sector in affiliate marketing distinguish it from other sectors?
MCW: I would say there are a few things that differentiate the travel sectors to others in the affiliate space.
Firstly, there is the time it takes for a booking to convert. Consumers typically put more consideration into their travel plans than they would with a purchase like clothing, and as such, travel has the highest amount of consumer research undertaken before purchasing.
Secondly, conversion rates and order values are distinctly different too. This can also mean lower conversion rates compared to other sectors; however, average order values for travel purchases tend to be much higher than other categories.
Thirdly, managing discounts is of particular importance to an advertiser. Across the travel industry, offering exclusive site discounts can be a challenge as the margins are typically smaller. As such, other partner types like loyalty and content tend to perform better. That’s not to say discount partners don’t perform well; travel advertisers have many offers on site that affiliates can promote. Gift vouchers, such as a gift card with purchase, can also work as an offer-based incentive.
CC: Travel is a complicated sector with a diverse set of products; there are many different types of holiday, transport methods, accommodation and travel extras to consider. It’s a product that almost all of us aspire to as we dream of our next getaway.
As a content provider, the travel industry gives us the opportunity to create authentic and engaging content that inspires users, helping them to think and plan their travels - it’s a genuinely interesting topic.
In terms of holidays, this is usually something most of us only do once or maybe twice a year. So, it’s a massive considered purchase and potentially a large basket size. The process of researching and booking a complete holiday with all the different elements is a long one.
There are often many affiliate touchpoints in the purchase where users revisit sites before deciding what to book. All this makes travel unique in the affiliate world.
Unlike most other sectors, many travel merchants don’t pay commission until the travel has taken place, which means a long delay between the transaction and payment of commission.
What do you consider to be the biggest challenges in the affiliate travel sector?
CC: I still consider the reliance on the pointy end of the funnel and the last-click model among the biggest challenges. Travel, more than any other sector, would benefit from an alternative method of measurement rather than last-click sales.
Holiday research is a lengthy process, and, at the moment, the majority of the affiliate industry is only rewarding the final step, even if more content rich and specialist websites have contributed to decisions ultimately being made.
There are also travel products, such as cruises and escorted tours, which are still reliant on telephone calls. Call tracking in the affiliate industry never really went mainstream and I would suspect there is still lots of leakage here.
MCW: Ad-blockers are an important consideration moving forward for all affiliate marketers, beyond the travel industry. Browser-based privacy controls like Safari’s ITP or third-party ad-blocking software can potentially stop traffic from working. Therefore, as affiliate marketers, we need to ensure that we have the right infrastructure is in place to ensure that we are compliant, while not negatively impacting our tracking.
More specific to travel (but I suspect also relevant in other verticals) I would emphasize the importance of accurately tracking cross-device behavior. Research shows that a traveler can have up to 500 touchpoints before committing to a purchase. One recent stat from Nielsen research found that “travelers spent an average of 53 days visiting 28 different websites over a period of 76 online sessions, with more than 50% of travelers checking social media for travel tips.” If travel is a purchase that people spend more time researching, it’s important that we can track this consumer behavior across different devices and be able to attribute accordingly with cross-device tracking.
Capturing customers on the go is also key. The mobile market is predicted to make up 80% of traffic in the future so it’s important that advertisers provide both a good mobile experience and find the right publishers to reach mobile users. Also, if you can find niche affiliates that crack in-destination - that’s a bonus!
Growing content partners past the traditional last-click CPA model, while still being able to demonstrate value, is of paramount importance. If we think content is a point of inspiration and suppresses on the lower funnel, the last-click model will not always be the best fit for these publishers.
With that said, for high-traffic content sites this model will still work, but for niche sites and influencers, this model is simply not as effective. Travel budgets are typically more restricted than other sectors with bigger margins. Therefore, as travel advertisers, we need to take off our performance channel hats and award content-based partners in a different manner.
Testing models like assist click, small tenancy, cost-per-click (CPC) and even looking deeper into the data to assess areas like lifetime value (LTV) could be a good approach to take.
Finally, better use of data is a major priority for us. The travel sector has the benefit of extremely rich data. The challenge is making sure we’re identifying and using those advanced data points in the most effective ways, enabling us to create robust reporting.
What are the current travel trends to look out for in 2020?
CC: It’s still difficult to see beyond Brexit, but as we get more clarity on the outcome we expect to see a “Big Boris Bounce” once we hit the end of January, as more people firm up their travel plans for 2020.
We’d expect to see low prices on some traditional destinations such as Spain and Greece, as they fight off competition from Egypt and Tunisia. Further afield, Sri Lanka is looking to woo back holidaymakers following the terror attacks - so we expect there to be bargains to be had here as well.
In terms of products, we expect massive growth in the activities and attractions market, as we see more people book local authentic tours and experiences. Sustainable travel is also an area that is set to explode in 2020 as people look to travel in new and more conscious ways - i.e. by rail or ferry instead of flying.
© 2020, AWIN Inc. All rights reserved. AWIN Inc. is part of Axel Springer Group. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner.