"Affiliate Marketing is NO Longer Limited to Big Brands with Budgets over $100k" - Ivan Baidin

As more and more brands have been launching their affiliate marketing programs, dozens of various tools and platforms have emerged to ease the task and boost the efficiency of marketing efforts. Such solutions are capable of solving most affiliate-related tasks, including searching for webmasters, providing them with materials, adding integrations, making payments, performing analytics, and more.

Travelpayouts is an affiliate marketing platform for the tourism industry with GMV over $1 billion and a multinational team. The platform connects over 100 trusted travel brands with clear statistics with 300k+ of inspired travel content creators and solo entrepreneurs from all over the world. 

I've asked Ivan Baidin, Head of Travelpayouts, to elaborate on some important issues businesses face when launching an affiliate marketing program.

What emerging trends do you see in the affiliate marketing market? How has it changed over the past couple of years? What were the main factors (like COVID, etc.)?

Just a few years ago, it was really difficult and expensive to implement a fully functional affiliate program, but today affiliate marketing is no longer limited to big brands that can afford to invest $100k for the development of the program and a team. The market is now ready to offer software even for small brands—ranging from SaaS solutions, like Affise for about $1,000 a month, to advanced marketing platforms, like Travelpayouts, with payment only for actual results achieved.

In terms of trends, affiliate marketing trends are not as important as global trends. Businesses either support them or become outsiders. One of the trends today is toward local travel and local service providers. Because of the accessibility of entry into affiliate marketing, even small local companies can effectively operate an affiliate program.

The second trend has to do with the long-term changes on the market. Online shopping has grown significantly and continues to grow. Consumers of goods and services make more purchases online than ever before. There are still people who buy airline tickets at an offline agency, but the potential reach of the audience that is willing to buy travel services online is now a lot wider than before. The number of online purchases has grown and is continuing to grow. Even with the easing of restrictions and the post-covid market recovery, people are staying online—it's convenient, fast and safe. Affiliate marketing is therefore a viable income source for content creators and businesses alike.

In my opinion, the most important global trend is More Focus on People, Make Brands Human. 84% of consumers prefer to be treated as a person and not a number. By creating memories, brands strengthen the personal connection between product and emotion which increases brand buy-in and conversions. 

Through partner marketing, brands can reach their target audiences without aggressive PPC advertising, but through influencers that they already trust. Since the business relies on trust between all participants in the process, I prefer to refer to it as partner marketing rather than affiliate marketing.

Influencer marketing is on the rise these days. Can this tool be bundled with affiliate marketing, is this something common or unique now?

Influencer marketing is getting extremely popular these days, whereas affiliate marketing is a way for businesses to reach thousands of influencers at once. Affiliates are influencers interested in offering your products and services to their audience. Unlike classic influencer marketing, where the brand pays for placement and coverage, with affiliate marketing you get placement, coverage and sales. Managing influencers isn't a walk in the park too as it takes a lot of time and paperwork.

In affiliate marketing, partners promote your brand on their own—their motivation is to get a percentage of revenue from sales and a recommendation of a brand that they really love. For example, GetYourGuide—one of the most popular excursion search engines in the world—pays affiliates 9% of the cost of a tour.

There are influencers of all scales, from local bloggers with an audience of a few thousand, to celebrities and opinion leaders. Through Travelpayouts, a travel brand can reach out to influencers with a combined reach of over 5,000,000 people.

In your opinion, what types of businesses benefit from using affiliate marketing the most today, and how has that changed over time?

The short answer is: virtually anyone who sells goods or services online. Obviously, these include services selling airline tickets, hotels, tours or car rentals, but there are also other types of businesses both outside and within travel. Here are just a few examples: 

• E-commerce—the share of online purchases has increased significantly, according to the UN;
• Online education—also increased due to the COVID-19, according to the World Economic Forum; 
• Legal services helping to get compensation for flight delays;
• SIM cards for travelers;
• Bank cards for travelers;
• and so on.

There is also one common misconception, which is that if the structure of a business implies different margins for different goods and services (for example, one service generates income of 10%, and another just 1%), there is a fear that it is impossible to offer partners a solution. But there is a way out, if you don’t pay a % of the cost but share a portion of the income. EconomyBookings, for example, do this by sharing with partners 60% of their income rather than the cost of the service.

What are the main issues that brands are facing when they deal with affiliate marketing?

The first one is partners. Even having solved the technical problem, businesses face the issue of attracting partners. In this matter, the decision to connect to a network that already has a large pool of partners wins a lot.

The second challenge is a transparent record of actions. The basic model is that the brand should account for all actions taken by the affiliate's audience, so correct and stable accounting is the cornerstone of affiliate marketing. No matter which technical solution you choose, the stability and transparency of accounting are important factors in developing the trust of bloggers.

Third, there are violations by affiliates. Although the affiliate channel involves low risks—you only pay for results—affiliates can unintentionally or deliberately violate the rules. For example, buying PPC ads with brand requests, if this is prohibited. It is important to prescribe complete rules that take into account all the specifics and to monitor the execution of the rules. Or trust a service with an anti-fraud solution like Travelpayouts.

Can you name some key mistakes brands make when they start working with the affiliate channel and scaling it?

One of the common mistakes is setting too strict rules for traffic. A brand chooses its own types of traffic sources, and it can significantly reduce potential reach by setting excessively strict traffic rules. Everything that fits within the company's traffic policy should be allowed, and if something is controversial, it can always be handled by using prior approval.

Another trivial but not uncommon mistake is starting an affiliate program and not investing in developing it further. Like any marketing channel, an affiliate program requires attention. Even though affiliates work with their own audiences and develop their own projects, your job is to help affiliates with their work, such as conducting training webinars, providing advanced tools, unique solutions for large affiliates, etc.

Are there any new technology solutions that can solve these problems?

Certainly. There are SaaS solutions like Affise, and platforms like Travelpayouts. The latter are solving all the issues with launching, developing, and operating. That doesn't mean a brand won't need to work with the channel at all, but of all the options available, it's probably the most efficient and easiest solution.

For example, the Travelpayouts platform solves every basic point:

• Launch: no development required;
• Partners: no need to look for them on your own, there is an existing base;
• Growth: 10+ years of team expertise;
• Anti-fraud protection: artificial intelligence + automatic notifications of any anomalies.

What is the main idea behind your First Digital Partnership Platform for Travel Brands? How does this work?

Travelpayouts Digital Partnership Platform gives travel brands access to 300,000 travel influencers worldwide. You can reach new customers, pay in a single transaction.

Our mission is simple—we help people travel more, show the world and earn money from it. We unite travel, experience, freedom, honesty, technology and money driven people and brands to benefit.

The platform connects those who have an audience with those who have a product or service for that audience. This is the ultimate win-win story, where a brand gets sales and a creator of travel content earns money by offering relevant brand products or services to their audience.

More than 300,000 travel content creators around the globe share their favorite travel brands and inspire travelers to get to know the world in a profitable and qualitative way. It benefits all: people get high-quality content and travel a lot; brands get a new channel to reach new audiences; and bloggers get a way to monetize their passion.

What is your advice to those travel and non-travel brands that are starting their efforts in affiliate marketing?

Launching an affiliate program is just the beginning of a long journey. And in order to get through it as efficiently as possible, you need to think about how you’re going to develop the program at the very beginning.

There is also competition in affiliate marketing—big brands or older solutions are already on the market. And even if you have the resources to develop your own affiliate program, it's worth connecting to one or more platforms. These are not mutually exclusive options. Walking the path with a market expert is what will allow you to jumpstart in affiliate marketing.