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Brief
In June 2008 Macdonald Hotels enlisted bigmouthmedia to assist with their affiliate marketing activities. They had previously been running an affiliate program in-house for about 12 months with varying degrees of success and knew that there were some major issues that needed ironing out in order to regain the confidence of the individual hotels and add incremental sales growth without cannibalising sales from other channels.
Strategy
The first thing that bigmouthmedia noticed when reviewing Macdonald Hotels’ in-house affiliate campaign was that the terms and conditions that were in place for the affiliates were very loose. This meant that the majority of sales were coming from affiliates that were linking directly through to the Macdonald Hotels website using hotel name based paid search ads. Ultimately this indicated that Macdonald Hotels’ own PPC campaign was being cannibalised, leading to a higher than average CPA across all online channels.
In order to turn this situation around bigmouthmedia established a proactive account management strategy based on three key areas:
- Development and enforcement of new T&Cs to gain the trust of each hotel
- Implementation of hotel specific offers utilising the affiliate channel
- Improving the coverage of hotel name terms and brand-hybrid terms using trusted affiliates
Execution
The strategy was executed as follows:
1. Development and enforcement of new T&Cs to gain the trust of each hotel
By enforcing new terms and conditions that prevented affiliates from linking directly to www.macdonaldhotels.co.uk, bigmouthmedia were able to gain the trust of the individual hotels as they saw the overall cost of the online channels fall.
2. Implementation of hotel-specific offers utilising the affiliate channel
Once confidence in the affiliate channel had been restored, there was the potential to devise bespoke campaigns for individual hotels to help boost sales. Bigmouthmedia rolled out exclusive customer offers for a number of hotels, with the underlying focus behind this being to drive incremental affiliate growth without having a detrimental impact on the ROI of other online channels.
On average, an exclusive customer offer to the affiliate channel saw:
- 200% increase in monthly bookings
- 219% increase in revenue
The success of these campaigns led to bespoke offers being created for several hotels each month, consistently generating excellent results.
3. Improvement of the coverage of Macdonald Hotels in the search space
In April 2009 bigmouthmedia approached two trusted affiliates to build sites dedicated to the Macdonald Hotels brand. In return they were permitted to bid on individual hotel names, i.e brand-hybrid terms as opposed to brand-only names, and direct traffic via paid search through to their landing pages. The strategy behind was to:
- Provide more coverage to the Macdonald Hotels sites in the sponsored listings
- Improve organic rankings for certain keywords
During this part of the project bigmouthmedia had to ensure that there was no negative impact on Macdonald Hotels’ own paid search campaign. To deliver as smooth a transition as possible, the paid PPC account manager struck up a dialogue with the affiliates in order to synchronise bid changes.
The result of this dialogue was that click costs for the hotel campaigns actually fell by 14% comparing 17 April to 30 June 2008 with 17 April to 30 June 2009, resulting in an improved ROI for the client.
Results
The above strategies formed just part of the overall growth plan for Macdonald Hotels’ affiliate program. The roll out of the full affiliate strategy for Macdonald Hotels saw an overall increase in revenue of 110%, an increase in bookings by 82% and an increase in the average booking value by 13.9% compared to the previous 12 months. The campaign also had a positive impact on the return on investment (ROI) across all online channels.
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