Case Study - Macdonald Hotels - Affiliate Marketing
Objectives
In June 2008 Macdonald Hotels enlisted bigmouthmedia to assist with their affiliate marketing activities. They had 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
- Add incremental sales growth without cannibalising sales from other channels
Our Solution
When reviewing Macdonald Hotels’ in-house affiliate campaign bigmouthmedia noticed 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
Results
New T&Cs
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.
Bespoke Customer Offers
Once confidence in the affiliate channel had been restored, there was the potential to devise bespoke campaigns for individual hotels to help boost sales. We tested three different types of campaigns running alongside each other in the first three months comprising:
- Increasing commission for one hotel
- Advertising exclusive customer offers for one hotel
- Combining an exclusive customer offer for one hotel with increased commission
Results from the first three months showed, surprisingly, that option ii delivered the best results and that increased commissions had no impact for these hotels. Bigmouthmedia therefore opted to promote the exclusive customer offer for a number of hotels throughout the year, the impact of which can be seen below.
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.
Improving the Coverage of Macdonald Hotels in the Search Space
In April 2009 bigmouthmedia approached two affiliates to build sites dedicated to the Macdonald Hotels brand. In return they were permitted to bid on individual hotel names (not brand-only terms) and direct traffic via paid search through to their landing pages. The impact of these sites 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% year on year, resulting in an improved ROI for the client.
Overall Growth
These 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 annual revenue of 110% compared to the previous 12 months.
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- Proactive affiliate marketing strategy based around development and enforcement of new T&Cs, use of bespoke offers, and improving coverage of hotel name and brand-hybrid terms using trusted affiliates
- 110% YoY overall increase in annual revenue
- 14% YoY decrease in CPC for hotel campaigns
- Improved ROI across all online channels
Bigmouthmedia has been a key driving force in the improvement and progression of Macdonald Hotels' affiliate marketing channel and has managed to extend the benefits to the organic and paid search spaces too. The bigmouthmedia team has become an important extension of the Macdonald Hotels marketing department. We really appreciate their invaluable input and are delighted with the results.
Ruaridh Macdonald
Sales and Marketing Director, Macdonald Hotels & Resorts