The report examines a complex online ecosystem that relies on multiple third parties to extend a brand’s Web visibility and, ultimately, to drive traffic. Potential conflict occurs when third parties begin to compete with brands for the same traffic.
In the report, it’s estimated that the global hotel industry loses over $2 billion as a result of hotel channel partners and affiliates bidding on keywords containing hotel brands. The majority of the losses occur when channel partners buy a branded keyword only to promote multiple competing brands; in this scenario, the consumer often ends up booking at a hotel brand other than the one which triggered the ad. Other losses occur when hotel brands provide unnecessary discounts or commissions to channel and affiliate partners when brand-triggered search ads lead the consumer to go through an intermediary before booking a room at the hotel property.
Parallels can be made to other business with online channel and marketing partners. Key lessons for these businesses are straightforward -- they need to clearly specify how their brands can be used in online search and promotion or risk losing business that is searching for their brands.
Without further ado, here are the top five strategies that brands should employ to optimize partner behavior and business results:
- Review your online channel strategy to ensure it’s in line with your goals. Many different online distribution and affiliate models exist and for different reasons. If your business co-exists with online partners, you need to clearly define each parties roles and practices to ensure that they are complementary, mutually beneficial and, most importantly, not competitive.
- Examine marketing partner and affiliate contracts and work with your legal team to include provisions that spell out how your company’s brand terms can be used and what compliance measures will be taken. Policies should be in line with your overall channel strategy and provide the correct incentives for partners.
- If you don’t already have a database of your company’s branded terms, now is the time to create one. You will want to share this database with your affiliates and channel partners so they will know which branded terms are off limits for their use. Of course, the database will be subject to updates as your company adds additional brands or changes existing brands.
- Set up a formal online monitoring and enforcement process with the legal team to track misuse and take action according to the terms of your newly-revised contracts. Proactive monitoring should track the non compliant partners, the terms, geographical markets and time of day when misuse occurs.
- Be vigilant of other undesirable ploys. Channel and affiliate partners, while often well intentioned, sometimes employ other SEO and SEM tactics to drive traffic to their sites. These tactics involve redirecting a cybersquatted domain to their own site or allowing their own affiliates to bid on their suppliers’ terms, among others. A comprehensive approach to monitoring partner activity across the entire Web is recommended to achieve your partner program goals.
Managing and optimizing the performance of multiple online business partners is indeed not an easy task. However, given the importance of the online channel, Internet strategies must be well thought out and executed and all parties need the right incentives and rules to play by. It’s a delicate balance to protect a brand's clickstream while providing sufficient opportunities for partners, but that balance is required in order to be successful in today’s complex online world.