ebookers.com has signed up with affiliate network TradeDoubler.
ebookers.com, one of Europe’s biggest travel agencies, and European affiliate network TradeDoubler, have announced they will team up in a bid to increase the number and quality of ebookers’ affiliates and increase traffic. For any eCommerce site to succeed, it must have a large number of visitors. Generating traffic is the only way to generate sales.
Whilst traffic levels can be increased through extensive conventional media advertising campaigns, these can also be expensive. In today’s investor climate, TV and billboard ads are only viable for the largest, richest eTailers. But there are also problems associated with online advertising: only around 1% of users will actually follow a given banner advert link. Since firms such as DoubleClick charge advertisers just for displaying the banner, dotcoms risk paying out to generate limited amounts of traffic.
Affiliate programs aim to overcome this. When someone follows a link from one website to an affiliated eTailer, and then buys something there, the refering site receives a commission. In this case, a site that links a user to ebookers will receive GBP2 in commission. This strategy will make content providers keen to encourage users to visit ebookers.com and buy flights, rather than regarding banner adverts as a necessary inconvenience. They may even tailor their content so that someone viewing a story on a certain city will be offered ebookers flights there.
TradeDoubler aims to make money by administrating the affiliate program, in exchange for an additional per-flight commission from ebookers. Unlike companies such as Amazon, which have invested large sums in building dedicated affiliate programs, ebookers will hence be able to increase revenues without paying anything upfront. This is obviously a good move for the eTailer.
But will TradeDoubler succeed? Offering affiliate programs to companies who don’t want to pay the upfront cost themselves looks like a good strategy, and as the first European company to provide such a service it has market power at the moment. In addition, high profile deals with letsbuyit.com as well as ebookers make it look more credible. But it is still taking all the risks surrounding a relatively untested business model, which still relies on customer clickthrough. Unless it builds scale quickly, it will be in trouble.
